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<SEC-DOCUMENT>0001144204-02-000199.txt : 20020508
<SEC-HEADER>0001144204-02-000199.hdr.sgml : 20020508
ACCESSION NUMBER:		0001144204-02-000199
CONFORMED SUBMISSION TYPE:	S-8
PUBLIC DOCUMENT COUNT:		5
FILED AS OF DATE:		20020508
EFFECTIVENESS DATE:		20020508

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SBE INC
		CENTRAL INDEX KEY:			0000087050
		STANDARD INDUSTRIAL CLASSIFICATION:	COMPUTER COMMUNICATIONS EQUIPMENT [3576]
		IRS NUMBER:				941517641
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1031

	FILING VALUES:
		FORM TYPE:		S-8
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-87828
		FILM NUMBER:		02638185

	BUSINESS ADDRESS:	
		STREET 1:		4550 NORRIS CANYON ROAD
		CITY:			SAN RAMON
		STATE:			CA
		ZIP:			94583
		BUSINESS PHONE:		5103552000

	MAIL ADDRESS:	
		STREET 1:		4550 NORRIS CANYON RD
		CITY:			SAN RAMON
		STATE:			CA
		ZIP:			94583
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-8
<SEQUENCE>1
<FILENAME>doc1.txt
<TEXT>

      AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 8, 2002
                                                  Registration  No.  333-
     =======================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                 --------------

                                    FORM S-8
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933


                                    SBE, INC.
             (Exact name of registrant as specified in its charter)

            Delaware                              94-1517641
     --------------------                ---------------------------
     (State  of  Incorporation)     (I.R.S.  Employer  Identification  No.)

                          2305 CAMINO RAMON, SUITE 200
                           SAN RAMON, CALIFORNIA 94583
                     (Address of principal executive offices)



                        1992 EMPLOYEE STOCK PURCHASE PLAN
                             1996 STOCK OPTION PLAN
                            (Full title of the plans)



                                DAVID W. BRUNTON
                CHIEF FINANCIAL OFFICER, VICE PRESIDENT, FINANCE
                                  AND SECRETARY
                                    SBE, INC.
                          2305 CAMINO RAMON, SUITE 200
                           SAN RAMON, CALIFORNIA 94583
                                 (925) 355-2000
  (Name, address, including zip code, and telephone number, including area code,
                              of agent for service)

                                  ---------------

                                   Copies to:
                             CHRISTOPHER A. WESTOVER
                               COOLEY GODWARD LLP
                         ONE MARITIME PLAZA, 20TH FLOOR
                             SAN FRANCISCO, CA 94111
                                 (415) 693-2000

                                  ----------------



<PAGE>
                         CALCULATION OF REGISTRATION FEE
                         ===============================
<TABLE>
<CAPTION>
<S>                         <C>                <C>                   <C>                  <C>
                                         PROPOSED MAXIMUM      PROPOSED MAXIMUM
TITLE OF SECURITIES TO   AMOUNT TO BE    OFFERING PRICE PER    AGGREGATE OFFERING       AMOUNT OF
BE REGISTERED            REGISTERED (1)       SHARE (2)             PRICE (2)        REGISTRATION FEE
- ----------------------   --------------  -------------------  -------------------  ------------------
 Shares of Common
 Stock, par value
 $0.001 per share,
 reserved for future
 grant under the 1992      250,000             $ 1.90             $  475,000.00         $   92.00
 Employee Stock
 Purchase Plan and
 the 1996 Stock
 Option Plan.

</TABLE>


(1)  This  registration  statement  is  intended  to cover the offering of up to
     100,000  shares  of  the  Registrant's  Common  Stock  pursuant to its 1992
     Employee  Stock  Purchase Plan, as amended (the "Employee Plan"), and up to
     150,000  shares of the Registrant's Common Stock pursuant to its 1996 Stock
     Option  Plan,  as  amended  (the  "1996 Plan"). This registration statement
     shall  also  cover  any  additional  shares  of  Common  Stock that becomes
     issuable  under  the  Employee  Plan  or  1996  Plan by reason of any stock
     dividend,  stock  split,  recapitalization or any other similar transaction
     without  receipt of consideration that results in an increase in the number
     of  shares  of  the  Registrant's  outstanding  Common  Stock.

(2)  Estimated  solely  for  the  purpose  of  calculating  the  amount  of  the
     registration fee pursuant to Rule 457(c). The price per share and aggregate
     offering price are based upon the high and low sales prices of Registrant's
     Common  Stock  on  May  6,  2002  as reported on the Nasdaq National Market
     System.


<PAGE>
                    INCORPORATION BY REFERENCE OF CONTENTS OF
                       REGISTRATION STATEMENTS ON FORM S-8
                       NOS. 33-45998, 33-45998, 333-63377,
                        33-67821, 333-32896 AND 333-63228


     The  contents  of  Registration  Statements  on  Form  S-8  Nos.  33-45998,
33-45998, 333-63377, 33-67821, 333-32896 and 333-63228 filed with the Securities
and  Exchange  Commission  on  February 26, 1992, August 19, 1998, September 15,
1998,  November  24,  1998,  March 21, 2000 and June 18, 2001, respectively, are
incorporated  by  reference  herein.

     The  Employee  Plan  and the 1996 Plan were amended in December 2001 by the
Board  of  Directors,  and  these  amendments  were subsequently approved by the
stockholders in March 2002. The Employee Plan was amended to increase the number
of  shares  of  Common  Stock  of the Registrant reserved for issuance under the
Employee  Plan  by  100,000  shares.  The  1996 Plan was amended to increase the
number  of  shares of Common Stock of the Registrant reserved for issuance under
the  1996  Plan  by  150,000  shares.

                                    EXHIBITS
EXHIBIT
NUMBER
- ------
5.1           Opinion  of  Cooley  Godward  LLP

23.1          Consent  of  PricewaterhouseCoopers  LLP,  Independent  Auditors

23.2          Consent  of  Cooley  Godward  LLP  is  contained in Exhibit 5.1
              to this Registration  Statement

24.1          Power  of  Attorney  is  contained  on  the  signature  pages

99.1          1992  Employee  Stock  Purchase  Plan,  as  amended

99.2          1996  Stock  Option  Plan,  as  amended



<PAGE>
                                   SIGNATURES


     Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement  to  be  signed  on  its  behalf  by  the  undersigned, thereunto duly
authorized,  in  the  City  of  San  Ramon, State of California, on May 8, 2002.


                                   SBE,  INC.



                                    By:  /s/  David  W.  Brunton
                                       ----------------------------
                                       David  W.  Brunton
                                       Chief Financial Officer, Vice President,
                                       Finance and  Secretary







<PAGE>
                                POWER OF ATTORNEY


     KNOW  ALL  PERSONS  BY  THESE  PRESENTS,  that  each person whose signature
appears below constitutes and appoints William B. Heye and David W. Brunton, and
each  or  any  one of them, his true and lawful attorney-in-fact and agent, with
full  power  of  substitution and resubstitution, for him and in his name, place
and  stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities  and  Exchange  Commission,  granting unto said attorneys-in-fact and
agents,  and  each  of them, full power and authority to do and perform each and
every  act and thing requisite and necessary to be done in connection therewith,
as  fully  to all intents and purposes as he might or could do in person, hereby
ratifying  and  confirming all that said attorneys-in-fact and agents, or any of
them,  or their or his substitutes or substitute, may lawfully do or cause to be
done  by  virtue  hereof.

     Pursuant  to  the  requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities  and  on  the  dates  indicated.

