Document:

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                                                                    Exhibit 10.2

                                SECOND AMENDMENT
                                       TO
                           LOAN AND SECURITY AGREEMENT

         THIS SECOND AMENDMENT (this "Amendment") is made March 28, 2002 by and
between GOLDEN EAGLE LEASING, INC., an Arizona corporation ("Borrower"), and
WEBSTER BANK, a federally chartered savings bank ("Lender").

                                   Background

         A. Lender has extended a revolving credit loan in the maximum amount of
$10,000,000 (the "Loan") to Borrower pursuant to the terms of the Loan and
Security Agreement by and between Lender and Borrower dated August 24, 2001 as
amended by a First Amendment to Loan and Security Agreement by and between
Lender and Borrower dated September 19, 2001 (collectively, the "Loan
Agreement").

         B. The Revolving Credit Loan is evidenced by the revolving credit note
dated August 24, 2001 in the original principal amount of $10,000,000 (the
"Note"). The indebtedness of the Note is secured by Borrower's grant to Lender
of a security interest in the Collateral, as such term is defined in the Loan
Agreement.

         C. The Loan has been guaranteed by Hypercom Corporation, the Borrower's
parent corporation, pursuant to that certain guaranty dated as of August 24,
2001 (the "Guaranty" and together with the Loan Agreement, the Note, and all
other documents relating thereto, the "Loan Documents").

         D. Borrower has requested that Lender modify the terms of the Loan
Documents to provide for an increase in the Maximum Amount of the Loan from
$10,000,000 to $15,000,000.

         E. Lender has agreed to Borrower's request, subject to the terms and
conditions contained in this Amendment.

                                    Agreement

         In consideration of the Background, which is incorporated by this
reference, other good and valuable consideration, the receipt and sufficiency of
which is acknowledged, and the mutual promises and covenants contained in this
Amendment, the parties, intending to be bound legally, agree as follows:

         1. Definitions. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to them in the Loan Agreement.

         2. Increase of Maximum Amount.

                  (a) The Maximum Amount set forth in the Transaction Summary
forming a
<PAGE>
part of Recital A of the Loan Agreement is hereby amended to read as follows:

         Maximum Amount: $15,000,000

                  (b) Section 1(cb) of the Loan Agreement is amended to read as
follows:

         "Maximum Amount" shall mean the maximum amount of credit to be provided
         by Lender to or for the benefit of Borrower for aggregate Revolving
         Credit Advances outstanding at any time, without regard to the
         Borrowing Base or reserves, which amount, for purposes of this
         Agreement, is $15,000,000.

         3. Amendment of Definition of Borrowing Base.

                  (a) The Borrowing Base set forth in the Transaction Summary
forming a part of Recital A of the Loan Agreement is hereby amended to read as
follows:

         Borrowing Base: 65% of the net present value of Borrower's Eligible
         Lease Receivables for principal balances of up to $10,000,000 and 60%
         of the net present value of Borrower's Eligible Lease Receivables for
         principal balances in excess of $10,000,000, all is more fully
         described in Section 1(i) below.

                  (b) Section 1(i) of the Loan Agreement is amended to read as
follows:

         (i) "Borrowing Base, shall mean at any time an amount equal to the sum
         of the Initial Borrowing Base plus the Over $10,000,000 Borrowing Base,
         if any. As used herein, "Initial Borrowing Base" shall mean at any time
         an amount equal to (i) the sum at such time of sixty-five (65%) percent
         of the present value (as determined by Lender) of Borrowers Eligible
         Lease Receivables reduced by (ii) the Credit Rating Deficiency Amount,
         if any, up to a maximum Initial Borrowing Base of $10,000,000. As used
         herein, "Over $10,000,000 Borrowing Base" shall mean at any time an
         amount equal to (x) the sum at such time of sixty (60%) percent of the
         present value (as determined by Lender) of Borrower's remaining
         Eligible Lease Receivables not utilized in the calculation of the
         Initial Borrowing Base reduced by (y) the Credit Rating Deficiency
         Amount pertaining to such Eligible Lease Receivables, if any. To the
         extent that it is necessary for any purpose (including without
         limitation, calculation of the Borrowing Base or calculation of the
         Credit Rating Deficiency Amount) to allocate Eligible Lease Receivables
         between the Initial Borrowing Base and the Over $10,000,000 Borrowing
         Base such allocation shall be done by Lender according to the date upon
         which such Eligible Lease Receivables become part of the Collateral
         with the earlier Eligible Lease Receivables being

                                      -2-
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         allocated to the Initial Borrowing Base to the extent thereof and any
         remaining Eligible Lease Receivables being allocated to the Over
         $10,000,000 Borrowing Base, or on such other basis as Lender, in its
         reasonable discretion, determines appropriate, provided that no such
         change in method of allocation shall serve to reduce the Borrowing Base
         as it pertains to any Revolving Loan Advance outstanding at the time of
         such change. Additionally, Lender may require that any request for a
         Revolving Credit Advance be divided into a request for two separate
         Revolving Credit Advances, one within the Initial Borrowing Base and
         one within the Over $10,000,000 Borrowing Base, and that the Eligible
         Lease Receivables associated with such request be allocated between the
         two Revolving Credit Advances in a manner acceptable to Lender in the
         exercise of its reasonable discretion. Initially Lender may, but shall
         not be required to, determine the present value of Eligible Lease
         Receivables by utilizing the Revolving Credit Rate as the discount
         rate. However, Lender reserves the right at any time to utilize such
         discount rate and such method of determining present value as Lender,
         in its sole discretion, determines appropriate.

         4. Amendment to Definition of Credit Rating Deficiency Amount. Section
1(ac) of the Loan Agreement is amended to read as follows:

         (ac) "Credit Rating Deficiency Amount" when determined for the purpose
         of calculating the Initial Borrowing Base shall mean, at any time an
         amount equal to the greater of: (a) the amount, if any, by which the
         aggregate present value (as determined by Lender) of all Eligible Lease
         Receivables utilized in calculating the Initial Borrowing Base at such
         time actually owed by Lessees having a Credit Rating of A or B is less
         than fifty-five percent (55%) of the total aggregate present value (as
         determined by Lender) of all such Eligible Lease Receivables or (b) the
         amount, if any, by which the aggregate present value (as determined by
         Lender) of all such Eligible Lease Receivables actually owed by Lessees
         having a Credit Rating of A, B or C is less than ninety percent (90%)
         of the total aggregate present value (as determined by Lender) of all
         such Eligible Lease Receivables.

         "Credit Rating Deficiency Amount" for the purposes of calculating the
         Over $10,000,000 Borrowing Base shall mean, at any time, an amount
         equal to the sum of: (x) the amount, if any, by which the aggregate
         present value (as determined by Lender) of all Eligible Lease
         Receivables utilized in calculating the Over $10,000,000 Borrowing Base
         at such time actually owed by Lessees having a Credit Rating of A or B
         is less than seventy-five (75%) percent of the total aggregate present
         value (as determined by Lender) of all such Eligible Lease Receivables
         plus (y) the aggregate present value (as determined by Lender) of all
         such Eligible Lease Receivables actually owed by Lessees having a
         credit rating other than A,B or C.

