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<SEC-DOCUMENT>0001144204-05-029462.txt : 20050921
<SEC-HEADER>0001144204-05-029462.hdr.sgml : 20050921
<ACCEPTANCE-DATETIME>20050921141542
ACCESSION NUMBER:		0001144204-05-029462
CONFORMED SUBMISSION TYPE:	S-8
PUBLIC DOCUMENT COUNT:		5
FILED AS OF DATE:		20050921
DATE AS OF CHANGE:		20050921
EFFECTIVENESS DATE:		20050921

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:	333-128475
		FILM NUMBER:		051095468

	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>v025986_s8.txt
<TEXT>
As filed with the Securities and Exchange Commission on __________, 2005.

                                                 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, CA 94583
                    (Address of Principal Executive Offices)
                                 ---------------

                             PYX TECHNOLOGIES, INC.
                                 2005 STOCK PLAN
                            (Full title of the plan)
                                 ---------------

                                David W. Brunton
               Vice President, Finance and Chief Financial Officer
                                    SBE, Inc.
                          2305 Camino Ramon, Suite 200
                               San Ramon, CA 94583
                                 (925) 355-2000
 (Name, address, including zip code, and telephone number, including area code,
                             of agent for service)

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

                                   Copies to:
                             Jodie M. Bourdet, Esq.
                               COOLEY GODWARD LLP
                         One Maritime Plaza, 20th Floor
                             San Francisco, CA 94111
                                 (415) 693-2000

                                 ---------------
<PAGE>

<TABLE>
<CAPTION>
                                           CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------------
                                                       Proposed Maximum          Proposed Maximum
    Title of Securities          Amount to be              Offering             Aggregate Offering         Amount of
      to be Registered           Registered(1)        Price per Share(2)             Price(2)           Registration Fee
- -------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                 <C>                       <C>                      <C>
Common Stock, par value            2,038,950                 $2.17                  $4,424,521          $520.77
$.01 per share
- ---------------------------- ---------------------- ------------------------ -------------------------- -----------------
</TABLE>

(1)   Pursuant to Rule 416(a) promulgated under the Securities Act of 1933, as
      amended (the "Act"), this Registration Statement shall also cover any
      additional shares of Registrant's common stock that become issuable under
      the PyX Technologies, Inc. 2005 Stock Plan (the "Plan") by reason of any
      stock dividend, stock split, recapitalization or other similar transaction
      effected without receipt of consideration that increases the number of
      outstanding shares of Registrant's common stock.

(2)   Estimated solely for the purpose of calculating the amount of the
      registration fee pursuant to Rule 457(h) promulgated under the Act. The
      offering price per share and aggregate offering price are based upon the
      weighted average exercise price for shares subject to options previously
      granted under the Plan.





<PAGE>

                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE


      The following documents filed by SBE, Inc. (the "Company") with the
Securities and Exchange Commission are incorporated by reference into this
Registration Statement:

      (a) The Company's Annual Report on Form 10-K for the fiscal year ended
      October 31, 2004, as filed with the Securities and Exchange Commission
      (the "SEC") under the Securities Exchange Act of 1934 (the "Exchange Act")
      on January 14, 2005.

      (b) The Company's (i) Quarterly Report on Form 10-Q for the quarterly
      period ended January 31, 2005, as filed with the SEC on March 2, 2005
      under the Exchange Act, (ii) Quarterly Report on Form 10-Q for the
      quarterly period ended April 30, 2005, as filed with the SEC on June 2,
      2005, under the Exchange Act, (iii) Quarterly Report on Form 10-Q for the
      quarterly period ended July 31, 2005, as filed with the SEC on August 31,
      2005 under the Exchange Act, (iv) Current Report on Form 8-K as filed with
      the SEC on January 14, 2005 under the Exchange Act, (v) Current Report on
      Form 8-K as filed with the SEC on March 28, 2005 under the Exchange Act,
      (vi) Current Report on Form 8-K as filed with the SEC on May 5, 2005 under
      the Exchange Act and (vii) Current Report on Form 8-K as filed with the
      SEC on August 1, 2005 under the Exchange Act.

      (c) The description of the Company's Common Stock which is contained in a
      registration statement on Form 8-A, as filed with the SEC under the
      Exchange Act, including any amendment or report filed for the purpose of
      updating such description.

      All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing
of a post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference herein and to be a part of this
registration statement from the date of the filing of such reports and
documents.

                            DESCRIPTION OF SECURITIES

      Not applicable.