SIGNATURE                         TITLE                           DATE


 /s/  Raimon  L.  Conlisk    Chairman  of  the  Board            May  8,  2002
- -------------------------
 (Raimon  L.  Conlisk)



  /s/  William  B.  Heye     President,  Chief  Executive        May  8,  2002
- ------------------------     Officer  and  Director
 (William  B.  Heye)         (principal  executive  officer)



 /s/  David  W.  Brunton     Chief Financial Officer, Vice       May  8,  2002
- ------------------------     President, Finance and Secretary
 (David  W.  Brunton)       (principal  financial  and accounting
                             officer)



 /s/  Randall  L-W.  Caudill  Director                           May  8,  2002
- ----------------------------
 (Randall  L-W.  Caudill)



 /s/  Ronald  J.  Ritchie     Director                           May  8,  2002
- -------------------------
 (Ronald  J.  Ritchie)




<PAGE>

                                  EXHIBIT INDEX


EXHIBIT
NUMBER                  DESCRIPTION

5.1      Opinion  of  Cooley  Godward  LLP

23.1     Consent  of  PricewaterhouseCoopers  LLP,  Independent  Auditors

23.2     Consent  of  Cooley  Godward LLP is contained in Exhibit 5.1 to this
         Registration  Statement

24.1     Power  of  Attorney  is  contained  on  the  signature  pages

99.1     1992  Employee  Stock  Purchase  Plan,  as  amended

99.2     1996  Stock  Option  Plan,  as  amended

<PAGE>


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>3
<FILENAME>doc2.txt
<TEXT>



Exhibit  5.1

May  6,  2002

SBE,  Inc.
2305  Camino  Ramon,  Suite  200
San  Ramon,  California  94583

Ladies  and  Gentlemen:

You  have  requested  our  opinion with respect to certain matters in connection
with the filing by SBE, Inc. (the "Company") of a Registration Statement on Form
S-8  (the  "Registration Statement") with the Securities and Exchange Commission
covering the offering of up to 250,000 additional shares of the Company's Common
Stock,  $0.001  par value (the "Shares"), issuable pursuant to its 1992 Employee
Stock  Purchase  Plan,  as  amended  (the "1992 Plan") and its 1996 Stock Option
Plan,  as  amended  (the  "1996  Plan").

In connection with this opinion, we have examined the Registration Statement and
related  Prospectuses,  the  Company's  Amended  and  Restated  Certificate  of
Incorporation,  as  amended,  and By-laws, as amended, and such other documents,
records, certificates, memoranda and other instruments as we deem necessary as a
basis for this opinion.  We have assumed the genuineness and authenticity of all
documents  submitted  to  us  as  originals,  the conformity to originals of all
documents  submitted to us as copies thereof, and the due execution and delivery
of  all  documents,  where  due execution and delivery are a prerequisite to the
effectiveness  thereof.

On  the  basis  of the foregoing, and in reliance thereon, we are of the opinion
that the Shares, when sold and issued in accordance with the 1992 Plan, the 1996
Plan,  the  Registration  Statement  and  related  Prospectuses, will be validly
issued,  fully  paid,  and nonassessable (except as to shares issued pursuant to
certain  deferred  payment  arrangements,  which  will  be  fully  paid  and
nonassessable  when  such  deferred  payments  are  made  in  full).

We  consent  to  the  filing  of  this opinion as an exhibit to the Registration
Statement.

Very  truly  yours,

Cooley  Godward  LLP
/s/  Jodie M. Bourdet
- -------------------------------------
Jodie M. Bourdet







</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>4
<FILENAME>doc3.txt
<TEXT>


Exhibit  23.1

                       CONSENT OF INDEPENDENT ACCOUNTANTS



     We  hereby  consent  to the incorporation by reference in this Registration
Statement  on Form S-8 of our report dated November 30, 2001, except for Note 14
as  to  which  the  date  is  December  14,  2001,  relating to the consolidated
financial  statements  and  financial  statement schedule, which appears in SBE,
Inc.'s Annual report  on  Form  10-K  for  the  year  ended  October  31,  2001.


                                       /s/PricewaterhouseCoopers LLP
                                       San Francisco,  California
                                       May  7,  2002






</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>5
<FILENAME>doc4.txt
<TEXT>


Exhibit  99.1

                                    SBE, INC.

                        1992 EMPLOYEE STOCK PURCHASE PLAN

                             Adopted January 9, 1992
                   Approved by Stockholders on March 24, 1992

                      As Amended through September 14, 1998
                  Approved by Stockholders on October 22, 1998

                      As Amended through December 14, 2001
                   Approved by Stockholders on March 19, 2002

1.     PURPOSE.

(A)     The  purpose of the 1992 Employee Stock Purchase Plan (the "Plan") is to
provide  a  means  by  which employees of SBE, Inc., a Delaware corporation (the
"Company"),  and  its  Affiliates,  as  defined  in  subparagraph 1(b) which are
designated  as  provided  in  subparagraph  2(b), may be given an opportunity to
purchase  stock  of  the  Company.

(B)     The word "Affiliate" as used in the Plan means any parent corporation or
subsidiary  corporation  of  the Company, as those terms are defined in Sections
424(e)  and  (f), respectively, of the Internal Revenue Code of 1986, as amended
(the  "Code").

(C)      The  Company, by means of the Plan, seeks to retain the services of its
employees,  to  secure  and retain the services of new employees, and to provide
incentives  for  such  persons  to  exert maximum efforts for the success of the
Company.

(D)     The  Company  intends  that  the rights to purchase stock of the Company
granted  under  the  Plan  be considered options issued under an "employee stock
purchase  plan"  as  that  term  is  defined  in  Section  423(b)  of  the Code.

2.     ADMINISTRATION.

(A)     The  Plan  shall be administered by the Board of Directors (the "Board")
of  the  Company  unless  and  until  the  Board  delegates  administration to a
Committee,  as  provided  in  subparagraph  2(c).  Whether  or not the Board has
delegated  administration, the Board shall have the final power to determine all
questions  of  policy and expediency that may arise in the administration of the
Plan.

(B)     The  Board  shall have the power, subject to, and within the limitations
of,  the  express  provisions  of  the  Plan:

<PAGE>

(i)  To  determine  when and how rights to purchase stock of the Company
     shall  be granted and the provisions of each offering of such rights (which
     need  not  be  identical).
(ii) To  designate  from  time  to time which Affiliates of the Company shall be
     eligible  to  participate  in  the  Plan.

(iii)To  construe  and  interpret the Plan and rights granted under it, and to
     establish,  amend  and revoke rules and regulations for its administration.
     The  Board, in the exercise of this power, may correct any defect, omission
     or  inconsistency  in the Plan, in a manner and to the extent it shall deem
     necessary  or  expedient  to  make  the  Plan  fully  effective.

(iv) To  amend  the  Plan  as  provided  in  paragraph  13.

(v)  Generally,  to  exercise  such powers and to perform such acts as the Board
     deems  necessary or expedient to promote the best interests of the Company.

(C)     The  Board  may  delegate  administration  of  the  Plan  to a Committee
composed  of  not fewer than two (2) members of the Board (the "Committee").  If
administration  is  delegated  to  a  Committee,  the  Committee  shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by  the  Board, subject, however, to such resolutions, not inconsistent with the
provisions  of  the Plan, as may be adopted from time to time by the Board.  The
Board  may  abolish  the  Committee  at  any  time  and  revest in the Board the
administration  of  the  Plan.

3.     SHARES  SUBJECT  TO  THE  PLAN.

(A)     Subject  to  the provisions of paragraph 12 relating to adjustments upon
changes  in  stock,  the stock that may be sold pursuant to rights granted under
the  Plan  shall  not  exceed  in the aggregate three hundred thousand (300,000)
shares of the Company's common stock (the "Common Stock").  If any right granted
under the Plan shall for any reason terminate without having been exercised, the
Common Stock not purchased under such right shall again become available for the
Plan.

(B)     The  stock  subject  to  the  Plan  may be unissued shares or reacquired
shares,  bought  on  the  market  or  otherwise.

4.     GRANT  OF  RIGHTS;  OFFERING.

     The  Board  or the Committee may from time to time grant or provide for the
grant  of  rights  to  purchase  Common  Stock  of the Company under the Plan to
eligible  employees  (an "Offering") on a date or dates (the "Offering Date(s)")
selected by the Board or the Committee.  Each Offering shall be in such form and
shall contain such terms and conditions as the Board or the Committee shall deem
appropriate.  If an employee has more than one right outstanding under the Plan,


<PAGE>
unless  he  or  she  otherwise  indicates  in  agreements  or  notices delivered
hereunder:  (1)  each  agreement  or  notice  delivered by that employee will be
deemed to apply to all of his or her rights under the Plan, and (2) a right with
a  lower  exercise  price  (or  an  earlier-granted  right,  if  two rights have
identical  exercise  prices),  will  be exercised to the fullest possible extent
before  a  right  with a higher exercise price (or a later-granted right, if two
rights  have  identical  exercise  prices) will be exercised.  The provisions of
separate  Offerings  need  not  be  identical,  but  each Offering shall include
(through  incorporation  of  the  provisions  of  this  Plan by reference in the
Offering or otherwise) the substance of the provisions contained in paragraphs 5
through  8,  inclusive.

