EBAY INC
EXHIBIT 10.08
<DOCUMENT>
<TYPE>EX-10.08
<SEQUENCE>3
<FILENAME>f79949ex10-08.txt
<DESCRIPTION>EXHIBIT 10.08
<TEXT>
<PAGE>
                                                                 EXHIBIT 10.08

                                    EBAY INC.

                        1998 EMPLOYEE STOCK PURCHASE PLAN

                                 As Amended and
                            Restated on May 25, 2001



        1. ESTABLISHMENT OF PLAN. eBay Inc. (the "COMPANY") proposes to grant
options for purchase of the Company's Common Stock to eligible employees of the
Company, its Participating Subsidiaries or Affiliates (as hereinafter defined)
pursuant to this Employee Stock Purchase Plan (this "PLAN"). For purposes of
this Plan, "PARENT CORPORATION" and "SUBSIDIARY" shall have the same meanings as
"parent corporation" and "subsidiary corporation" in Sections 424(e) and 424(f),
respectively, of the Internal Revenue Code of 1986, as amended (the "CODE").
"PARTICIPATING SUBSIDIARIES" are Parent Corporations or Subsidiaries that the
Board of Directors of the Company (the "BOARD") designates from time to time as
corporations that shall participate in this Plan. The Board may also designate
as participating companies in the Plan certain affiliates ("AFFILIATES") which
are any entities where the Corporation has a significant equity interest or
significant business relationship and which have been designated as such. The
Company intends this Plan to qualify as an "employee stock purchase plan" under
Section 423 of the Code (including any amendments to or replacements of such
Section), and this Plan shall be so construed. Any term not expressly defined in
this Plan but defined for purposes of Section 423 of the Code shall have the
same definition herein. A total of 1,800,0001 shares of the Company's Common
Stock was reserved for issuance under this Plan when originally adopted. In
addition, on each January 1, the aggregate number of shares of the Company's
Common Stock reserved for issuance under the Plan shall be increased
automatically by the number of shares purchased under this Plan in the preceding
calendar year; provided that the aggregate shares reserved under this Plan shall
not exceed 9,000,000 shares. Such number shall be subject to adjustments
effected in accordance with Section 14 of this Plan.

        2. PURPOSE. The purpose of this Plan is to provide eligible employees of
the Company, Participating Subsidiaries or Affiliates with a convenient means of
acquiring an equity interest in the Company through payroll deductions or
contributions, to enhance such employees' sense of participation in the affairs
of the Company, Participating Subsidiaries or Affiliates, and to provide an
incentive for continued employment. In addition, the Plan authorizes the grant
of options and the issuance of the Company's Common Stock which do not qualify
under Section 423 of the Code pursuant to sub-plans or special rules adopted by
the Board or the Compensation Committee of the Board (as hereinafter defined)
designated to achieve desired tax or other objectives in particular locations
outside the United States.

        3. ADMINISTRATION.

           (a) This Plan shall be administered by the Compensation Committee of
the Board (the "COMMITTEE"). Subject to the provisions of this Plan and the
limitations of Section 423 of the Code or any successor provision in the Code,
all questions of interpretation or application of this Plan shall be determined
by the Committee and its decisions shall be final and binding upon all
participants. Members of the Committee shall receive no compensation for their
services in connection with the administration of this Plan, other than standard
fees as established from time to time by the Board for services rendered by
Board members serving on Board committees. All expenses incurred in connection
with the administration of this Plan shall be paid by the Company.

           (b) The Board or the Committee may adopt rules or procedures relating
to the operation and administration of the Plan to accommodate the specific
requirements of local laws and procedures. Without limiting the generality of
the foregoing, the Board or the Committee is specifically authorized to adopt
rules and procedures regarding handling of payroll deductions, contributions,
payment of interest, conversion of local currency, payroll tax, withholding
procedures and handling of stock certificates which vary with local
requirements. The Board or the Committee may adopt such rules, guidelines and
forms as the applicable laws allow to accomplish the transfer of secondary Class
1 National Insurance Contributions ("NIC") in the United Kingdom ("UK") from the
employer to the participants in the UK and to make such transfer of NIC
liability a condition to the exercise of options in the UK.