                     INTERESTS OF NAMED EXPERTS AND COUNSEL

      Not applicable.


                    INDEMNIFICATION OF DIRECTORS AND OFFICERS

      As permitted by Section 145 of the Delaware General Corporation Law, the
By-Laws of the Company provide that (i) the Company is required to indemnify its
directors and executive officers to the fullest extent not prohibited by the
Delaware General Corporation Law, (ii) the Company may, in its discretion,
indemnify other officers, employees and agents as set forth in the Delaware
General Corporation Law, (iii) the Company is required to advance all expenses
incurred by its directors and executive officers in connection with certain
legal proceedings (subject to certain exceptions), (iv) the rights conferred in
the By-Laws are not exclusive, (v) the Company is authorized to enter into
indemnification agreements with its directors, officers, employees and agents
and (vi) the Company may not retroactively amend the By-Law provisions relating
to indemnification.


      The Company has entered into agreements with its directors and executive
officers that require the Company to indemnify such persons against expenses,
judgements, fines, settlements and other

<PAGE>

amounts that such person becomes legally obligated to pay (including expenses of
a derivative action) in connection with any proceeding, whether actual or
threatened, to which any such person may be made a party by reason of the fact
that such person is or was a director of or officer of the Company or any of its
affiliated enterprises, provided such person acted in good faith and in a manner
such person reasonable believed to be in or not opposed to the best interests of
the Company. The indemnification agreements also set forth certain procedures
that will apply in the event of a claim for indemnification thereunder.

                       EXEMPTION FROM REGISTRATION CLAIMED

      Not applicable.

                                    EXHIBITS

EXHIBIT
NUMBER           DESCRIPTION
- ------           -----------

5.1      Opinion of Cooley Godward LLP
23.1     Consent of BDO Seidman LLP. Independent Registered Public Accounting
         Firm
23.2     Consent of PricewaterhouseCoopers LLP. Independent Registered Public
         Accounting Firm
23.3     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 page to this
         Registration Statement
99.1     PyX Technologies, Inc. 2005 Stock Plan and forms of agreement
         thereunder

                                  UNDERTAKINGS

1.    The Company hereby undertakes:

      (a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

            (i) To include any prospectus required by section 10(a)(3) of the
Securities Act;

            (ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) (ss. 230.424(b) of this
chapter) if, in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration statement.

            (iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;

      Provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the issuer pursuant to
section 13 or section 15(d) of the Exchange Act that are incorporated by
reference herein.

<PAGE>

      (b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

      (c) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.

2.    The Company hereby undertakes that, for purposes of determining any
      liability under the Securities Act, each filing of its annual report
      pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where
      applicable, each filing of an employee benefit plan's annual report
      pursuant to section 15(d) of the Exchange Act) that is incorporated by
      reference in the Registration Statement shall be deemed to be a new
      registration statement relating to the securities offered herein, and the
      offering of such securities at that time shall be deemed to be the initial
      bona fide offering thereof.

3.    Insofar as indemnification for liabilities arising under the Securities
      Act may be permitted to directors, officers and controlling persons of the
      Company pursuant to the foregoing provisions, or otherwise, the Company
      has been advised that in the opinion of the Securities and Exchange
      Commission such indemnification is against public policy as expressed in
      the Securities Act and is, therefore, unenforceable. In the event that a
      claim for indemnification against such liabilities (other than the payment
      by the Company of expenses incurred or paid by a director, officer or
      controlling person of the Company in the successful defense of any action,
      suit or proceeding) is asserted by such director, officer or controlling
      person in connection with the securities being registered, the Company
      will, unless in the opinion of its counsel the matter has been settled by
      controlling precedent, submit to a court of appropriate jurisdiction the
      question whether such indemnification by it is against public policy as
      expressed in the Securities Act and will be governed by the final
      adjudication of such issue.

<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, as amended,
the Company 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 September 20,
2005.

                               SBE, INC.


                               By: /s/ Daniel Grey
                                   ---------------
                                       Daniel Grey
                                       President and Chief Executive Officer


                                POWER OF ATTORNEY

      KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Dan Grey 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:

<TABLE>
<CAPTION>
               Signature                                     Title                                  Date
               ---------                                     -----                                  ----
<S>                                        <C>                                           <C>
/s/ Daniel Grey
- ---------------------------------------      President and Chief Executive Officer           September 20, 2005
             Daniel Grey                         (Principal Executive Officer)


/s/ David W. Brunton                              Vice President, Finance and                September 20, 2005
- ---------------------------------------             Chief Financial Officer
           David W. Brunton              (Principal Financial and Accounting Officer)

/s/ Ronald J. Ritchie                                Chairman of the Board                   September 20, 2005
- ---------------------------------------
           Ronald J. Ritchie

/s/ William B. Heye, Jr.                                   Director                          September 20, 2005
- ---------------------------------------
         William B. Heye, Jr.