                                      -3-
<PAGE>
         5. Replacement Note.

                  (a) Simultaneously with the execution and delivery of this
Amendment, Borrower is executing and delivering to Lender a $15,000,000 Amended
and Restated Revolving Credit Note in the form of Exhibit F attached hereto.

                  (b) Borrower shall pay interest on the outstanding principal
balance of the Amended and Restated Revolving Credit Note and shall repay the
Indebtedness evidenced thereby in accordance with the terms thereof. The
Borrower's obligations under the Amended and Restated Revolving Credit Note are
and shall continue to be secured by the Collateral.

                  (c) The Amended and Restated Revolving Credit Note shall
constitute the Revolving Credit Note under the Loan Agreement for all purposes.
Exhibit F attached hereto shall be substituted for and shall constitute for all
purposes Exhibit F to the Loan Agreement.

                  (d) Section 1(d)(b) of the Loan Agreement is amended to read
as follows:

         (db) Revolving Credit Note shall mean the Promissory Note of Borrower
         dated March 28, 2002 substantially in the form of Exhibit F.

         6. Representations and Warranties. All of the representations,
warranties and covenants contained in the Loan Documents are true and correct on
and as of the date hereof.

         7. Conditions Precedent. Lender's obligations hereunder and the
increase of the Maximum Amount as described above are subject to the
satisfaction as of the date of this Amendment (or, in the case of (a), (d) and
(e) below, on or before April 12, 2002) of each of the following conditions
precedent which shall be in form, scope and substance satisfactory to Lender and
its counsel :

                  (a) Evidence of Corporate Action. Lender shall have received
certified copies of all Board of Director resolutions (in form and substance
satisfactory to Lender) made by Borrower and Guarantor to authorize the
execution, delivery and performance of this Amendment, together with certified
copies of Borrower's and Guarantor's Articles of Incorporation and all
amendments thereto, certified copies of Borrower's and Guarantor's By-Laws and
all amendments thereto, and current Certificates of Good Standing for Borrower
and Guarantor, and such other documents as Lender or its counsel may reasonably
require.

                  (b) Guarantor's Documents. Lender shall have received a
Reaffirmation of Guaranty, duly executed by the Guarantor, in form and substance
satisfactory to Lender and its counsel.

                  (c) Commitment Fee. In consideration for entering into this
Amendment and increasing the amount of the Loan as described herein, the
Borrower has paid to Lender a Commitment Fee of $50,000.

                  (d) Opinion. Lender shall have received a written opinion of
counsel to

                                      -4-
<PAGE>
Borrower and Guarantor in form and substance satisfactory to Lender and its
counsel.

                  (e) Legal Fees. Borrower shall have reimbursed Lender for the
legal fees and disbursements of Shipman & Goodwin LLP, counsel to Lender, in
connection with the negotiation, review, execution and delivery of all of the
documents prepared with respect to the transactions contemplated herein, plus
related disbursements.

                  (f) Other Documents. Borrower shall have delivered to Lender
such other documents as Lender or its counsel reasonably require.

         8. Reaffirmation of the Obligations. The Borrower acknowledges and
reaffirms the Obligations, the Borrower's liability for repayment thereof and
all previous grants of collateral by the Borrower to secure the Obligations. The
Borrower acknowledges that no setoff, counterclaim or defense exists with
respect to the Borrower's liability under the Obligations and that no claim
against the Lender exists, and waives its right to raise any such setoff,
counterclaim, defense or claim against the Lender arising out of occurrences on
or prior to the date hereof.

         9. Loan Documents. Except to the extent explicitly modified by this
Amendment or by any document contemplated by, or executed pursuant to the
provisions of this Amendment, all of the provisions of the Loan Documents shall
remain in full force and effect, including, without limitation, all
representations, warranties, negative covenants, affirmative covenants, and
events of default. In addition, as of the date hereof, the Borrower represents
that the Borrower is in full compliance with all provisions of the Loan
Document, and no Event of Default, as specified in the Loan Documents, and no
event which, with the giving of notice or passage of time or both, would
constitute an Event of Default, has occurred. Any default under any of the Loan
Documents shall constitute a default hereunder.

         10. Other.

                  (a) Prejudgment Remedy Waiver. THE BORROWER ACKNOWLEDGES THAT
THE TRANSACTIONS TO WHICH THIS AMENDMENT RELATE ARE COMMERCIAL TRANSACTIONS. THE
BORROWER HEREBY VOLUNTARILY AND KNOWINGLY WAIVES ITS RIGHTS TO NOTICE AND
HEARING UNDER CHAPTER 903A OF THE CONNECTICUT GENERAL STATUTES, AS AMENDED AND
IN EFFECT ON THE DATE HEREOF, OR AS OTHERWISE ALLOWED BY ANY STATE OR FEDERAL
LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY OR OTHER RIGHT OR REMEDY THAT THE
LENDER MAY ELECT TO USE OR OF WHICH IT MAY AVAIL ITSELF. THE BORROWER FURTHER
WAIVES, TO THE GREATEST EXTENT PERMITTED BY LAW, THE BENEFITS OF ALL PRESENT AND
FUTURE VALUATION, APPRAISEMENT, EXEMPTION, STAY, REDEMPTION AND MORATORIUM LAWS.
THE BORROWER FURTHER WAIVES ANY REQUIREMENT THAT LENDER OBTAIN A BOND OR OTHER
SIMILAR DEVICE IN CONNECTION WITH THE EXERCISE OF ANY REMEDY OR THE ENFORCEMENT
OF ANY RIGHT HEREUNDER.

                                      -5-
<PAGE>
                  (b) Governing Law. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS
ARISING UNDER THE LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CONNECTICUT APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES
THEREOF REGARDING CONFLICTS OF LAWS, AND ANY APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA.

                  (c) Jury Waiver. THE BORROWER WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AMENDMENT OR UNDER ANY AGREEMENT, INSTRUMENT OR OTHER DOCUMENT CONTEMPLATED
HEREBY OR RELATED HERETO AND IN ANY ACTION DIRECTLY OR INDIRECTLY RELATED TO OR
CONNECTED WITH THE LOAN PROVIDED FOR HEREIN, OR ANY CONDUCT RELATING TO THE
NEGOTIATION, ADMINISTRATION OR ENFORCEMENT OF SUCH LOAN OR ARISING FROM THE
DEBTOR/CREDITOR RELATIONSHIP OF THE BORROWER AND THE LENDER HERETO. THE BORROWER
ACKNOWLEDGES THAT THIS WAIVER MAY DEPRIVE IT OF AN IMPORTANT RIGHT AND THAT SUCH
WAIVER HAS KNOWINGLY BEEN AGREED TO BY THE BORROWER.