----------

1   All share numbers are post-split on 08/98, 3/99 and 5/00.

<PAGE>

           (c) The Board or the Committee may also adopt sub-plans applicable to
particular Participating Subsidiaries, Affiliates or locations, which sub-plans
may be designed to be outside the scope of Code Section 423. The rules of such
sub-plans may take precedence over other provisions of this Plan, with the
exception of Paragraph 1 above, but unless otherwise superseded by the terms of
such sub-plan, the provisions of this Plan shall govern the operation of such
sub-plan.

        4. ELIGIBILITY. Any employee of the Company, its Participating
Subsidiaries or an Affiliate is eligible to participate in an Offering Period
(as hereinafter defined) under this Plan, subject to Paragraph 19 and except the
following:

           (a) employees who are not employed by the Company, a Participating
Subsidiary or an Affiliate (10) days before the beginning of such Offering
Period, except that employees who were employed on the Effective Date of the
Registration Statement filed by the Company with the Securities and Exchange
Commission ("SEC") under the Securities Act of 1933, as amended (the "SECURITIES
ACT") registering the initial public offering of the Company's Common Stock were
eligible to participate in the first Offering Period under the Plan;

           (b) employees who are customarily employed for twenty (20) hours or
less per week, unless local law prohibits exclusion of part-time employees;

           (c) employees who are customarily employed for five (5) months or
less in a calendar year, unless local law prohibits exclusion of such employees;

           (d) employees who, together with any other person whose stock would
be attributed to such employee pursuant to Section 424(d) of the Code, own stock
or hold options to purchase stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Company, any
of its Participating Subsidiaries or an Affiliate or who, as a result of being
granted an option under this Plan with respect to such Offering Period, would
own stock or hold options to purchase stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of the
Company, any of its Participating Subsidiaries or an Affiliate; and

           (e) individuals who provide services to the Company, any of its
Participating Subsidiaries or an Affiliate as independent contractors who are
reclassified as common law employees for any reason except for federal income
and employment tax purposes.

        5. OFFERING DATES. The offering periods of this Plan (each, an "OFFERING
PERIOD") shall be of twenty-four (24) months duration commencing on May 1 and
November 1 of each year and ending on April 30 and October 31 of each year;
provided, however, that notwithstanding the foregoing, the first such Offering
Period shall commence on the first business day on which price quotations for
the Company's Common Stock are available on the Nasdaq National Market (the
"FIRST OFFERING DATE") and shall end on October 31, 2000. Except for the first
Offering Period, each Offering Period shall consist of four (4) six month
purchase periods (individually, a "PURCHASE PERIOD") during which payroll
deductions or contributions of the participants are accumulated under this Plan.
The first Offering Period shall consist of no more than five and no fewer than
three Purchase Periods, any of which may be greater or less than six months as
determined by the Committee. The first business day of each Offering Period is
referred to as the "OFFERING DATE". The last business day of each Purchase
Period is referred to as the "PURCHASE DATE". The Committee shall have the power
to change the duration of Offering Periods with respect to offerings without
stockholder approval if such change is announced at least fifteen (15) days
prior to the scheduled beginning of the first Offering Period to be affected.
Notwithstanding the foregoing, the Board or the Committee may establish other
Offering Periods in addition to those described above, which shall be subject to
any specific terms and conditions that the Committee approves, including
requirements with respect to eligibility, participation, the establishment of
Purchase Periods and Purchase Dates and other rights under any such Offering. A
participant may be enrolled in only one Offering Period at a time.

        6. PARTICIPATION IN THIS PLAN.

           (a) Eligible employees may become participants in an Offering Period
under this Plan on the first Offering Date after satisfying the eligibility
requirements by delivering a subscription agreement authorizing payroll
deductions or contributions, if Paragraph 6(b) below applies, to the Company's
treasury department (the "TREASURY DEPARTMENT") not later than five (5) days
before such Offering Date. Notwithstanding the foregoing, the Committee may set
a later time for filing the subscription agreement authorizing payroll
deductions or contributions for all eligible employees with respect to a


<PAGE>

given Offering Period. An eligible employee who does not deliver a subscription
agreement to the Treasury Department by such date after becoming eligible to
participate in such Offering Period shall not participate in that Offering
Period or any subsequent Offering Period unless such employee enrolls in this
Plan by filing a subscription agreement with the Treasury Department not later
than five (5) days preceding a subsequent Offering Date. Once an employee
becomes a participant in an Offering Period, such employee will automatically
participate in the Offering Period commencing immediately following the last day
of the prior Offering Period unless the employee withdraws or is deemed to
withdraw from this Plan or terminates further participation in the Offering
Period as set forth in Paragraph 11 below. Such participant is not required to
file any additional subscription agreement in order to continue participation in
this Plan.

