Document:

<PAGE>

Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

                                                                   EXHIBIT 10.30
                                OPTION AGREEMENT

     This Option Agreement (the "Agreement") is made and entered into as of this
1st day of June, 2000 (the "Effective Date"), by and among Tularik Inc.
("Tularik"), a Delaware corporation, Japan Tobacco Inc. ("JT"), a corporation
organized under the laws of Japan, and Tularik Pharmaceutical Company (the
"Subsidiary"), a Delaware corporation and a wholly owned subsidiary of Tularik.
Each of Tularik, JT and the Subsidiary are referenced herein individually as a
"Party" and together as the "Parties."

                                   Witnesseth

     Whereas, Tularik and JT are entering into a Collaboration Agreement of even
date herewith (the "Collaboration Agreement") pursuant to which they will
develop and commercialize products useful to treat or prevent metabolic diseases
and conditions;

     Whereas, Tularik has formed the Subsidiary to perform its obligations under
the research program to be conducted pursuant to the Collaboration Agreement,
and is the beneficial owner of all issued and outstanding shares of capital
stock of the Subsidiary (the "Stock");

     Whereas, JT desires to acquire an option to purchase the Subsidiary at
specified times, and Tularik desires to grant such option to JT and to provide
for certain related requirements for the voting of Tularik's shares of Stock;
and

     Whereas, the Parties' obligations in the Collaboration Agreement are
conditioned upon the execution and delivery of this Agreement;

     Now, Therefore, in consideration of these premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto agree as follows:

                                   ARTICLE 1

                                  Definitions

     1.1 "Affiliate" shall mean any corporation or other business entity that
during the term of this Agreement controls, is controlled by or is under common
control with a Party, but only for so long as such entity controls, is
controlled by or is under common control with a Party. For this purpose, control
means the possession of the power to direct or cause the direction of the
management and the policies of an entity, whether through ownership (directly or
indirectly) of over fifty percent (50%) of the stock entitled to vote, or if not
meeting the preceding requirements, any company owned or controlled by or owning
or controlling a Party at the maximum control or ownership right permitted in a
country where such company exists. Notwithstanding the foregoing, the Government
of Japan shall not be considered an Affiliate of JT.

                                       1.
<PAGE>

     1.2 "Bylaws" shall mean the then-current bylaws of the Subsidiary. The
Bylaws effective as of the Effective Date are set forth on Exhibit A attached
hereto.

     1.3 "Certificate of Incorporation" shall mean the then-current certificate
of incorporation of the Subsidiary filed with the Secretary of State of the
State of Delaware. The Certificate of Incorporation effective as of the
Effective Date are set forth on Exhibit B attached hereto

     1.4 "Change in Control" means the date JT receives notice of occurrence of
any of the following events:

          (a) Tularik is merged, consolidated, or reorganized into or with
     another corporation or other legal person, and, as a result of such merger,
     consolidation or reorganization, less than [*] of the combined voting power
     of the then-outstanding securities entitled to vote generally in the
     election of directors ("Voting Stock") of the surviving and controlling
     corporation or person immediately after such transaction are held in the
     aggregate by the holders of Voting Stock of Tularik immediately prior to
     such transaction;

          (b) Tularik sells or otherwise transfers all or substantially all of
     its assets to another corporation or other legal person;

          (c) Any person (as the term "person" is used in Section 13(d)(3) or
     Section 14(d)(2) of the Exchange Act) becomes the beneficial owner (as the
     term "beneficial owner" is defined under Rule 13d-3 or any successor rule
     or regulation promulgated under the Exchange Act) of securities
     representing [*] or more of the combined voting power of the then-
     outstanding Voting Stock of Tularik;

          (d) Tularik files a report or proxy statement with the Securities and
     Exchange Commission pursuant to the Exchange Act disclosing in response to
     Item 1 of Form 8-K or Schedule 14A (or any successor schedule, form or
     report or item therein) that a change in control of Tularik has occurred;
     or

          (e) If, during any period of [*], individuals who at the beginning of
     any such period constitute the directors of Tularik cease for any reason to
     constitute at least [*] thereof; provided, however, that for purposes of
     this Section 1.4(e), each director who is first elected, or first nominated
     for election by Tularik's stockholders, by vote of at least [*] of the
     directors of Tularik (or a committee thereof) then still in office who were
     directors of Tularik at the beginning of any such period (or deemed to be a
     director of Tularik at the beginning of such period) will be deemed to have
     been a director of Tularik at the beginning of such period.

Notwithstanding the foregoing provisions of Section 1.4(c) or (d), unless
otherwise determined in a specific case by majority vote of the board of
directors of Tularik, a "Change in Control" shall not be deemed to have occurred
for purposes of Section 1.4(c) or (d) solely because either (i) (A) Tularik, (B)
an entity in which Tularik directly or indirectly beneficially owns [*] or more
of the outstanding Voting Stock (a "Tularik Subsidiary"), or (C) any Tularik-
sponsored employee stock ownership plan or any other employee benefit plan of
Tularik or any Tularik Subsidiary, either files, becomes obligated to file or
requires the filing of a report or a proxy

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                       2.
<PAGE>

statement under or in response to Schedule 13D, Schedule 14D-1, Item 1 to Form
8-K, or Schedule 14A (or any successor schedule, form or report or item therein)
under the Exchange Act disclosing beneficial ownership by it of shares of Voting
Stock, whether in excess of [*] or otherwise, or (ii) Tularik reports that a
change in control of Tularik has occurred by reason of such beneficial
ownership.

     1.5 "Change of Control Purchase Option" shall have the meaning given in
Section 2.2.

     1.6 "Change of Control Purchase Option Exercise Date" means the date that
JT notifies Tularik and the Subsidiary that JT is exercising the Change of
Control Purchase Option as provided in Sections 2.2 and 2.3.

     1.7 "Change of Control Purchase Option Exercise Price" means the amount set
forth below in the event the Change of Control Purchase Option Exercise Date
occurs within the relevant time period set forth below:

        ---------------------------------------------------------------------
         Exercise Price    Change of Control Purchase Option Exercise Date
        ---------------------------------------------------------------------
               [*]         Prior to or on [*]
        ---------------------------------------------------------------------
               [*]         After [*] and prior to or on [*]
        ---------------------------------------------------------------------
               [*]         After [*] and prior to or on [*]
        ---------------------------------------------------------------------
               [*]         After [*] and prior to or on [*]
        ---------------------------------------------------------------------
               [*]         After [*] and prior to or on [*]
        ---------------------------------------------------------------------
               [*]         After [*] and prior to or on [*]
        ---------------------------------------------------------------------
               [*]         After [*] and prior to or on [*]
        ---------------------------------------------------------------------
               [*]         After [*] and prior to or on [*]
        ---------------------------------------------------------------------
               [*]         After [*] and prior to or on [*]
        ---------------------------------------------------------------------
               [*]         After [*] and prior to or on [*]
        ---------------------------------------------------------------------

     1.8 "Collaboration Agreement" shall have the meaning given in the recitals.

     1.9 "Confidential Information" shall mean, subject to the limitations set
forth in Section 5.1 hereof, all information disclosed by each Party to another
Party under this Agreement; provided, however, that information [*] shall not be
considered Confidential Information.

     1.10 "Exercise Date" means the Change of Control Purchase Option Exercise
Date or the Volitional Purchase Option Exercise Date, as the case may be.

     1.11 "Exercise Price" means the Change of Control Purchase Option Exercise
Price or the Volitional Purchase Option Exercise Price, as the case may be.

     1.12 "Final Change of Control Purchase Option Exercise Price" means the
Change of Control Purchase Option Exercise Price minus the amount by which [*]
exceed the aggregate of [*].

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                       3.
<PAGE>

     1.13 "Final Exercise Price" means the Final Volitional Purchase Option
Exercise Price or the Final Change of Control Purchase Option Exercise Price, as
the case may be.

     1.14 "Final Volitional Purchase Option Exercise Price" means the Volitional
Purchase Option Exercise Price minus the amount by which [*] exceed the
aggregate of the [*].

