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                                                                     EXHIBIT 4.2

                             NEOVISTA SOFTWARE, INC.

                        1991 INCENTIVE STOCK OPTION PLAN
                            (AMENDED AS OF JULY 1999)

         I. PURPOSE

            A. This 1991 Incentive Stock Option Plan (the "Plan") is an equity
incentive program which is intended to promote the interests of NeoVista
Software, Inc. (the "Corporation") by providing employees (including officers
and directors) of the Corporation (or its parent or subsidiary corporations) who
are responsible for the management, growth and financial success of the
Corporation (or its parent or subsidiary corporations) with the opportunity to
acquire a proprietary interest, or increase their proprietary interest, in the
Corporation and thereby encourage them to remain in the service of the
Corporation (or its parent or subsidiary corporations).

            B. For purposes of the Plan, the following provisions shall be
applicable in determining the parent and subsidiary corporations of the
Corporation:

               (i) Any corporation (other than the Corporation) in an unbroken
         chain of corporations ending with the Corporation shall be considered
         to be a parent corporation of the Corporation, provided each such
         corporation in the unbroken chain (other than the Corporation) owns, at
         the time of the determination, stock possessing fifty percent (50%) or
         more of the total combined voting power of all classes of stock in one
         of the other corporations in such chain.

               (ii) Each corporation (other than the Corporation) in an unbroken
         chain of corporations beginning with the Corporation shall be
         considered to be a subsidiary of the Corporation, provided each such
         corporation (other than the last corporation) in the unbroken chain
         owns, at the time of the determination, stock possessing fifty percent
         (50%) or more of the total combined voting power of all classes of
         stock in one of the other corporations in such chain.

         II. ADMINISTRATION OF THE PLAN

             A. The Plan shall be administered by the Board of Directors (the
"Board") of the Corporation. The Board, however, may at any time appoint a
committee ("Committee") of two (2) or more members of the Board and delegate to
such Committee one or more of the administrative powers allocated to the Board
pursuant to the provisions of the Plan. Members of the Committee shall serve for
such period of time as the Board may determine and shall be subject to removal
by the Board at any time. The Board may also at any time terminate the functions
of the Committee and reassume all powers and authority previously delegated to
the Committee.

Adopted by the Board of Directors and the Shareholders on August 19, 1997.
As amended by the Board of Directors on August 21, 1998 and February 3, 1999 and
approved by the Shareholders on February 5, 1999.

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              B. The Plan Administrator (either the Board or the Committee, to
the extent the Committee is at the time responsible for the administration of
the Plan) shall have full power and authority (subject to the provisions of the
Plan) to establish such rules and regulations as it may deem appropriate for the
proper administration of the Plan and to make such determinations under, and
issue such interpretations of, the Plan and any outstanding option grants as it
may deem necessary or advisable. Decisions of the Plan Administrator shall be
final and binding on all parties who have an interest in the Plan or any
outstanding option.

              C. The Plan Administrator shall have complete discretion (subject
to the express provisions of the Plan) to determine the employees who are to be
granted options from time to time under the Plan, the number of shares which are
to purchasable under each granted option, the time or times at which the option
is to become exercisable, the vesting schedule (if any) which is to be in effect
for the shares purchased under the option, and the maximum term for which the
grant is to remain outstanding.

         III. STOCK SUBJECT TO THE PLAN

              A. The stock issuable under the Plan shall be shares of the
Corporation's authorized but unissued or reacquired common stock ("Common
Stock"). The maximum number of shares which may be issued over the term of the
Plan shall not exceed 8,214,396 shares, less any and all shares of Common Stock
(whether vested or unvested) issued under the Corporation's 1991 Non-Qualified
Stock Option/Stock Issuance Plan (the "Non-Qualified Plan"). The total number of
shares issuable under the Plan shall be subject to adjustment from time to time
in accordance with the provisions of paragraph C. below.

              B. Should an option granted under either this Plan or the
Non-Qualified Plan expire or terminate for any reason prior to exercise or
surrender in full (including options cancelled in accordance with the
cancellation-regrant provisions of this Plan or the Non-Qualified Plan), the
shares subject to the portion of the option not so exercised or surrendered
shall be available for subsequent option grants under either this Plan (subject
to the share-issuance limitation of paragraph A. above) or the Non-Qualified
Plan. Shares issued under either this Plan or the Non-Qualified Plan (whether as
vested or unvested shares) which are repurchased by the Corporation shall not be
available for subsequent issuance under this Plan.

              C. In the event any change is made to the Common Stock issuable
under the Plan by reason of any stock dividend, stock split, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without receipt of consideration, then appropriate adjustments
shall be made to (i) the maximum number and/or class of shares issuable under
the Plan and (ii) the aggregate number and/or class of shares and the option
price per share of the Common Stock subject to each outstanding option in order
to prevent the dilution or enlargement of benefits thereunder. The adjustments
determined by the Plan Administrator shall be final, binding and conclusive.

              D. Common Stock issuable under the Plan may be subject to such
restrictions on transfer, repurchase rights or other restrictions as may be
determined by the Plan Administrator.

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         IV. ELIGIBILITY

             Any and all employees (including officers and directors) of the
Corporation (or its parent or subsidiary corporations) shall be eligible to
receive option grants from time to time under the Plan.

          V. TERMS AND CONDITIONS OF OPTIONS

             A. All options granted the Plan shall be structured to qualify as
incentive stock options under Section 422 of the Internal Revenue Code (the
"Code").

             B. Options granted pursuant to the Plan shall be authorized by
action of the Plan Administrator. Each granted option shall be evidenced by one
or more instruments in the form approved by the Plan Administrator; provided,
however, that each such instrument (the "Option Agreement") shall comply with
and incorporate the terms and conditions specified below.

                1. Option Price.

                   a. The option price per share of the Common Stock subject to
each granted option shall in no event be less than one hundred percent (100%) of
the fair market value per share of such Common Stock on the grant date.

                   b. The aggregate fair market value (determined as of the
respective date or dates of grant) of the Common Stock for which one or more
options granted to any one Employee under this Plan (or any other option plan of
the Corporation or its parent or subsidiary corporations) may for the first time
become exercisable as incentive stock options under the Federal tax laws during
any one calendar year shall not exceed the sum of One Hundred Thousand Dollars
($100,000.00). To the extent the Employee holds two or more such options which
become exercisable for the first time in the same calendar year, the foregoing
limitation on the exercisability thereof as incentive stock options under the
Federal tax laws shall be applied on the basis of the chronological order in
which such options are granted. Should such limitation be exceeded, the excess
shares purchased under such option or options shall be taxed under the Code as
shares acquired under a non-qualified or non-statutory option.

                   c. If any individual to whom an option is to be granted
pursuant to the provisions of the Plan is at the time the owner of stock (as
determined under Section 424(d) of the Internal Revenue Code) possessing 10% or
more of the total combined voting power of all classes of stock of the
Corporation or any one of its parent or subsidiary corporations ("10%
Stockholder"), then the option price per share shall not be less than one
hundred ten percent (110%) of the fair market value per share of Common Stock on
the grant date.

                   d. The option price shall become immediately due upon
exercise of the option and shall, subject to the provisions of Article X, be
payable in cash or cash equivalent such as a personal check or bank draft.