/s/ John Reardon                                           Director                          September 20, 2005
- ---------------------------------------
             John Reardon

/s Marion M. Stuckey                                       Director                          September 20, 2005
- ---------------------------------------
           Marion M. Stuckey
</TABLE>

<PAGE>

                                  EXHIBIT INDEX

EXHIBIT
NUMBER                 DESCRIPTION
- ------                 -----------
5.1        Opinion of Cooley Godward LLP
23.1       Consent of BDO Seidman, LLP. Independent Registered Public Accounting
           Firm
23.2       Consent of PricewaterhouseCoopers LLP. Independent Registered Public
           Accounting Firm
23.3       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 page to this
           Registration Statement
99.1       PyX Technologies, Inc. 2005 Stock Plan and forms of agreement
           thereunder
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>2
<FILENAME>v025986_ex51.txt
<TEXT>
                                                                     EXHIBIT 5.1

                         [Cooley Godward LLP letterhead]

September 20, 2005

SBE, Inc.
2305 Camino Ramon, Suite 200
San Ramon, CA 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 2,038,950 shares of the Company's common stock,
$.001 par value (the "Shares") pursuant to the PyX Technologies, Inc. 2005 Stock
Plan (the "Plan").

In connection with this opinion, we have examined the Registration Statement and
related Prospectus, the Company's Certificate of Incorporation, as amended, and
Bylaws, 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 Plan, the
Registration Statement and related Prospectus, 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

By:    /s/ Jodie M. Bourdet
     --------------------------------
       Jodie M. Bourdet

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>3
<FILENAME>v025986_ex231.txt
<TEXT>
                                                                    Exhibit 23.1




              CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS

SBE, Inc.
San Ramon, California

We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated December 10, 2004 relating to the
consolidated financial statements and financial statement schedule of SBE, Inc.,
appearing in SBE, Inc.'s Annual Report on Form 10-K for the year ended October
31, 2004.


/s/ BDO Seidman, LLP

San Francisco, California
September 20, 2005



               CONSENT OF BDO SEIDMAN, LLP, INDEPENDENT REGISTERED
                             PUBLIC ACCOUNTING FIRM

SBE, Inc.
San Ramon, California

We hereby consent to the incorporation by reference in this Registration
Statement of our report dated December 10, 2004, relating to the financial
statements of PyX Technologies, Inc. appearing in the Current Report on Form 8-K
of SBE, Inc. dated July 26, 2005.

We also consent to the reference to us under the caption "Experts" in the
Registration Statement.

/s/ BDO Seidman, LLP

San Francisco, California
September 20, 2005
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>4
<FILENAME>v025986_ex232.txt
<TEXT>
                                                                    Exhibit 23.2





            CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
            --------------------------------------------------------

We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 13, 2003 relating to the
financial statements and financial statement schedule, which appears in SBE's
Annual Report on Form 10-K for the year ended October 31, 2004.


/s/ PricewaterhouseCoopers LLP
San Francisco, California
September 20, 2005

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>5
<FILENAME>v025986_ex991.txt
<TEXT>
                                                                    EXHIBIT 99.1

                             PYX TECHNOLOGIES, INC.


                                 2005 STOCK PLAN


      1. Purposes of the Plan. The purposes of this 2005 Stock Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants 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 of an option and subject to the
applicable provisions of Section 422 of the Code and the regulations and
interpretations promulgated thereunder. 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 its Committee appointed pursuant to
Section 4 of the Plan.

      (b) "Affiliate" means an entity other than a Subsidiary (as defined below)
which, together with the Company, is under common control of a third person or
entity.

      (c) "Applicable Laws" means the legal requirements relating to the
administration of stock option and restricted stock purchase plans, including
under applicable U.S. state corporate laws, U.S. federal and applicable state
securities laws, other U.S. federal and state laws, the Code, any Stock Exchange
rules or regulations and the applicable laws, rules and regulations of any other
country or jurisdiction where Options or Stock Purchase Rights are granted under
the Plan, as such laws, rules, regulations and requirements shall be in place
from time to time.