5.     ELIGIBILITY.

(A)  Rights  may be granted only to employees of the Company or, as the Board or
the  Committee  may  designate as provided in subparagraph 2(b), to employees of
any  Affiliate  of  the  Company.  Except  as  provided in subparagraph 5(b), an
employee  of  the  Company  or any Affiliate shall not be eligible to be granted
rights  under  the Plan, unless, on the Offering Date, such employee has been in
the  employ of the Company or any Affiliate for such continuous period preceding
such  grant as the Board or the Committee may require, but in no event shall the
required  period  of  continuous  employment be equal to or greater than two (2)
years.  In  addition,  unless otherwise determined by the Board or the Committee
and  set  forth  in  the  terms  of  the applicable Offering, no employee of the
Company  or any Affiliate shall be eligible to be granted rights under the Plan,
unless,  on  the  Offering  Date,  such employee's customary employment with the
Company  or  such  Affiliate is at least twenty (20) hours per week and at least
five  (5)  months  per  calendar  year.

(B)  The  Board  or  the Committee may provide that, each person who, during the
course  of  an  Offering,  first  becomes an eligible employee of the Company or
designated  Affiliate  will,  on a date or dates specified in the Offering which
coincides  with  the  day  on  which such person becomes an eligible employee or
occurs  thereafter,  receive  a  right  under  that  Offering, which right shall
thereafter  be  deemed  to be a part of that Offering. Such right shall have the
same  characteristics  as  any rights originally granted under that Offering, as
described  herein,  except  that:

(i)  the  date  on  which  such right is granted shall be the "Offering Date" of
     such  right for all purposes, including determination of the exercise price
     of  such  right;

(ii) the  Purchase  Period  (as defined below) for such right shall begin on its
     Offering  Date  and  end  coincident  with  the  end  of such Offering; and

(iii)  the  Board or the Committee may provide that if such person first becomes
     an  eligible  employee  within a specified period of time before the end of
     the  Purchase  Period  (as defined below) for such Offering, he or she will
     not  receive  any  right  under  that  Offering.

<PAGE>
(C)     No employee shall be eligible for the grant of any rights under the Plan
if,  immediately  after  any  such  rights are granted, such employee owns stock
possessing  five  percent  (5  %)  or more of the total combined voting power or
value  of all classes of stock of the Company or of any Affiliate.  For purposes
of  this  subparagraph 5(c), the rules of Section 424(d) of the Code shall apply
in  determining  the  stock  ownership  of  any  employee,  and stock which such
employee  may purchase under all outstanding rights and options shall be treated
as  stock  owned  by  such  employee.

(D)     An  eligible  employee may be granted rights under the Plan only if such
rights,  together  with  any other rights granted under "employee stock purchase
plans"  of  the Company and any Affiliates, as specified by Section 423(b)(8) of
the  Code, do not permit such employee's rights to purchase stock of the Company
or  any Affiliate to accrue at a rate which exceeds twenty-five thousand dollars
($25,000) of fair market value of such stock (determined at the time such rights
are  granted) for each calendar year in which such rights are outstanding at any
time.

(E)     Officers  of  the Company and any designated Affiliate shall be eligible
to  participate  in  Offerings under the Plan, provided, however, that the Board
may  provide  in  an  Offering that certain employees who are highly compensated
employees  within  the  meaning of Section 423(b)(4)(D) of the Code shall not be
eligible  to  participate.

6.     RIGHTS;  PURCHASE  PRICE.

(A)     On  each  Offering Date, each eligible employee, pursuant to an Offering
made  under the Plan, shall be granted the right to purchase up to the number of
shares  of  Common Stock of the Company purchasable with a percentage designated
by  the  Board  or  the  Committee  not  exceeding fifteen percent (15%) of such
employee's  Earnings (as defined in Section 7(a)) during the period which begins
on  the  Offering  Date  (or  such  later  date  as  the  Board or the Committee
determines  for  a  particular  Offering)  and  ends  on  the date stated in the
Offering,  which  date  shall be no more than twenty-seven (27) months after the
Offering  Date  (the  "Purchase Period").  In connection with each Offering made
under  this  Plan,  the Board or the Committee shall specify a maximum number of
shares  which  may  be  purchased by any employee as well as a maximum aggregate
number  of  shares  which may be purchased by all eligible employees pursuant to
such  Offering.  In  addition,  in  connection with each Offering which contains
more  than  one  Exercise  Date  (as  defined in the Offering), the Board or the
Committee  may  specify  a  maximum  aggregate  number  of  shares  which may be
purchased  by  all  eligible  employees  on  any  given  Exercise Date under the
Offering.  If  the  aggregate purchase of shares upon exercise of rights granted
under  the Offering would exceed any such maximum aggregate number, the Board or
the  Committee  shall  make  a pro rata allocation of the shares available in as
nearly  a  uniform  manner  as  shall  be practicable and as it shall deem to be
equitable.

<PAGE>
(B)     The  purchase  price  of stock acquired pursuant to rights granted under
the  Plan  shall  be  not  less  than  the  lesser  of,

(i)  an  amount  equal  to eighty-five percent (85%) of the fair market value of
     the  stock  on  the  Offering  Date;  or

(ii) an  amount  equal  to eighty-five percent (85%) of the fair market value of
     the  stock  on  the  Exercise  Date.


7.     PARTICIPATION;  WITHDRAWAL;  TERMINATION.

(A)     An  eligible  employee  may  become  a  participant  in  an  Offering by
delivering a participation agreement to the Company within the time specified in
the  Offering,  in such form as the Company provides.  Each such agreement shall
authorize  payroll  deductions  of up to the maximum percentage specified by the
Board  or  the Committee of such employee's Earnings during the Purchase Period.
"Earnings"  is  defined as the total compensation paid to an employee, including
all  salary,  wages  (including  amounts elected to be deferred by the employee,
that  would  otherwise  have  been  paid, under any cash or deferred arrangement
established  by  the  Company),  overtime  pay,  commissions, bonuses, and other
remuneration  paid  directly  to the employee, but excluding profit sharing, the
cost  of  employee  benefits  paid  for  by  the  Company,  education or tuition
reimbursements,  imputed  income  arising  under  any Company group insurance or
benefit program, traveling expenses, business and moving expense reimbursements,
income  received  in  connection  with  stock options, contributions made by the
Company under any employee benefit plan, and similar items of compensation.  The
payroll deductions made for each participant shall be credited to an account for
such participant under the Plan and shall be deposited with the general funds of
the  Company.  A  participant  may reduce (including to zero), increase or begin
such  payroll  deductions  after  the  beginning  of any Purchase Period only as
provided  for  in the Offering.  A participant may make additional payments into
his or her account only if specifically provided for in the Offering and only if
the  participant  has  not  had  the maximum amount withheld during the Purchase
Period.

(B)     At  any time during a Purchase Period a participant may terminate his or
her  payroll  deductions  under  the  Plan  and  withdraw  from  the Offering by
delivering  to  the  Company  a notice of withdrawal in such form as the Company
provides.  Such  withdrawal  may  be elected at any time prior to the end of the
Purchase  Period  except  as  provided  by  the  Board  or  the Committee in the
Offering.  Upon  such withdrawal from the Offering by a participant, the Company
shall  distribute  to  such  participant  all  of his or her accumulated payroll
deductions  (reduced  to  the  extent, if any, such deductions have been used to
acquire  stock  for  the  participant) under the Offering, without interest, and
such  participant's interest in that Offering shall be automatically terminated.
A  participant's  withdrawal  from  an  Offering  will  have no effect upon such

<PAGE>
participant's  eligibility  to participate in any other Offerings under the Plan
but  such participant will, be required to deliver a new participation agreement
in  order  to  participate  in  subsequent  Offerings  under  the  Plan.

(C)     Rights  granted  pursuant to any Offering under the Plan shall terminate
immediately  upon  cessation of any participating employee's employment with the
Company  and  any  designated  Affiliate,  for any reason, and the Company shall
distribute  to  such  terminated  employee all of his or her accumulated payroll
deductions  (reduced  to  the  extent, if any, such deductions have been used to
acquire  stock  for  the  terminated  employee),  under  the  Offering,  without
interest.

Rights  granted  under  the  Plan  shall  not  be  transferable,  and  shall  be
exercisable  only  by  the  person  to  whom  such  rights  are  granted.

8.     EXERCISE.

(A)     On each exercise date, as defined in the relevant Offering (an "Exercise
Date"),  each  participant's accumulated payroll deductions and other additional
payments  specifically  provided  for  in the Offering (without any increase for
interest)  will  be  applied  to  the  purchase  of whole shares of stock of the
Company,  up  to the maximum number of shares permitted pursuant to the terms of
the  Plan  and  the  applicable Offering, at the purchase price specified in the
Offering.  No  fractional  shares  shall  be  issued upon the exercise of rights
granted  under  the Plan.  The amount, if any, of accumulated payroll deductions
remaining  in  each  participant's account after the purchase of shares which is
less  than  the  amount  required  to  purchase  one share of stock on the final
Exercise  Date  of  an Offering shall be held in each such participant's account
for  the  purchase of shares under the next Offering under the Plan, unless such
participant withdraws from such next Offering, as provided in subparagraph 7(b),
or  is  no  longer  eligible to be granted rights under the Plan, as provided in
paragraph  5,  in which case such amount shall be distributed to the participant
after  said  final  Exercise  Date,  without  interest.  The  amount, if any, of
accumulated  payroll deductions remaining in any participant's account after the
purchase  of  shares  which  is  equal  to the amount required to purchase whole
shares  of  stock on the final Exercise Date of an Offering shall be distributed
in  full  to  the  participant  after  such  Exercise  Date,  without  interest.