     1.15 "Liabilities" means, with respect to the Subsidiary, (a) all
liabilities required to be reflected or reserved against in the Subsidiary's
financial statements under U.S. generally accepted accounting principles
consistently applied ("GAAP"), (b) any guaranty of any indebtedness of another
person and (c) any reimbursement or similar obligation with respect to any
letter of credit issued for the account of the Subsidiary or as to which the
Subsidiary is otherwise liable. Liabilities of the type described in (b) and (c)
shall be [*].

     1.16 "License Agreement" means the License Agreement of even date herewith
between Tularik and the Subsidiary.

     1.17 "Payment Agent" shall have the meaning given in Section 2.4(d).

     1.18 "Program" shall have the meaning given in the Collaboration Agreement.

     1.19  "Purchase Option" means either the Volitional Purchase Option or the
Change of Control Purchase Option, as the case may be.

     1.20 "Status Statement" a balance sheet prepared by the Subsidiary, audited
by independent public accountants and delivered to JT reflecting the
Subsidiary's business operations as of a given date, together with a statement
and brief description of all other liabilities [*] of the Subsidiary
constituting Total Liabilities as of such date not reflected on such balance
sheet.

     1.21  "Stock" shall have the meaning given in the recitals.

     1.22  "Subsidiary" shall have the meaning given in the recitals.

     1.23 "Third Party" shall mean any person or entity other than a Party
hereto or their Affiliates.

     1.24 "Total Liabilities" means (a) all Liabilities, plus (b) any other
debts, liabilities or obligations, absolute or contingent, matured or unmatured,
liquidated or unliquidated, accrued or unaccrued, known or unknown, whenever
arising, including all costs and expenses relating thereto, and including those
debts, liabilities and obligations arising under any law, rule or regulation, or
under any pending or threatened action, suit or proceeding, or any order or
consent decree of any governmental entity or any award of any arbitrator of any
kind, and those arising under any contract, commitment or undertaking.

     1.25 "Volitional Purchase Option" shall have the meaning given in Section
2.1.

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                       4.
<PAGE>

     1.26 "Volitional Purchase Option Exercise Date" means the date upon which
JT notifies Tularik and the Subsidiary that JT is exercising the Volitional
Purchase Option in accordance with Sections 2.1 and 2.3.

     1.27 "Volitional Purchase Option Exercise Price" means the amount set forth
below in the event the Volitional Purchase Option Exercise Date occurs within
the time periods set forth below:

                ------------------------------------------------------
                 Exercise Price           Volitional Purchase Option
                                               Exercise Date
                ------------------------------------------------------
                       [*]                          [*]
                ------------------------------------------------------
                       [*]                          [*]
                ------------------------------------------------------
                       [*]                          [*]
                ------------------------------------------------------

     1.28 "Voting Stock" shall have the meaning set forth in Section 1.4(a).

                                   ARTICLE 2

                                    Option

     2.1 Grant of Volitional Purchase Option. Tularik hereby grants to JT an
exclusive option for JT or an Affiliate of JT to purchase all issued and
outstanding shares of Stock for the Final Volitional Purchase Option Exercise
Price (the "Volitional Purchase Option"). The Volitional Purchase Option, if
exercised, must be exercised as to all, but not less than all, issued and
outstanding shares of Stock on or within thirty days after [*] (the date of such
exercise, as determined in accordance with Section 2.3, the "Volitional Purchase
Option Exercise Date") by written notice to Tularik and the Subsidiary as
provided in Section 2.3. JT or an Affiliate shall pay the Final Volitional
Purchase Option Exercise Price in cash upon the closing of such purchase as
provided in Section 2.4. The Volitional Purchase Option shall expire [*].

     2.2 Grant of Change of Control Purchase Option. Tularik hereby grants to JT
an exclusive option for JT or an Affiliate of JT to purchase all issued and
outstanding shares of Stock for the Final Change of Control Purchase Option
Exercise Price (the "Change of Control Purchase Option"). The Change of Control
Purchase Option, if exercised, must be exercised as to all, but not less than
all, issued and outstanding shares of Stock and may be exercised [*]; provided
that JT may exercise the Change of Control Purchase Option only if such date
[*]; provided, further, that the Change of Control Purchase Option shall expire
if not exercised [*] following the first Change of Control to occur. JT shall,
if it so elects, exercise the Change of Control Purchase Option by written
notice to Tularik and the Subsidiary as provided in Section 2.3. JT or an
Affiliate shall pay the Final Change of Control Purchase Option Exercise Price
in cash as provided in Section 2.4. The Change of Control Purchase Option shall
expire [*] following the date upon which a Change in Control occurs.

     2.3 Manner of Exercise. The Purchase Option shall be exercised, if at all,
within the time periods provided in Section 2.1 or 2.2, as applicable, by
written notice (the "Exercise Notice") from JT to Tularik and to the Subsidiary
stating that the Purchase Option is being

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                       5.
<PAGE>

exercised and setting forth (1) the Exercise Price; and (2) a closing date (the
"Closing Date") on which JT shall purchase all of the issued and outstanding
shares of Stock, subject to Section 2.4, which date shall not be more than [*]
after the Exercise Date (the "Closing"). The Exercise Date shall be deemed to
occur upon the date [*] in accordance with Section 2.1 or 2.2, as applicable.

     2.4  Closing.

          (a) Closing Date; Cooperation. Except as set forth below, the Closing
     Date shall be the date specified as such in the Exercise Notice provided
     pursuant to Section 2.3. The Closing Date may be extended by JT if, in the
     judgment of JT, an extension of the Closing Date is necessary to obtain any
     governmental or Third Party consent to the purchase of the Stock or to
     permit the expiration prior to the Closing Date of any statutory or
     regulatory waiting period. JT may extend the Closing Date for the reasons
     set forth in the preceding sentence by delivering written notice of such
     extension to the Subsidiary on or prior to the previously specified Closing
     Date. Tularik and the Subsidiary shall cooperate with JT to effect the
     Closing, including without limitation seeking any required Third Party or
     governmental consents, and filing any applications, notifications,
     registration statements or the like that may be necessary to effect the
     closing.

          (b) Certain Restrictions Following Exercise Date. From the Exercise
     Date until the Closing Date, Tularik shall cause the Subsidiary to conduct
     its operations in the ordinary and usual course consistent with past
     practice and to use its best efforts to preserve intact its business
     organization, to keep available the services of its officers and employees
     and to maintain satisfactory relations with suppliers, contractors,
     distributors, licensors, licensees, customers and others having business
     relationships with it. Without limiting the generality of the foregoing and
     except as provided in or contemplated by this Agreement, the Subsidiary
     will not take any of the following actions (or permit any such actions to
     be taken on its behalf), except with the prior written consent of Tularik
     and JT:

              (i)   declare or pay any dividends on or make any other
     distribution in respect of any of the capital stock of the Subsidiary;

              (ii)  incur any indebtedness for borrowed money or guarantee any
     such indebtedness or issue or sell any debt securities of the Subsidiary or
     guarantee any debt securities of others, other than in the ordinary course
     of business consistent with past practice;

              (iii) sell, lease, license or otherwise dispose of any of its
assets (including the Subsidiary's intellectual property rights), other than in
the ordinary course of business consistent with its past practices;

              (iv)  default in its obligations under any material contract,
     agreement, commitment or undertaking of any kind or enter into any material
     contract, agreement, purchase order or other commitment;

              (v)   enter into any other material transaction or agreement or
     arrangement, or incur any liabilities, not in the ordinary course of the
     Subsidiary's business consistent with past practice;

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                       6.
<PAGE>

              (vi)   split, combine or reclassify any of the capital stock of
     the Subsidiary or issue or authorize any other securities in respect of, in
     lieu of or in substitution for, shares of the capital stock of the
     Subsidiary or repurchase, redeem or otherwise acquire any shares of the
     capital stock of the Subsidiary, except from former employees, directors
     and consultants in accordance with agreements providing for the repurchase
     of shares in connection with any termination of service to the Subsidiary;