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

      (e) "Cause" for termination of a Participant's Continuous Service Status
will exist if the Participant is terminated by the Company for any of the
following reasons: (i) Participant's willful failure substantially to perform
his or her duties and responsibilities to the Company or deliberate violation of
a Company policy; (ii) Participant's commission of any act of fraud,
embezzlement, dishonesty or any other willful misconduct that has caused or is
reasonably expected to result in material injury to the Company; (iii)
unauthorized use or disclosure by Participant of any proprietary information or
trade secrets of the Company or any other party to whom the Participant owes an
obligation of nondisclosure as a result of his or her relationship with the
Company; or (iv) Participant's willful breach of any of his or her obligations
under any written agreement or covenant with the Company. The determination as
to whether a Participant is being terminated for Cause shall be made in good
faith by the Company and shall be final and binding on the Participant. The
foregoing definition does not in any way limit the Company's ability to
terminate a Participant's employment or consulting relationship at

<PAGE>

any time as provided in Section 5(d) below, and the term "Company" will be
interpreted to include any Subsidiary, Parent or Affiliate, as appropriate.

      (f) "Change of Control" means (1) a sale of all or substantially all of
the Company's assets, or (2) any merger, consolidation or other business
combination transaction of the Company with or into another corporation, entity
or person, other than a transaction in which the holders of at least a majority
of the shares of voting capital stock of the Company outstanding immediately
prior to such transaction continue to hold (either by such shares remaining
outstanding or by their being converted into shares of voting capital stock of
the surviving entity) a majority of the total voting power represented by the
shares of voting capital stock of the Company (or the surviving entity)
outstanding immediately after such transaction, or (3) the direct or indirect
acquisition (including by way of a tender or exchange offer) by any person, or
persons acting as a group, of beneficial ownership or a right to acquire
beneficial ownership of shares representing a majority of the voting power of
the then outstanding shares of capital stock of the Company.

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

      (h) "Committee" means one or more committees or subcommittees of the Board
appointed by the Board to administer the Plan in accordance with Section 4
below.

      (i) "Common Stock" means the Common Stock of the Company.

      (j) "Company" means PyX Technologies, Inc., a California corporation.

      (k) "Consultant" means any person, including an advisor, who is engaged by
the Company or any Parent, Subsidiary or Affiliate to render services and is
compensated for such services, and any director of the Company whether
compensated for such services or not.

      (l) "Continuous Service Status" means the absence of any interruption or
termination of service as an Employee or Consultant. Continuous Service Status
as an Employee or Consultant shall not be considered interrupted in the case of:
(i) sick leave; (ii) military leave; (iii) any other leave of absence approved
by the Administrator, provided that such leave is for a period of not more than
ninety (90) days, unless reemployment upon the expiration of such leave is
guaranteed by contract or statute, or unless provided otherwise pursuant to
Company policy adopted from time to time; or (iv) in the case of transfers
between locations of the Company or between the Company, its Parents,
Subsidiaries, Affiliates or their respective successors. A change in status from
an Employee to a Consultant or from a Consultant to an Employee will not
constitute an interruption of Continuous Service Status.

      (m) "Corporate Transaction" means a sale of all or substantially all of
the Company's assets, or a merger, consolidation or other capital reorganization
or business combination transaction of the Company with or into another
corporation, entity or person, or the direct or indirect acquisition (including
by way of a tender or exchange offer) by any person, or persons acting as a
group, of beneficial ownership or a right to acquire beneficial ownership of
shares representing a majority of the voting power of the then outstanding
shares of capital stock of the Company.

                                       2
<PAGE>

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

      (o) "Employee" means any person employed by the Company or any Parent,
Subsidiary or Affiliate, with the status of employment determined based upon
such factors as are deemed appropriate by the Administrator in its discretion,
subject to any requirements of the Code or the Applicable Laws. The payment by
the Company of a director's fee to a Director shall not be sufficient to
constitute "employment" of such Director by the Company.

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

      (q) "Fair Market Value" means, as of any date, the fair market value of
the Common Stock, as determined by the Administrator in good faith on such basis
as it deems appropriate and applied consistently with respect to Participants.
Whenever possible, the determination of Fair Market Value shall be based upon
the closing price for the Shares as reported in the Wall Street Journal for the
applicable date.

      (r) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code, as
designated in the applicable Option Agreement.