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                   e. Provided the Corporation is at the time a reporting
company under Section 12(g) of the Securities Exchange Act of 1934, the option
price will also be payable in one of the alternative forms specified below (to
the extent provided in the Option Agreement):

                      (i) Full payment in shares of Common Stock held by the
         optionee for the requisite period necessary to avoid a charge to the
         Corporation's earnings for financial reporting purposes and valued at
         fair market value on the Exercise Date (as such term is defined below);
         or

                      (ii) Full payment through a combination of shares of
         Common Stock held by the optionee for the requisite period necessary to
         avoid a charge to the Corporation's earnings for financial reporting
         purposes and valued at fair market value on the Exercise Date and cash
         or cash equivalents;

                      (iii) Full payment through a special sale and remittance
         procedure pursuant to which the Optionee is to provide irrevocable
         written instructions (a) to a designated brokerage firm to effect the
         immediate sale of the purchased shares and remit to the Corporation,
         out of the sale proceeds available on the settlement date, sufficient
         funds to cover the aggregate Option Price payable for the purchased
         shares plus all applicable Federal and State income and employment
         taxes required to be withheld by the Corporation by reason of such
         purchase and (b) concurrently to the Corporation to deliver the
         certificates for the purchased shares directly to such brokerage firm
         in order to effect the sale transaction.

For purposes of this subparagraph e., the Exercise Date shall be the date on
which the Corporation shall have received written notice of the exercise of the
option. Except to the extent the sale and remittance procedure is utilized in
connection with the exercise of the option, payment of the option price must
accompany the written notice of the exercise delivered to the Corporation.

                   f. For purposes of subparagraphs a. through e. above (and for
all other valuation purposes under the Plan), the fair market value per share of
Common Stock on any relevant date shall be determined in accordance with the
following provisions:

                      (i) If the Common Stock is not at the time listed or
         admitted to trading on any stock exchange but is traded on the NASDAQ
         National Market System, the fair market value shall be the closing
         selling price of one share of Common Stock on the date in question, as
         such price is reported by the National Association of Securities
         Dealers through its NASDAQ system or any successor system. If there is
         no closing selling price for the Common Stock on the date in question,
         then the closing selling price on the last preceding date for which
         such quotation exists shall be determinative of fair market value.

                      (ii) If the Common Stock is at the time listed or admitted
         to trading on any stock exchange, then the fair market value shall be
         the closing

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         selling price per share of Common Stock on the date in question on the
         stock exchange determined by the Plan Administrator to be the primary
         market for the Common Stock, as such price is officially quoted in the
         composite tape of transactions on such exchange. If there is no
         reported sale of Common Stock on such exchange on the date in question,
         then the fair market value shall be the closing selling price on the
         exchange on the last preceding date for which such quotation exists.

                      (iii) If the Common Stock is at the time neither listed
         nor admitted to trading on any stock exchange nor 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.

                2. Term and Exercise of Options. Each option granted under the
Plan shall be exercisable at such time or times, during such period, and for
such number of shares as shall be determined by the Plan Administrator and set
forth in the Option Agreement. In no event, however, shall any option granted
under the Plan have a term in excess of ten (10) years from the grant date, and
no option granted to a 10% Stockholder shall have a term in excess of five (5)
years from the grant date. During the lifetime of the optionee, the option shall
be exercisable only by the optionee and shall not be assignable or transferable
by the optionee otherwise than by will or by the laws of descent and
distribution.

                3. Effect of Termination of Employment.

                   a. Should the optionee cease to remain in Service for any
reason (including death or permanent disability as defined in Section 22(e)(3)
of the Internal Revenue Code) while the holder of one or more outstanding
options under the Plan, then each such option shall not (except to the extent
otherwise provided pursuant to Article IX) remain exercisable for more than the
limited period of time (following the date of such cessation of Service)
specified by the Plan Administrator in the relevant Option Agreement. In no
event, however, shall any such option be exercisable after the specified
expiration date of the option term. Each such option shall, during such limited
period, be exercisable only to the extent of the number of shares (if any) for
which the option is exercisable on the date of the optionee's cessation of
Service. Upon the expiration of such period or (if earlier) upon the expiration
of the option term, the option shall terminate and cease to be exercisable.

                   b. Any option held by the optionee under the Plan at the time
of his/her death may be subsequently exercised, but only to the extent of the
number of shares (if any) for which the option is exercisable on the date of the
optionee's cessation of Service, by the personal representative of the
optionee's estate or by the person or persons to whom the option is transferred
pursuant to the optionee's will or in accordance with the laws of descent and
distribution, provided and only if such exercise occurs prior to the earlier of
(i) the first anniversary of the date of the optionee's death (or such shorter
period as is specified by the Plan Administrator in the Option Agreement) or
(ii) the specified expiration date of the option term. Upon the occurrence of
the earlier event, the option shall terminate and cease to be exercisable.

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                   c. For purposes of the foregoing provisions of this
subsection 3 (and for all other purposes under the Plan), unless it is expressly
provided otherwise in the relevant Option Agreement evidencing the grant or in
the purchase agreement evidencing the purchase of the option shares, the
optionee shall be deemed to continue in Service for so long as such individual
renders services on a periodic basis to the Corporation (or any parent or
subsidiary corporation) in the capacity of an Employee. The optionee shall be
considered to be an Employee for so long as such individual remains in the
common-law employ of the Corporation or one or more of its parent or subsidiary
corporations.

                4. Stockholder Rights. The optionee shall have none of the
rights of a stockholder with respect to any shares covered by the option until
such optionee shall have exercised the option and paid the option price for the
purchased shares.