(B)     No  rights  granted under the Plan may be exercised to any extent unless
the  Plan  (including  rights  granted  thereunder)  is  covered by an effective
registration  statement  pursuant to the Securities Act of 1933, as amended (the
"Securities Act").  If on an Exercise Date of any Offering hereunder the Plan is
not  so  registered,  no  rights granted under the Plan or any Offering shall be
exercised on said Exercise Date and the Exercise Date shall be delayed until the
Plan  is  subject  to  such an effective registration statement, except that the
Exercise  Date  shall  not  be delayed more than two (2) months and the Exercise
Date  shall  in no event be more than twenty-seven (27) months from the Offering
Date.  If  on  the  Exercise  Date  of any Offering hereunder, as delayed to the
maximum  extent permissible, the Plan is not registered, no rights granted under

<PAGE>
the  Plan  or  any  Offering  shall  be  exercised  and  all  payroll deductions
accumulated  during  the  purchase  period  (reduced to the extent, if any, such
deductions  have  been  used  to  acquire  stock)  shall  be  distributed to the
participants,  without  interest.

9.     COVENANTS  OF  THE  COMPANY.

(A)     During the terms of the rights granted under the Plan, the Company shall
keep  available  at  all times the number of shares of stock required to satisfy
such  rights.

The  Company  shall  seek  to  obtain  from each regulatory commission or agency
having jurisdiction over the Plan such authority as may be required to issue and
sell  shares  of  stock upon exercise of the rights granted under the Plan.  If,
after  reasonable  efforts,  the  Company  is  unable  to  obtain  from any such
regulatory  commission  or  agency  the  authority which counsel for the Company
deems  necessary  for  the lawful issuance and sale of stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell stock
upon  exercise  of  such  rights  unless  and  until such authority is obtained.

10.     USE  OF  PROCEEDS  FROM  STOCK.

     Proceeds  from  the sale of stock pursuant to rights granted under the Plan
shall  constitute  general  funds  of  the  Company.

11.     RIGHTS  AS  A  STOCKHOLDER.

     A  participant  shall  not be deemed to be the holder of, or to have any of
the  rights  of  a  holder with respect to, any shares subject to rights granted
under the Plan unless and until certificates representing such shares shall have
been  issued.

12.     ADJUSTMENTS  UPON  CHANGES  IN  STOCK.

(A)     If  any  change  is made in the stock subject to the Plan, or subject to
any  rights  granted  under  the  Plan  (through  merger,  consolidation,
reorganization,  recapitalization,  stock  dividend,  dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares,  change  in  corporate structure or otherwise), the Plan and outstanding
rights  will  be  appropriately  adjusted in the class(es) and maximum number of
shares  subject to the Plan and the class(es) and number of shares and price per
share  of  stock  subject  to  outstanding  rights.

(B)     In the event of:  (1) a dissolution or liquidation of the Company; (2) a
merger  or  consolidation in which the Company is not the surviving corporation;
(3)  a  reverse merger in which the Company is the surviving corporation but the
shares  of  the  Company's  Common  Stock  outstanding immediately preceding the
merger are converted by virtue of the merger into other property, whether in the
form  of  securities, cash or otherwise; or (4) any other capital reorganization
in  which more than fifty percent (50%) of the shares of the Company entitled to
vote  are exchanged, then, as determined by the Board in its sole discretion (i)

<PAGE>
any  surviving  corporation  may assume outstanding rights or substitute similar
rights for those under the Plan, (ii) such rights may continue in full force and
effect,  or  (iii)  participants'  accumulated payroll deductions may be used to
purchase  Common  Stock immediately prior to the transaction described above and
the  participants'  rights  under  the  ongoing  Offering  terminated.

13.     AMENDMENT  OF  THE  PLAN.

(A)     The  Board  at  any  time,  and  from  time to time, may amend the Plan.
However, except as provided in paragraph 12 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the stockholders of
the  Company  within  twelve  (12)  months  before  or after the adoption of the
amendment,  where  the  amendment  will:

(i)  Increase  the  number  of  shares  reserved  for  rights  under  the  Plan;

(ii) Modify  the  provisions as to eligibility for participation in the Plan (to
     the extent such modification requires stockholder approval in order for the
     Plan  to obtain employee stock purchase plan treatment under Section 423 of
     the Code or to comply with the requirements of Rule 16b-3 promulgated under
     the  Securities  Exchange  Act  of  1934,  as  amended  ("Rule 16b-3")); or

(iii) Modify the Plan in any other way if such modification requires stockholder
     approval  in  order  for  the  Plan  to obtain employee stock purchase plan
     treatment  under Section 423 of the Code or to comply with the requirements
     of  Rule  16b-3.  It is expressly contemplated that the Board may amend the
     Plan  in  any  respect  the  Board  deems necessary or advisable to provide
     eligible  employees  with  the  maximum benefits provided or to be provided
     under the provisions of the Code and the regulations promulgated thereunder
     relating  to  employee stock purchase plans and/or to bring the Plan and/or
     rights  granted  under  it  into  compliance  therewith.

(B)     Rights  and obligations under any rights granted before amendment of the
Plan  shall not be altered or impaired by any amendment of the Plan, except with
the  consent  of  the  person  to  whom  such  rights  were granted or except as
necessary  to  comply  with  any  laws  or  governmental  regulation.

14.     TERMINATION  OR  SUSPENSION  OF  THE  PLAN.

(A)     The  Board may suspend or terminate the Plan at any time.  Unless sooner
terminated,  the  Plan  shall terminate on September 13, 2008.  No rights may be
granted  under  the  Plan while the Plan is suspended or after it is terminated.

(B)     Rights  and  obligations  under  any rights granted while the Plan is in
effect  shall  not  be  altered  or impaired by suspension or termination of the
Plan,  except with the consent of the person to whom such rights were granted or
except  as  necessary  to  comply  with  any  laws  or  governmental regulation.
<PAGE>
15.     EFFECTIVE  DATE  OF  PLAN.

     The  Plan  shall become effective as determined by the Board, but no rights
granted  under  the  Plan  shall be exercised unless and until the Plan has been
approved  by  the  stockholders  of  the  Company.




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>6
<FILENAME>doc5.txt
<TEXT>


Exhibit  99.2

                                    SBE, INC.

                             1996 STOCK OPTION PLAN

                ADOPTED BY THE BOARD OF DIRECTORS JULY 21, 1987,
          AMENDED MARCH 23, 1993, AUGUST 23, 1994 AND JANUARY 17, 1995
            APPROVED BY SHAREHOLDERS MARCH 9, 1989 AND MARCH 21, 1995
                      AMENDED AND RESTATED JANUARY 18, 1996
                 APPROVED BY THE SHAREHOLDERS ON APRIL 16, 1996
                            AMENDED DECEMBER 9, 1997
                 APPROVED BY THE STOCKHOLDERS ON APRIL 14, 1998
                            AMENDED JANUARY 27, 1999
                 APPROVED BY THE STOCKHOLDERS ON MARCH 23, 1999
                             AMENDED JANUARY 8, 2001
                 APPROVED BY THE STOCKHOLDERS ON MARCH 20, 2001
                            AMENDED DECEMBER 14, 2001
                 APPROVED BY THE STOCKHOLDERS ON MARCH 19, 2002


1.     Purposes.

(A)     The  purpose  of  the  Plan  is  to  provide  a  means by which selected
Employees  and  Directors of and Consultants to the Company, and its Affiliates,
may  be  given  an  opportunity  to  purchase  stock  of  the  Company.

(B)     The  Company,  by  means  of  the  Plan, seeks to retain the services of
persons  who  are now Employees or Directors of or Consultants to the Company or
its  Affiliates,  to  secure and retain the services of new Employees, Directors
and  Consultants,  and  to  provide incentives for such persons to exert maximum
efforts  for  the  success  of  the  Company  and  its  Affiliates.

