NEON SYSTEMS INC
2002 STOCK PLAN
<DOCUMENT>
<TYPE>EX-10.27
<SEQUENCE>5
<FILENAME>dex1027.txt
<DESCRIPTION>2002 STOCK PLAN
<TEXT>
<PAGE>


                                                                   EXHIBIT 10.27

                                NEON SYSTEMS, INC.

                                 2002 STOCK PLAN

     1.      Purposes of the Plan. The purposes of this 2002 Stock Plan are:
             --------------------

             .    to attract and retain the best available personnel for
                  positions of substantial responsibility,

             .    to provide additional incentive to Employees, and

             .    to promote the success of the Company's business.

             Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.

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

             (a)       "Administrator" means the Board or any of its Committees
                        -------------
as shall be administering the Plan, in accordance with Section 4 of the Plan.

             (b)       "Applicable Laws" means the requirements relating to the
                        ---------------
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are,
or will be, granted under the Plan.

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

             (d)       "Change in Control" means the occurrence of any of the
                        -----------------
following events:

                       (i)      Any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined
in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the total voting power
represented by the Company's then outstanding voting securities; or

                      (ii)      A change in the composition of the Board
occurring within a two-year period, as a result of which fewer than a majority
of the directors are Incumbent Directors. "Incumbent Directors" will mean
directors who either (A) are directors of the Company as of the date hereof, or
(B) are elected, or nominated for election, to the Board with the affirmative
votes of at least a majority of the Incumbent Directors at the time of such
election or nomination (but will not include an individual whose election or
nomination is in connection with an actual or threatened proxy contest relating
to the election of directors to the Company); or

                     (iii)      The consummation of the sale or disposition by
the Company of all or substantially all of the Company's assets; or

                      (iv)      The consummation of a merger or consolidation of
the Company with any other corporation, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity
or its parent) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity or
its parent outstanding immediately after such merger or consolidation.

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

<PAGE>


             (f)       "Committee" means a committee of Directors appointed by
                        ---------
the Board in accordance with Section 4 of the Plan.

             (g)       "Common Stock" means the common stock of the Company.
                        ------------

             (h)       "Company" means NEON Systems, Inc., a Delaware
                        -------
corporation.

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

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

             (k)       "Employee" means any person, including Officers and
                        --------
Directors, employed by the Company or any Parent or Subsidiary of the Company.
An Employee shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or any Parent or Subsidiary, as applicable or
(ii) transfers between locations of the Company or between the Company, its
Parent, any Subsidiary, or any successor. For purposes of Incentive Stock
Options, no such leave may exceed ninety days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract. If reemployment
upon expiration of a leave of absence approved by the Company is not so
guaranteed, then three (3) months following the 90th day of such leave, any
Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory
Stock Option. Neither service as a Director nor payment of a director's fee by
the Company shall be sufficient to constitute "employment" by the Company. If an
Employee's employer ceases to be a Subsidiary of the Company, such Employee's
employment shall be deemed terminated on such date unless the Administrator
provides otherwise.

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

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

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

                      (ii)      If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the day of determination, as
reported in The Wall Street Journal or such other source as the Administrator
deems reliable; or

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

             (n)       "Incentive Stock Option" means an Option intended to
                        ----------------------
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.

             (o)       "Nonstatutory Stock Option" means an Option not intended
                        -------------------------
to qualify as an Incentive Stock Option.

             (p)       "Notice of Grant" means a written or electronic notice
                        ---------------
evidencing certain terms and conditions of an individual Option or Stock
Purchase Right grant. The Notice of Grant is part of the Option Agreement.

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

             (r)       "Option" means a stock option granted pursuant to the
                        ------
Plan.

                                      -2-

<PAGE>

             (s)       "Option Agreement" means an agreement between the Company
                        ----------------
and an Optionee evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions of the Plan.

             (t)       "Option Exchange Program" means a program whereby
                        -----------------------
outstanding Options are surrendered in exchange for Options with a lower
exercise price.

             (u)       "Optioned Stock" means the Common Stock subject to an
                        --------------
Option or Stock Purchase Right.

             (v)       "Optionee" means the holder of an outstanding Option or
                        --------
Stock Purchase Right granted under the Plan.