                            SIGNATURE PAGE TO FOLLOW

                                      -6-
<PAGE>
         The parties hereto have executed this Amendment as of the date first
written above.

                                            GOLDEN EAGLE LEASING, INC.

                                            By: /s/ L. Lersner
                                                 Name: Lisa Lersner
                                                 Title: Chief Operating Officer

                                            WEBSTER BANK

                                            By: /s/ Glenn Marx
                                                 Name: Glenn Marx
                                                 Title: Vice President

83772 v.04

                                    EXHIBIT F

                                      -7-
<PAGE>
                   AMENDED AND RESTATED REVOLVING CREDIT NOTE

$15,000,000                                                March 28, 2002
                                                           Stamford, Connecticut

For value received, the receipt and sufficiency of which are hereby
acknowledged, GOLDEN EAGLE LEASING, INC., an Arizona corporation ("Borrower"),
hereby promises to pay to the order of WEBSTER BANK, a federally chartered bank
("Lender"), $15,000,000 or such greater or lesser amount as shall be advanced by
Lender hereunder from time to time, together with interest on the unpaid balance
of such amount from the date of the initial Revolving Credit Advance. This Note
is the Revolving Credit Note issued under the Loan and Security Agreement
between Borrower and Lender dated August 24, 2001 herewith (said agreement, as
previously amended by that certain First Amendment to Loan and Security
Agreement dated September 19, 2001, and that certain Second Amendment to Loan
and Security Agreement dated March __, 2002 and as the same may be amended,
restated or supplemented from time to time, being herein called the
"Agreement"). Capitalized terms not defined in this Note shall have the
respective meanings assigned to them in the Agreement. This Note is secured by
the Agreement, the other Loan Documents and the Collateral, and is entitled to
the benefit of the rights and security provided thereby.

         1. Interest Rate. Subject to the terms of the Loan Agreement Interest
shall accrue on the unpaid principal balance at:

         (i) a rate per annum (the Revolving LIBOR-Based Rate") equal to the sum
of London InterBank Offering Rate available to Lender for U.S. dollar thirty-day
deposits, plus four hundred seventy (470) basis points such Revolving
LIBOR-Based Rate to be further adjusted to compensate Lender for all applicable
reserve requirements imposed upon Lender in respect of LIBOR investments as
determined by Lender at the time of such advance and at the end of each
successive 30 day period thereafter (each an "Interest Period"). Each such rate
shall remain in effect for the entire interest period until redetermined for the
next successive interest period; or

                  (ii) a floating rate per annum (the "Revolving Credit Rate")
equal to the "Prime Rate" as published in the section of the Wall Street Journal
entitled "Money Rates," (the "Wall Street Journal Prime Rate"), plus one and
three quarters percent (1.75%). The Revolving Credit Rate will change
automatically and immediately as of the date of a change in the Wall Street
Journal Prime, without notice to Borrower.

         2. Payments.

                  (a) Commencing April 1, 2002 and on the first day of each
subsequent month during the term of this Note, interest only shall be paid in
arrears on the daily outstanding principal balance of this Note at the interest
rate set forth herein.

                  (b) Payments may be applied first to expenses, if any, then to
late charges, if any, then to accrued interest, and then to principal. Following
the occurrence of an Event of Default payments may be applied to amounts due
hereunder in any manner or order deemed appropriate by Lender.

                  (c) The Entire Note Balance shall be due and payable in full
on August 24, 2002 (the "Maturity Date").

                                      -8-
<PAGE>
         3. Default. Upon the occurrence of any Event of Default which continues
uncured beyond the expiration of the applicable grace period, if any, as
provided in the Loan Agreement, the outstanding balance of the Borrower's
indebtedness to the Lender, including all applicable interest, fees and charges,
shall, at the option of the Lender, become immediately due and payable in full
without notice or demand and Lender may exercise any and all rights as provided
herein, under the Loan Agreement and the other Loan Documents, and as provided
by law.

         4. Interest Rate After Default and Late Payment Charges.
Notwithstanding any contrary provision in this Note or in any agreement,
document or instrument pertaining to this Note, after the occurrence of an Event
of Default which continues uncured beyond the expiration of the applicable grace
period, if any, as provided in the Loan Agreement, the outstanding principal
balance of this Note shall bear interest at a rate per annum three percentage
points (3.0%) in excess of the otherwise applicable rate. The Lender may collect
a late charge of not greater than five percent (5.0%) of any payment of
principal, interest or other amount due to the Lender which is not paid or
reimbursed by the Borrower within ten (10) days after the due date thereof to
cover the extra expense involved in handling such delinquent payment. Acceptance
by the Lender of any late payment without an accompanying late charge shall not
be deemed a waiver of the Lender's right to collect such late charge or collect
a late charge for any subsequent late payment received.

         5. Prejudgment Remedy Waiver. THE BORROWER ACKNOWLEDGES THAT THE
TRANSACTIONS TO WHICH THIS NOTE RELATE ARE COMMERCIAL TRANSACTIONS. THE BORROWER
HEREBY VOLUNTARILY AND KNOWINGLY WAIVES ITS RIGHTS TO NOTICE AND HEARING UNDER
CHAPTER 903A OF THE CONNECTICUT GENERAL STATUTES, AS AMENDED AND IN EFFECT ON
THE DATE HEREOF, OR AS OTHERWISE ALLOWED BY ANY STATE OR FEDERAL LAW WITH
RESPECT TO ANY PREJUDGMENT REMEDY OR OTHER RIGHT OR REMEDY THAT THE LENDER MAY
ELECT TO USE OR OF WHICH IT MAY AVAIL ITSELF. THE BORROWER FURTHER WAIVES, TO
THE GREATEST EXTENT PERMITTED BY LAW, THE BENEFITS OF ALL PRESENT AND FUTURE
VALUATION, APPRAISEMENT, EXEMPTION, STAY, REDEMPTION AND MORATORIUM LAWS. THE
BORROWER FURTHER WAIVES ANY REQUIREMENT THAT LENDER OBTAIN A BOND OR OTHER
SIMILAR DEVICE IN CONNECTION WITH THE EXERCISE OF ANY REMEDY OR THE ENFORCEMENT
OF ANY RIGHT HEREUNDER.

         6. Additional Waivers. BORROWER AND ALL GUARANTORS AND ENDORSERS HEREOF
HEREBY WAIVE PRESENTMENT, DEMAND, NOTICE OF DISHONOR, PROTEST AND NOTICE OF
PROTEST. No extension of time for payment or delay in enforcement hereof nor any
renewal of this Note or substitution or release of any collateral or mortgage or
release of any party, with or without notice, shall release the obligation of
any borrower, guarantor, endorser or other accommodation party to the Lender, or
shall operate as a waiver of any of the rights of the Lender. No delay by the
Lender in exercising any of the rights it may have hereunder shall not operate
as a waiver of any rights the Lender might have, and any waiver granted for one
occasion shall operate as a waiver in the event of any subsequent default.