                5. Repurchase Rights. The shares of Common Stock acquired upon
the exercise of options granted under the Plan may be subject to one or more
repurchase rights of the Corporation in accordance with the following
provisions:

                   a. The Plan Administrator may in its discretion determine
that it shall be a term and condition of one or more options exercised under the
Plan that the Corporation (or its assignees) shall have the right, exercisable
upon the optionee's cessation of Service, to repurchase at the option price all
or (at the discretion of the Corporation and with the consent of the optionee)
part of any unvested shares of Common Stock held at the time by the optionee as
a result of one or more prior exercises of such option. The repurchase right
shall be exercisable by the Corporation (or its assignees) upon such terms and
conditions (including the establishment of the appropriate vesting schedule and
other provision for the expiration of such right in one or more installments
over the optionee's period of Service) as the Plan Administrator may specify in
the instrument evidencing such right.

                   b. In no event may the Plan Administrator impose a vesting
schedule upon any option granted under the Plan or upon any shares of Common
Stock issued under the Plan which is more restrictive than 20% per year annual
vesting, beginning one year after the grant date of the option.

                   c. All of the Corporation's outstanding repurchase rights
shall automatically terminate upon the occurrence of any Corporate Transaction
under Section VII, except to the extent: (i) the Corporation's outstanding
repurchase rights are to be assigned to the successor corporation (or parent
thereof) in connection with the Corporate Transaction or (ii) the termination of
such repurchase rights are precluded by other limitations imposed by the Plan
Administrator at the time of the option grant.

                   d. Until such time as the Corporation's outstanding shares of
Common Stock are first registered under Section 12(g) of the 1934 Act, the
Corporation shall have the right of first refusal with respect to any proposed
sale or other disposition by the optionee (or any successor in interest by
reason of purchase, gift or other mode of transfer) of any shares of Common
Stock issued under the Plan. Such right of first refusal shall be

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exercisable by the Corporation (or its assignees) in accordance with the terms
and conditions established by the Plan Administrator and set forth in the
instrument evidencing such right.

         VI. STOCK APPRECIATION RIGHTS

             A. Provided and only if the Plan Administrator determines in its
discretion to implement the stock appreciation right provisions of this Article
VI., one or more optionees may be granted the right, exercisable upon such terms
and conditions as the Plan Administrator may establish at the time of the option
grant or at any time thereafter, to surrender all or part of an unexercised
option under the Plan in exchange for a distribution from the Corporation equal
in amount to the excess of (i) the fair market value (at date of surrender) of
the number of shares in which the optionee is at the time vested under the
surrendered option (or surrendered portion thereof) over (ii) the aggregate
option price payable for such vested shares.

             B. No surrender of an option shall be effective hereunder unless it
is approved by the Plan Administrator. If the surrender is so approved, then the
distribution to which the optionee shall accordingly become entitled under this
Article VI. may be made in shares of Common Stock valued at fair market value at
date of surrender, in cash, or partly in shares and partly in cash, as the Plan
Administrator shall in its sole discretion deem appropriate.

        VII. CORPORATE TRANSACTION

             A. In the event of any of the following transactions ("Corporate
Transaction"):

                (i) a merger or acquisition in which the Corporation is not the
         surviving entity, except for a transaction the principal purpose of
         which is to change the State of the Corporation's incorporation;

                (ii) the sale, transfer or other disposition of all or
         substantially all of the assets of the Corporation; or

                (iii) any reverse merger in which the Corporation is the
         surviving entity but in which fifty percent (50%) or more of the
         Corporation's outstanding voting stock is transferred to persons
         different from those who held the stock immediately prior to such
         merger, then each option at the time outstanding under the Plan shall
         terminate upon the consummation of such Corporate Transaction and cease
         to be exercisable, unless assumed by the successor corporation or
         parent thereof.

             B. If the Corporation is the surviving entity in any Corporate
Transaction or the outstanding options under the Plan are to be assumed in
connection with such Corporate Transaction, then each continuing or assumed
option shall, immediately after such Corporate Transaction, be appropriately
adjusted to apply and pertain to the number and class of securities which would
have been issuable to the optionee, in consummation of such Corporate
Transaction, had the option been exercised immediately prior to such Corporate
Transaction. Appropriate adjustments shall also be made to the option price
payable per share, provided the

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aggregate option price payable for such securities shall remain the same. In
addition, the class and number of securities available for issuance under the
Plan following the consummation of such Corporate Transaction shall be
appropriately adjusted.

             C. The grant of options under this Plan shall in no way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.

       VIII. CANCELLATION AND NEW GRANT OF OPTIONS

             The Plan Administrator shall have the authority to effect, at any
time and from time to time, with the consent of the affected optionees, the
cancellation of any or all outstanding options under the Plan and to grant in
substitution therefor new options under the Plan covering the same or different
numbers of shares of Common Stock but having an option price per share not less
than one hundred percent (100%) of the fair market value per share of Common
Stock on the new grant date or, in the case of a 10% Stockholder, not less than
one hundred and ten percent (110%) of such fair market value.

         IX. EXTENSION OF EXERCISE PERIOD

             The Plan Administrator shall have full power and authority to
extend (either at any time while the option is granted or at the time while the
option remains outstanding) the period of time for which the option is to remain
exercisable following the optionee's cessation of Service from the limited
period specified in the Option Agreement to such greater period of time as the
Plan Administrator shall deem appropriate; provided, however, that in no event
shall such option be exercisable after the specified expiration date of the
option term.

          X. PLAN LOANS

             A. The Plan Administrator may assist any optionee (including any
optionee who is an officer or director of the Corporation) in the exercise of
one or more options granted to such optionee under the Plan, including the
satisfaction of any Federal and State income and employment tax obligations
arising therefrom, by (i) authorizing the extension of a loan from the
Corporation to such optionee or (ii) permitting the optionee to pay the option
price in installments over a period of years. The terms of any loan or
installment method of payment (including the interest rate and terms of
repayment) shall be established by the Plan Administrator in its sole
discretion. Loans or installment payments may be granted with or without
security or collateral, but the maximum credit available to the optionee may not
exceed the sum of (A) the aggregate option price payable for the acquired shares
(less the par value of such shares) plus (B) any Federal and State income and
employment tax liability incurred by the optionee in connection with such
exercise or issuance.

             B. The Plan Administrator may, in its absolute discretion,
determine that one or more loans extended under the Plan shall be subject to
forgiveness by the Corporation in

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whole or in part upon such terms and conditions as the Plan Administrator may in
its discretion deem appropriate.

         XI. AMENDMENT OF THE PLAN AND AWARDS

             A. The Board shall have complete and exclusive power and authority
to amend or modify the Plan in any or all respects whatsoever; provided,
however, that no such amendment or modification shall adversely affect the
rights and obligations of an optionee with respect to options at the time
outstanding under the Plan, nor adversely affect the rights of any holder of
unvested Common Stock issued under the Plan prior to such action, unless such
individual consents to such amendment; and provided further, that the Board
shall not, without the approval of the Corporation's stockholders, amend the
Plan to (i) materially increase the maximum number of shares issuable under the
Plan (except for permissible adjustments under Article III.C), (ii) materially
increase the benefits accruing to individuals who participate in the Plan, or
(iii) materially modify the eligibility requirements for participation in the
Plan.