             (w)       "Parent" means a "parent corporation," whether now or
                        ------
hereafter existing, as defined in Section 424(e) of the Code.

             (x)       "Plan" means this 2002 Stock Plan, as it may be amended
                        ----
and/or restated from time to time.

             (y)       "Restricted Stock" means shares of Common Stock
                        -----------------
acquired pursuant to a grant of Stock Purchase Rights under Section 11 of the
Plan.

             (z)       "Restricted Stock Purchase Agreement" means a written
                        -----------------------------------
agreement between the Company and the Optionee evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right. The
Restricted Stock Purchase Agreement is subject to the terms and conditions of
the Plan and the Notice of Grant.

             (aa)      "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
                        ----------
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.

             (bb)      "Section 16(b)" means Section 16(b) of the Exchange Act.
                        -------------

             (cc)      "Share" means a share of the Common Stock, as adjusted in
                        -----
accordance with Section 13 of the Plan.

             (dd)      "Stock Purchase Right" means the right to purchase Common
                        --------------------
Stock pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.

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

     3.      Stock Subject to the Plan. Subject to the provisions of Section 13
             -------------------------
of the Plan, the maximum aggregate number of Shares that may be sold under the
Plan is 2,000,000 Shares plus (a) any Shares which have been reserved but not
issued under the Company's 1999 Long-Term Incentive Plan (the "1999 Plan") as of
the date of stockholder approval of this Plan, (b) any Shares returned to the
1999 Plan as a result of termination of options or repurchase of Shares issued
under the 1999 Plan and (c) an annual increase to be added on the first day of
the Company's fiscal year beginning April 1, 2003, equal to the lesser of (i)
750,000 Shares, (ii) 5% of the outstanding Shares on such date or (iii) an
amount determined by the Board. The Shares may be authorized, but unissued, or
reacquired Common Stock.

             If an Option or Stock Purchase Right expires or becomes
unexercisable without having been exercised in full, or is surrendered pursuant
to an Option Exchange Program, the unpurchased Shares which were subject thereto
shall become available for future grant or sale under the Plan (unless the Plan
has terminated); provided, however, that Shares that have actually been issued
under the Plan, whether upon exercise of an Option or Stock Purchase Right,
shall not be returned to the Plan and shall not become available for future
distribution under the Plan, except that if Shares of Restricted Stock are
repurchased by the Company at their original purchase price, such Shares shall
become available for future grant under the Plan.

                                      -3-

<PAGE>

     4.      Administration of the Plan.
             --------------------------
             (a)       Procedure.
                       ---------
                        (i)     Multiple Administrative Bodies. Different
                                ------------------------------
Committees with respect to different groups of Employees may administer the
Plan.

                       (ii)     Section 162(m). To the extent that the
                                --------------
Administrator determines it to be desirable to qualify Options granted hereunder
as "performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.

                      (iii)     Rule 16b-3. To the extent desirable to qualify
                                ----------
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under
Rule 16b-3, including having the Plan administered by a Committee comprised
solely of "Non-Employee Directors" within the meaning of Rule 16b-3(b)(3).

                       (iv)     Other Administration. Other than as provided
                                --------------------
above, the Plan shall be administered by (A) the Board or (B) a Committee, which
committee shall be constituted to satisfy Applicable Laws.

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

                       (i)     to determine the Fair Market Value;

                      (ii)     to select the Employees to whom Options and Stock
Purchase Rights may be granted hereunder;

                     (iii)     to determine the number of shares of Common
Stock to be covered by each Option and Stock Purchase Right granted hereunder;

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

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

                      (vi)     to reduce the exercise price of any Option or
Stock Purchase Right to the then current Fair Market Value if the Fair Market
Value of the Common Stock covered by such Option or Stock Purchase Right shall
have declined since the date the Option or Stock Purchase Right was granted;

                     (vii)     to institute an Option Exchange Program;

                    (viii)     to construe and interpret the terms of the Plan
and awards granted pursuant to the Plan;

                      (ix)     to establish, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of satisfying applicable foreign laws;

                                      -4-

<PAGE>

                       (x)     to modify or amend each Option or Stock Purchase
Right (subject to Section 15(c) of the Plan), including the discretionary
authority to extend the post-termination exercisability period of Options longer
than is otherwise provided for in the Plan;

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

                     (xii)     to authorize any person to execute on behalf of
the Company any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator;