           (b) Notwithstanding any other provisions of the Plan to the contrary,
in locations where local law prohibits payroll deductions, an eligible employee
may elect to participate through contributions to his account under the Plan in
a form acceptable to the Board or the Committee.

        7. GRANT OF OPTION ON ENROLLMENT. Enrollment by an eligible employee in
this Plan with respect to an Offering Period will constitute the grant (as of
the Offering Date) by the Company to such employee of an option to purchase on
the Purchase Date up to that number of shares of Common Stock of the Company
determined by dividing (a) the amount accumulated in such employee's payroll
deduction account during such Purchase Period by (b) the lower of (i)
eighty-five percent (85%) of the fair market value of a share of the Company's
Common Stock on the Offering Date (but in no event less than the par value of a
share of the Company's Common Stock), or (ii) eighty-five percent (85%) of the
fair market value of a share of the Company's Common Stock on the Purchase Date
(but in no event less than the par value of a share of the Company's Common
Stock), provided, however, that the number of shares of the Company's Common
Stock subject to any option granted pursuant to this Plan shall not exceed the
lesser of (x) the maximum number of shares set by the Committee pursuant to
Paragraph 10(c) below with respect to the applicable Purchase Date, or (y) the
maximum number of shares which may be purchased pursuant to Paragraph 10(b)
below with respect to the applicable Purchase Date. The fair market value of a
share of the Company's Common Stock shall be determined as provided in Paragraph
8 below.

        8. PURCHASE PRICE The purchase price per share at which a share of
Common Stock will be sold in any Offering Period shall be eighty-five percent
(85%) of the lesser of:

           (a) The fair market value on the Offering Date; or

           (b) The fair market value on the Purchase Date.

        For purposes of this Plan, the term "FAIR MARKET VALUE" means, as of any
date, any date, the value of a share of the Company's Common Stock determined as
follows:

           (a) if such Common Stock is then quoted on the Nasdaq National
Market, its closing price on the Nasdaq National Market on the date of
determination as reported in The Wall Street Journal;

           (b) if such Common Stock is publicly traded and is then listed on a
national securities exchange, its closing price on the date of determination on
the principal national securities exchange on which the Common Stock is listed
or admitted to trading as reported in The Wall Street Journal;

           (c) if such Common Stock is publicly traded but is not quoted on the
Nasdaq National Market nor listed or admitted to trading on a national
securities exchange, the average of the closing bid and asked prices on the date
of determination as reported in The Wall Street Journal; or

           (d) if none of the foregoing is applicable, by the Board in good
faith, which in the case of the First Offering Date will be the price per share
at which shares of the Company's Common Stock are initially offered for sale to
the public by the Company's underwriters in the initial public offering of the
Company's Common Stock pursuant to a registration statement filed with the SEC
under the Securities Act.

        9. PAYMENT OF PURCHASE PRICE; CHANGES IN PAYROLL DEDUCTIONS; ISSUANCE OF
SHARES.

           (a) The purchase price of the shares is accumulated by regular
payroll deductions or contributions made during each Offering Period. The
deductions or contributions are made as a percentage of the participant's
compensation in



<PAGE>

one percent (1%) increments not less than two percent (2%), nor greater than ten
percent (10%) or such lower limit set by the Committee. Compensation shall mean
all W-2 cash compensation, including, but not limited to, base salary, wages,
commissions, overtime, shift premiums and bonuses, plus draws against
commissions, provided, however, that for purposes of determining a participant's
compensation, any election by such participant to reduce his or her regular cash
remuneration under Sections 125 or 401(k) of the Code shall be treated as if the
participant did not make such election. For options that are not intended to be
qualified under Section 423 of the Code, compensation may vary as determined by
the Committee. Payroll deductions or contributions shall commence on the first
payday of the Offering Period and shall continue to the end of the Offering
Period unless sooner altered or terminated as provided in this Plan.