             B. Options to purchase shares of Common Stock may be granted under
the Plan in excess of shares then available for issuance under the Plan,
provided (i) an amendment to increase the maximum number of shares issuable
under the Plan is adopted by the Board prior to the initial grant of any such
option or the issuance of any such shares and is thereafter submitted to the
Corporation's stockholders for approval and (ii) any excess shares actually
issued under the Plan are held in escrow until such stockholder approval is
obtained. If such stockholder approval is not obtained within twelve (12) months
after the date the share-increase amendment is adopted by the Board, then any
unexercised options granted on the basis of such increase shall terminate and
cease to be exercisable, and the Corporation shall promptly refund the option
price paid for any excess shares issued under the Plan and held in escrow,
together with interest (at the applicable Short Term Federal Rate) for the
period the shares were held in escrow.

        XII. EFFECTIVE DATE AND TERM OF PLAN

             A. This Plan was initially adopted by the Board in June 1990 and
was ratified by the Corporation's stockholders in July 1990. The Plan was
subsequently amended by the Board at various dates to increase the total number
of shares issuable thereunder to a total of 8,214,396. This restatement of the
Plan is effective as of June 1999, the date the restatement was adopted by the
Board. However, no stock option or stock appreciation right granted on the basis
of any share-increase shall become exercisable, and no shares shall be issued on
the basis of such share-increase, unless and until such increase shall have been
approved by the Corporation's stockholders. If such stockholder approval is not
obtained within twelve (12) months after the date of the Board's adoption of an
increase, then all stock options and stock appreciation rights previously
granted on the basis of such share-increase shall terminate and no further stock
options or stock appreciation rights shall be granted on the basis of such
share-increase. Subject to such limitation, the Plan Administrator may grant
stock options and stock appreciation rights under the Plan at any time after the
effective date and before the date fixed herein for termination of the Plan.

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             B. The sale and remittance procedure authorized for the exercise of
outstanding options under this Plan shall be available for all options granted
under this Plan on or after July 10, 1992. The Plan Administrator may also allow
such procedure to be utilized in connection with one or more disqualifying
dispositions of Incentive Option shares effected after July 10, 1992.

             C. The Plan shall in all events terminate upon the earlier of (i)
the tenth (10th) anniversary of the date of its adoption by the Board or (ii)
the date on which all shares available for issuance under the Plan shall have
been issued or cancelled pursuant to the exercise or surrender of stock options
and/or stock appreciation rights under the Plan. If the date of termination is
determined under clause (i) above, then any stock options, stock appreciation
rights and unvested shares at the time outstanding under the Plan shall continue
to have force and effect in accordance with the provisions of the instruments
evidencing such grants or issuances.

       XIII. USE OF PROCEEDS

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

        XIV. WITHHOLDING

             The Corporation's obligation to deliver shares upon the exercise or
surrender of any options granted under the Plan shall be subject to the
satisfaction of all applicable Federal, State and local income and employment
tax withholding requirements.

         XV. REGULATORY APPROVALS

             The implementation of the Plan, the granting of any options under
the Plan, and the issuance of Common Stock upon the exercise or surrender of the
option grants made hereunder shall be subject to the Corporation's procurement
of all approvals and permits required by regulatory authorities having
jurisdiction over the Plan, the options granted under it, and the Common Stock
issued pursuant to it.

        XVI. FINANCIAL REPORTS

             The Corporation shall deliver a balance sheet and an income
statement at least annually to each individual holding an outstanding option
under the Plan, unless the optionee is a key employee whose duties in connection
with the Corporation assures such employee access to equivalent information.

                                      -10-<PAGE>   1

                                                                     EXHIBIT 4.3

                             NEOVISTA SOFTWARE, INC.

               1991 NON-QUALIFIED STOCK OPTION/STOCK ISSUANCE PLAN
                          (AMENDED AS OF JULY 2, 1991)

                                    ARTICLE I

                               GENERAL PROVISIONS

         1. PURPOSE.

            A. This 1991 Non-Qualified Stock Option/Stock Issuance Plan (the
"Plan") is a new equity incentive program which is to serve as the successor to
the NeoVista Software, Inc. Restricted Stock Purchase Plan (the "Predecessor
Plan"). The Plan is intended to promote the interests of NeoVista Software, Inc.
(the "Corporation") by providing (i) employees (including officers and
directors) of the Corporation (or its parent or subsidiary corporations) and
(ii) consultants and independent contractors who provide valuable services to
the Corporation (or its parent or subsidiary corporations) with the opportunity
to acquire a proprietary interest, or increase their proprietary interest, in
the Corporation and thereby encourage them to remain in the service of the
Corporation (or its parent or subsidiary corporations).

            B. For purposes of the Plan, the following provisions shall be
applicable in determining the parent and subsidiary corporations of the
Corporation:

               (i) Any corporation (other than the Corporation) in an unbroken
chain of corporations ending with the Corporation shall be considered to be a
parent corporation of the Corporation, provided each such corporation in the
unbroken chain (other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

               (ii) Each corporation (other than the Corporation) in an unbroken
chain of corporations beginning with the Corporation shall be considered to be a
subsidiary of the Corporation, provided each such corporation (other than the
last corporation) in the unbroken chain owns, at the time of the determination,
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.

         2. STRUCTURE OF THE PLAN.

            A. The Plan shall be divided into two separate components: the
Option Grant Program specified in Article II and the Stock Issuance Program
specified in Article III. Under the Option Grant Program, eligible individuals
may be granted options to purchase shares of the Corporation's Common Stock at a
discount of up to 15% of the fair market value of such shares on the grant date.

Adopted by the Board of Directors and the Shareholders on August 19, 1997.
As amended by the Board of Directors on August 21, 1998 and February 3, 1999 and
approved by the Shareholders on February 5, 1999.

<PAGE>   2

            B. The Stock Issuance Program shall allow eligible individuals to
acquire shares of the Corporation's Common Stock at discounts from the fair
market value of such shares of up to 15%. Such shares may be fully-vested when
issued or may vest over time.

            C. The provisions of Articles I and IV of the Plan shall apply to
both the Option Grant Program and the Stock Issuance Program and shall
accordingly govern the interests of all individuals in the Plan.

         3. ADMINISTRATION OF THE PLAN.

            A. The Plan shall be administered by the Board of Directors (the
"Board") of the Corporation. The Board, however, may at any time appoint a
committee ("Committee") of three (3) or more members of the Board and delegate
to such Committee one or more of the administrative powers allocated to the
Board pursuant to the provisions of the Plan. Members of the Committee shall
serve for such period of time as the Board may determine and shall be subject to
removal by the Board at any time. The Board may also at any time terminate the
functions of the Committee and reassume all powers and authority previously
delegated to the Committee.