                    (xiii)     to correct any defect, supply any omission, or
reconcile any inconsistency in the Plan, or in any Option Agreement, in a manner
and to the extent it shall deem necessary, all of which determinations and
interpretations made by the Administrator shall be conclusive and binding on all
Optionees, any other holders of Options and on their legal representatives and
beneficiaries;

                     (xiv)     except to the extent prohibited by, or
impermissible in order to obtain treatment desired by the Administrator under,
applicable law or rule, to allocate or delegate all or any portion of its powers
and responsibilities to any one or more of its members or to any person(s)
selected by it, subject to revocation or modification by the Administrator of
such allocation or delegation; and

                      (xv)     to make all other determinations deemed
necessary or advisable for administering the Plan.

             (c)       Effect of Administrator's Decision. The Administrator's
                       ----------------------------------
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Stock Purchase Rights.

     5.      Eligibility. Incentive Stock Options, Nonstatutory Stock Options
             -----------
and Stock Purchase Rights may only be granted to Employees.

     6.      Limitations.
             -----------
             (a)       Each Option shall be designated in the Option Agreement
as either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.

             (b)       Neither the Plan nor any Option or Stock Purchase Right
shall confer upon an Optionee any right with respect to continuing the
Optionee's relationship as an Employee with the Company, nor shall they
interfere in any way with the Optionee's right or the Company's right to
terminate such relationship at any time, with or without cause.

             (c)       The following limitations shall apply to grants of
Options:

                         (i)    No Employee shall be granted, in any fiscal year
of the Company, Options to purchase more than 500,000 Shares.

                        (ii)    The foregoing limitation shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 13.

                                      -5-

<PAGE>

                       (iii)    If an Option is cancelled in the same fiscal
year of the Company in which it was granted (other than in connection with a
transaction described in Section 13), the cancelled Option will be counted
against the limit set forth in subsection (i) above. For this purpose, if the
exercise price of an Option is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new Option.

     7.      Term of Plan. Subject to Section 19 of the Plan, the Plan shall
             ------------
become effective upon its adoption by the Board. It shall continue in effect for
a term of ten (10) years unless terminated earlier under Section 15 of the Plan.

     8.      Term of Option. The term of each Option shall be stated in the
             --------------
Option Agreement. In the case of an Incentive Stock Option, the term shall be
ten (10) years from the date of grant or such shorter term as may be provided in
the Option Agreement. Moreover, in the case of an Incentive Stock Option granted
to an Optionee who, at the time the Incentive Stock Option is granted, owns
stock representing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
term of the Incentive Stock Option shall be five (5) years from the date of
grant or such shorter term as may be provided in the Option Agreement.

     9.      Option Exercise Price and Consideration.
             ---------------------------------------

             (a)       Exercise Price. The per share exercise price for the
                       --------------
Shares to be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

                         (i)    In the case of an Incentive Stock Option

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

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

                        (ii)    In the case of a Nonstatutory Stock Option, the
per Share exercise price shall be determined by the Administrator. In the case
of a Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.

                       (iii)    Notwithstanding the foregoing, Options may be
granted with a per Share exercise price of less than 100% of the Fair Market
Value per Share on the date of grant pursuant to a merger or other corporate
transaction.

             (b)       Waiting Period and Exercise Dates. At the time an Option
                       ---------------------------------
is granted, the Administrator shall fix the period within which the Option may
be exercised and shall determine any conditions that must be satisfied before
the Option may be exercised.

             (c)       Form of Consideration. The Administrator shall determine
                       ---------------------
the acceptable form of consideration for exercising an Option, including the
method of payment. In the case of an Incentive Stock Option, the Administrator
shall determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:

                         (i)    cash;

                        (ii)    check;

                       (iii)    promissory note;

                                      -6-

<PAGE>

                        (iv)    other Shares, provided such Shares (A) if
acquired directly or indirectly from the Company, have been owned by the
Optionee for more than six (6) months on the date of surrender, and (B) have a
Fair Market Value on the date of surrender equal to the aggregate exercise price
of the Shares as to which said Option shall be exercised;

                         (v)    consideration received by the Company under a
cashless exercise program implemented by the Company in connection with the
Plan;

                        (vi)    a reduction in the amount of any Company
liability to the Optionee, including any liability attributable to the
Optionee's participation in any Company-sponsored deferred compensation program
or arrangement;

                       (vii)    such other consideration and method of payment
for the issuance of Shares to the extent permitted by Applicable Laws; or

                      (viii)    any combination of the foregoing methods of
payment.