         7. Governing Law. The provisions of this Note shall be governed by the
substantive law of the State of Connecticut.

         8. Jurisdiction and Venue. Any action or proceeding to enforce or
defend any rights under this Note or under any agreement, instrument or other
document contemplated hereby or related hereto; directly or indirectly related
to or connected with the loan contemplated by this Note or the negotiation,
administration or enforcement thereof; or arising from the debtor/creditor
relationship of the Borrower

                                      -9-
<PAGE>
and the Lender shall be brought only in the Superior Court of Connecticut or the
United States District Court for the District of Connecticut. The Borrower
agrees that any proceeding instituted in either of such courts shall be of
proper venue, and waives any right to challenge the venue of such courts or to
seek the transfer or relocation of any such proceeding for any reasons. The
Borrower further agrees that such courts shall have personal jurisdiction over
the Borrower and that any and all pleadings, summons, motions and other process
in such proceeding shall be fully and effectively served when transmitted by
United States Mail (registered or certified), postage and registry fees prepaid.
Any judgment or decree obtained in any such action or proceeding may be filed or
enforced in any other appropriate court.

         9. Jury Waiver. THE BORROWER WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS NOTE OR UNDER
ANY AGREEMENT, INSTRUMENT OR OTHER DOCUMENT CONTEMPLATED HEREBY OR RELATED
HERETO AND IN ANY ACTION DIRECTLY OR INDIRECTLY RELATED TO OR CONNECTED WITH THE
LOAN PROVIDED FOR HEREIN, OR ANY CONDUCT RELATING TO THE NEGOTIATION,
ADMINISTRATION OR ENFORCEMENT OF SUCH LOAN OR ARISING FROM THE DEBTOR/CREDITOR
RELATIONSHIP OF THE BORROWER AND THE LENDER HERETO. THE BORROWER ACKNOWLEDGES
THAT THIS WAIVER MAY DEPRIVE IT OF AN IMPORTANT RIGHT AND THAT SUCH WAIVER HAS
KNOWINGLY BEEN AGREED TO BY THE BORROWER.

         10. Restated Note. This Note constitutes the restatement, reaffirmation
and modification of that certain Revolving Credit Note dated August 24, 2001
from Borrower in favor of Lender in the original principal amount of
$10,000,000.00 (the "Existing Note"). This Note does not release the obligations
of Borrower or any maker, guarantor or other obligated party under the Existing
Note or constitute a novation of any obligation thereunder.

         IN WITNESS WHEREOF, the undersigned has caused this Note to be signed
as of the date first written above.

                                       GOLDEN EAGLE LEASING, INC.

                                       By: /s/ L. Lersner
                                       TITLE: Chief Operating Officer

                                      -10-<PAGE>

                                 Exhibit 10.68

                       ACTION PERFORMANCE COMPANIES, INC.
                           FIRST AMENDED AND RESTATED
                             2000 STOCK OPTION PLAN

            ADOPTED BY THE BOARD OF DIRECTORS AS OF JANUARY 27, 2000
                 APPROVED BY THE SHAREHOLDERS ON MARCH 30, 2000

      AMENDED AND RESTATED BY THE BOARD OF DIRECTORS AS OF OCTOBER 4, 2001
                  APPROVED BY THE SHAREHOLDERS ON MARCH 4, 2002

         1. PURPOSE. The purpose of this 2000 Stock Option Plan (the "Plan") is
to attract, retain and motivate employees, directors, and independent
contractors by providing them with the opportunity to acquire a proprietary
interest in ACTION PERFORMANCE COMPANIES, INC., an Arizona corporation (the
"Company") and to link their interest and efforts to the long-term interests of
the Company's shareholders.

         2. PLAN ADMINISTRATION

                  2.1 IN GENERAL. The Plan shall be administered by the
Company's Board of Directors (the "Board"). Except for the power to amend the
Plan as provided in Section 12, the Board, in its sole discretion, may delegate
all or any portion of its authority and duties under the Plan to one or more
committees appointed by the Board and consisting of at least one member of the
Board, under such conditions and limitations as the Board may from time to time
establish. The Board and/or any committee that has been delegated the authority
to administer the Plan shall be referred to as the "Plan Administrator." Except
as otherwise explicitly set forth in the Plan, the Plan Administrator shall have
the authority, in its discretion, to determine all matters relating to awards
(as described in Section 5) under the Plan, including the selection of the
individuals to be granted awards, the time or times of grant, the type of
awards, the number of shares of the Company's common stock ("Common Stock")
subject to an award, vesting conditions, and any and all other terms,
conditions, restrictions and limitations, if any, of an award. To the extent
that the Plan Administrator determines that the restrictions imposed by the Plan
preclude the achievement of the material purposes of the awards in jurisdictions
outside the United States, the Plan Administrator will have the authority and
discretion to modify those restrictions as the Plan Administrator determines to
be necessary or appropriate to conform to applicable requirements or practices
of jurisdictions outside of the United States. The Plan Administrator shall have
the authority and discretion to interpret the Plan, to establish, amend, and
rescind any rules and regulations relating to the Plan, to determine the terms
and provisions of any award agreement made pursuant to the Plan, and to make all
other determinations that may be necessary or advisable for the administration
of the Plan. In controlling and managing the operation and administration of the
Plan, the Plan Administrator shall take action in a manner that conforms to the
articles of incorporation and bylaws of the Company, as amended from time to
time, and applicable state law. All decisions made by the Plan Administrator
pursuant to the Plan and related orders and resolutions shall be final,
conclusive, and binding on all persons.
<PAGE>
                  2.2 RULE 16B-3 AND CODE SECTION 162(m). Notwithstanding any
provision of this Plan to the contrary, only the Board or a committee composed
of two or more "Non-Employee Directors" may make determinations regarding grants
of awards to officers, directors, and 10% shareholders of the Company. For
purposes of this Plan, the term "Non-Employee Directors" shall have the meaning
set forth in Rule 16b-3 promulgated under the Securities Exchange Act of 1934,
as amended (the "1934 Act"). The Plan Administrator shall have the authority and
discretion to determine the extent to which awards will conform to the
requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code") and to take such action, establish such procedures, and impose such
restrictions as the Plan Administrator determines to be necessary or appropriate
to conform to such requirements.

                  2.3 OTHER PLANS. The Plan Administrator also shall have
authority to grant awards as an alternative to, as a replacement of, or as the
form of payment for grants or rights earned or due under the Plan or other
compensation plans or arrangements of the Company or a subsidiary of the
Company, including the plan of any entity acquired by the Company or a
subsidiary of the Company.