              (vii)  issue, deliver, encumber, sell or purchase any shares of
the capital stock of the Subsidiary or any securities convertible into, or
rights, warrants, options or other rights of any kind to acquire, any such
shares of capital stock (other than stock option grants in the ordinary course
of business consistent with past practice), other convertible securities or any
other ownership interest (other than the issuance of shares upon the exercise of
outstanding stock options and warrants);

              (viii) amend or otherwise change its Certificate of Incorporation
or Bylaws;

              (ix)   authorize any single capital expenditure (as treated under
GAAP) which is in excess of [*] dollars or capital expenditures which are, in
the aggregate, in excess of [*] dollars;

              (x)    increase the compensation payable or to become payable to
     its officers or employees, except for increases in accordance with past
     practices for salaries or wages of employees of the Subsidiary who are not
     officers of the Subsidiary, or grant any severance or termination pay to
     (other than pursuant to existing agreements), or enter into any employment
     or severance agreement with, any director, officer or other employee of the
     Subsidiary, or establish, adopt, enter into or amend any collective
     bargaining, bonus, profit sharing, thrift, compensation, stock option,
     restricted stock, pension, retirement, deferred compensation, employment,
     termination, severance or other plan, agreement, trust, fund, policy or
     arrangement for the benefit of any director, officer or employee, other
     than in the ordinary course of business consistent with past practices;

              (xi)   take any action, other than reasonable and usual actions in
     the ordinary course of business and consistent with past practice, with
     respect to accounting policies or procedures (including, without
     limitation, procedures with respect to cash management, the payment of
     accounts payable and the collection of accounts receivable);

              (xii)  make any tax election or settle or compromise any material
federal, state, local or foreign income tax liability, or execute or file with
the IRS or any other taxing authority any agreement or other document extending,
or having the effect of extending, the period of assessment or collection of any
taxes;

              (xiii) pay, discharge, satisfy, settle or compromise any suit,
claim, liability or obligation (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge or satisfaction, in
the ordinary course of business and consistent with past practice, of
liabilities reflected or reserved against in the Status Statement or
subsequently incurred in the ordinary course of business and consistent with
past practice; or

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                       7.
<PAGE>

               (xiv)  take any action that would result in any of the
representations and warranties of the Subsidiary set forth in this Agreement
becoming untrue in any material respect or in any of the conditions to the
transaction not being satisfied.

          (c)  Determination of Final Exercise Price. Not later than [*]
following the Exercise Date, the Subsidiary shall deliver a final Status
Statement to JT prepared as of the Exercise Date. Following receipt of such
Status Statement and completion of any other investigation as is reasonably
necessary or appropriate in connection with JT's exercise of the Purchase
Option, and prior to the Closing Date, JT and Tularik shall determine the Final
Exercise Price by [*], and shall notify Tularik and the Subsidiary of such
determination. JT may rescind the Exercise Notice prior to the Closing Date
should the review of the Status Statement or the results of any investigation
performed by JT pursuant to this Section 2.4(c) reveal a materially adverse
change in the operations or financial position of the Subsidiary; [*].

          (d)  Payment of Final Exercise Price. On or before the Closing Date,
JT shall deposit the full amount of the Final Exercise Price with a bank or
banks or similar entit(y)ies (the "Payment Agent(s)") designated by JT to pay,
on JT's behalf, the Final Exercise Price. Funds deposited with the Payment
Agent(s) shall be delivered in trust for the benefit of Tularik, and JT shall
provide the Payment Agent(s) with irrevocable instructions to pay, on or
promptly after the Closing Date, the Final Exercise Price for the shares of
Stock to Tularik. Payment for shares of Stock shall be sent by wire transfer to
the account designated by Tularik.

     2.5  Transfer of Title. Tularik and the Subsidiary shall each take all
actions reasonably requested by JT to assist in effectuating the transfer of
title to the shares of Stock following exercise of the Purchase Option in
accordance with this Article 2.

     2.6  Termination of Purchase Option. If [*] the Purchase Option shall
terminate.

     2.7  No Assignment. JT may not assign or otherwise transfer the Purchase
Option, or any other rights of JT under this Article 2, to any Third Party.

     2.7  Guarantee. If JT or its Affiliate exercises the Purchase Option, JT
shall, and hereby does, guarantee the performance of the Subsidiary under the
License Agreement after the Closing Date.

                                   ARTICLE 3

                                    Voting

     3.1  Stock. Tularik agrees to hold all shares of Stock registered in its
name or beneficially owned by it subject to, and to vote the Stock in accordance
with, the provisions of this Agreement.

     3.2  Size of Board of Directors. Tularik hereby covenants and agrees that
the authorized size of the Board of Directors of Tularik shall be and remain
[*].

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                       8.
<PAGE>

     3.3  Election of Directors.  On all matters relating to the election of
directors of the Subsidiary, Tularik agrees to vote all Stock held by it (or to
consent pursuant to an action by written consent of the holders of Stock) so as
to elect members of the Subsidiary's Board of Directors as follows.  At each
election of directors in which the holders of Stock are entitled to elect
directors of the Subsidiary, Tularik shall vote all of its shares of Stock so as
to [*].  Any vote taken to [*] shall also be subject to the provisions of this
Section 3.3.  JT shall be responsible for [*] to the Subsidiary.

     3.4  Appointment of Officers. Tularik agrees to cause its representatives
on Subsidiary's Board of Directors to appoint as president and chief executive
officer of the Subsidiary a representative of JT, which individual shall
initially be [*]. In addition, Tularik agrees to cause the Subsidiary's Board of
Directors to [*]. Any vote taken by the Subsidiary's Board of Directors to [*]
shall also be subject to the provisions of this Section 3.4. [*]

     3.5  Duration of Obligations. The obligation to elect a director nominated
by JT pursuant to Section 3.3 and the obligation to appoint officers of the
Subsidiary pursuant to Section 3.4 shall continue for so long as the [*].

     3.6  Resignations. If JT terminates the Program in accordance with Section
3.7 of the Collaboration Agreement [*], JT shall cause the director of the
Subsidiary elected pursuant to Section 3.3 and the officers of the Subsidiary
that are representatives of JT appointed pursuant to Section 3.4 shall tender
their respective resignations immediately. Tularik may accept such resignations
in its sole discretion.

     3.7  Legend.

          (a)  Concurrently with the execution of this Agreement, there shall be
imprinted or otherwise placed, on certificates representing the Stock the
following restrictive legend (the "Legend"), as well as any other restrictive
legends required to be placed thereon pursuant to federal or state securities
laws:

               "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
          SUBJECT TO THE TERMS AND CONDITIONS OF AN OPTION
          AGREEMENT THAT PLACES CERTAIN RESTRICTIONS ON THE
          VOTING OF THE SHARES REPRESENTED HEREBY. ANY PERSON
          ACCEPTING ANY INTEREST IN SUCH SHARES SHALL BE DEEMED
          TO AGREE TO AND SHALL BECOME BOUND BY ALL THE
          PROVISIONS OF SUCH AGREEMENT. A COPY OF SUCH OPTION
          AGREEMENT WILL BE FURNISHED TO THE RECORD HOLDER OF
          THIS CERTIFICATE WITHOUT CHARGE UPON WRITTEN REQUEST TO
          THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS."

          (b)  Tularik and the Subsidiary agree that, during the term of this
Agreement, neither of them will remove, nor permit to be removed (upon
registration of transfer, reissuance of otherwise), the Legend from any such
certificate and will place or cause to be placed the

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                       9.
<PAGE>

Legend on any new certificate issued to represent shares of Stock theretofore
represented by a certificate carrying the Legend.

     3.8  Successors. The provisions of this Agreement shall be binding upon the
successors in interest to any of the shares of Stock. Tularik shall not permit
the transfer of any of the shares of Stock on its books or issue a new
certificate representing any of the shares of Stock unless and until the person
to whom such security is to be transferred shall have executed a written
agreement, substantially in the form of this Agreement, pursuant to which such
person becomes a Party to this Agreement and agrees to be bound by all the
provisions hereof.