(C)     The  Company  intends that the Stock Awards issued under the Plan shall,
in  the  discretion  of  the  Board or any Committee to which responsibility for
administration  of  the  Plan has been delegated pursuant to subsection 3(c), be
Incentive  Stock  Options,  Nonstatutory  Stock  Options  or stock bonuses.  All
Options  shall  be separately designated Incentive Stock Options or Nonstatutory
Stock  Options  at  the  time  of  grant, and in such form as issued pursuant to
Section  6, and a separate certificate or certificates will be issued for shares
purchased  on exercise of each type of Option.  Stock bonuses will be designated
as such on the date of grant and shall be subject to the terms and conditions of
Section  7.

2.     Definitions.

(A)     "Affiliate"  means  any  parent  corporation  or subsidiary corporation,
whether now or hereafter existing, as those terms are defined in Sections 424(e)
and  (f)  respectively,  of  the  Code.

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

<PAGE>
(C)     "Code"  means  the  Internal  Revenue  Code  of  1986,  as  amended.

(D)     "Committee"  means a Committee appointed by the Board in accordance with
subsection  3(c)  of  the  Plan.

(E)     "Company"  means  SBE,  Inc.,  a  Delaware  corporation.

(F)     "Consultant"  means  any  person,  including  an advisor, engaged by the
Company or an Affiliate to render consulting services and who is compensated for
such  services,  provided that the term "Consultant" shall not include Directors
who  are paid only a director's fee by the Company or who are not compensated by
the  Company  for  their  services  as  Directors.

(G)     "Continuous  Status  as  an Employee, Director or Consultant" means that
the service of an individual to the Company, whether as an Employee, Director or
Consultant,  is  not  interrupted  or  terminated.  The  Board,  in  its  sole
discretion,  may determine whether Continuous Status as an Employee, Director or
Consultant  shall  be  considered  interrupted in the case of:  (i) any leave of
absence  approved  by  the  Board,  including sick leave, military leave, or any
other personal leave; or (ii) transfers between the Company, Affiliates or their
successors.

(H)     "Covered  Employee"  means  the chief executive officer and the four (4)
other highest compensated officers of the Company for whom total compensation is
required  to  be  reported to stockholders under the Exchange Act, as determined
for  purposes  of  Section  162(m)  of  the  Code.

(I)     "Director"  means  a  member  of  the  Board.

(J)     "Disinterested  Person"  means  a Director who either (i) was not during
the one year prior to service as an administrator of the Plan granted or awarded
equity  securities  pursuant to the Plan or any other plan of the Company or any
affiliate entitling the participants therein to acquire equity securities of the
Company  or any affiliate except as permitted by Rule 16b-3(c)(2)(i); or (ii) is
otherwise  considered  to  be  a  "disinterested person" in accordance with Rule
16b-3(c)(2)(i), or any other applicable rules, regulations or interpretations of
the  Securities  and  Exchange  Commission.

(K)     "Employee"  means any person, including Officers and Directors, employed
by  the  Company or any Affiliate of the Company.  Neither service as a Director
nor payment of a director's fee by the Company shall be sufficient to constitute
"employment"  by  the  Company.

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

(M)     "Fair Market Value" means, as of any date, the value of the common stock
of  the  Company  determined  as  follows

<PAGE>
(i)  If  the  common  stock  is  listed  on  any established stock exchange or a
     national  market  system,  including without limitation the National Market
     System  of  the  National Association of Securities Dealers, Inc. Automated
     Quotation  ("NASDAQ")  System,  the  Fair Market Value of a share of common
     stock  shall be the closing sales price for such stock (or the closing bid,
     if  no  sales  were  reported) as quoted on such system or exchange (or the
     exchange  with  the greatest volume of trading in common stock) on the last
     market  trading  day  prior to the day of determination, as reported in the
     Wall  Street  Journal  or  such  other  source as the Board deems reliable;

(ii) If the common stock is quoted on the NASDAQ System (but not on the National
     Market  System  thereof)  or 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 bid and asked prices
     for  the  common  stock  on the last market trading day prior to the day of
     determination,  as reported in the Wall Street Journal or such other source
     as  the  Board  deems  reliable;

(iii)  In  the  absence  of an established market for the common stock, the Fair
     Market  Value  shall  be  determined  in  good  faith  by  the  Board.

(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)     "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.

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

(R)     "Option  Agreement" means a written agreement between the Company and an
Optionee  evidencing  the  terms  and  conditions of an individual Option grant.
Each  Option Agreement shall be subject to the terms and conditions of the Plan.

(S)     "Optionee"  means  a  person  who  holds  an  outstanding  Option.

(T)     "Outside  Director"  means  a  Director  who either (i) is not a current
employee  of  the  Company or an "affiliated corporation" (within the meaning of
the Treasury regulations promulgated under Section 162(m) of the Code), is not a
former  employee  of  the  Company  or  an  "affiliated  corporation"  receiving
compensation  for  prior  services  (other  than  benefits under a tax qualified

<PAGE>
pension  plan), was not an officer of the Company or an "affiliated corporation"
at any time, and is not currently receiving direct or indirect remuneration from
the  Company  or  an "affiliated corporation" for services in any capacity other
than  as  a  Director, or (ii) is otherwise considered an "outside director" for
purposes  of  Section  162(m)  of  the  Code.

(U)     "Participant"  means  a person to whom a Stock Award is granted pursuant
to  the Plan or, if applicable, such other person who holds an outstanding Stock
Award.

(V)     "Plan"  means  this  SBE,  Inc.  1996  Stock  Option  Plan.

(W)     "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.

(X)     "Stock  Award"  means  any  right  granted  under the Plan, including an
Option  and  a  stock  bonus.

"Stock  Award  Agreement"  means  a  written agreement between the Company and a
holder  of  a  Stock  Award evidencing the terms and conditions of an individual
Stock Award grant.  Each Stock Award Agreement shall be subject to the terms and
conditions  of  the  Plan.


3.     Administration.

(A)     The  Plan  shall be administered by the Board unless and until the Board
delegates  administration  to  a  Committee,  as  provided  in  subsection 3(c).

(B)     The  Board  shall have the power, subject to, and within the limitations
of,  the  express  provisions  of  the  Plan:

(i)  To determine from time to time which of the persons eligible under the Plan
     shall  be  granted  Stock  Awards;  when  and how each Stock Award shall be
     granted;  whether  an  Option  will  be  an  Incentive  Stock  Option  or a
     Nonstatutory  Stock  Option;  the  provisions  of  each Stock Award granted
     (which need not be identical), including the time or times such Stock Award
     may  be exercised in whole or in part; and the number of shares for which a
     Stock  Award  shall  be  granted  to  each  such  person.

(ii) To  construe  and interpret the Plan and Stock Awards granted under it, and
     to  establish,  amend  and  revoke  rules  and  regulations  for  its
     administration.  The  Board, in the exercise of this power, may correct any
     defect,  omission  or  inconsistency  in  the  Plan  or  in any Stock Award
     Agreement,  in  a  manner  and  to  the  extent  it shall deem necessary or
     expedient  to  make  the  Plan  fully  effective.

(iii)To  amend  the  Plan  or  a  Stock  Award  as  provided  in  Section  12.

(iv) Generally,  to  exercise  such powers and to perform such acts as the Board
     deems  necessary or expedient to promote the best interests of the Company.

<PAGE>
(C)     The  Board  may  delegate  administration  of  the  Plan  to a committee
composed of not fewer than two (2) members (the "Committee"), all of the members
of  which  Committee  shall  be  Disinterested  Persons  and may also be, in the
discretion of the Board, Outside Directors.  If administration is delegated to a
Committee,  the  Committee  shall have, in connection with the administration of
the  Plan, the powers theretofore possessed by the Board (and references in this
Plan  to  the  Board shall thereafter be to the Committee), subject, however, to
such  resolutions,  not  inconsistent with the provisions of the Plan, as may be
adopted  from time to time by the Board.  The Board may abolish the Committee at
any  time  and  revest  in  the  Board  the  administration  of  the  Plan.
Notwithstanding  anything  in  this  Section 3 to the contrary, the Board or the
Committee  may  delegate  to a committee of one or more persons the authority to
grant  Options to eligible persons who (1) are not then subject to Section 16 of
the  Exchange  Act  and/or (2) are either (i) not then Covered Employees and are
not  expected  to  be  Covered  Employees  at  the time of recognition of income
resulting from such Option, or (ii) not persons with respect to whom the Company
wishes  to  comply  with  Section  162(m)  of  the  Code.

(D)     Any  requirement  that  an  administrator of the Plan be a Disinterested
Person  shall  not  apply  if the Board or the Committee expressly declares that
such  requirement  shall  not  apply.  Any  Disinterested Person shall otherwise
comply  with  the  requirements  of  Rule  16b-3.