            B. The Plan Administrator (either the Board or the Committee, to the
extent the Committee is at the time responsible for the administration of the
Plan) shall have full power and authority (subject to the provisions of the
Plan) to establish such rules and regulations as it may deem appropriate for the
proper administration of the Plan and to make such determinations under, and
issue such interpretations of, the Plan and any outstanding option grants or
share issuances as it may deem necessary or advisable. Decisions of the Plan
Administrator shall be final and binding on all parties who have an interest in
the Plan or any outstanding option or share issuance.

         4. OPTION GRANTS AND SHARE ISSUANCES.

            A. Eligibility for share issuances under the Stock Issuance Program
or option grants pursuant to the Option Grant Program shall be limited to the
following individuals:

               (i) any and all employees (including officers and directors) of
the Corporation (or its parent or subsidiary corporations); and

               (ii) consultants and other independent contractors who provide
valuable services to the Corporation (or its parent or subsidiary corporations).

            B. The Plan Administrator shall have full authority to determine:

               (i) with respect to the option grants made under the Plan, the
eligible individuals who are to receive option grants, the number of shares to
be covered by each such grant, the time or times at which each granted option is
to become exercisable, the vesting schedule (if any) which is to be in effect
for the shares purchased under such option and the maximum term for which the
option may remain outstanding, and

                                      -2-
<PAGE>   3

               (ii) with respect to share issuances under the Stock Issuance
Program, the number of shares to be issued to each Recipient, the vesting
schedule (if any) to be applicable to the issued shares, and the consideration
to be paid by the individual for such shares.

            C. The Plan Administrator shall have the absolute discretion either
to grant options in accordance with Article II of the Plan or to effect share
issuances in accordance with Article III of the Plan.

         5. STOCK SUBJECT TO THE PLAN.

            A. The stock issuable under the Plan shall be shares of the
Corporation's authorized but unissued or reacquired common stock ("Common
Stock"). The maximum number of shares which may be issued over the term of the
Plan shall not exceed the sum of (i) 2,250,000 shares of Common Stock plus (ii)
the number of shares of Common Stock available for issuance, as of the June 8,
1990 adoption date of this Plan, under the Predecessor Plan plus (iii) any
shares of Common Stock outstanding under the Predecessor Plan as of June 8, 1990
which are subsequently repurchased by the Corporation as unvested shares
pursuant to its repurchase rights under the Predecessor Plan, less any and all
vested shares of Common Stock issued from time to time under the Corporation's
1991 Incentive Stock Option Plan (the "ISO Plan"). The total number of shares
issuable under the Plan shall be subject to adjustment from time to time in
accordance with the provisions of subparagraph C. below.

            B. Should an option granted under either this Plan or the ISO Plan
expire or terminate for any reason prior to exercise or surrender in full
(including options cancelled in accordance with the cancellation-regrant
provisions of this Plan or the ISO Plan), the shares subject to the portion of
the option not so exercised or surrendered shall be available for subsequent
option grants or share issuances under this Plan or the subsequent option grants
under the ISO Plan. Shares of Common Stock issued under either the Option Grant
Program of the Stock Issuance Program of this Plan or under the ISO Plan which
are subsequently repurchased by the Corporation as unvested shares pursuant to
its repurchase rights under such Plans shall be available for subsequent option
grants and issuances under this Plan but shall not be available for subsequent
option grants or issuances under the ISO Plan.

            C. In the event any change is made to the Common Stock issuable
under the Plan by reason of any stock dividend, stock split, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without receipt of consideration, then appropriate adjustments
shall be made to (i) the maximum number and/or class of shares issuable under
the Plan and (ii) the aggregate number and/or class of shares and the option
price per share of the Common Stock subject to each outstanding option in order
to prevent the dilution or enlargement of benefits thereunder. The adjustments
determined by the Plan Administrator shall be final, binding and conclusive.

            D. Common Stock issuable under the Plan, whether under the Option
Grant Program or the Stock Issuance Program, may be subject to such restrictions
on transfer, repurchase rights or other restrictions as may be determined by the
Plan Administrator.

                                      -3-
<PAGE>   4

                                   ARTICLE II

                              OPTION GRANT PROGRAM

         1. TERMS AND CONDITIONS OF OPTIONS.

            A. All options granted under the Plan shall be non-qualified stock
options which are not intended to meet the requirements of Section 422 of the
Internal Revenue Code.

            B. Options granted pursuant to the Plan shall be authorized by
action of the Plan Administrator and shall be evidenced by one or more
instruments in the form approved by the Plan Administrator; provided, however,
that each such instrument (the "Option Agreement") shall comply with and
incorporate the terms and conditions specified below.

            1. Option Price.

               a. The option price per share shall be fixed by the Plan
Administrator; provided, however, that in no event shall the option price per
share be less than eighty-five percent (85%) of the fair market value per share
of Common Stock on the grant date.

               b. If any individual to whom an option is to be granted pursuant
to the provisions of the Plan is at the time the owner of stock (as determined
under Section 424(d) of the Internal Revenue Code) possessing 10% or more of the
total combined voting power of all classes of stock of the Corporation or any
one of its parent or subsidiary corporations ("10% Stockholder"), then the
option price per share shall not be less than one hundred ten percent (110%) of
the fair market value per share of Common Stock on the grant date.

               c. The option price shall become immediately due upon exercise of
the option and shall, subject to the provisions of Section 1 of Article IV, be
payable in cash or cash equivalent such as a personal check or bank draft.

               d. Provided the Corporation is at the time a reporting company
under Section 12(g) of the Securities Exchange Act of 1934, the option price
will also be payable in one of the following alternative forms specified below
(to the extent provided in the Option Agreement):

                  (i) Full payment in shares of Common Stock held by the
Optionee for the requisite period necessary to avoid a charge to the
Corporation's earnings for financial reporting purposes and valued at fair
market value on the Exercise Date (as such term is defined below); or

                  (ii) Full payment through a combination of shares of Common
Stock held by the Optionee for the requisite period necessary to avoid a charge
to the Corporation's earnings for financial reporting purposes and valued at
fair market value on the Exercise Date and cash or cash equivalents.

                                      -4-
<PAGE>   5

For purposes of this subparagraph d., the Exercise Date shall be the first date
on which the Corporation shall have received both written notice of the exercise
of the option and payment of the option price for the purchased shares.

               e. For purposes of subparagraphs a. through d. above (and for all
other valuation purposes under the Plan), the fair market value per share of
Common Stock on any relevant date shall be determined in accordance with the
following provisions:

                  (i) If the Common Stock is not at the time listed or admitted
to trading on any stock exchange but is traded in the over-the-counter market,
the fair market value shall be the mean between the highest bid and the lowest
asked prices (or if such information is available the closing selling price) per
share of Common Stock on the date in question in the over-the-counter market, as
such prices are reported by the National Association of Securities Dealers
through the NASDAQ system or any successor system. If there are no reported bid
and asked prices (or closing selling price) for the Common Stock on the date in
question, then the mean between the highest bid and lowest asked prices (or
closing selling price) on the last preceding date for which such quotations
exist shall be determinative of fair market value.