     3.9  Subsidiary Actions Prior to the Exercise Date. Prior to the Exercise
Date, Tularik shall cause the Subsidiary to not take any of the following
actions, except with the unanimous consent of the Board of Directors of the
Subsidiary:

               (i) [*]

                                   ARTICLE 4

                                  Termination

     4.1  This Agreement shall continue in full force and effect from the
Effective Date through the earliest of the following dates, on which date it
shall terminate in its entirety:

          (a)  the Program is terminated by JT in accordance with Section 3.7 of
the Collaboration Agreement [*];

          (b)  the Closing Date (including any extension thereof pursuant to
Section 2.4);

          (c)  [*] from the Effective Date, if the Purchase Option is not
exercised prior thereto;

          (d)  the date as of which the Parties hereto terminate this Agreement
by written consent; or

          (e)  [*] following the date upon which a Change in Control occurs, if
the Purchase Option is not exercised prior thereto.

                                   ARTICLE 5

                        Confidentiality and Publication

     5.1  Confidential Information; Exceptions. Except to the extent expressly
authorized by this Agreement or otherwise agreed in writing by the parties, each
Party agrees that, for the term of this Agreement and for [*] thereafter, it
shall keep confidential and shall not publish or otherwise disclose and shall
not use for any purpose other than as provided for in this Agreement any
Confidential Information furnished to it by the other party pursuant to this

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                      10.
<PAGE>

Agreement, except to the extent that the receiving Party can demonstrate by
competent proof that such Confidential Information:

          (a)  was already known to the receiving Party, other than under an
obligation of confidentiality, at the time of disclosure by the other Party;

          (b)  was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the receiving Party;

          (c)  became generally available to the public or otherwise part of the
public domain after its disclosure and other than through any act or omission of
the receiving Party in breach of this Agreement;

          (d)  was disclosed to the receiving Party, other than under an
obligation of confidentiality to a Third Party, by a Third Party who had no
obligation to the disclosing Party not to disclose such information to others;
or

          (e)  was independently discovered or developed by the receiving Party
without the use of Confidential Information belonging to the disclosing Party.

     5.2  Financial Terms; Permitted Disclosure. The Parties agree that the
material terms of the Agreement will be considered Confidential Information of
both Parties. Notwithstanding the foregoing, either Party may disclose such
terms to bona fide potential investors or acquirors or to investment banks, if
necessary for purposes of this Agreement and/or the Collaboration Agreement, and
may disclose other Confidential Information as required by law, regulation or
court order. In connection with any permitted disclosure of Confidential
Information pursuant to this Section 5.2, each Party agrees to use all
reasonable efforts to secure confidential treatment of, or a protective order
for, any such information. No Party shall make any public announcement regarding
the existence or terms of this Agreement, or the exercise of any rights under
this Agreement, without the prior written consent of the other Party, except
that a Party may make disclosures to governmental authorities to the extent
necessary to secure regulatory approvals.

                                   ARTICLE 6

                                Indemnification

     6.1  Indemnification by JT. JT hereby agrees to indemnify, hold harmless
and defend Tularik, its Affiliates, employees, agents and independent
contractors ("Tularik Indemnified Parties") against any and all expenses, costs
of defense (including without limitation attorneys' fees, witness fees, damages,
judgments, fines and amounts paid in settlement) and any amounts Tularik
Indemnified Parties become legally obligated to pay because of any Third Party
claim or claims against it to the extent that such claim or claims result from
(i) the negligence, recklessness or willful misconduct of JT, its Affiliates,
employees, agents, or independent contractors, or (ii) JT's breach or alleged
breach of any representation or warranty or any other provision of this
Agreement, except in each case to the extent such claims arise from the
negligence, recklessness or willful misconduct of Tularik Indemnified Parties,
or from any

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                      11.
<PAGE>

breach of any representation or warranty in this Agreement or of any other
provision of this Agreement by Tularik; provided that Tularik provides JT with
prompt notice of any such claim and the exclusive ability to defend (with the
reasonable cooperation of Tularik Indemnified Parties) and settle any such
claim.

     6.2  Indemnification by Tularik. Tularik hereby agrees to indemnify, hold
harmless and defend JT, its Affiliates, employees, agents and independent
contractors ("JT Indemnified Parties") against any and all expenses, costs of
defense (including without limitation attorneys' fees, witness fees, damages,
judgments, fines and amounts paid in settlement) and any amounts JT Indemnified
Parties become legally obligated to pay because of any Third Party claim or
claims against it to the extent that such claim or claims arise out of (i) the
negligence, recklessness or willful misconduct of Tularik, its employees or
agents, or (ii) Tularik' breach or alleged breach of any representation or
warranty or of any other provision of this Agreement by Tularik, except in each
case to the extent such claims arise from the negligence, recklessness or
willful misconduct of JT Indemnified Parties, or any breach of any
representation or warranty or of any other provision of this Agreement by JT;
provided that JT provides Tularik with prompt notice of any such claim and the
exclusive ability to defend (with the reasonable cooperation of JT Indemnified
Parties) or settle any such claim.

     6.3  Mechanics. In the event that the Parties cannot agree as to the
application of Sections 6.1 and 6.2 above to any particular loss or claim, the
Parties may conduct separate defenses of such claim. Each Party further reserves
the right to claim indemnity from the other in accordance with Sections 6.1 and
6.2 above upon resolution of the underlying claim, notwithstanding the
provisions of Sections 6.1 and 6.2 above requiring the indemnified Party to
tender to the indemnifying Party the exclusive ability to defend such claim or
suit.

     6.4  [*] Indemnification. In addition to the indemnification set forth in
the Section 6.2, [*] Indemnified Parties for any [*] that the Subsidiary becomes
legally obligated to pay on or after the Closing Date resulting from, arising
out of or in connection with [*] the Closing Date by, [*] except to the extent
[*].

                                   ARTICLE 7

                                 Miscellaneous

     7.1  Ownership. Tularik represents and warrants to JT that (a) Tularik now
owns the Stock, free and clear of liens or encumbrances, and has not, prior to
or on the Effective Date, executed or delivered any proxy or entered into any
other voting agreement or similar arrangement with respect thereto, other than
one which has expired or terminated prior to the Effective Date, and (b) Tularik
has full power and authority to execute, deliver and perform this Agreement,
which has been duly executed and delivered by, and evidences the valid and
binding obligation of, Tularik, enforceable in accordance with its terms. JT
represents and warrants to Tularik that it has full power and authority to
execute, deliver and perform this Agreement, which has been duly executed and
delivered by, and evidences the valid and binding obligation of, JT, enforceable
in accordance with its terms.

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                      12.
<PAGE>

     7.2  Additional Shares. In the event that subsequent to the Effective Date
any shares or other securities are issued on, or in exchange for, any of the
Stock by reason of any stock dividend, stock split, combination of shares,
reclassification, recapitalization or similar event, such shares or securities
shall be deemed to be Stock, as the case may be, for purposes of this Agreement.

     7.3  [*]. Tularik shall not, for a period of [*] from the Exercise Date, if
any, without obtaining the prior written consent of JT, [*] the Subsidiary as of
the Exercise Date.

     7.4  Additional Covenants. If JT exercises the Purchase Option, it shall,
promptly after the Closing Date, (a) grant to the Subsidiary all necessary
rights and licenses to enable the Subsidiary to perform its obligations under
the License Agreement; and (b) not take any actions in contravention of or in
conflict with the intent of the License Agreement or the Collaboration Agreement
following the exercise of the Purchase Option. In the event that any Affiliate
of JT exercises the Purchase Option, JT shall, promptly after the Closing Date,
(a) grant to the Affiliate all necessary rights and licenses to enable the
Subsidiary to continue to perform its obligations under the Collaboration
Agreement and the License Agreement; (b) cause such Affiliate to grant to the
Subsidiary all necessary rights and licenses to allow Tularik to exercise its
rights under the Collaboration Agreement and the License Agreement, and (c)
cause such Affiliate not to take any actions in contravention of or in conflict
with the intent of the License Agreement or the Collaboration Agreement
following the exercise of the Purchase Option. Tularik shall cause the
Subsidiary's financial statements to be audited by independent public
accountants on an annual basis. A copy of such audited financial statements
shall be provided to JT.