         3. ELIGIBILITY. Any employee, proposed employees, and independent
contractors who provide valuable services to the Company shall be eligible to
receive awards under the Plan. Directors who are not employees of the Company
shall be eligible to receive awards only pursuant to the provisions of Section 6
of the Plan. An award may be granted to a proposed employee prior to the date
the proposed employee first performs services for the Company, provided that
such awards shall not become vested prior to the date the employee first
performs such services. Subject to the foregoing, the Plan Administrator, in its
discretion, may grant any award permitted under the provisions of the Plan to
any eligible person and may grant more than one award to any eligible person.
For purposes of the Plan, the "Company," with respect to all awards under the
Plan other than Incentive Stock Options, includes any entity that is directly or
indirectly controlled by the Company or any entity in which the Company has a
significant interest, as determined by the Plan Administrator. With respect to
Incentive Stock Options (as defined in Section 5.2), the "Company" includes any
parent or subsidiary of the Company as defined in Section 424 of the Code.

         4. SHARES SUBJECT TO THE PLAN

                  4.1 NUMBER AND SOURCE. The shares offered under the Plan shall
be shares of Common Stock and may be unissued shares or shares now held or
subsequently acquired by the Company as treasury shares, as the Plan
Administrator may from time to time determine. Subject to the provisions of
Section 4.3, the number of shares of Common Stock for which awards may be
granted under the Plan (including shares that may be issued upon exercise of
options that are intended to be Incentive Stock Options) shall not exceed in the
aggregate thirteen percent (13%) of the issued shares of Common Stock of the
Company as of the Approval Date (as defined in Section 18); provided that, if
the number of issued shares of Common Stock is increased after the Approval
Date, the maximum number of shares of Common Stock for which awards may be
granted under the Plan shall be increased by 13% of such increase. Subject to
adjustment as provided in Section 4.3, the aggregate number of shares that may
be issued under the Plan (including shares that may be issued upon exercise of
options that are intended to be

                                       2
<PAGE>
Incentive Stock Options) shall not exceed 3,000,000. The aggregate number of
shares that may be covered by awards granted to any one individual in any year
shall not exceed 25% of the total number of shares that may be issued under the
Plan.

                  4.2 SHARES AVAILABLE. Any shares subject to an award granted
under the Plan that are not delivered because the award is forfeited, terminated
or canceled or any shares of Common Stock that are not delivered because the
award is settled in cash or used to satisfy the applicable tax withholding
obligation shall not be deemed to have been delivered for purposes of
determining the maximum number of shares of Common Stock available for delivery
under the Plan and shall again be available for the granting of awards under the
Plan. If the exercise price of any stock option granted under the Plan is
satisfied by tendering shares of Common Stock to the Company (by either actual
delivery or by attestation), only the number of shares of Common Stock issued
net of the shares of Common Stock tendered shall be deemed delivered for
purposes of determining the maximum number of shares of Common Stock available
for delivery under the Plan. The payment of cash dividends and dividend
equivalents paid in cash in conjunction with outstanding awards shall not be
counted against the shares available for issuance.

                  4.3 ADJUSTMENT OF SHARES AVAILABLE. The Plan Administrator
shall have authority to proportionately adjust the aggregate number and type of
shares available for awards under the Plan, the maximum number and type of
shares that may be subject to awards to any individual under the Plan, the
number and type of shares covered by each outstanding award, and the exercise
price per share (but not the total price) for stock options outstanding under
the Plan for any increase or decrease in the number of issued shares of Common
Stock resulting from the payment of any stock dividend or from any stock split,
split-up, combination or exchange of shares, consolidation, spin-off,
reorganization, or recapitalization of shares or any like capital adjustment.

                  4.4 CHANGE OF CONTROL. In the event of a Change of Control of
the Company (as defined below), any unexercisable and/or unvested portion of the
outstanding awards shall be immediately exercisable and vested in full upon
consummation of the Change of Control. The exercise and/or vesting of any award
that is permissible solely by reason of this Section 4.4 shall be conditioned
upon the consummation of the Change of Control. Any awards that are not
exercised upon consummation of the Change of Control shall terminate and cease
to be outstanding effective as of the date of the Change of Control. Unless
otherwise determined by the Board, a "Change of Control" shall be deemed to have
occurred in the event of any of the following:

                           (a) any "person" (as such term is used in Section
13(d) and 14(d)(2) of the 1934 Act) is or becomes a beneficial owner, directly
or indirectly, of stock of the Company representing 25 percent or more of the
total voting power of the Company's then-outstanding stock;

                           (b) a tender offer (for which a filing has been made
with the SEC that purports to comply with the requirements of Section 14(d) of
the 1934 Act and the corresponding SEC rules) is made for the stock of the
Company; provided, that in case of a tender offer described in this Section
4.4(b), the Change in Control will be deemed to have occurred upon the

                                       3
<PAGE>
first to occur of (i) any time during the offer when the person (using the
definition in Section 4.4(a) above) making the offer owns or has accepted for
payment stock of the Company with 25 percent or more of the total voting power
of the Company's outstanding stock, or (ii) three business days before the offer
is to terminate unless the offer is withdrawn first, if the person making the
offer could own, by the terms of the offer plus any shares owned by such person,
stock with 50 percent or more of the total voting power of the Company's
outstanding stock when the offer terminates;

                           (c) the direct or indirect sale or exchange by the
shareholders of the Company of all or substantially all of the stock of the
Company if the shareholders of the Company before such sale or exchange do not
retain, directly or indirectly, at least a majority of the beneficial interest
in the voting stock of the Company after such sale or exchange;

                           (d) a merger or consolidation if the shareholders of
the Company before such merger or consolidation do not retain, directly or
indirectly, at least a majority of the beneficial interest in the voting stock
of the Company after such merger or consolidation (regardless of whether the
Company is the surviving corporation);

                           (e) the sale, exchange or transfer of all or
substantially all of the assets of the Company to any person other than a parent
or subsidiary of the Company;

                           (f) a liquidation or dissolution of the Company to
any person other than a parent or subsidiary of the Company; or

                           (g) individuals who were the Board's nominees for
election as directors of the Company immediately prior to a meeting of the
shareholders of the Company involving a contest for the election of directors
shall not constitute a majority of the Board following the election.

         5. DISCRETIONARY AWARDS

                  5.1 TYPES OF DISCRETIONARY AWARDS. The Plan Administrator
shall have authority to make discretionary grants of awards under the Plan to
all eligible persons other than non-employee directors of the Company.
Discretionary awards granted under the Plan shall be either Incentive Stock
Options or Nonqualified Stock Options (as defined in Section 5.2).