      (s) "Involuntary Termination" means termination of a Participant's
Continuous Service Status under the following circumstances: (i) termination
without Cause by the Company or a Subsidiary, Parent or Affiliate, as
appropriate; or (ii) voluntary termination by the Participant within ninety (90)
days following (A) a material reduction in the Participant's job
responsibilities, provided that neither a mere change in title alone nor
reassignment following a Change of Control to a position that is substantially
similar to the position held prior to the Change of Control shall constitute a
material reduction in job responsibilities; (B) relocation by the Company or a
Subsidiary, Parent or Affiliate, as appropriate, of the Participant's work site
to a facility or location more than fifty (50) miles from the Participant's
principal work site for the Company at the time of the Change of Control; or (C)
a reduction in Participant's then-current base salary by at least twenty percent
(20%), provided that an across-the-board reduction in the salary level of all
other employees or consultants in positions similar to the Participant's by the
same percentage amount as part of a general salary level reduction shall not
constitute such a salary reduction.

      (t) "Listed Security" means any security of the Company that is listed or
approved for listing on a national securities exchange or designated or approved
for designation as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc.

      (u) "Named Executive" means any individual who, on the last day of the
Company's fiscal year, is the chief executive officer of the Company (or is
acting in such capacity) or among the four most highly compensated officers of
the Company (other than the chief executive officer). Such officer status shall
be determined pursuant to the executive compensation disclosure rules under the
Exchange Act.

                                       3
<PAGE>

      (v) "Nonstatutory Stock Option" means an Option not intended to qualify as
an Incentive Stock Option, as designated in the applicable Option Agreement.

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

      (x) "Option Agreement" means a written document, the form(s) of which
shall be approved from time to time by the Administrator, reflecting the terms
of an Option granted under the Plan and includes any documents attached to or
incorporated into such Option Agreement, including, but not limited to, a notice
of stock option grant and a form of exercise notice.

      (y) "Option Exchange Program" means a program approved by the
Administrator whereby outstanding Options are exchanged for Options with a lower
exercise price or are amended to decrease the exercise price as a result of a
decline in the Fair Market Value of the Common Stock.

      (z) "Optioned Stock" means the Common Stock subject to an Option.

      (aa) "Optionee" means an Employee or Consultant who receives an Option.

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

      (cc) "Participant" means any holder of one or more Options or Stock
Purchase Rights, or the Shares issuable or issued upon exercise of such awards,
under the Plan.

      (dd) "Plan" means this 2005 Stock Plan.

      (ee) "Reporting Person" means an officer, Director, or greater than ten
percent stockholder of the Company within the meaning of Rule 16a-2 under the
Exchange Act, who is required to file reports pursuant to Rule 16a-3 under the
Exchange Act.

      (ff) "Restricted Stock" means Shares of Common Stock acquired pursuant to
a grant of a Stock Purchase Right under Section 11 below.

      (gg) "Restricted Stock Purchase Agreement" means a written document, the
form(s) of which shall be approved from time to time by the Administrator,
reflecting the terms of a Stock Purchase Right granted under the Plan and
includes any documents attached to such agreement.

      (hh) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act, as
amended from time to time, or any successor provision.

      (ii) "Share" means a share of the Common Stock, as adjusted in accordance
with Section 14 of the Plan.

      (jj) "Stock Exchange" means any stock exchange or consolidated stock price
reporting system on which prices for the Common Stock are quoted at any given
time.
                                       4
<PAGE>

      (kk) "Stock Purchase Right" means the right to purchase Common Stock
pursuant to Section 11 below.

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

      (mm) "Ten Percent Holder" means a person who 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.

      3. Stock Subject to the Plan. Subject to the provisions of Section 14 of
the Plan, the maximum aggregate number of Shares that may be sold under the Plan
is Four Million Six Hundred Forty-Seven Thousand Five Hundred (4,647,500) Shares
of Common Stock. The Shares may be authorized, but unissued, or reacquired
Common Stock. If an award should expire or become unexercisable for any reason
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares that were subject thereto shall, unless
the Plan shall have been terminated, become available for future grant under the
Plan. In addition, any Shares of Common Stock which are retained by the Company
upon exercise of an award in order to satisfy the exercise or purchase price for
such award or any withholding taxes due with respect to such exercise or
purchase shall be treated as not issued and shall continue to be available under
the Plan. Shares issued under the Plan and later repurchased by the Company
pursuant to any repurchase right which the Company may have shall not be
available for future grant under the Plan.