           (b) A participant may increase or decrease the rate of payroll
deductions or contributions during an Offering Period by filing with the
Treasury Department a new authorization for payroll deductions, in which case
the new rate shall become effective for the next payroll period commencing more
than fifteen (15) days after the Treasury Department's receipt of the
authorization and shall continue for the remainder of the Offering Period unless
changed as described below. Such change in the rate of payroll deductions or
contributions may be made at any time during an Offering Period, but not more
than one (1) change may be made effective during any Purchase Period. A
participant may increase or decrease the rate of payroll deductions or
contributions for any subsequent Offering Period by filing with the Treasury
Department a new authorization for payroll deductions or an election for
contributions not later than fifteen (15) days before the beginning of such
Offering Period.

           (c) A participant may reduce his or her payroll deduction or
contributions percentage to zero during an Offering Period by filing with the
Treasury Department a request for cessation of payroll deductions or
contributions. Such reduction shall be effective beginning with the next payroll
period commencing more than fifteen (15) days after the Treasury Department's
receipt of the request and no further payroll deductions or contributions will
be made for the duration of the Offering Period. Payroll deductions or
contributions credited to the participant's account prior to the effective date
of the request shall be used to purchase shares of Common Stock of the Company
in accordance with Section (e) below. A participant may not resume making
payroll deductions or contributions during the Offering Period in which he or
she reduced his or her payroll deductions or contributions to zero.

           (d) In countries where local law prohibits payroll deductions, at the
time a participant files his or her subscription agreement, instead of
authorization for payroll deductions, he or she shall elect to make
contributions on each payday during the Offering Period at a rate not exceeding
ten percent (10%) of the compensation which he or she receives on such payday,
provided that the aggregate of such contributions during the Offering Period
shall not exceed ten percent (10%) of the aggregate compensation which he or she
would receive during said Offering Period. The Board or the Committee shall
determine whether the amount to be contributed is to be designated as a specific
dollar amount, or as a percentage of the eligible compensation being paid on
such payday, or as either, and may also establish a minimum percentage or amount
for such contributions.

           (e) All participant's payroll deductions or contributions are
credited to his or her account under this Plan and are deposited with the
general funds of the Company. No interest accrues on the payroll deductions or
contributions unless local law requires that payroll deductions or contributions
be held in an interest-bearing account. All payroll deductions or contributions
received or held by the Company may be used by the Company for any corporate
purpose, and the Company shall not be obligated to segregate such payroll
deductions or contributions unless segregation of accounts is required by local
law.

           (f) On each Purchase Date, so long as this Plan remains in effect and
provided that the participant has not submitted a signed and completed
withdrawal form before that date which notifies the Company that the participant
wishes to withdraw from that Offering Period under this Plan and have all funds
accumulated in the account maintained on behalf of the participant as of that
date returned to the participant, the Company shall apply the funds then in the
participant's account to the purchase of whole shares of Common Stock reserved
under the option granted to such participant with respect to the Offering Period
to the extent that such option is exercisable on the Purchase Date. The purchase
price per share shall be as specified in Section 8 of this Plan. Any cash
remaining in a participant's account after such purchase of shares shall be
refunded to such participant in cash, without interest unless local law requires
the payment of interest; provided, however that any amount remaining in such
participant's account on a Purchase Date which is less than the amount necessary
to purchase a full share of Common Stock of the Company shall be carried
forward, without interest, unless local law requires the payment of interest
into the next Purchase Period or Offering Period and in the locations where the
Board or the Committee have determined that such rollover is available under the
Plan, as the case may be. In the event that this Plan has been oversubscribed,
all funds not used to purchase shares on the Purchase Date shall be returned to
the


<PAGE>

participant, without interest unless local law requires the payment of interest.
No Common Stock shall be purchased on a Purchase Date on behalf of any employee
whose participation in this Plan has terminated prior to such Purchase Date.

            (g) Subject to Paragraph 9(h), as promptly as practicable after the
Purchase Date, the Company shall issue shares for the participant's benefit
representing the shares purchased upon exercise of his or her option. If a
participant dies before receiving his or her shares, the account will be set up
in the name of such participant's beneficiary, or the shares will be issued in
such beneficiary's name.

            (h) If, on the Purchase Date, the Company, a Participating
Subsidiary or an Affiliate is required by local law to withhold taxes on a
participant's exercise of his or her options and such participant's compensation
is not sufficient to cover such withholding, the Company will sell the requisite
number of shares to raise the necessary funds to make the withholding.

            (i) During a participant's lifetime, his or her option to purchase
shares hereunder is exercisable only by him or her. The participant will have no
interest or voting right in shares covered by his or her option until such
option has been exercised.