                  5.2 STOCK OPTIONS. The Plan Administrator may grant stock
options, designated as "Incentive Stock Options," which comply with the
provisions of Section 422 of the Code or any successor statutory provision, or
"Nonqualified Stock Options" that do not comply with the provisions of Section
422 of the Code or any successor statutory provision. The price for which shares
may be purchased upon exercise of a particular option shall be determined by the
Plan Administrator at the time of grant; provided that, the exercise price of an
option shall not be less than 100% of the Fair Market Value (as defined in
Section 13) of the Common Stock on the date such option is granted (110% of the
Fair Market Value if options are intended to be Incentive Stock Options and are
granted to a shareholder who at the time the option is granted owns or is deemed
to own stock possessing more than 10% of the total combined voting power

                                       4
<PAGE>
of all classes of stock of the Company or of any parent or subsidiary of the
Company). The Plan Administrator shall set the term of each stock option, but no
option shall be exercisable more than 10 years after the date such option is
granted (five years if the option is an Incentive Stock Option granted to a
shareholder who at the time the option is granted owns or is deemed to own stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or of any parent or subsidiary of the Company). In
addition, to the extent the aggregate Fair Market Value (determined as of the
date the option is granted) of Common Stock with respect to which Incentive
Stock Options granted to a particular individual become exercisable for the
first time during any calendar year (under the Plan and all other stock option
plans of the Company) exceeds $100,000 (or such corresponding amount as may be
set by the Code) such options shall be treated as Nonqualified Stock Options. An
optionholder and the Plan Administrator can agree at any time to convert an
Incentive Stock Option to a Nonqualified Stock Option.

                  5.3 PAYMENT; DEFERRAL. Awards granted under the Plan may be
settled through cash payments, the delivery of Common Stock (valued at Fair
Market Value) or the granting of replacement awards or combinations thereof as
the Plan Administrator shall determine. Any award settlement, including payment
deferrals, may be subject to such conditions, restrictions, and contingencies as
the Plan Administrator shall determine. The Plan Administrator may permit or
require the deferral of any award payment, subject to such rules and procedures
as it may establish, which may include provisions for the payment or crediting
of interest, or dividend equivalents, including converting such credits to
deferred stock unit equivalents.

                  5.4 INDIVIDUAL AWARD AGREEMENTS. Stock options shall be
evidenced by agreements between the Company and the recipient in such form and
content as the Plan Administrator from time to time approves, which agreements
shall substantially comply with and be subject to the terms of the Plan. Such
individual agreements may contain such provisions or conditions as the Plan
Administrator deems necessary or appropriate to effectuate the sense and purpose
of the Plan and may be amended from time to time in accordance with the terms
thereof.

         6. AUTOMATIC GRANT PROGRAM.

                  6.1 AMOUNT AND DATE OF GRANT. During the term of the Plan, the
Company shall make automatic grants of options ("Automatic Options") in the form
of Nonqualified Stock Options to each Board member who is not employed by the
Company, whether or not such person is a Non-Employee Director as referred to in
Section 2.2, (each an "Eligible Director") as follows:

                           (a) INITIAL DIRECTOR GRANTS. On the Approval Date,
the Company shall grant an Automatic Option to acquire 8,000 shares of Common
Stock to each Eligible Director serving as a member of the Board as of such
date.

                           (b) NEW DIRECTOR GRANTS. On the Initial Grant Date
(as defined below), each new member of the Board who is an Eligible Director and
who has not previously received an Automatic Option under Section 6.1(a), this
Section 6.1(b), or under the Company's

                                       5
<PAGE>
1993 Stock Option Plan shall be granted an Automatic Option to acquire 10,000
shares of Common Stock for so long as shares of Common Stock are available under
Section 4.1 hereof. The "Initial Grant Date" shall be the date that an Eligible
Director is first appointed or elected to the Board.

                           (c) ANNUAL GRANTS. Each year on the Annual Grant Date
(as defined below), an Automatic Option to acquire 8,000 shares of Common Stock
shall be granted to each Eligible Director for so long as shares of Common Stock
are available under Section 4.1 hereof. The "Annual Grant Date" shall be the
date of the Company's annual meeting of shareholders held in each year
commencing as of the first annual meeting occurring after the Approval Date. Any
Eligible Director who was granted an Automatic Option under Section 6.1(b)
within 90 days prior to an Annual Grant Date shall be ineligible to receive an
Automatic Option pursuant to this Section 6.1(c) on such Annual Grant Date.

                  6.2 EXERCISE PRICE. The exercise price per share of Common
Stock subject to each Automatic Option granted under this Section 6 shall be
equal to 100 percent of the Fair Market Value per share of the Common Stock on
the date such Automatic Option is granted, as determined in accordance with
Section 13.

                  6.3 VESTING. Each Automatic Option granted pursuant to this
Section 6 shall vest and become exercisable immediately on the date of grant.

                  6.4 TERM OF AUTOMATIC OPTIONS. Each Automatic Option shall
expire on the tenth anniversary (the "Expiration Date") of the date on which
such Automatic Option is granted. Should a holder of an Automatic Option cease,
for any reason other than death, to serve as a member of the Board, then the
option holder shall have 90 days measured from the date of such cessation of
Board service in which to exercise his or her unexercised Automatic Options.
Should an option holder die while serving as a Board member or within 90 days
after cessation of Board service, then the personal representative of the option
holder's estate (or the person or persons to whom the Automatic Option is
transferred pursuant to a qualified domestic relations order, the option
holder's will or in accordance with the laws of the descent and distribution)
shall have a one-year period measured from the date of the option holder's
cessation of Board service (or such longer period as may be determined by the
Plan Administrator in its discretion) in which to exercise any unexercised
Automatic Options. In no event, however, may any Automatic Option be exercised
after the Expiration Date of such Automatic Option.

                  6.5 OTHER TERMS. Except as expressly provided otherwise in
this Section 6, an Automatic Option shall be subject to all of the terms and
conditions of the Plan, provided that Eligible Directors shall not be entitled
to receive other awards under the Plan. Eligible Directors shall, however, be
entitled to receive awards under other plans of the Company in accordance with
the terms and conditions thereof.

         7. AWARD EXERCISE

                  7.1 PRECONDITION TO STOCK ISSUANCE. Options shall be
exercisable in accordance with such terms and conditions and during such periods
as may be established by the

                                       6
<PAGE>
Plan Administrator. No shares shall be delivered pursuant to the exercise of any
stock option, in whole or in part, until payment in full of the option price
thereof (in cash or stock as provided in Section 7.3) is received by the
Company. No holder of an option, or any legal representative, legatee or
distributee shall be or be deemed to be a holder of any shares subject to such
option or right unless and until such option or right is exercised, the full
exercise price is paid, and such shares are issued.

                  7.2 NO FRACTIONAL SHARES. No stock option may at any time be
exercised with respect to a fractional share.

                  7.3 FORM OF PAYMENT. An optionee may exercise a stock option
using as the form of payment (a) cash or cash equivalent, (b) stock-for-stock
payment (as described below), (c) cashless exercises (as described below), (d)
any combination of the above, or (e) such other means as the Plan Administrator
may approve.

                           (i) STOCK-FOR-STOCK PAYMENT. Any optionee who owns
Common Stock may use such shares as a form of payment to exercise stock options
granted under the Plan. The Plan Administrator, in its discretion, may restrict
or rescind this right by notice to optionees. A stock option may be exercised in
such manner only by tendering (actually or by attestation) to the Company whole
shares of Common Stock acceptable to the Plan Administrator and having a Fair
Market Value equal to or less than the exercise price. If an option is exercised
by surrender of shares having a Fair Market Value less than the exercise price,
the option holder must pay the difference in cash.