     7.5  Services and Facilities Agreement. If JT exercises the Purchase
Option, the Parties hereby covenant and agree to negotiate a services and
facilities agreement that provides JT with access to the Tularik infrastructure
utilized by the Subsidiary immediately prior to the exercise of such Purchase
Option for a period not to exceed [*]. Such infrastructure shall include access
to space in the Tularik facility that is the same as, or substantially
comparable to, that occupied by the Subsidiary prior to the Closing Date. Such
services and facilities shall be provided [*] following the date upon which JT
exercises such Purchase Option, and thereafter JT shall [*]

     7.6  Specific Performance. The Parties hereto hereby declare that it is
impossible to measure in money the damages that will accrue to a Party hereto or
to their heirs, personal representatives, or assigns by reason of a failure to
perform any of the obligations under this Agreement and agree that the terms of
this Agreement shall be specifically enforceable. If any Party hereto or his
heirs, personal representatives, or assigns institutes any action or proceeding
to specifically enforce the provisions hereof, any person against whom such
action or proceeding is brought hereby waives the claim or defense therein that
such Party or such personal representative has an adequate remedy at law, and
such person shall not offer in any such action or proceeding the claim or
defense that such remedy at law exists.

     7.7  Severability. If any part of this Agreement is declared invalid by any
legal authority having jurisdiction over a Party, then such declaration shall
not affect the remainder of the Agreement, which shall continue in full force
and effect. The Parties shall revise the

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                      13.
<PAGE>

invalidated part in a manner that will render such provision valid and closely
approximate the Parties' original intent.

     7.8  Waiver. Except as specifically provided for herein, the waiver from
time to time by either of the Parties of any of their rights or their failure to
exercise any remedy shall not operate or be construed as a continuing waiver of
same or of any other of such Party's rights or remedies provided in this
Agreement.

     7.9  Consents Not Unreasonably Withheld. Whenever provision is made in this
Agreement for a Party to secure the consent or approval of the other, that
consent or approval shall not unreasonably be withheld, and whenever in this
Agreement provision is made for one Party to object to or disapprove a matter,
such objection or disapproval shall not unreasonably be exercised.

     7.10 Ambiguities. Ambiguities, if any, in this Agreement shall not be
construed against any Party, irrespective of which Party may be deemed to have
authored the ambiguous provision.

     7.11 Further Action. Each Party agrees to execute, acknowledge and deliver
such further instruments, and to do all such other acts, as may be necessary or
appropriate in order to carry out the purposes and intent of this Agreement.

     7.12 Notices. All notices hereunder shall be in writing and shall be deemed
given if delivered personally or by facsimile transmission (receipt verified),
telexed, mailed by registered or certified mail (return receipt requested),
postage prepaid, or sent by express courier service, to the Parties at the
following addresses (or at such other address for a Party as shall be specified
by like notice; provided, that notices of a change of address shall be effective
only upon receipt thereof).

          (A)  If to Japan Tobacco, Inc., addressed to:

                       Japan Tobacco, Inc.
                       Pharmaceutical Division
                       JT Building, 2-1 Toranomon, 2-chome
                       Minato-ku, Tokyo 105, Japan
                       Attention: Vice President Business Development
                       Telephone: 011 81 3 3582 3111
                       Facsimile: 011 81 3 5572 1449

               With a copy to:
                       Neal N. Beaton, Esq.
                       Gilbert, Segall and Young LLP
                       430 Park Avenue
                       New York, NY 10022
                       Telephone: (212) 644-4010
                       Facsimile: (212) 644-4051

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                      14.
<PAGE>

          (b)  If to Tularik Inc. or Tularik Pharmaceutical Company, addressed
to:

                    Tularik Inc.
                    Two Corporate Drive
                    South San Francisco, CA 94080
                    Attn: Secretary
                    Telephone: (650) 825-7300
                    Facsimile: (650) 825-7392

               With a copy to:

                    Cooley Godward LLP
                    Five Palo Alto Square
                    3000 El Camino Real
                    Palo Alto, CA 94306-2155
                    Attention: Judith A. Hasko, Esq.
                    Telephone: (650) 843-5000
                    Facsimile: (650) 857-0663

     7.13  Assignment. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their permitted successors and assigns;
provided, however, that no Party shall assign any of its rights and obligations
hereunder, except that JT may assign its rights hereunder to its Affiliate.

     7.14  Force Majeure. Any delays in performance by a Party under this
Agreement shall not be considered a breach of this Agreement if and to the
extent caused by occurrences beyond the reasonable control of the Party
affected, including but not limited to acts of God, embargoes, governmental
restrictions, strikes or other concerted acts of workers, fire, earthquake,
flood, explosion, riots, wars, civil disorder, rebellion or sabotage. The Party
suffering such occurrence shall immediately notify the other Party as soon as
practicable and any time for performance hereunder shall be extended by the
actual time of delay caused by the occurrence, provided that the Party affected
by such event uses reasonable efforts to overcome such delay.

     7.15  Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
shall constitute one and the same agreement.

     7.16  Headings. The section and paragraph headings contained herein are for
the purposes of convenience only and are not intended to define or limit the
contents of said sections or paragraphs.

     7.17  Governing Law and Language. This Agreement shall be governed by
California law, notwithstanding its conflicts of laws principles. The official
text of this Agreement and any Appendices hereto, or any notice given or
accounts or statements required by this Agreement shall be in English. In the
event of any dispute concerning the construction or

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                      15.
<PAGE>

meaning of this Agreement, reference shall be made only to this Agreement as
written in English and not to any other translation into any other language.

     7.18  Arbitration. In the event of any controversy or claim arising out of,
relating to or in connection with any provision of this agreement, the Parties
shall try to settle their differences amicably between themselves. Any
unresolved disputes arising between the Parties arising out of, relating to, in
connection with or in any way connected with this Agreement or any term or
condition hereof, or performance by a Party of its obligations hereunder,
whether before or after termination or expiration of this Agreement, shall be
finally resolved by binding arbitration, except as otherwise provided in this
Agreement and except that any disputes regarding the validity, scope or
enforceability of patents shall be submitted to a court of competent
jurisdiction. The arbitration shall be held in San Francisco, California
according to the rules of the American Arbitration Association ("AAA"). The
arbitration will be conducted by a panel of three (3) arbitrators with
significant experience in the pharmaceutical industry appointed in accordance
with applicable AAA rules. Any arbitration herewith shall be conducted in the
English language to the maximum extent possible. Each Party shall bear its own
costs and attorney's and witness' fees. Judgment on the award so rendered shall
be final and may be entered in any court having jurisdiction thereof.

     7.19  Entire Agreement; Amendment. This Agreement, together with the
Collaboration Agreement and the License Agreement, and all Appendices hereto and
thereto, sets forth the principal terms of the arrangement between the Parties
hereto and, except as otherwise set forth herein, supersedes and terminates all
prior agreements, including the preliminary agreement, and understandings
between the Parties. No subsequent alteration, amendment, change or addition to
this Agreement shall be binding upon the Parties unless reduced to writing and
signed by an authorized officer of each Party.

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                      16.
<PAGE>

     In Witness Whereof, the Parties hereto have executed this Option Agreement
as of the Effective Date.

Tularik Inc.                            Japan Tobacco Inc.

By: /s/ David Goeddel                   By: /s/ Takashi Kato
    ----------------------------            ------------------------------
    Chief Executive Officer             Name:   Takashi Kato
                                              ----------------------------
                                        Title:  Managing Director
                                               ---------------------------
                                               Pharmaceutical Division

Tularik Pharmaceutical Company

By: /s/ William J. Rieflin
    ----------------------------
Name: Wm. J. Rieflin
      --------------------------
Title:   Secretary
      --------------------------

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                      17.
<PAGE>

                                  Appendix A

                                    Bylaws

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                      18.
<PAGE>

                                  Appendix B
                         CERTIFICATE OF INCORPORATION

                                      OF

                        TULARIK PHARMACEUTICAL COMPANY

     The undersigned, a natural person (the "Sole Incorporator"), for the
purpose of organizing a corporation to conduct the business and promote the
purposes hereinafter stated, under the provisions and subject to the
requirements of the laws of the State of Delaware hereby certifies that:

                                      1.