      4. Administration of the Plan.

      (a) General. The Plan shall be administered by the Board or a Committee,
or a combination thereof, as determined by the Board. The Plan may be
administered by different administrative bodies with respect to different
classes of Participants and, if permitted by the Applicable Laws, the Board may
authorize one or more officers to make awards under the Plan.

      (b) Committee Composition. If a Committee has been appointed pursuant to
this Section 4, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. From time to time the Board may
increase the size of any Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies (however caused) and remove all members of a Committee
and thereafter directly administer the Plan, all to the extent permitted by the
Applicable Laws and, in the case of a Committee administering the Plan in
accordance with the requirements of Rule 16b-3 or Section 162(m) of the Code, to
the extent permitted or required by such provisions. The Committee shall in all
events conform to any requirements of the Applicable Laws.

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

                                       5
<PAGE>

      (i) to determine the Fair Market Value of the Common Stock, in accordance
with Section 2(q) of the Plan, provided that such determination shall be applied
consistently with respect to Participants under the Plan;

      (ii) to select the Employees and Consultants to whom Plan awards may from
time to time be granted;

      (iii) to determine whether and to what extent Plan awards are granted;

      (iv) to determine the number of Shares of Common Stock to be covered by
each award granted;

      (v) to approve the form(s) of agreement(s) used under the Plan;

      (vi) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any award granted hereunder, which terms and conditions
include but are not limited to the exercise or purchase price, the time or times
when awards may be exercised (which may be based on performance criteria), any
vesting acceleration or waiver of forfeiture restrictions, any pro rata
adjustment to vesting as a result of a Participant's transitioning from full- to
part-time service (or vice versa), and any restriction or limitation regarding
any Option, Optioned Stock, Stock Purchase Right or Restricted Stock, based in
each case on such factors as the Administrator, in its sole discretion, shall
determine;

      (vii) to implement an Option Exchange Program on such terms and conditions
as the Administrator in its discretion deems appropriate, provided that no
amendment or adjustment to an Option that would materially and adversely affect
the rights of any Optionee shall be made without the prior written consent of
the Optionee;

      (viii) to adjust the vesting of an Option held by an Employee or
Consultant as a result of a change in the terms or conditions under which such
person is providing services to the Company;

      (ix) to construe and interpret the terms of the Plan and awards granted
under the Plan, which constructions, interpretations and decisions shall be
final and binding on all Participants; and

      (x) in order to fulfill the purposes of the Plan and without amending the
Plan, to modify grants of Options or Stock Purchase Rights to Participants who
are foreign nationals or employed outside of the United States in order to
recognize differences in local law, tax policies or customs.

      5. Eligibility.

      (a) Recipients of Grants. Nonstatutory Stock Options and Stock Purchase
Rights may be granted to Employees and Consultants. Incentive Stock Options may
be granted only to Employees, provided that Employees of Affiliates shall not be
eligible to receive Incentive Stock Options.

                                       6
<PAGE>

      (b) Type of Option. Each Option shall be designated in the Option
Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.

      (c) ISO $100,000 Limitation. Notwithstanding any designation under Section
5(b), to the extent that the aggregate Fair Market Value of Shares with respect
to which Options designated as Incentive Stock Options are exercisable for the
first time by any Optionee during any calendar year (under all plans of the
Company or any Parent or Subsidiary) exceeds $100,000, such excess Options shall
be treated as Nonstatutory Stock Options. For purposes of this Section 5(c),
Incentive Stock Options shall be taken into account in the order in which they
were granted, and the Fair Market Value of the Shares subject to an Incentive
Stock Option shall be determined as of the date of the grant of such Option.

      (d) No Employment Rights. The Plan shall not confer upon any Participant
any right with respect to continuation of an employment or consulting
relationship with the Company, nor shall it interfere in any way with such
Participant's right or the Company's right to terminate the employment or
consulting relationship at any time for any reason.

      6. Term of Plan. The Plan shall become effective upon its adoption by the
Board of Directors. It shall continue in effect for a term of ten (10) years
unless sooner terminated under Section 16 of the Plan.

      7. Term of Option. The term of each Option shall be the term stated in the
Option Agreement; provided that the term shall be no more than ten years from
the date of grant thereof or such shorter term as may be provided in the Option
Agreement and provided further that, in the case of an Incentive Stock Option
granted to a person who at the time of such grant is a Ten Percent Holder, the
term of the Option shall be five years from the date of grant thereof or such
shorter term as may be provided in the Option Agreement.