        10. LIMITATIONS ON SHARES TO BE PURCHASED.

            (a) No participant shall be entitled to purchase stock under this
Plan at a rate which, when aggregated with his or her rights to purchase stock
under all other employee stock purchase plans of the Company, any Participating
Subsidiary or an Affiliate, exceeds $25,000 in fair market value, determined as
of the Offering Date (or such other limit as may be imposed by the Code) for
each calendar year in which the employee participates in this Plan. The Company
shall automatically suspend the payroll deductions or contributions of any
participant as necessary to enforce such limit provided that when the Company
automatically resumes making such payroll deductions or accepting contributions,
the Company must apply the rate in effect immediately prior to such suspension.

            (b) No more than two hundred percent (200%) of the number of shares
determined by using eighty-five percent (85%) of the fair market value of a
share of the Company's Common Stock on the Offering Date as the denominator may
be purchased by a participant on any single Purchase Date.

            (c) No participant shall be entitled to purchase more than the
Maximum Share Amount (as defined below) on any single Purchase Date. Not less
than thirty (30) days prior to the commencement of any Offering Period, the
Committee may, in its sole discretion, set a maximum number of shares which may
be purchased by any employee at any single Purchase Date (hereinafter the
"MAXIMUM SHARE AMOUNT"). Until otherwise determined by the Committee, there
shall be no Maximum Share Amount. In no event shall the Maximum Share Amount
exceed the amounts permitted under Paragraph 10(b) above. If a new Maximum Share
Amount is set, then all participants must be notified of such Maximum Share
Amount prior to the commencement of the next Offering Period. The Maximum Share
Amount shall continue to apply with respect to all succeeding Purchase Dates and
Offering Periods unless revised by the Committee as set forth above.

            (d) If the number of shares to be purchased on a Purchase Date by
all employees participating in this Plan exceeds the number of shares then
available for issuance under this Plan, then the Company will make a pro rata
allocation of the remaining shares in as uniform a manner as shall be reasonably
practicable and as the Committee shall determine to be equitable. In such event,
the Company shall give written notice of such reduction of the number of shares
to be purchased under a participant's option to each participant affected.

            (e) Any funds accumulated in a participant's account which are not
used to purchase stock due to the limitations in this Paragraph 10 shall be
returned to the participant as soon as practicable after the end of the
applicable Purchase Period, without interest unless local law requires the
payment of interest.

        11. WITHDRAWAL.

            (a) Each participant may withdraw from an Purchase Period under this
Plan by signing and delivering to the Treasury Department a written notice to
that effect on a form provided for such purpose. Such withdrawal may be elected
at any time at least fifteen (15) days prior to the end of a Purchase Period.


<PAGE>

            (b) Upon withdrawal from this Plan, the accumulated payroll
deductions shall be returned to the withdrawn participant, without interest
unless local law requires the payment of interest, and his or her interest in
this Plan shall terminate. In the event a participant voluntarily elects to
withdraw from this Plan, he or she may not resume his or her participation in
this Plan during the same Offering Period, but he or she may participate in any
Offering Period under this Plan which commences on a date subsequent to such
withdrawal by filing a new authorization for payroll deductions or by commencing
to make contributions in the same manner as set forth in Paragraph 6 above for
initial participation in this Plan.

            (c) If the Fair Market Value on the first day of the current
Offering Period in which a participant is enrolled is higher than the Fair
Market Value on the first day of any subsequent Offering Period, the Company
will automatically enroll such participant in the subsequent Offering Period.
Any funds accumulated in a participant's account prior to the first day of such
subsequent Offering Period will be applied to the purchase of shares on the
Purchase Date immediately prior to the first day of such subsequent Offering
Period. Notwithstanding the foregoing, if the first Offering Date occurs prior
to November 1, 1998 and the Fair Market Value on the First Offering Date is
higher than the Fair Market Value on the first day of the second Offering
Period, any funds accumulated in a participant's account prior to the first day
of the second Offering Period will be applied to the purchase of shares on the
Purchase Date next following the first day of such second Offering Period. A
participant does not need to file any forms with the Company to automatically be
enrolled in the subsequent Offering Period.