     The name of this corporation is Tularik Pharmaceutical Company (the
"Corporation").

                                      2.

     The address of the registered office of the Corporation in the State of
Delaware is 1013 Centre Road, City of Wilmington, County of New Castle, and the
name of the registered agent of the Corporation in the State of Delaware at such
address is Corporation Service Company.

                                      3.

     The purpose of this Corporation is to engage in any lawful act or activity
for which a corporation may be organized under the General Corporation Law of
the State of Delaware.

                                      4.

     This Corporation is authorized to issue only one class of stock, to be
designated Common Stock.  The total number of shares of Common Stock presently
authorized is One Hundred Shares (100 shares), each having a par value of one-
tenth of one cent ($0.001).

                                      5.

     5.1 The management of the business and the conduct of the affairs of the
Corporation shall be vested in its Board of Directors. The number of directors
that shall constitute the whole Board of Directors shall be fixed by the Board
of Directors in the manner provided in the Bylaws.

     5.2 Subject to paragraph (h) of Section 43 of the Bylaws, the Bylaws may be
altered or amended or new Bylaws adopted by the stockholders entitled to vote.
The Board of Directors shall also have the power to adopt, amend or repeal
Bylaws.

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                      19.
<PAGE>

                                      6.

     6.1 The liability of the directors for monetary damages shall be eliminated
to the fullest extent under applicable law.

     6.2 Any repeal or modification of this Article VI shall be prospective and
shall not affect the rights under this Article VI in effect at the time of the
alleged occurrence of any act or omission to act giving rise to liability or
indemnification.

                                      7.

     The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon the stockholders
herein are granted subject to this reservation.

                                      8.

     The name and the mailing address of the Sole Incorporator is as follows:

          William J. Rieflin
          Two Corporate Drive
          South San Francisco, CA 94080

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                      20.
<PAGE>

     In Witness Whereof, this Certificate has been subscribed this 12/th/ day of
May, 2000 by the undersigned who affirms that the statements made herein are
true and correct.

                              ________________________________
                              William J. Rieflin
                              Sole Incorporator

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                      21.<PAGE>

                                                                   Exhibit 10.25

                               WEBCASTS.COM, INC.

                             1999 STOCK OPTION PLAN

                                    ARTICLE I

                                     PURPOSE
                                     -------

         1. Purposes of the Plan. The purposes of Stock Option Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees, Leased Employees,
Directors and Consultants and to promote the success of the Company's business.
Options granted under this Plan may be Incentive Stock Options or Non-Qualified
Stock Options, as determined by the Committee at the time of grant.

                                   ARTICLE II

                                   DEFINITIONS
                                   -----------

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

         (a) "Applicable Laws" means the requirements relating to the
administration of stock option plans under state corporate laws, Federal and
state securities laws, the Code, any stock exchange or quotation system on which
the Common Stock is listed or quoted and the applicable laws of any other
country or jurisdiction where Options are granted under this Plan.

         (b) "Cause" shall mean, with respect to a Participant's Termination of
Service, unless otherwise determined by the Committee at grant, or, if no rights
of the Participant are reduced, thereafter, termination due to a Participant's
dishonesty, fraud, insubordination, willful misconduct, refusal to perform
services (for any reason other than illness or incapacity) or materially
unsatisfactory performance of his or her duties for the Company as determined by
the Committee in its sole discretion. With respect to a Director's Termination
of Service, Cause shall mean an act or failure to act that constitutes "cause"
for removal of a director under applicable state corporate law.

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

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

         (e) "Committee" means the Board or any of its Committees as shall be
administering this Plan in accordance with Section 4 hereof.

         (f) "Common Stock" means the Common Stock, $.0001 par value, of the
Company.

         (g) "Company" means WEBCASTS.COM, INC., an Oklahoma corporation.
<PAGE>

         (h) "Consultant" means any person who is engaged by the Company or any
Subsidiary to render consulting or advisory services to such entity.

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

         (j) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.

         (k) "Employee" means any person, including Officers and Directors,
employed by the Company or any Subsidiary of the Company. A person shall not
cease to be an Employee in the case of (i) any leave of absence approved by the
Company or (ii) transfers between locations of the Company or between the
Company, its Parent, any Subsidiary, or any successor. For purposes of Incentive
Stock Options, no such leave may exceed ninety days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract. If reemployment
upon expiration of a leave of absence approved by the Company is not so
guaranteed, on the 181st day of such leave any Incentive Stock Option held by
the Participant shall cease to be treated as an Incentive Stock Option and shall
be treated for tax purposes as a Non-Qualified Stock Option. Neither service as
a Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.

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

         (m) "Good Reason" shall mean, with respect to a Participant's
Termination of Service unless otherwise determined by the Committee at grant,
or, if no rights of the Participant are reduced, thereafter, a voluntary
termination due to "good reason," as the Committee, in its sole discretion,
decides to treat as a Good Reason termination.

         (n) "Leased Employee" means an employee of a company other than the
Company or a Subsidiary, whom performs services for the benefit of the Company
or a Subsidiary and otherwise does not qualify as an Employee, Director or
Consultant.

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

                  (i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Committee deems reliable;

                  (ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and

                                       2
<PAGE>

low asked prices for the Common Stock on the last market trading day prior to
the day of determination; or

                  (iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Committee.

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

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

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

         (s) "Option" means a stock option granted pursuant to this Plan.

         (t) "Option Agreement" means a written or electronic agreement between
the Company and a Participant evidencing the terms and conditions of an
individual Option grant. The Option Agreement is subject to the terms and
conditions of this Plan.

         (u) "Option Exchange Program" means a program whereby outstanding
Options are exchanged for Options with a lower exercise price.

         (v) "Optioned Stock" means the Common Stock subject to an Option.

         (w) "Participant" means the holder of an outstanding Option granted
under this Plan.

         (x) "Plan" means this 1999 Stock Option Plan.

         (y) "Section 16(b)" means Section 16(b) of the Securities Exchange Act
of 1934, as amended.

         (z) "Service Provider" means an Employee, Consultant or Leased
Employee.

         (aa) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 below.

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

         (cc) "Termination of Service" shall mean:

                                       3
<PAGE>

                  (i) with respect to a Consultant, that the Consultant is no
longer acting as a Consultant to the Company or a Subsidiary.

                  (ii) with respect to a non-employee Director, that the
non-employee Director has ceased to be a Director of the
Company.

                  (iii) with respect to an Employee, except as provided in the
next sentence, (i) a termination of service (for reasons other than a military
or personal leave of absence granted by the Company) of a Participant from the
Company or a Subsidiary; or (ii) when an entity which is employing a Participant
ceases to be a Subsidiary, unless the Participant thereupon becomes employed by
the Company or another Subsidiary.

The Committee may otherwise define Termination of Service in the Option grant
or, if no rights of the Participant are reduced, may otherwise define
Termination of Service thereafter, including, but not limited to, defining
Termination of Employment with regard to entities controlling, under common
control with or controlled by the Company rather than just the Company and its
Subsidiaries and/or entities that provide substantial services to the Company or
its Subsidiaries to which the Participant has transferred directly from the
Company or its Subsidiaries at the request of the Company.

                                   ARTICLE III

                                SHARES UNDER PLAN
                                -----------------

         3. Stock Subject to this Plan. Subject to the provisions of Section 12
of this Plan, the maximum aggregate number of Shares which may be issuable under
this Plan is 2,200,000 Shares. The Shares may be authorized but unissued, or
reacquired Common Stock.

         If an Option expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under this Plan (unless the Plan has terminated). However, Shares
that have actually been issued under the Plan upon exercise of an Option shall
not be returned to the Plan and shall not become available for future
distribution under the Plan.

                                   ARTICLE IV

                                 ADMINISTRATION
                                 --------------

         4. Administration of the Plan.

         (a) Committee. The Plan shall be administered by the Board or a
             ---------
Committee appointed by the Board, which Committee shall be constituted to comply
with Applicable Laws.