     10.     Exercise of Option.
             ------------------

             (a)       Procedure for Exercise; Rights as a Stockholder. Any
                       -----------------------------------------------
Option granted hereunder shall be exercisable according to the terms of the Plan
and at such times and under such conditions as determined by the Administrator
and set forth in the Option Agreement. Unless the Administrator provides
otherwise, vesting of Options granted hereunder shall be suspended during any
unpaid leave of absence. An Option may not be exercised for a fraction of a
Share.

                       An Option shall be deemed exercised when the Company
receives: (i) written or electronic notice of exercise (in accordance with the
Option Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised and any
withholding taxes the Company is required to withhold or arrangements for the
payment of such taxes, satisfactory to the Company, have been made. Full payment
may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse or
in the name of a family trust of which the Optionee is a trustee. Until the
Shares are issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the Option. The
Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised; provided that if the Company shall be advised by counsel
that certain requirements under the Federal, state or foreign securities laws
must be met before Shares may be issued under this Plan, the Company shall
notify all persons who have been issued Options, and the Company shall have no
liability for failure to issue Shares under any exercise of Options because of
delay while such requirements are being met or the inability of the Company to
comply with such requirements. No adjustment will be made for a dividend or
other right for which the record date is prior to the date the Shares are
issued, except as provided in Section 13 of the Plan.

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

             (b)       Termination of Relationship as an Employee. If an
                       ------------------------------------------
Optionee ceases to be an Employee, other than upon the Optionee's death or
Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable
for three (3) months following the Optionee's termination (but in no event later
than the expiration of the term of such Option as set forth in the Option
Agreement). If, on the date of termination, the Optionee is not vested as to his
or her entire Option, the Shares covered by the unvested portion of the Option
shall revert to the Plan. If, after termination, the Optionee does not exercise
his or her

                                      -7-

<PAGE>

Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

             (c)       Disability of Optionee. If an Optionee ceases to be an
                       ----------------------
Employee as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option Agreement
to the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement). If, on the date of termination,
the Optionee is not vested as to his or her entire Option, the Shares covered by
the unvested portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.

             (d)       Death of Optionee. If an Optionee dies, the Option may be
                       -----------------
exercised following the Optionee's death within such period of time as is
specified in the Option Agreement to the extent that the Option is vested on the
date of death (but in no event may the Option be exercised later than the
expiration of the term of such Option as set forth in the Option Agreement), by
the Optionee's designated beneficiary, provided such beneficiary has been
designated prior to the Optionee's death in a form acceptable to the
Administrator. If no such beneficiary has been designated by the Optionee, then
such Option may be exercised by the personal representative of the Optionee's
estate or by the person(s) to whom the Option is transferred pursuant to the
Optionee's will or in accordance with the laws of descent and distribution. In
the absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee's death (but in no
event later than the expiration of the term of such Option as set forth in the
Option Agreement). If, at the time of death, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall immediately revert to the Plan. If the Option is not so exercised
within the time specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

     11.     Stock Purchase Rights.
             ---------------------

             (a)       Rights to Purchase. Stock Purchase Rights may be issued
                       ------------------
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it shall
advise the offeree in writing or electronically, by means of a Notice of Grant,
of the terms, conditions and restrictions related to the offer, including the
number of Shares that the offeree shall be entitled to purchase, the price to be
paid, and the time within which the offeree must accept such offer. The offer
shall be accepted by execution of a Restricted Stock Purchase Agreement in the
form determined by the Administrator.

             (b)       Repurchase Option. Unless the Administrator determines
                       -----------------
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with the Company, its Parent and Subsidiaries for any
reason (including death or Disability). The purchase price for Shares
repurchased pursuant to the Restricted Stock Purchase Agreement shall be the
original price paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company. The repurchase option shall lapse
at a rate determined by the Administrator.

             (c)       Other Provisions. The Restricted Stock Purchase Agreement
                       ----------------
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion,
including tax withholding rights and obligations.