        12. TERMINATION OF EMPLOYMENT. Termination of a participant's employment
for any reason, including retirement, death or the failure of a participant to
remain an eligible employee of the Company, a Participating Subsidiary or an
Affiliate, immediately terminates his or her participation in this Plan. In such
event, the funds credited to the participant's account will be returned to him
or her or, in the case of his or her death, to his or her legal representative,
without interest unless local law requires the payment of interest. For purposes
of this Paragraph 12, an employee will not be deemed to have terminated
employment or failed to remain in the continuous employ of the Company, of a
Participating Subsidiary or an Affiliate in the case of sick leave, military
leave, or any other leave of absence approved by the Board; provided that such
leave is for a period of not more than ninety (90) days, unless reemployment
upon the expiration of such leave is guaranteed by contract or statute or unless
provided otherwise pursuant to formal policy adopted from time to time by the
Company.

        13. RETURN OF PAYROLL DEDUCTIONS AND CONTRIBUTIONS. In the event a
participant's interest in this Plan is terminated by withdrawal, termination of
employment or otherwise, or in the event this Plan is terminated by the Board,
the Company shall deliver to the participant all payroll deductions or
contributions credited to such participant's account. Subject to Paragraph 9(e),
no interest shall accrue on the payroll deductions or contributions of a
participant in this Plan.

        14. CAPITAL CHANGES. Subject to any required action by the stockholders
of the Company, the number of shares of Common Stock covered by each option
under this Plan which has not yet been exercised and the number of shares of
Common Stock which have been authorized for issuance under this Plan but have
not yet been placed under option (collectively, the "RESERVES"), as well as the
price per share of Common Stock covered by each option under this Plan which has
not yet been exercised, shall be proportionately adjusted for any increase or
decrease in the number of issued and outstanding shares of Common Stock of the
Company resulting from a stock split or the payment of a stock dividend (but
only on the Common Stock) or any other increase or decrease in the number of
issued and outstanding shares of Common Stock effected without receipt of any
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the
Committee, whose determination shall be final, binding and conclusive. Except as
expressly provided herein, no issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock subject to an option.

        In the event of the proposed dissolution or liquidation of the Company,
the Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Committee. The Committee may,
in the exercise of its sole discretion in such instances, declare that this Plan
shall terminate as of a date fixed by the Committee and give each participant
the right to purchase shares under this Plan prior to such termination. In the
event of (i) a merger or consolidation in which the Company is not the surviving
corporation (other than a merger or consolidation with a wholly owned
subsidiary, a reincorporation of the Company in a different jurisdiction, or
other


<PAGE>

transaction in which there is no substantial change in the stockholders of the
Company or their relative stock holdings and the options under this Plan are
assumed, converted or replaced by the successor corporation, which assumption
will be binding on all participants), (ii) a merger in which the Company is the
surviving corporation but after which the stockholders of the Company
immediately prior to such merger (other than any stockholder that merges, or
which owns or controls another corporation that merges, with the Company in such
merger) cease to own their shares or other equity interest in the Company, (iii)
the sale of all or substantially all of the assets of the Company or (iv) the
acquisition, sale, or transfer of more than 50% of the outstanding shares of the
Company by tender offer or similar transaction, the Plan will continue with
regard to Offering Periods that commenced prior to the closing of the proposed
transaction and shares will be purchased based on the Fair Market Value of the
surviving corporation's stock on each Purchase Date, unless otherwise provided
by the Committee consistent with pooling of interests accounting treatment.

        The Committee may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per share of Common Stock covered by each outstanding option, in the event that
the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of its outstanding Common
Stock, or in the event of the Company being consolidated with or merged into any
other corporation.

        15. NONASSIGNABILITY. Neither payroll deductions or contributions
credited to a participant's account nor any rights with regard to the exercise
of an option or to receive shares under this Plan may be assigned, transferred,
pledged or otherwise disposed of in any way (other than by will, the laws of
descent and distribution or as provided in Paragraph 22 below) by the
participant. Any such attempt at assignment, transfer, pledge or other
disposition shall be void and without effect.

        16. REPORTS. Individual accounts will be maintained for each participant
in this Plan. Each participant shall receive promptly after the end of each
Purchase Period a report of his or her account setting forth the total funds
accumulated in the participant's account, the number of shares purchased, the
per share price thereof and the remaining cash balance, if any, carried forward
to the next Purchase Period or Offering Period, as the case may be.