4.     Shares  Subject  To  The  Plan.

(A)     Subject  to  the  provisions  of Section 11 relating to adjustments upon
changes  in stock, the stock that may be sold pursuant to Stock Awards shall not
exceed  in  the  aggregate  one million five hundred eighty thousand (1,580,000)
shares  of  the Company's common stock.  If any Stock Award shall for any reason
expire  or  otherwise  terminate,  in  whole  or  in  part,  without having been
exercised  in  full, the stock not purchased under such Stock Award shall revert
to  and  again  become  available  for  issuance  under  the  Plan.

(B)     The  stock  subject  to  the  Plan  may be unissued shares or reacquired
shares,  bought  on  the  market  or  otherwise.

5.     Eligibility.

(A)     Incentive  Stock Options may be granted only to Employees.  Nonstatutory
Stock  Options  and stock bonuses may be granted only to Employees, Directors or
Consultants.

(B)     A  Director  shall  in no event be eligible for the benefits of the Plan
unless at the time discretion is exercised in the selection of the Director as a
person  to  whom  Stock  Awards  may  be granted, or in the determination of the
number  of  shares which may be covered by Stock Awards granted to the Director:
(i)  the  Board  has  delegated  its  discretionary authority over the Plan to a
Committee  which  consists  solely  of  Disinterested  Persons; or (ii) the Plan

<PAGE>
otherwise  complies  with  the  requirements  of  Rule  16b-3.  The  Board shall
otherwise  comply  with  the  requirements  of Rule 16b-3.  This subsection 5(b)
shall  not  apply if the Board or Committee expressly declares that it shall not
apply.

(C)     No  person  shall be eligible for the grant of an Incentive Stock Option
if,  at  the  time  of  grant, such person owns (or is deemed to own pursuant to
Section  424(d) of the Code) stock possessing more than ten percent (10%) of the
total  combined voting power of all classes of stock of the Company or of any of
its  Affiliates  unless  the exercise price of such Incentive Stock Option is at
least  one  hundred ten percent (110%) of the Fair Market Value of such stock at
the  date  of  grant and the Incentive Stock Option is not exercisable after the
expiration  of  five  (5)  years  from  the  date  of  grant.

(D)     Subject  to  the  provisions  of Section 11 relating to adjustments upon
changes  in  stock,  no  person shall be eligible to be granted Options covering
more  than  one  hundred fifty thousand (150,000) shares of the Company's common
stock  in  any  calendar  year.

6.     Option  Provisions.

     Each  Option  shall  be  in  such  form  and  shall  contain such terms and
conditions  as  the  Board  shall  deem appropriate.  The provisions of separate
Options  need  not  be  identical,  but  each  Option  shall  include  (through
incorporation  of provisions hereof by reference in the Option or otherwise) the
substance  of  each  of  the  following  provisions:

(A)     Term.  No  Option  shall be exercisable after the expiration of ten (10)
years  from  the  date  it  was  granted.

(B)     Price.  The  exercise  price of each Incentive Stock Option shall be not
less  than  one  hundred  percent  (100%)  of the Fair Market Value of the stock
subject  to  the Option on the date the Option is granted; the exercise price of
each  Nonstatutory Stock Option shall be not less than eighty-five percent (85%)
of  the  Fair  Market  Value  of the stock subject to the Option on the date the
Option  is  granted.   Notwithstanding  the  foregoing,  an  Option  (whether an
Incentive  Stock  Option  or a Nonstatutory Stock Option) may be granted with an
exercise  price  lower  than  that  set  forth in the preceding sentence if such
Option  is  granted pursuant to an assumption or substitution for another option
in  a  manner  satisfying  the  provisions  of  Section  424(a)  of  the  Code.

(C)     Consideration.  The  purchase  price  of  stock  acquired pursuant to an
Option  shall  be  paid,  to  the  extent  permitted  by applicable statutes and
regulations,  either (i) in cash at the time the Option is exercised, or (ii) at
the  discretion  of  the Board or the Committee, at the time of the grant of the
Option, (A) by delivery to the Company of other common stock of the Company, (B)
according to a deferred payment or other arrangement (which may include, without
limiting  the  generality of the foregoing, the use of other common stock of the
Company)  with the person to whom the Option is granted or to whom the Option is
transferred  pursuant  to  subsection  6(d),  or  (C) in any other form of legal
consideration  that  may  be  acceptable  to  the  Board.

<PAGE>
     In  the case of any deferred payment arrangement, interest shall be payable
at least annually and shall be charged at the minimum rate of interest necessary
to avoid the treatment as interest, under any applicable provisions of the Code,
of  any  amounts  other  than  amounts  stated to be interest under the deferred
payment  arrangement.

(D)     Transferability.  An  Incentive  Stock  Option shall not be transferable
except  by  will  or  by  the  laws  of  descent  and distribution, and shall be
exercisable during the lifetime of the person to whom the Incentive Stock Option
is  granted  only  by  such  person.  A  Nonstatutory  Stock Option shall not be
transferable  except  by  will  or  by  the  laws of descent and distribution or
pursuant  to a qualified domestic relations order satisfying the requirements of
Rule  16b-3 and the rules thereunder (a "QDRO"), and shall be exercisable during
the  lifetime of the person to whom the Option is granted only by such person or
any  transferee  pursuant  to  a QDRO.  The person to whom the Option is granted
may,  by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the Optionee,
shall  thereafter  be  entitled  to  exercise  the  Option.

(E)     Vesting.  The  total number of shares of stock subject to an Option may,
but  need not, be allotted in periodic installments (which may, but need not, be
equal).  The  Option Agreement may provide that from time to time during each of
such  installment  periods,  the  Option  may  become  exercisable ("vest") with
respect  to  some  or  all  of  the  shares  allotted to that period, and may be
exercised  with  respect  to  some  or all of the shares allotted to such period
and/or  any  prior period as to which the Option became vested but was not fully
exercised.  The  Option may be subject to such other terms and conditions on the
time  or  times  when  it may be exercised (which may be based on performance or
other  criteria)  as  the  Board  may  deem appropriate.  The provisions of this
subsection  6(e)  are  subject  to  any  Option provisions governing the minimum
number  of  shares  as  to  which  an  Option  may  be  exercised.

(F)     Securities Law Compliance.  The Company may require any Optionee, or any
person to whom an Option is transferred under subsection 6(d), as a condition of
exercising  any  such Option, (1) to give written assurances satisfactory to the
Company  as to the Optionee's knowledge and experience in financial and business
matters  and/or  to employ a purchaser representative reasonably satisfactory to
the  Company  who  is  knowledgeable  and  experienced in financial and business
matters, and that he or she is capable of evaluating, alone or together with the
purchaser representative, the merits and risks of exercising the Option; and (2)
to  give written assurances satisfactory to the Company stating that such person
is  acquiring  the stock subject to the Option for such person's own account and

<PAGE>
not  with  any present intention of selling or otherwise distributing the stock.
The  foregoing  requirements,  and  any  assurances  given  pursuant  to  such
requirements,  shall  be  inoperative if (i) the issuance of the shares upon the
exercise  of  the  Option  has  been registered under a then currently effective
registration  statement  under  the  Securities  Act  of  1933,  as amended (the
"Securities  Act"), or (ii) as to any particular requirement, a determination is
made  by  counsel  for  the Company that such requirement need not be met in the
circumstances  under  the  then  applicable  securities  laws.  The  Company may
require  the  Optionee to provide such other representations, written assurances
or  information  which  the  Company  shall determine is necessary, desirable or
appropriate  to  comply with applicable securities and other laws as a condition
of  granting  an  Option to such Optionee or permitting the Optionee to exercise
such  Option.  The  Company  may,  upon  advice of counsel to the Company, place
legends  on  stock  certificates  issued  under  the  Plan as such counsel deems
necessary  or  appropriate  in  order to comply with applicable securities laws,
including,  but  not  limited to, legends restricting the transfer of the stock.

(G)     Termination  of  Employment or Relationship as a Director or Consultant.
In  the  event  an  Optionee's  Continuous  Status  as  an Employee, Director or
Consultant  terminates (other than upon the Optionee's death or disability), the
Optionee  may  exercise  his  or her Option (to the extent that the Optionee was
entitled  to  exercise  it  as  of the date of termination) but only within such
period  of time ending on the earlier of (i) the date three (3) months after the
termination  of  the  Optionee's  Continuous  Status as an Employee, Director or
Consultant,  or such longer or shorter period specified in the Option Agreement,
or  (ii)  the  expiration  of  the term of the Option as set forth in the Option
Agreement.  If,  after  termination,  the  Optionee does not exercise his or her
Option  within  the  time  specified  in  the Option Agreement, the Option shall
terminate,  and  the  shares  covered  by  such Option shall revert to and again
become  available  for  issuance  under  the  Plan.