                                       4
<PAGE>

         (b) Powers of the Committee. Subject to the provisions of the Plan and,
             -----------------------
in the case of a Committee, the specific duties delegated by the Board to such
Committee, and subject to the approval of any relevant authorities, the
Committee shall have the authority in its discretion:

                  (i) to determine the Fair Market Value;

                  (ii) to select the Service Providers and Directors to whom
Options may from time to time be granted hereunder;

                  (iii) to determine the number of Shares to be covered by each
such award granted hereunder;

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

                  (v) to determine the terms and conditions, of any Option
granted hereunder. Such terms and conditions include, but are not limited to,
the exercise price, the time or times when Options may be exercised (which may
be based on performance criteria), any forfeiture provisions, any vesting
acceleration or waiver of forfeiture provisions, and any restriction or
limitation regarding any Option or the Common Stock relating thereto, based in
each case on such factors as the Committee, in its sole discretion, shall
determine;

                  (vi) to determine whether and under what circumstances an
Option may be settled in cash under subsection 9(e) instead of Common Stock;

                  (vii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option has declined since the date the Option was granted;

                  (viii) to initiate an Option Exchange Program;

                  (ix) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;

                  (x) to allow Participants to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option that number of Shares having a Fair Market
Value equal to the amount required to be withheld. The Fair Market Value of the
Shares to be withheld shall be determined on the date that the amount of tax to
be withheld is to be determined. All elections by Participants to have Shares
withheld for this purpose shall be made in such form and under such conditions
as the Committee may deem necessary or advisable; and

                  (xi) To establish other terms and conditions of Options, which
shall not be inconsistent with any of the foregoing terms of the Plan, as the
Committee shall deem

                                       5
<PAGE>

appropriate including, without limitation, permitting "reloads" such that the
same number of Options are granted as the number of Options exercised, shares
used to pay for the exercise price of Options or shares used to pay withholding
taxes ("Reloads"); with respect to Reloads, the exercise price of the new Option
shall be the Fair Market Value on the date of the "reload" and the term of the
Option shall be the same as the remaining term of the Options that are
exercised, if applicable, or such other exercise price and term as determined by
the Committee; and

                  (xi) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan.

         (c) Effect of Committee's Decision. All decisions, determinations and
             ------------------------------
interpretations of the Committee shall be final and binding on all Participants.

                                    ARTICLE V

                                   ELIGIBILITY
                                   -----------

         5. Eligibility.

         (a) Non-Qualified Stock Options may be granted to Service Providers
(whether or not Employees) and non-employee Directors. Incentive Stock Options
may be granted only to Employees.

         (b) Each Option shall be designated in the Option Agreement as either
an Incentive Stock Option or a Non-Qualified Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Participant during any calendar year
(under all plans of the Company and any Subsidiary) exceeds $100,000, such
Options shall be treated as Non-Qualified Stock Options. For purposes of this
Section 5(b), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.

         (c) Neither the Plan nor any Option shall confer upon any Participant
any right with respect to continuing the Participant's relationship as a Service
Provider a Director of the Company, nor shall it interfere in any way with his
or her right or the Company's right to terminate such relationship at any time,
with or without cause.

                                   ARTICLE VI

                                      TERM
                                      ----

         6. Term of Plan. The Plan shall become effective upon its adoption by
the Board. It shall continue in effect for a term of ten (10) years unless
sooner terminated under Section 14 hereof.

                                       6
<PAGE>

                                   ARTICLE VII

                                 TERM OF OPTIONS
                                 ---------------

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

                                  ARTICLE VIII

                              OPTION EXERCISE PRICE
                              ---------------------

         8. Option Exercise Price and Consideration.

         (a) Exercise Price. The per share exercise price for the Shares to be
             --------------
issued upon exercise of an Option shall be such price as is determined by the
Committee, but shall be subject to the following:

                  (i) In the case of an Incentive Stock Option

                           (A) granted to an Employee who, at the time of grant
of such Option, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Subsidiary, the
exercise price shall be no less than 110% of the Fair Market Value per Share on
the date of grant;

                           (B) granted to any other Employee,  the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.

                  (ii) In the case of a Non-Qualified Stock Option granted to
any Service Provider, the per Share exercise price shall be no less than 85% of
the Fair Market Value per Share on the date of grant, and in the case of a
Director, shall be no less than 100% of the Fair Market Value per Share on the
date of grant.

                  (iii) Notwithstanding the foregoing, Options may be granted
with a per Share exercise price other than as required above pursuant to a
merger or other corporate transaction.

         (b) Consideration. The consideration to be paid for the Shares to be
             -------------
issued upon exercise of an Option, including the method of payment, shall be
determined by the Committee (and, in

                                       7
<PAGE>

the case of an Incentive Stock Option, shall be determined at the time of
grant). Such consideration may consist of (1) cash, (2) check, (3) promissory
note, (4) other Shares which (x) in the case of Shares acquired upon exercise of
an Option, have been owned by the Participant for more than six months on the
date of surrender, and (y) have a Fair Market Value on the date of surrender
equal to the aggregate exercise price of the Shares as to which such Option
shall be exercised, (5) consideration received by the Company under a cashless
exercise program implemented by the Committee in connection with this Plan, or
(6) any combination of the foregoing methods of payment. In making its
determination as to the type of consideration to accept, the Committee shall
consider if acceptance of such consideration may be reasonably expected to
benefit the Company.

                                   ARTICLE IX

                                 OPTION EXERCISE
                                 ---------------

         9. Exercise of Option.

         (a) Procedure for Exercise; Rights as a Shareholder. Any Option granted
             -----------------------------------------------
hereunder shall be exercisable according to the terms hereof at such times and
under such conditions as determined by the Committee and set forth in the Option
Agreement. Options shall become exercisable at a rate of no less than 20% per
year over five (5) years from the date the Options are granted. Unless the
Committee provides otherwise, vesting of Options granted hereunder shall be
tolled during any unpaid leave of absence. An Option may not be exercised for a
fraction of a Share.

         An Option shall be deemed exercised when the Company receives: (i)
written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Committee and permitted by the Option Agreement and this Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Participant or, if
requested by the Participant, in the name of the Participant and his or her
spouse. Until the Shares are issued (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer agent of the Company),
no right to vote or receive dividends or any other rights as a shareholder shall
exist with respect to the Shares, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 12 hereof.

         Exercise of an Option in any manner shall result in a decrease in the
number of Shares thereafter available, both for purposes of this Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.

                                       8
<PAGE>

         (b) Buyout Provisions. The Committee may at any time offer to buy out
             -----------------
for a payment in cash or Shares, an Option previously granted, based on such
terms and conditions as the Committee shall establish and communicate to the
Participant at the time that such offer is made.

                                    ARTICLE X

                           TERMINATION OF PARTICIPANT
                           --------------------------

         10. Termination of Participants.

         (a) Involuntary Termination Without Cause or Voluntary Termination for
             ------------------------------------------------------------------
Good Reason. If a Service Provider's Termination of Service is by involuntary
-----------
termination without Cause or for Good Reason, any Option held by such
Participant, unless otherwise determined by the Committee at grant or, if no
rights of the Participant are reduced, thereafter, may be exercised, to the
extent exercisable at termination, by the Participant at any time within a
period of ninety (90) days from the date of such termination, but in no event
beyond the expiration of the stated term of such Option.

         (b) Voluntary Termination Without Good Reason. If a Service Provider's
             -----------------------------------------
Termination of Service is voluntary but without Good Reason and occurs prior to,
or more than ninety (90) days after, the occurrence of an event which would be
grounds for Termination of Service by the Company for Cause (without regard to
any notice or cure period requirements), any Option held by such Participant,
unless otherwise determined by the Committee at grant or, if no rights of the
Participant are reduced, thereafter, may be exercised, to the extent exercisable
at termination, by the Participant at any time within a period of thirty (30)
days from the date of such termination, but in no event beyond the expiration of
the stated term of such Option.