        17. NOTICE OF DISPOSITION. Each participant shall notify the Company in
writing if the participant disposes of any of the shares purchased in any
Offering Period pursuant to this Plan if such disposition occurs within two (2)
years from the Offering Date or within one (1) year from the Purchase Date on
which such shares were purchased (the "NOTICE PERIOD"). The Company may, at any
time during the Notice Period, place a legend or legends on any certificate
representing shares acquired pursuant to this Plan requesting the Company's
transfer agent to notify the Company of any transfer of the shares. The
obligation of the participant to provide such notice shall continue
notwithstanding the placement of any such legend on the certificates.

        18. NO RIGHTS TO CONTINUED EMPLOYMENT. Neither this Plan nor the grant
of any option hereunder shall confer any right on any employee to remain in the
employ of the Company, any Participating Subsidiary or an Affiliate, or restrict
the right of the Company, any Participating Subsidiary or an Affiliate to
terminate such employee's employment.

        19. EQUAL RIGHTS AND PRIVILEGES. All employees who participate in the
Plan shall have the same rights and privileges under the Plan except for
differences which may be mandated by local law and which are consistent with
Code Section 423(b)(5); provided, however, that employees participating in a
sub-plan adopted pursuant to Paragraph 3 which is not designed to qualify under
Code Section 423 need not have the same rights and privileges as employees
participating in the Code Section 423 Plan. The Board or the Committee may
impose restrictions on eligibility and participation of employees who are
officers and directors to facilitate compliance with federal or state securities
laws or foreign laws. This Paragraph 19 shall take precedence over all other
provisions in this Plan.

        20. NOTICES. All notices or other communications by a participant to the
Company under or in connection with this Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.

        21. TERM; STOCKHOLDER APPROVAL. After this Plan is adopted by the Board,
this Plan will become effective on the First Offering Date (as defined above).
This Plan shall be approved by the stockholders of the Company, in any manner
permitted by applicable corporate law, within twelve (12) months before or after
the date this Plan is adopted by the Board. No purchase of shares pursuant to
this Plan shall occur prior to such stockholder approval. This Plan shall
continue until


<PAGE>

the earlier to occur of (a) termination of this Plan by the Board (which
termination may be effected by the Board at any time), (b) issuance of all of
the shares of Common Stock reserved for issuance under this Plan, or (c) ten
(10) years from the adoption of this Plan by the Board.

        22. DESIGNATION OF BENEFICIARY.

            (a) A participant may file a written designation of a beneficiary
who is to receive any shares and cash, if any, from the participant's account
under this Plan in the event of such participant's death subsequent to the end
of an Purchase Period but prior to delivery to him of such shares and cash. In
addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant's account under this Plan in the event
of such participant's death prior to a Purchase Date.

            (b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under this
Plan who is living at the time of such participant's death, the Company shall
deliver such shares or cash to the executor or administrator of the estate of
the participant, or if no such executor or administrator has been appointed (to
the knowledge of the Company), the Company, in its discretion, may deliver such
shares or cash to the spouse or to any one or more dependents or relatives of
the participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.

        23. CONDITIONS UPON ISSUANCE OF SHARES; LIMITATION ON SALE OF SHARES.
Shares shall not be issued with respect to an option unless the exercise of such
option and the issuance and delivery of such shares pursuant thereto shall
comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange or automated quotation system upon which the shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.

        24. APPLICABLE LAW. The Plan shall be governed by the substantive laws
(excluding the conflict of laws rules) of the State of California.

        25. AMENDMENT OR TERMINATION OF THIS PLAN. The Board may at any time
amend, terminate or extend the term of this Plan, except that any such
termination cannot affect options previously granted under this Plan, nor may
any amendment make any change in an option previously granted which would
adversely affect the right of any participant, nor may any amendment be made
without approval of the stockholders of the Company obtained in accordance with
Paragraph 21 above within twelve (12) months of the adoption of such amendment
(or earlier if required by Paragraph 21) if such amendment would:

            (a) increase the number of shares that may be issued under this
Plan; or

            (b) change the designation of the employees (or class of employees)
eligible for participation in this Plan.

        Notwithstanding the foregoing, the Board may make such amendments to the
Plan as the Board determines to be advisable, if the continuation of the Plan or
any Offering Period would result in financial accounting treatment for the Plan
that is different from the financial accounting treatment in effect on the date
this Plan is adopted by the Board.




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</DOCUMENT>