      8. [Reserved]

      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 such price as is determined by
the Administrator and set forth in the Option Agreement, but shall be subject to
the following:

      (i) In the case of an Incentive Stock Option

          (A) granted to an Employee who at the time of grant is a Ten Percent
Holder, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant; or

          (B) granted to any other Employee, 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

                                       7
<PAGE>

          (A) granted on any date on which the Common Stock is not a Listed
Security to a person who is at the time of grant is a Ten Percent Holder, the
per Share exercise price shall be no less than 110% of the Fair Market Value per
Share on the date of grant if required by the Applicable Laws and, if not so
required, shall be such price as is determined by the Administrator;

          (B) granted on any date on which the Common Stock is not a Listed
Security to any other eligible person, the per Share exercise price shall be no
less than 85% of the Fair Market Value per Share on the date of grant if
required by the Applicable Laws and, if not so required, shall be such price as
is determined by the Administrator; or

          (C) granted on any date on which the Common Stock is a Listed Security
to any eligible person, the per share Exercise Price shall be such price as
determined by the Administrator provided that if such eligible person is, at the
time of the grant of such Option, a Named Executive of the Company, the per
share Exercise Price shall be no less than 100% of the Fair Market Value on the
date of grant if such Option is intended to qualify as performance-based
compensation under Section 162(m) of the Code.

      (iii) Notwithstanding the foregoing, Options may be granted with a per
Share exercise price other than as required above pursuant to a merger or other
corporate transaction.

      (b) Permissible Consideration. The consideration to be paid for the Shares
to be issued upon exercise of an Option, including the method of payment, shall
be determined by the Administrator (and, in the case of an Incentive Stock
Option, shall be determined at the time of grant) and may consist entirely of
(1) cash; (2) check; (3) subject to any requirements of the Applicable Laws,
delivery of Optionee's promissory note having such recourse, interest, security
and redemption provisions as the Administrator determines to be appropriate
after taking into account the potential accounting consequences of permitting an
Optionee to deliver a promissory note; (4) cancellation of indebtedness; (5)
other Shares that have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which the Option is exercised,
provided that in the case of Shares acquired, directly or indirectly, from the
Company, such Shares must have been owned by the Optionee for more than six
months on the date of surrender (or such other period as may be required to
avoid the Company's incurring an adverse accounting charge); (6) if, as of the
date of exercise of an Option the Company then is permitting employees to engage
in a "same-day sale" cashless brokered exercise program involving one or more
brokers, through such a program that complies with the Applicable Laws
(including without limitation the requirements of Regulation T and other
applicable regulations promulgated by the Federal Reserve Board) and that
ensures prompt delivery to the Company of the amount required to pay the
exercise price and any applicable withholding taxes; or (7) any combination of
the foregoing methods of payment. In making its determination as to the type of
consideration to accept, the Administrator shall consider if acceptance of such
consideration may be reasonably expected to benefit the Company and the
Administrator may, in its sole discretion, refuse to accept a particular form of
consideration at the time of any Option exercise.

                                       8
<PAGE>

      10. Exercise of Option.

      (a)   General.

      (i) Exercisability. Any Option granted hereunder shall be exercisable at
such times and under such conditions as determined by the Administrator,
consistent with the term of the Plan and reflected in the Option Agreement,
including vesting requirements and/or performance criteria with respect to the
Company and/or the Optionee; provided however that, if required under the
Applicable Laws, the Option (or Shares issued upon exercise of the Option) shall
comply with the requirements of Section 260.140.41(f) and (k) of the Rules of
the California Corporations Commissioner.

      (ii) Leave of Absence. The Administrator shall have the discretion to
determine whether and to what extent the vesting of Options shall be tolled
during any unpaid leave of absence; provided, however, that in the absence of
such determination, vesting of Options shall be tolled during any such unpaid
leave (unless otherwise required by the Applicable Laws). In the event of
military leave, vesting shall toll during any unpaid portion of such leave,
provided that, upon a Participant's returning from military leave (under
conditions that would entitle him or her to protection upon such return under
the Uniform Services Employment and Reemployment Rights Act), he or she shall be
given vesting credit with respect to Options to the same extent as would have
applied had the Participant continued to provide services to the Company
throughout the leave on the same terms as he or she was providing services
immediately prior to such leave.

      (iii) Minimum Exercise Requirements. An Option may not be exercised for a
fraction of a Share. The Administrator may require that an Option be exercised
as to a minimum number of Shares, provided that such requirement shall not
prevent an Optionee from exercising the full number of Shares as to which the
Option is then exercisable.