                           (ii) CASHLESS EXERCISES. The Plan Administrator may
permit an option holder to elect to pay the exercise price upon the exercise of
an option by irrevocably authorizing a third party to sell shares of Common
Stock (or a sufficient portion of the shares) acquired upon exercise of the
option and remit to the Company a sufficient portion of the sale proceeds to pay
the entire exercise price and any tax withholding resulting from such exercise.

                  7.4 FORM AND TIME OF EXERCISES. Unless otherwise specified
herein, each exercise required or permitted to be made by any option holder or
other person entitled to benefits under the Plan, and any permitted modification
or revocation thereof, shall be in writing filed with the Plan Administrator at
such times, in such form, and subject to such restrictions and limitations, not
inconsistent with the terms of the Plan, as the Plan Administrator shall
require.

         8. TRANSFERABILITY. Any Incentive Stock Option granted under the Plan
shall, during the recipient's lifetime, be exercisable only by such recipient,
and shall not be assignable or transferable by such recipient other than by will
or the laws of descent and distribution. Except as specifically allowed by the
Plan Administrator, any other award under the Plan and any of the rights and
privileges conferred thereby shall not be assignable or transferable by the
recipient other than (i) pursuant to a qualified domestic relations order
("QDRO"), or (ii) by will or the laws of descent and distribution and such award
shall be exercisable during the recipient's lifetime only by the recipient or
the person to whom the Option is transferred pursuant to a qualified domestic
relations order.

                                       7
<PAGE>
         9. WITHHOLDING TAXES; OTHER DEDUCTIONS. All distributions under the
Plan are subject to withholding of all applicable taxes, and the Plan
Administrator may condition the delivery of any shares or other benefits under
the Plan on satisfaction of the applicable withholding obligations. The Company
shall have the right to deduct from any settlement of an award granted under the
Plan, including the delivery or vesting of shares, (a) an amount of cash or
shares of Common Stock having a value sufficient to cover withholding as
required by law for any federal, state or local taxes, and (b) any amounts due
from the recipient of such award to the Company or to any parent or subsidiary
of the Company or to take such other action as may be necessary to satisfy any
such withholding or other obligations, including withholding from any other cash
amounts due or to become due from the Company to such recipient an amount equal
to such taxes or obligations. The Plan Administrator also may, in its
discretion, permit the holder of an award to deliver to the Company, at the time
the award is exercised or vests, one or more shares of Common Stock previously
acquired by such individual (other than pursuant to the transaction triggering
the taxes) with an aggregate Fair Market Value up to or equal to (but not in
excess of) the amount of the taxes incurred in connection with such exercise or
vesting.

         10. TERMINATION OF SERVICES.

                  10.1 DEFINITION OF "SERVICE." For purposes of the Plan, unless
it is evidenced otherwise in the option agreement with the holder, the holder is
deemed to be in "Service" to the Company so long as such individual renders
continuous services on a periodic basis to the Company (or to any parent or
subsidiary) in the capacity of an employee, director, or an independent
consultant or advisor. In the discretion of the Plan Administrator, an option
holder will be considered to be rendering continuous services to the Company
even if the type of services change, e.g., from employee to independent
consultant. An option holder will be considered to be an employee for so long as
such individual remains in the employ of the Company or one or more parent or
subsidiary of the Company.

                  10.2 TERMINATION OF INCENTIVE STOCK OPTIONS.

                           (a) TERMINATION OF SERVICE OTHER THAN DISABILITY OR
DEATH. If any option holder ceases to be in Service to the Company for any
reason other than permanent disability or death and any vested option held by
such person is an Incentive Stock Option, then such holder may, within three
months after the date of termination of such Service, but in no event after the
stated expiration date of such Incentive Stock Option, exercise some or all of
the Incentive Stock Options that the holder was entitled to exercise on the date
the holder's Service terminated; provided, that if the option holder is
discharged for "Cause" (as defined below) or commits acts detrimental to the
Company's interests after the Service of the option holder has been terminated,
then the Incentive Stock Options shall immediately be void for all purposes.
"Cause" shall mean a termination of Service based upon a finding by the Plan
Administrator that the option holder (i) has willfully engaged in conduct
involving dishonesty, fraud, theft or embezzlement; (ii) within a reasonable
period of time after written notice and demand for substantial performance is
delivered by the Company, has repeatedly failed or refused, in a material
respect, to follow reasonable policies or directives established by the Company;
(iii) within a reasonable period of time after written notice and demand for
substantial performance is delivered by the Company, has willfully and
persistently failed to attend to his or her material

                                       8
<PAGE>
duties or obligations with the Company (other than any such failure as a result
of the option holder's disability, as defined in Section 10.2(b); (iv) has
willfully performed an act, or willfully failed to act, where such act or
failure to act is demonstrably and materially injurious to the Company,
monetarily or otherwise; (v) has engaged in egregious misconduct involving
serious moral turpitude to the extent that, in the reasonable judgment of the
Plan Administrator, the option holder's credibility and reputation no longer
conform to the standard of the Company's employees; or (vi) has misrepresented
or concealed a material fact for purposes of securing employment with the
Company. For purposes of this Section 10.2, no act or failure to act on the part
of an option holder shall be deemed "willful" unless the Plan Administrator
reasonably determines that the act was done or omitted to be done by the option
holder not in good faith and without a reasonable belief that the option
holder's action or omission was in the best interest of the Company. Any written
notice and demand required by this Section 10.2 shall identify, with reasonable
specificity, the manner in which the Company believes the option holder has
failed to follow the Company's policies and directives or has failed to attend
to his or her material duties.

                           (b) DISABILITY OF OPTION HOLDER. If any option holder
ceases to be in Service to the Company by reason of permanent disability within
the meaning Section 22(e)(3) of the Code (as determined by the Plan
Administrator), the holder shall for a period of one year after the date of
termination of Service, but in no event after the stated expiration date of the
holder's Incentive Stock Options, be entitled to exercise Incentive Stock
Options that the holder was entitled to exercise on the date the holder's
Service terminated as a result of the disability.

                           (c) DEATH OF OPTION HOLDER. If an option holder dies
while in the Company's Service, any vested Options that are Incentive Stock
Options that the option holder was entitled to exercise on the date of death
will be exercisable for a period of one year (or such longer period as may be
determined by the Plan Administrator in its discretion) after such date or until
the stated expiration date of the option holder's Incentive Stock Options,
whichever occurs first, by the person or persons to whom the option holder's
rights pass under a will or by the laws of descent and distribution.

                  10.3 TERMINATION OF NONQUALIFIED OPTIONS. Any Nonqualified
Options that are exercisable at the time an option holder ceases to be in
Service to the Company shall remain exercisable for such period of time
thereafter as determined by the Plan Administrator in its discretion. In the
absence of any provision in the documents evidencing such options or other
determination by the Plan Administrator, the options shall remain exercisable
pursuant to the terms of Section 10.2 of the Plan; provided, however, that in
the event of the death of a recipient, whose Nonqualified Options have been
transferred to a former spouse pursuant to a qualified domestic relations order,
such former spouse shall have a period of one year (or such longer period as may
be determined by the Plan Administrator in its discretion) after the recipient's
date of death to exercise such Options.