(H)     Disability of Optionee.  In the event an Optionee's Continuous Status as
an  Employee,  Director  or  Consultant terminates as a result of the Optionee's
disability,  the Optionee may exercise his or her Option (to the extent that the
Optionee  was  entitled  to exercise it as of the date of termination), but only
within  such  period  of  time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period specified in
the  Option  Agreement), or (ii) the expiration of the term of the Option as set
forth  in the Option Agreement.  If, at the date of termination, the Optionee is
not  entitled  to  exercise  his or her entire Option, the shares covered by the
unexercisable  portion  of the Option shall revert to and again become available
for  issuance  under  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 and again
become  available  for  issuance  under  the  Plan.

(I)     Death  of Optionee.  In the event of the death of an Optionee during, or
within  a period specified in the Option Agreement after the termination of, the
Optionee's  Continuous Status as an Employee, Director or Consultant, the Option

<PAGE>
may be exercised (to the extent the Optionee was entitled to exercise the Option
as  of the date of death) by the Optionee's estate, by a person who acquired the
right to exercise the Option by bequest or inheritance or by a person designated
to  exercise  the  option upon the Optionee's death pursuant to subsection 6(d),
but  only  within the period ending on the earlier of (i) the date eighteen (18)
months  following  the date of death (or such longer or shorter period specified
in  the  Option Agreement), or (ii) the expiration of the term of such Option as
set  forth  in the Option Agreement.  If, at the time of death, the Optionee was
not  entitled  to  exercise  his or her entire Option, the shares covered by the
unexercisable  portion  of the Option shall revert to and again become available
for  issuance  under  the  Plan.  If,  after  death, the Option is not exercised
within  the  time  specified  herein, the Option shall terminate, and the shares
covered  by  such Option shall revert to and again become available for issuance
under  the  Plan.

(J)     Early  Exercise.  The  Option  may,  but  need  not, include a provision
whereby  the  Optionee  may  elect  at  any  time while an Employee, Director or
Consultant to exercise the Option as to any part or all of the shares subject to
the  Option  prior  to  the  full vesting of the Option.  Any unvested shares so
purchased may be subject to a repurchase right in favor of the Company or to any
other  restriction  the  Board  determines  to  be  appropriate.

(K)     Withholding.  To  the  extent  provided  by  the  terms  of  an  Option
Agreement,  the Optionee may satisfy any federal, state or local tax withholding
obligation relating to the exercise of such Option by any of the following means
or  by  a  combination  of  such  means:  (1)  tendering  a  cash  payment;  (2)
authorizing  the  Company to withhold shares from the shares of the common stock
otherwise issuable to the Optionee as a result of the exercise of the Option; or
(3)  delivering to the Company owned and unencumbered shares of the common stock
of  the  Company.

7.     Stock  Bonus  Provisions.

     Each  stock  bonus  agreement  shall be in such form and shall contain such
terms  and  conditions  as  the  Board  shall  deem  appropriate.  The terms and
conditions of stock bonus agreements may change from time to time, and the terms
and  conditions  of  separate  stock bonus agreements need not be identical, but
each  stock  bonus  agreement shall include (through incorporation of provisions
hereof  by reference in the agreement or otherwise) the substance of each of the
following  provisions:

(A)     Consideration.  A  stock  bonus may be awarded in consideration for past
services  actually  rendered  to  the  Company  or an Affiliate for its benefit.

(B)     Vesting.  Shares  of  Company common stock awarded under the stock bonus
agreement may, but need not, be subject to a share repurchase option in favor of
the Company in accordance with a vesting schedule to be determined by the Board.

(C)     Termination  of  Employment or Relationship as a Director or Consultant.
In  the event that a Participant's Continuous Status as an Employee, Director or

<PAGE>
Consultant  terminates,  the Company may reacquire any or all of the shares held
by  the Participant that have not vested as of the date of termination under the
terms  of  the  stock  bonus  agreement.

(D)     Transferability.  Rights  to  acquire  shares  under  the  stock  bonus
agreement  shall  be  transferable  by  the Participant only upon such terms and
conditions  as  are  set  forth in the stock bonus agreement, as the Board shall
determine in its discretion, so long as the shares awarded under the stock bonus
agreement  remain  subject  to  the  terms  of  the  stock  bonus  agreement.

(E)     Securities  Law Compliance.  The Company may require any Participant, as
a  condition  of  acquiring  stock  under  a  stock bonus agreement, (1) to give
written assurances satisfactory to the Company as to the Participant's knowledge
and  experience  in  financial and business matters and/or to employ a purchaser
representative  reasonably  satisfactory to the Company who is knowledgeable and
experienced  in financial and business matters, and that he or she is capable of
evaluating,  alone or together with the purchaser representative, the merits and
risks  of  acquiring  stock  under  the  stock  bonus agreement; and (2) to give
written  assurances  satisfactory  to  the  Company  stating that such person is
acquiring the stock subject to the stock bonus for such person's own account and
not  with  any present intention of selling or otherwise distributing the stock.
The  foregoing  requirements,  and  any  assurances  given  pursuant  to  such
requirements, shall be inoperative if (i) the issuance of the shares pursuant to
the  stock  bonus agreement has been registered under a then currently effective
registration  statement  under  the  Securities  Act  of  1933,  as amended (the
"Securities  Act"), or (ii) as to any particular requirement, a determination is
made  by  counsel  for  the Company that such requirement need not be met in the
circumstances  under  the  then  applicable  securities  laws.  The  Company may
require  the  Participant  to  provide  such  other  representations,  written
assurances  or  information  which  the  Company  shall  determine is necessary,
desirable  or appropriate to comply with applicable securities and other laws as
a  condition  of  granting  a  stock bonus to such Participant or permitting the
Participant  to  acquire  stock under a stock bonus agreement.  The Company may,
upon  advice  of  counsel  to  the  Company, place legends on stock certificates
issued under the Plan as such counsel deems necessary or appropriate in order to
comply  with  applicable securities laws, including, but not limited to, legends
restricting  the  transfer  of  the  stock.

(F)     Withholding.  To  the  extent  provided  by  the  terms of a stock bonus
agreement,  the  Participant  may  satisfy  any  federal,  state  or  local  tax
withholding  obligation  relating  to  the  acquisition of stock under the stock
bonus agreement by any of the following means or by a combination of such means:
(1)  tendering  a  cash  payment; (2) authorizing the Company to withhold shares
from  the  shares of the common stock otherwise issuable to the Participant as a
result  of  the  acquisition  of  shares under the stock bonus agreement; or (3)
delivering  to  the Company owned and unencumbered shares of the common stock of
the  Company.

<PAGE>
8.     Covenants  Of  The  Company.

(A)     During  the  terms of the Stock Awards, the Company shall keep available
at  all  times  the  number  of  shares  of stock required to satisfy such Stock
Awards.

(B)     The  Company  shall  seek  to  obtain from each regulatory commission or
agency  having  jurisdiction  over the Plan such authority as may be required to
issue  and  sell  shares  of  stock upon exercise of the Stock Awards; provided,
however,  that  this undertaking shall not require the Company to register under
the  Securities  Act  either  the  Plan,  any Stock Award or any stock issued or
issuable  pursuant  to  any such Stock Award.  If, after reasonable efforts, the
Company  is  unable  to obtain from any such regulatory commission or agency the
authority  which counsel for the Company deems necessary for the lawful issuance
and  sale  of  stock  under  the  Plan,  the  Company shall be relieved from any
liability for failure to issue and sell stock upon exercise of such Stock Awards
unless  and  until  such  authority  is  obtained.

9.     Use  Of  Proceeds  From  Stock.

     Proceeds  from  the sale of stock pursuant to Stock Awards shall constitute
general  funds  of  the  Company.

10.     Miscellaneous.

(A)     The  Board  shall have the power to accelerate the time at which a Stock
Award  may first be exercised or the time during which a Stock Award or any part
thereof will vest in accordance with the Plan, notwithstanding the provisions in
the  Stock Award stating the time at which it may first be exercised or the time
during  which  it  will  vest.

(B)     No  Participant  shall  be deemed to be the holder of, or to have any of
the  rights  of  a  holder  with respect to, any shares subject to a Stock Award
unless  and until such person has satisfied all requirements for exercise of the
Stock  Award  pursuant  to  its  terms.