                  (ii) If the Common Stock is at the time listed or admitted to
trading on any stock exchange, then the fair market value shall be the closing
selling price per share of Common Stock on the date in question on the stock
exchange determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape of
transactions on such exchange. If there is no reported sale of Common Stock on
such exchange on the date in question, then the fair market value shall be the
closing selling price on the exchange on the last preceding date for which such
quotation exists.

                  (iii) If the Common Stock is at the time neither listed nor
admitted to trading on any stock exchange nor 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.

            2. Term and Exercise of Options. Each option granted under the Plan
shall be exercisable at such time or times, during such period, and for such
number of shares as shall be determined by the Plan Administrator and set forth
in the Option Agreement. In no event, however, shall any option granted under
the Plan have a term in excess of ten (10) years from the grant date, and no
option granted to a 10% Stockholder shall have a term in excess of five (5)
years from the grant date. During the lifetime of the Optionee, the option shall
be exercisable only by the Optionee and shall not be assignable or transferable
by the Optionee otherwise than by will or by the laws of descent and
distribution.

            3. Effect of Termination of Employment.

               a. Should an Optionee cease to remain in Service for any reason
(including death or permanent disability as defined in Section 22(e)(3) of the
Internal Revenue Code) while the holder of one or more outstanding options under
the Plan, then each such option

                                      -5-
<PAGE>   6

shall not (except to the extent otherwise provided pursuant to Section 5 of this
Article II) remain exercisable for more than the limited period of time
(following the date of such cessation of Service) specified by the Plan
Administrator in the relevant Option Agreement. In no event, however, shall any
such option be exercisable after the specified expiration date of the option
term. Each such option shall, during such limited period, be exercisable only to
the extent of the number of shares (if any) for which the option is exercisable
on the date of the Optionee's cessation of Service. Upon the expiration of such
period or (if earlier) upon the expiration of the option term, the option shall
terminate and cease to be exercisable.

               b. Any option held by the Optionee under the Plan at the time of
the Optionee's death may be subsequently exercised, but only to the extent of
the number of shares (if any) for which the option is exercisable on the date of
the Optionee's cessation of Service, by the personal representative of the
Optionee's estate or by the person or persons to whom the option is transferred
pursuant to the Optionee's will or in accordance with the laws of descent and
distribution, provided and only if such exercise occurs prior to the earlier of
(i) the first anniversary of the date of the Optionee's death (or such shorter
period as is specified by the Plan Administrator in the Option Agreement) or
(ii) the specified expiration date of the option term. Upon the occurrence of
the earlier event, the option shall terminate and cease to be exercisable.

               c. Notwithstanding subparagraphs a. and b. above, the Plan
Administrator shall have complete discretion, exercisable either at the time of
the option grant or at the time of the Optionee's cessation of Service, to
establish as a provision applicable to the exercise of one or more options
granted under the Plan that during the limited period of exercisability
following such cessation of Service, the option may be exercised not only with
respect to the number of shares for which it is otherwise exercisable at such
time, but also with respect to one or more subsequent installments of
purchasable shares for which the option would have otherwise become exercisable
had the Optionee continued in Service.

               d. For purposes of the foregoing provisions of this subsection 3
(and for all other purposes under the Plan), unless it is expressly provided
otherwise in the relevant Option Agreement evidencing the option grant or in the
purchase agreement evidencing the purchase of the option shares:

                  (i) the Optionee shall, if an Employee at the time of the
option grant, be deemed to continue in Service for so long as such individual
renders services on a periodic basis to the Corporation (or any parent or
subsidiary corporation) in the capacity of an Employee;

                  (ii) the Optionee shall, if a consultant or other independent
advisor at the time of the option grant, be deemed to continue in Service for so
long as such individual renders services on a periodic basis to the Corporation
(or any parent or subsidiary corporation) in the capacity of an independent
consultant or advisor or as an Employee; and

                  (iii) the Optionee shall be considered to be an Employee for
so long as such individual remains in the common-law employ of the Corporation
or one or more of its parent or subsidiary corporations.

                                      -6-
<PAGE>   7

         5. Stockholder Rights. An Optionee shall have none of the rights of a
stockholder with respect to any shares covered by the option until such Optionee
shall have exercised the option and paid the option price for the purchased
shares.

         6. Repurchase Rights. The shares of Common Stock acquired upon the
exercise of options granted under the Plan may be subject to one or more
repurchase rights of the Corporation in accordance with the following
provisions:

            a. The Plan Administrator may in its discretion determine that it
shall be a term and condition of one or more options exercised under the Plan
that the Corporation (or its assignees) shall have the right, exercisable upon
the Optionee's cessation of Service, to repurchase at the option price all or
(at the discretion of the Corporation and with the consent of the Optionee) part
of any unvested shares of Common Stock held at the time by the Optionee as a
result of one or more prior exercises of such option. The repurchase right shall
be exercisable by the Corporation (or its assignees) upon such terms and
conditions (including the establishment of the appropriate vesting schedule and
other provision for the expiration of such right in one or more installments of
the Optionee's period of Service) as the Plan Administrator may specify in the
instrument evidencing such right.

            b. The Plan Administrator may assign the Corporation's repurchase
rights under subsection a. above to any person or entity selected by the Plan
Administrator, including one or more stockholders of the Corporation. If the
selected assignee is other than a parent or subsidiary corporation of the
Corporation, then the assignee must make a cash payment to the Corporation upon
the assignment of the repurchase rights, in an amount equal to the excess (if
any) of the fair market value of the unvested shares at the time subject to the
assigned rights and the aggregate repurchase price payable for such unvested
shares thereunder.

            c. The Plan Administrator may also in its discretion establish as a
term and condition of one or more options granted under the Plan that the
Corporation shall have a right of first refusal with respect to any proposed
sale or other disposition by the Optionee (or any successor in interest by
reason of purchase, gift or other mode of transfer) of any shares of Common
Stock issued upon the exercise of such options. Any such right of first refusal
shall be exercisable by the Corporation (or its assignees) in accordance with
the terms and conditions set forth in the instrument evidencing such right.