         11. TERM OF THE PLAN. The Plan shall become effective as of January 27,
2000 and shall remain in full force and effect through January 27, 2010, subject
to shareholder approval pursuant to Section 18, and unless sooner terminated by
the Board. After the Plan is terminated, no future awards may be granted, but
awards previously granted shall remain outstanding in accordance with their
applicable terms and conditions and the Plan's terms and conditions.

                                       9
<PAGE>
         12. PLAN AMENDMENT AND TERMINATION; BIFURCATION OF THE PLAN. The Board
may, without action on the part of the Company's shareholders, amend, change,
make additions to, or suspend or terminate the Plan as it may, from time to
time, deem necessary or appropriate and in the best interests of the Company;
provided that the Board may not, without the consent of the applicable option
holders, take any action that disqualifies any option previously granted under
the Plan for treatment as an Incentive Stock Option or which adversely affects
or impairs the rights of the holder of any option outstanding under the Plan;
and further provided that, except as provided in Section 4.3, the Board may not,
without the approval of the Company's shareholders, (a) increase the aggregate
number of shares of Common Stock subject to the Plan, (b) reduce the exercise
price at which options may be granted, (c) extend the term of the Plan, (d)
enlarge the class of persons eligible to receive awards under the Plan, (e)
materially increase the benefits accruing to participants under the Plan, or (f)
if such approval is required (i) to comply with Section 422 of the Code with
respect to Incentive Stock Options, or (ii) for purposes of Section 162(m) of
the Code. Notwithstanding any provision of this Plan to the contrary, the Board,
in its sole discretion, may bifurcate the Plan so as to restrict, limit or
condition the use of any provision of the Plan to participants who are officers,
directors or shareholders subject to Section 16 of the 1934 Act without so
restricting, limiting or conditioning the Plan with respect to other
participants

         13. FAIR MARKET VALUE. For purposes of the Plan, the "Fair Market
Value" of a share of Common Stock on any relevant date shall be determined in
accordance with the following provisions:

                  13.1 If the Common Stock is at the time listed or admitted to
trading on any stock exchange or the Nasdaq Stock Market, then the Fair Market
Value shall be the closing selling price per share of Common Stock on the date
in question as reported on the stock exchange or trading market determined by
the Plan Administrator to be the primary market for the Common Stock. If there
is no reported sale of Common Stock on such exchange or trading market on the
date in question, then the Fair Market Value shall be the closing selling price
on the exchange or trading market on the last preceding date for which such
quotation exists.

                  13.2 If the Common Stock is not at the time listed or admitted
to trading on any stock exchange or the Nasdaq Stock Market, but is traded in
over-the-counter market, the Fair Market Value shall be the closing selling
price (or, if such information is not available, the average of the highest bid
and lowest asked prices) per share of Common Stock on the date in question in
the over-the-counter market. If there is no reported closing selling price (or
bid and asked prices) for the Common Stock on the date in question, then the
closing selling price (or the average of the highest bid price and lowest asked
price) on the last preceding date for which such quotations exist shall be
determinative of Fair Market Value.

                  13.3 If the Common Stock at the time is not listed or admitted
to trading on any stock exchange or traded in the over-the-counter market, then
the Fair Market Value shall be determined by the Plan Administrator after taking
into account such factors as the Plan Administrator shall deem appropriate,
including one or more independent professional appraisals.

                                       10
<PAGE>
         14. NO REPRICING WITHOUT SHAREHOLDER APPROVAL. No stock options granted
under the Plan may be repriced without the approval of the shareholders of the
Company within 12 months of such repricing. Shareholder approval shall be
evidenced by the affirmative vote of the holders of the majority of the shares
of the Company's capital stock present in person or by proxy and voting at the
meeting. For purposes of the Plan, "repricing" shall include amendments to stock
options that reduce the exercise price of such options, as well as those
situations in which new options are issued to an option holder in place of
cancelled options, and which would be reportable in the repricing table of the
Company's proxy statement for its annual meeting of shareholders.

         15. GENERAL RESTRICTIONS. Notwithstanding any other provision of the
Plan, the Company shall have no liability to deliver any shares of Common Stock
under the Plan or make any other distribution of benefits under the Plan unless
such delivery or distribution would comply with all applicable laws (including,
without limitation, the requirements of the Securities Act of 1933), and the
applicable requirements of any securities exchange, the Nasdaq Stock Market, or
similar entity. To the extent that the Plan provides for issuance of stock
certificates to reflect the issuance of shares of Common Stock, the issuance may
be effected on a non-certificated basis to the extent not prohibited by
applicable law or the applicable rules of any stock exchange, the Nasdaq Stock
Market, or similar entity.

         16. PLAN NOT EXCLUSIVE. This Plan is not intended to be the exclusive
means by which the Company may issue awards to acquire its Common Stock.

         17. GOVERNING LAW. The Plan shall be governed by, and all questions
arising hereunder shall be determined in accordance with, the laws of the State
of Arizona.

         18. APPROVAL BY SHAREHOLDERS. This Plan shall be submitted to the
shareholders of the Company for their approval at a regular or special meeting
to be held within 12 months after the adoption of this Plan by the Board.
Shareholder approval shall be evidenced by the affirmative vote of the holders
of a majority of the shares of the Company's Common Stock present in person or
by proxy and voting at the meeting. The date on which the shareholders approve
the plan shall be the "Approval Date" of the Plan. If the shareholders decline
to approve this Plan at such meeting or if this Plan is not approved by the
shareholders within 12 months after its adoption by the Board, this Plan (and
all awards granted hereunder) shall automatically terminate to the same extent
and with the same effect as though this Plan had never been adopted. If this
Plan is approved by shareholders, all awards granted under the Plan to persons
who are "Affiliates" of the Company (as defined under the Securities Act of
1933, as amended) shall be deemed acquired on the date such approval is
obtained.

         19. LIMITATION OF IMPLIED RIGHTS. Neither an option holder nor any
other person shall, by reason of participation in the Plan, acquire any right in
or title to any assets, funds or property of the Company or any subsidiary
whatsoever, including, without limitation, any specific funds, assets, or other
property which the Company or any subsidiary, in their sole discretion, may set
aside in anticipation of a liability under the Plan. An option holder shall have
only a contractual right to the common stock or other amounts, if any, payable
under the Plan, unsecured by any assets of the Company or any subsidiary, and
nothing contained in the Plan

                                       11
<PAGE>
shall constitute sufficient to pay any benefits to any person. The Plan does not
constitute a contract of employment, and selection as to receive any aware under
the Plan will not give any participating employee the right to be retained in
the employ of the Company or any subsidiary, nor any right or claim to any
benefit under the Plan, unless such right or claim has specifically accrued
under the terms of the Plan.

                                       12

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