             (d)       Rights as a Stockholder. Once the Stock Purchase Right is
                       -----------------------
exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.

     12.     Transferability of Options and Stock Purchase Rights. Unless
             ----------------------------------------------------
determined otherwise by the Administrator with respect to Nonstatutory Stock
Options, an Option or Stock Purchase Right may not be sold, pledged,

                                      -8-

<PAGE>

assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee. If the Administrator makes an
Option or Stock Purchase Right transferable, such Option or Stock Purchase Right
shall contain such additional terms and conditions as the Administrator deems
appropriate.

     13.     Adjustments Upon Changes in Capitalization, Dissolution, Merger or
             ------------------------------------------------------------------
Change in Control.
-----------------

             (a)       Changes in Capitalization. Subject to any required action
                       -------------------------
by the stockholders of the Company, the number of shares of Common Stock that
have been authorized for issuance under the Plan but as to which no Options or
Stock Purchase Rights have yet been granted or which have been returned to the
Plan upon cancellation or expiration of an Option or Stock Purchase Right, the
number of Shares that may be added annually to the Shares reserved under the
Plan (pursuant to Section 3(c)(i)) and the number of Shares as well as the price
per share of Common Stock covered by each such outstanding Option or Stock
Purchase Right, shall be proportionately adjusted for any increase or decrease
in the number of issued shares of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the
Common Stock, or any other increase or decrease in the number of issued shares
of Common Stock effected without receipt of consideration by the Company;
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 Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to an Option or Stock Purchase Right.

             (b)       Dissolution or Liquidation. In the event of the proposed
                       --------------------------
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option or Stock Purchase Right shall lapse
as to all such Shares, provided the proposed dissolution or liquidation takes
place at the time and in the manner contemplated. To the extent it has not been
previously exercised, an Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.

             (c)       Merger or Change in Control. In the event of a merger of
                       ---------------------------
the Company with or into another corporation, or a Change in Control, each
outstanding Option and Stock Purchase Right shall be assumed or an equivalent
option or right substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the Option or Stock Purchase
Right, the Optionee shall fully vest in and have the right to exercise the
Option or Stock Purchase Right as to all of the Optioned Stock, including Shares
as to which it would not otherwise be vested or exercisable. If an Option or
Stock Purchase Right becomes fully vested and exercisable in lieu of assumption
or substitution in the event of a merger or Change in Control, the Administrator
shall notify the Optionee in writing or electronically that the Option or Stock
Purchase Right shall be fully vested and exercisable for a period of fifteen
(15) days from the date of such notice, and the Option or Stock Purchase Right
shall terminate upon the expiration of such period.

                       For the purposes of this subsection (c), the Option or
Stock Purchase Right shall be considered assumed if, following the merger or
Change in Control, the option or right confers the right to purchase or receive,
for each Share of Optioned Stock subject to the Option or Stock Purchase Right
immediately prior to the merger or Change in Control, the consideration (whether
stock, cash, or other securities or property) received in the merger or Change
in Control by holders of Common Stock for each Share held on the effective date
of the transaction (and if holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the merger or
Change in Control is not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option or
Stock Purchase Right, for each Share of Optioned Stock subject to the Option or
Stock Purchase Right, to be solely common stock of the successor corporation or
its Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger or Change in Control.

                                      -9-

<PAGE>

     14.     Date of Grant. The date of grant of an Option or Stock Purchase
             -------------
Right shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the determination shall
be provided to each Optionee within a reasonable time after the date of such
grant.

     15.     Amendment and Termination of the Plan.
             -------------------------------------

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

             (b)       Stockholder Approval. The Company shall obtain
                       --------------------
stockholder approval of any Plan amendment to the extent necessary and desirable
to comply with Applicable Laws.

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

     16.     Conditions Upon Issuance of Shares.
             ----------------------------------

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

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

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

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

     19.     Stockholder Approval. The Plan shall be subject to approval by the
             --------------------
stockholders of the Company within twelve (12) months after the date the Plan is
adopted. Such stockholder approval shall be obtained in the manner and to the
degree required under Applicable Laws. No Option shall become exercisable or
Stock Purchase Right vested prior to such stockholder approval and in the event
such stockholder approval is not obtained, all awards granted under the Plan
shall be automatically cancelled.

                                      -10-

</TEXT>
</DOCUMENT>