         2. STOCK APPRECIATION RIGHTS.

            a. Provided and only if the Plan Administrator determines in its
discretion to implement the stock appreciation right provisions of this Section
2, one or more Optionees may be granted the right, exercisable upon such terms
and conditions as the Plan Administrator may establish at the time of the option
grant or at any time thereafter, to surrender all or part of an unexercised
option under the Plan in exchange for a distribution from the Corporation equal
in amount to the excess of (i) the fair market value (at date of surrender) of
the number of shares in which the Optionee is at the time vested under the
surrendered option (or surrendered portion thereof) over (ii) the aggregate
option price payable for such vested shares.

                                      -7-
<PAGE>   8

            b. No surrender of an option shall be effective hereunder unless it
is approved by the Plan Administrator. If the surrender is so approved, then the
distribution to which the Optionee shall accordingly become entitled under this
Section 2 may be made in shares of Common Stock valued at fair market value at
date of surrender, in cash, or partly in shares and partly in cash, as the Plan
Administrator shall in its sole discretion deem appropriate.

         3. CORPORATE TRANSACTION.

            a. In the event of any of the following transactions ("Corporate
Transaction"):

               (i) a merger or acquisition in which the Corporation is not the
surviving entity, except for a transaction the principal purpose of which is to
change the State of the Corporation's incorporation;

               (ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation; or

               (iii) any reverse merger in which the Corporation is the
surviving entity but in which fifty percent (50%) or more of the Corporation's
outstanding voting stock is transferred to holders different from those who held
the stock immediately prior to such merger,

then each option at the time outstanding under the Plan shall terminate upon the
consummation of such Corporation Transaction and cease to be exercisable, unless
assumed by the successor corporation or parent thereof.

            b. If the Corporation is the surviving entity in any Corporate
Transaction or the outstanding options under the Plan are to be assumed in
connection with such Corporate Transaction, then each continuing or assumed
option shall, immediately after such Corporate Transaction, be appropriately
adjusted to apply and pertain to the number and class of securities which would
have been issuable to the Optionee, in consummation of such Corporate
Transaction, had the option been exercised immediately prior to such Corporate
Transaction. Appropriate adjustments shall also be made to the option price
payable per share, provided the aggregate option price payable for such
securities shall remain the same. In addition, the class and number of
securities available for issuance under the Plan following the consummation of
such Corporate Transaction shall be appropriately adjusted.

            c. The grant of options under this Plan shall in no way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.

         4. CANCELLATION AND NEW GRANT OF OPTIONS.

            The Plan Administrator shall have the authority to effect, at any
time and from time to time, with the consent of the affected Optionees, the
cancellation of any or all outstanding

                                      -8-
<PAGE>   9

options under the Plan and to grant in substitution therefor new options under
the Plan covering the same or different numbers of shares of Common Stock but
having an option price per share not less than eighty-five percent (85%) of the
fair market value per share of Common Stock on the new grant date (or, in the
case of a 10% Stockholder, not less than one hundred and ten percent (110%) of
such fair market value).

         5. EXTENSION OF EXERCISE PERIOD.

            The Plan Administrator shall have full power and authority to extend
(either at any time while the option is granted or at the time while the option
remains outstanding) the period of time for which the option is to remain
exercisable following the Optionee's cessation of Service from the limited
period specified in the Option Agreement to such greater period of time as the
Plan Administrator shall deem appropriate; provided, however, that in no event
shall such option be exercisable after the specified expiration date of the
option term.

                                   ARTICLE III

                             STOCK ISSUANCE PROGRAM

         1. TERMS AND CONDITIONS OF STOCK ISSUANCES.

            A. Shares may be issued under this Stock Incentive Program as a
reward for past services rendered the Corporation or one or more of its parent
or subsidiary corporations or as an incentive for future service with such
entities. All shares so issued shall be evidenced by an appropriate Stock
Issuance Agreement ("Issuance Agreement") which complies with the terms and
conditions of this Stock Issuance Program.

            1. Share Issuance.

               a. Shares may, in the absolute discretion of the Plan
Administrator, be issued for consideration with a value less than one-hundred
percent (100%) of the fair market value of the issued shares. In no event,
however, shall any shares be issued hereunder for consideration valued by the
Plan Administrator at less than eighty-five percent (85%) of the fair market
value of the shares at the time of issuance. In the event the Recipient of the
share issuance is a 10% Stockholder, the issue price shall not be less than one
hundred and ten percent (110%) of such fair market value.

               b. Shares shall be issued under the Plan for such consideration
as the Plan Administrator shall from time to time determine; provided, however,
that in no event shall shares be issued for consideration other than

                  (i) cash or cash equivalent (such as a personal check or bank
draft) paid the Corporation;

                                      -9-
<PAGE>   10

                  (ii) promissory note payable to the Corporation's order, which
may be subject to cancellation by the Corporation in whole or in part upon such
terms and conditions as the Plan Administrator shall specify; or

                  (iii) services rendered.

            2. Vesting Schedule.

               a. The Recipient's interest in the issued shares of Common Stock
may, in the absolute discretion of the Plan Administrator, be fully and
immediately vested upon issuance or may vest in one or more installments.

               b. The elements of the vesting schedule applicable to any
unvested shares issued under this Stock Issuance Program, namely the number of
installments in which the shares are to vest, the interval or intervals (if any)
which are to lapse between installments and the effect which death, disability
or other event designated by the Plan Administrator is to have upon the vesting
schedule, shall be determined by the Plan Administrator and set forth in the
Issuance Agreement executed by the Corporation and the Recipient at the time of
the share issuance.

               c. Except as may otherwise be provided in the Issuance Agreement,
the Recipient may not transfer unvested shares of Common Stock. The Recipient,
however, shall have all the rights of a stockholder with respect to such
unvested shares, including the right to vote such shares and to receive all
regular cash dividends paid on such shares.

            3. Cancellation of Shares.

               a. In the event the Recipient should, while his/her interest in
the issued Common Stock remains unvested, cease to continue in Service for any
reason whatsoever, then all such unvested shares shall immediately be cancelled,
and the Recipient shall cease to have any further stockholder rights with
respect to such cancelled shares. In connection with such cancellation, the
Recipient shall be entitled to a concurrent payment from the Corporation
(payable in cash or through forgiveness of any purchase-money indebtedness
outstanding with respect to the cancelled shares) equal to the per share price
at which such shares were initially issued to the Recipient.

               b. The Plan Administrator may in its discretion waive such
cancellation of unvested shares in whole or in part and thereby effect the
immediate vesting of the Recipient's interest in the shares of Common Stock (or
other assets) as to which the waiver applies.

            4. Corporate Transaction.

               a. Upon the occurrence of any Corporate Transaction, the
Corporation's outstanding repurchase rights under the Stock Issuance Program
shall be assigned to the successor corporation (or parent thereof).