         (c) Other Termination. Unless otherwise determined by the Committee at
             -----------------
grant or, if no rights of the Service Provider are reduced, thereafter, if a
Service Provider's Termination of Service is for any reason other than death,
Disability, Retirement, Good Reason, involuntary termination without Cause or
voluntary termination as provided in subsection (b) above, any Option held by
such Service Provider shall thereupon terminate and expire as of the date of
termination, provided that (unless the Committee determines a different period
upon grant or, if no rights of the Service Provider are reduced, thereafter) in
the event the termination is for Cause or is a voluntary termination without
Good Reason within ninety (90) days after occurrence of an event which would be
grounds for Termination of Service by the Company for Cause (without regard to
any notice or cure period requirement), any Option held by the Service Provider
at the time of occurrence of the event which would be grounds for Termination of
Service by the Company for Cause shall be deemed to have terminated and expired
upon occurrence of the event which would be grounds for Termination of Service
by the Company for Cause.

         (d) Disability of Service Provider. If a Participant ceases to be a
             ------------------------------
Service Provider as a result of the Service Provider's Disability, the Service
Provider may exercise his or her Option

                                       9
<PAGE>

within such period of time as is specified in the Option Agreement (of at least
six (6) months) to the extent the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement). In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following
the Service Provider's termination. If, on the date of termination, the Service
Provider is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan. If, after termination,
the Service Provider does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.

         (e) Death of Service Provider. If a Participant dies while a Service
             -------------------------
Provider, the Option may be exercised within such period of time as is specified
in the Option Agreement (of at least six (6) months) to the extent that the
Option is vested on the date of death (but in no event later than the expiration
of the term of such Option as set forth in the Option Agreement) by the Service
Provider's estate or by a person who acquires the right to exercise the Option
by bequest or inheritance. In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following
the Service Provider's termination. If, at the time of death, the Service
Provider is not vested as to the entire Option, the Shares covered by the
unvested portion of the Option shall immediately revert to the Plan. If the
Option is not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

         (f) Termination of Directorship. The following rules apply with regard
             ---------------------------
to Options upon the Termination of Directorship:

                  (i) Death, Disability or Otherwise Ceasing to be a Director
                      -------------------------------------------------------
         Other than for Cause. Except as otherwise provided herein, upon the
         --------------------
         Termination of Directorship, on account of Disability, death,
         Retirement, resignation, failure to stand for reelection, failure to be
         renominated or failure to be reelected or otherwise other than as set
         forth in (b) below, all outstanding Options then exercisable and not
         exercised by the Participant prior to such Termination of Directorship
         shall remain exercisable, to the extent exercisable at the Termination
         of Directorship, by the Participant or, in the case of death, by the
         Participant's estate or by the person given authority to exercise such
         Options by his or her will or by operation of law, for the remainder of
         the stated term of such Options.

                  (ii) Cause. Upon removal or failure to be renominated for
                       -----
         Cause, or if the Company obtains or discovers information after
         Termination of Directorship that such Participant had engaged in
         conduct that would have justified a removal for Cause during such
         directorship, all outstanding Options of such Participant shall
         immediately terminate and shall be null and void.

                  (iii) Cancellation of Options. No Options that were not
                        -----------------------
         exercisable during the period such person serves as a Director shall
         thereafter become exercisable upon a

                                       10
<PAGE>

         Termination of Directorship for any reason or no reason whatsoever, and
         such Options shall terminate and become null and void upon a
         Termination of Directorship.

                                   ARTICLE XI

                         NON-TRANSFERABILITY OF OPTIONS
                         ------------------------------

         11. Non-Transferability of Options. Options may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Participant, only by the Participant.

                                   ARTICLE XII

                                   ADJUSTMENTS
                                   -----------

         12. Adjustments Upon Changes in Capitalization, Merger or Asset Sale.

         (a) Changes in Capitalization. Subject to any required action by the
             -------------------------
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under this Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company. The conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option.

         (b) Dissolution or Liquidation. In the event of the proposed
             --------------------------
dissolution or liquidation of the Company, the Committee shall notify each
Participant as soon as practicable prior to the effective date of such proposed
transaction. The Committee in its discretion may provide for a Participant to
have the right to exercise his or her Option until fifteen (15) days prior to
such transaction as to all of the Optioned Stock covered thereby, including
Shares as to which the Option would not otherwise be exercisable. In addition,
the Committee may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the

                                       11
<PAGE>

time and in the manner contemplated. To the extent it has not been previously
exercised, an Option will terminate immediately prior to the consummation of
such proposed action.

         (c) Merger or Asset Sale. In the event of a merger of the Company with
             --------------------
or into another corporation, or the sale of substantially all of the assets of
the Company, each outstanding Option shall be assumed or an equivalent option or
right substituted by the successor corporation or a Subsidiary of the successor
corporation. In the event that the successor corporation refuses to assume or
substitute for the Option, the Participant shall fully vest in and have the
right to exercise the Option as to all of the Optioned Stock, including Shares
as to which it would not otherwise be vested or exercisable. If an Option
becomes fully vested and exercisable in lieu of assumption or substitution in
the event of a merger or sale of assets, the Committee shall notify the
Participant in writing or electronically that the Option shall be fully
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option shall terminate upon the expiration of such period. For the purposes
of this paragraph, the Option shall be considered assumed if, following the
merger or sale of assets, the option or right confers the right to purchase or
receive, for each Share of Optioned Stock subject to the Option immediately
prior to the merger or sale of assets, the consideration (whether stock, cash,
or other securities or property) received in the merger or sale of assets by
holders of Common Stock for each Share held on the effective date of the
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or sale of
assets is not solely common stock of the successor corporation or its Parent,
the Committee may, with the consent of the successor corporation, provide for
the consideration to be received upon the exercise of the Option, for each Share
of Optioned Stock subject to the Option, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.

                                  ARTICLE XIII

                            TIME OF GRANTING OPTIONS
                            ------------------------

         13. Time of Granting Options. The date of grant of an Option shall, for
all purposes, be the date on which the Committee makes the determination
granting such Option, or such other date as is determined by the Committee.
Notice of the determination shall be given to each Employee to whom an Option is
so granted within a reasonable time after the date of such grant.

                                   ARTICLE XIV

                         PLAN AMENDMENT AND TERMINATION
                         ------------------------------

         14. Amendment and Termination of the Plan.

         (a) Amendment and Termination. The Board may at any time amend, alter,
             -------------------------
suspend or terminate this Plan.

                                       12
<PAGE>

         (b) Shareholder Approval. The Board shall obtain shareholder approval
             --------------------
of any Plan amendment to the extent necessary and

desirable to comply with Applicable Laws.

         (c) Effect of Amendment or Termination. No amendment, alteration,
             ----------------------------------
suspension or termination of this Plan shall impair the rights of any
Participant, unless mutually agreed otherwise between the Participant and the
Committee, which agreement must be in writing and signed by the Participant and
the Company. Termination of this Plan shall not affect the Committee's ability
to exercise the powers granted to it hereunder with respect to Options granted
under the Plan prior to the date of such termination.

                                   ARTICLE XV

                       CONDITIONS UPON ISSUANCE OF SHARES
                       ----------------------------------

         15. Conditions Upon Issuance of Shares.

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

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

                                   ARTICLE XVI

                               REGULATORY APPROVAL
                               -------------------

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

                                       13
<PAGE>

                                  ARTICLE XVII

                              RESERVATION OF SHARES
                              ---------------------

         17. Reservation of Shares. The Company, during the term of this Plan,
shall at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

                                  ARTICLE XVIII

                              SHAREHOLDER APPROVAL
                              --------------------

         18. Shareholder Approval. The Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months after the date the Plan is
adopted. Such shareholder approval shall be obtained in the degree and manner
required under Applicable Laws.

                                   ARTICLE XIX

                           INFORMATION TO PARTICIPANTS
                           ---------------------------

         19. Information to Participants. The Company shall provide to each
Participant, not less frequently than annually during the period such
Participant or purchaser has one or more Options outstanding, copies of annual
financial statements. The Company shall not be required to provide such
statements to key employees whose duties in connection with the Company assure
their access to equivalent information.

                                       14

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