(C)     Nothing  in  the  Plan or any instrument executed or Stock Award granted
pursuant  thereto shall confer upon any Participant any right to continue in the
employ  of  the Company or any Affiliate (or to continue acting as a Director or
Consultant)  or  shall  affect  the  right  of  the  Company or any Affiliate to
terminate  the  employment of any Employee, with or without cause, to remove any
Director  as provided in the Company's By-Laws and the provisions of the General
Corporation  Law  of  the State of Delaware, or to terminate the relationship of
any  Consultant in accordance with the terms of that Consultant's agreement with
the  Company  or  Affiliate  to  which  such  Consultant  is providing services.

(D)     To  the  extent  that the aggregate Fair Market Value (determined at the
time  of  grant)  of  stock  with  respect  to which Incentive Stock Options are
exercisable  for  the  first time by any Optionee during any calendar year under

<PAGE>
all plans of the Company and its Affiliates exceeds one hundred thousand dollars
($100,000),  the  Options or portions thereof which exceed such limit (according
to  the order in which they were granted) shall be treated as Nonstatutory Stock
Options.

(E)  (i)  The  Board or the Committee shall have the authority to effect, at any
     time  and  from  time  to time (i) the repricing of any outstanding Options
     under  the  Plan  and/or  (ii)  with the consent of the affected holders of
     Options,  the  cancellation  of  any  outstanding  Options and the grant in
     substitution  therefor  of  new Options under the Plan covering the same or
     different  numbers  of shares of common stock, but having an exercise price
     per  share not less than eighty-five percent (85%) of the Fair Market Value
     (one  hundred  percent  (100%)  of  the Fair Market Value in the case of an
     Incentive Stock Option or, in the case of an Incentive Stock Option granted
     to  a  ten  percent  (10%) stockholder (as defined in subsection 5(c)), not
     less  than one hundred and ten percent (110%) of the Fair Market Value) per
     share  of  common  stock  on  the  new  grant  date.

(ii) Shares  subject  to  an  Option  canceled under this subsection 10(f) shall
     continue to be counted against the maximum award of Options permitted to be
     granted pursuant to subsection 5(d) of the Plan. The repricing of an Option
     under  this  subsection  10(f),  resulting  in  a reduction of the exercise
     price,  shall be deemed to be a cancellation of the original Option and the
     grant  of  a  substitute  Option;  in the event of such repricing, both the
     original  and  the substituted Options shall be counted against the maximum
     awards  of  Options  permitted to be granted pursuant to subsection 5(d) of
     the  Plan. The provisions of this subsection 10(f) shall be applicable only
     to  the  extent  required  by  Section  162(m)  of  the  Code.


11.     Adjustments  Upon  Changes  In  Stock.

(A)     If  any  change  is made in the stock subject to the Plan, or subject to
any  Stock  Award  (through  merger,  consolidation,  reorganization,
recapitalization,  stock  dividend,  dividend in property other than cash, stock
split,  liquidating  dividend, combination of shares, exchange of shares, change
in  corporate  structure  or  other  transaction  not  involving  the receipt of
consideration  by  the  Company), the Plan will be appropriately adjusted in the
class(es)  and  maximum  number  of  shares  subject  to  the  Plan  pursuant to
subsection  4(a) and the maximum number of shares subject to award to any person
during  any calendar year pursuant to subsection 5(d), and the outstanding Stock
Awards  will be appropriately adjusted in the class(es) and number of shares and
price  per  share  of  stock  subject  to  such  outstanding Stock Awards.  Such
adjustments  shall be made by the Board or Committee, the determination of which
shall  be  final,  binding  and  conclusive.  (The conversion of any convertible
securities  of  the Company shall not be treated as a "transaction not involving
the  receipt  of  consideration  by  the  Company.")

(B)     In  the  event  of:  (1)  a  dissolution, liquidation, or sale of all or
substantially all of the assets of the Company; (2) a merger or consolidation in
which  the  Company  is  not  the surviving corporation; (3) a reverse merger in
which  the  Company is the surviving corporation but the shares of the Company's

<PAGE>
common  stock  outstanding  immediately  preceding  the  merger are converted by
virtue  of  the  merger  into other property, whether in the form of securities,
cash  or otherwise; or (4) the acquisition by any person, entity or group within
the  meaning  of  Section  13(d) or 14(d) of the Exchange Act, or any comparable
successor  provisions  (excluding  any  employee benefit plan, or related trust,
sponsored  or  maintained by the Company or any Affiliate of the Company) of the
beneficial  ownership  (within  the  meaning of Rule 13d-3 promulgated under the
Exchange  Act,  or  comparable  successor  rule)  of  securities  of the Company
representing  at least fifty percent (50%) of the combined voting power entitled
to vote in the election of directors, then to the extent permitted by applicable
law:  (i)  any  surviving or acquiring corporation shall assume any Stock Awards
outstanding under the Plan or shall substitute similar Stock Awards (including a
stock  award  to  acquire the same consideration paid to the stockholders in the
transaction  described in this subsection 11(b)) for those outstanding under the
Plan, or (ii) such Stock Awards shall continue in full force and effect.  In the
event  any  surviving  or  acquiring  corporation  refuses  to assume such Stock
Awards,  or  to  substitute similar Stock Awards for those outstanding under the
Plan, then with respect to Stock Awards held by persons then performing services
as  Employees,  Directors or Consultants, the vesting of such Stock Awards (and,
if  applicable,  the  time  at which such Stock Award may be exercised) shall be
accelerated  in  full prior to such event and the Stock Awards terminated if not
exercised (if applicable) after such acceleration and at or prior to such event.

12.     Amendment  Of  The  Plan  And  Stock  Awards.

(A)     The  Board  at  any  time,  and  from  time to time, may amend the Plan.
However,  except  as provided in Section 11 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the stockholders of
the  Company  within  twelve  (12)  months  before  or after the adoption of the
amendment,  where  the  amendment  will:

(i)  Increase  the  number  of  shares reserved for Stock Awards under the Plan;

(ii) Modify the requirements as to eligibility for participation in the Plan (to
     the extent such modification requires stockholder approval in order for the
     Plan  to  satisfy  the  requirements  of  Section  422  of  the  Code);  or

(iii)Modify the Plan in any other way if such modification requires stockholder
     approval  in  order for the Plan to satisfy the requirements of Section 422
     of  the  Code  or  to  comply  with  the  requirements  of  Rule  16b-3.

(B)     The  Board  may in its sole discretion submit any other amendment to the
Plan  for stockholder approval, including, but not limited to, amendments to the
Plan  intended to satisfy the requirements of Section 162(m) of the Code and the
regulations  promulgated thereunder regarding the exclusion of performance-based

<PAGE>
compensation  from  the limit on corporate deductibility of compensation paid to
certain  executive  officers.

(C)     It  is  expressly  contemplated that the Board may amend the Plan in any
respect  the Board deems necessary or advisable to provide Participants with the
maximum benefits provided or to be provided under the provisions of the Code and
the  regulations  promulgated  thereunder  relating  to  Incentive Stock Options
and/or  to  bring  the Plan and/or Incentive Stock Options granted under it into
compliance  therewith.

(D)     Rights and obligations under any Stock Award granted before amendment of
the  Plan  shall  not  be  impaired  by any amendment of the Plan unless (i) the
Company  requests  the consent of the person to whom the Stock Award was granted
and  (ii)  such  person  consents  in  writing.

(E)     The Board at any time, and from time to time, may amend the terms of any
one  or  more  Stock  Awards; provided, however, that the rights and obligations
under any Stock Award shall not be impaired by any such amendment unless (i) the
Company  requests  the consent of the person to whom the Stock Award was granted
and  (ii)  such  person  consents  in  writing.

13.     Termination  Or  Suspension  Of  The  Plan.

(A)     The  Board may suspend or terminate the Plan at any time.  Unless sooner
terminated,  the  Plan shall terminate on January 17, 2006 which shall be within
ten (10) years from the date the Plan is adopted by the Board or approved by the
stockholders  of  the  Company,  whichever  is earlier.   No Stock Awards may be
granted  under  the  Plan while the Plan is suspended or after it is terminated.

(B)     Rights  and  obligations under any Stock Award granted while the Plan is
in effect shall not be impaired by suspension or termination of the Plan, except
with  the  written  consent  of  the person to whom the Stock Award was granted.

14.     Effective  Date  Of  Plan.

     The  Plan  shall  become effective as determined by the Board, but no Stock
Awards  granted  under the Plan shall be exercised unless and until the Plan has
been approved by the stockholders of the Company, which approval shall be within
twelve  (12)  months  before or after the date the Plan is adopted by the Board.





</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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