                                      -10-
<PAGE>   11

               b. For purposes of this Stock Issuance Program, a Corporate
Transaction shall mean the occurrence of any of the following transactions:

                  (i) a merger or acquisition in which the Corporation is not
the surviving entity, except for a transaction the principal purpose of which is
to change the State of incorporation,

                  (ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation to any entity other than a
parent or subsidiary corporation, or

                  (iii) a reverse merger in which the Corporation is the
surviving entity but in which fifty percent (50%) or more of the Corporation's
outstanding voting stock is transferred to holders different from those who held
the stock immediately prior to such merger.

            5. Right of First Refusal.

               a. The Plan Administrator may in its discretion establish as a
term and condition of the issuance of one or more shares of Common Stock
pursuant to this Stock Issuance Program that the Corporation shall have a right
of first refusal with respect to any proposed disposition of such shares by the
Recipient (or any successor in interest by reason of purchase, gift or other
mode of transfer).

               b. Any such right of first refusal shall be exercisable by the
Corporation (or its assignees) in accordance with the terms and conditions
specified forth in the Issuance Agreement incorporating such right.

                                   ARTICLE IV

                                  MISCELLANEOUS

         1. PLAN LOANS.

            a. The Plan Administrator may assist any Optionee or Recipient
(including any Optionee or Recipient who is an officer or director of the
Corporation) in the exercise of one or more options granted to such Optionee
under the Article II Option Grant Program or the purchase of one or more shares
issued to such Recipient under the Article III Stock Issuance Program, including
the satisfaction of any Federal and State income and employment tax obligations
arising therefrom, by (i) authorizing the extension of a loan from the
Corporation to such Optionee or Recipient or (ii) permitting the Optionee or
Recipient to pay the option price or issue price in installments over a period
of years. The terms of any loan or installment method of payment (including the
interest rate and terms of repayment) shall be established by the Plan
Administrator in its sole discretion. Loans and installment payments may be
granted with or without security or collateral, but the maximum credit available
to the Optionee or Recipient may not exceed the sum of (A) the aggregate option
price or issue price payable for the acquired shares (less the par value of such
shares), plus (B) any Federal and State income and employment tax liability
incurred by the Optionee or Recipient in connection with such exercise or
issuance.

                                      -11-
<PAGE>   12

            b. The Plan Administrator may, in its absolute discretion, determine
that one or more loans extended under the Plan shall be subject to forgiveness
by the Corporation in whole or in part upon such terms and conditions as the
Plan Administrator may in its discretion deem appropriate.

         2. AMENDMENT OF THE PLAN AND AWARDS.

            a. The Board shall have complete and exclusive power and authority
to amend or modify the Plan in any or all respects whatsoever; provided,
however, that no such amendment or modification shall adversely affect the
rights and obligations of an Optionee with respect to options at the time
outstanding under the Plan, nor adversely affect the rights of any Recipient
with respect to Common Stock issued under the Plan prior to such action, unless
the Optionee or Recipient consents to such amendment; and provided, further,
that the Board shall not, without the approval of the Corporation's
stockholders, amend the Plan to (i) materially increase the maximum number of
shares issuable under the Plan (except for permissible adjustments under Article
I, Section 5.C.), (ii) materially increase the benefits accruing to individuals
who participate in the Plan, or (iii) materially modify the eligibility
requirements for participation in the Plan.

            b. Options to purchase shares of Common Stock may be granted under
the Option Grant Program and shares of Common Stock may be issued under the
Stock Issuance Program, which are in both instances in excess of the number of
shares then available for issuance under the Plan, provided (i) an amendment to
increase the maximum number of shares issuable under the Plan is adopted by the
Board prior to the initial grant of any such option or the issuance of any such
shares and is thereafter submitted to the Corporation's stockholders for
approval and (ii) any excess shares actually issued under the Option Grant
Program or the Stock Issuance Program are held in escrow until such stockholder
approval is obtained. If such stockholder approval is not obtained within twelve
(12) months after the date the share-increase amendment is adopted by the Board,
then any unexercised options granted on the basis of such increase shall
terminate and cease to be exercisable, and the Corporation shall promptly refund
to the Optionees and Recipients the option or issue price paid for any excess
shares issued under the Plan and held in escrow, together with interest (at the
applicable Short Term Federal Rate) for the period the shares were held in
escrow.

         3. EFFECTIVE DATE AND TERM OF PLAN.

            a. The Plan was initially adopted by the Board in June 1990 and was
ratified by the Corporation's shareholders in July 1990. The Plan was
subsequently amended by the Board on May 7, 1991 to increase the total number of
shares issuable thereunder by 1,500,000 to a total of 2,250,000. However, no
stock option or stock appreciation right granted under the Plan shall become
exercisable, and no shares shall be issued under the Plan, unless and until the
Plan shall have been approved by the Corporation's stockholders. If such
stockholder approval is not obtained within twelve (12) months after the date of
the Board's adoption of the Plan, then all stock options and stock appreciation
rights previously granted under the Plan shall terminate and no further stock
options or stock appreciation rights shall be granted. Subject to such
limitation,

                                      -12-
<PAGE>   13

the Plan Administrator may grant stock options and stock appreciation rights
under the Plan at any time after the effective date and before the date fixed
herein for termination of the Plan.

            b. The Plan shall in all events terminate upon the earlier of (i)
the tenth (10th) anniversary of the date of its adoption by the Board or (ii)
the date on which all shares available for issuance under the Plan shall have
been issued or cancelled pursuant to (I) the exercise or surrender of stock
options and/or stock appreciation rights under the Plan or (II) the issuance of
shares under the Stock Issuance Program. If the date of termination is
determined under clause (i) above, then any stock options, stock appreciation
rights and unvested shares at the time outstanding under the Plan shall continue
to have force and effect in accordance with the provisions of the instruments
evidencing such grants or issuances.

         4. USE OF PROCEEDS.

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

         5. WITHHOLDING.

            The Corporation's obligation to deliver shares upon the exercise or
surrender of any options granted under Article II or upon the issuance of any
shares under Article III shall be subject to the satisfaction of all applicable
Federal, State and local income and employment tax withholding requirements.

         6. REGULATORY APPROVALS.

            The implementation of the Plan, the granting of any options under
the Option Grant Program, the issuance of any shares under the Stock Issuance
Program, and the issuance of Common Stock upon the exercise or surrender of the
option grants made hereunder shall be subject to the Corporation's procurement
of all approvals and permits required by regulatory authorities having
jurisdiction over the Plan, the options granted under it, and the Common Stock
issued pursuant to it.

         7. FINANCIAL REPORTS.

            The Corporation shall deliver financial and other information
regarding the Corporation, on an annual or more frequent basis, to each
individual holding an outstanding option under and each participant in the Plan,
to the extent the Corporation is required to provide such information pursuant
to Section 260.140.41.2 of the Rules of the California Corporations
Commissioner.

                                      -13-

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