      (iv) Procedures for and Results of Exercise. An Option shall be deemed
exercised when written notice of such exercise has been given to the Company in
accordance with the terms of the Option by the person entitled to exercise the
Option and the Company has received full payment for the Shares with respect to
which the Option is exercised. Full payment may, as authorized by the
Administrator, consist of any consideration and method of payment allowable
under Section 9(b) of the Plan, provided that the Administrator may, in its sole
discretion, refuse to accept any form of consideration at the time of any Option
exercise.

      Exercise of an Option in any manner shall result in a decrease in the
number of Shares that thereafter may be 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.

      (v) Rights as Stockholder. Until the issuance of the Shares (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. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the stock
certificate is issued, except as provided in Section 14 of the Plan.

                                       9
<PAGE>

      (b) Termination of Employment or Consulting Relationship. Except as
otherwise set forth in this Section 10(b), the Administrator shall establish and
set forth in the applicable Option Agreement the terms and conditions upon which
an Option shall remain exercisable, if at all, following termination of an
Optionee's Continuous Service Status, which provisions may be waived or modified
by the Administrator at any time. Unless the Administrator otherwise provides in
the Option Agreement, to the extent that the Optionee is not vested in Optioned
Stock at the date of termination of his or her Continuous Service Status, or if
the Optionee (or other person entitled to exercise the Option) does not exercise
the Option to the extent so entitled within the time specified in the Option
Agreement or below (as applicable), the Option shall terminate and the Optioned
Stock underlying the unexercised portion of the Option shall revert to the Plan.
In no event may any Option be exercised after the expiration of the Option term
as set forth in the Option Agreement (and subject to Section 7).

      The following provisions (1) shall apply to the extent an Option Agreement
does not specify the terms and conditions upon which an Option shall terminate
upon termination of an Optionee's Continuous Service Status, and (2) establish
the minimum post-termination exercise periods that may be set forth in an Option
Agreement:

      (i) Termination other than Upon Disability or Death or for Cause. In the
event of termination of Optionee's Continuous Service Status other than under
the circumstances set forth in subsections (ii) through (iv) below, such
Optionee may exercise an Option for 30 days following such termination to the
extent the Optionee was vested in the Optioned Stock as of the date of such
termination. No termination shall be deemed to occur and this Section 10(b)(i)
shall not apply if (i) the Optionee is a Consultant who becomes an Employee, or
(ii) the Optionee is an Employee who becomes a Consultant.

      (ii) Disability of Optionee. In the event of termination of an Optionee's
Continuous Service Status as a result of his or her disability (including a
disability within the meaning of Section 22(e)(3) of the Code), such Optionee
may exercise an Option at any time within six months following such termination
to the extent the Optionee was vested in the Optioned Stock as of the date of
such termination.

      (iii) Death of Optionee. In the event of the death of an Optionee during
the period of Continuous Service Status since the date of grant of the Option,
or within thirty days following termination of Optionee's Continuous Service
Status, the Option may be exercised by Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance at any time
within twelve months following the date of death, but only to the extent the
Optionee was vested in the Optioned Stock as of the date of death or, if
earlier, the date the Optionee's Continuous Service Status terminated.

      (iv) Termination for Cause. In the event of termination of an Optionee's
Continuous Service Status for Cause, any Option (including any exercisable
portion thereof) held by such Optionee shall immediately terminate in its
entirety upon first notification to the Optionee of termination of the
Optionee's Continuous Service Status. If an Optionee's employment or consulting
relationship with the Company is suspended pending an investigation of whether
the Optionee shall be terminated for Cause, all the Optionee's rights under any
Option likewise shall be suspended during the investigation period and the
Optionee shall have

                                       10
<PAGE>

no right to exercise any Option. This Section 10(b)(iv) shall apply with equal
effect to vested Shares acquired upon exercise of an Option granted prior to the
date, if any, upon which the Common Stock becomes a Listed Security to a person
other than an officer, Director or Consultant, in that the Company shall have
the right to repurchase such Shares from the Participant upon the following
terms: (A) the repurchase is made within 90 days of termination of the
Participant's Continuous Service Status for Cause at the Fair Market Value of
the Shares as of the date of termination, (B) consideration for the repurchase
consists of cash or cancellation of purchase money indebtedness, and (C) the
repurchase right terminates upon the effective date of the Company's initial
public offering of its Common Stock. With respect to vested Shares issued upon
exercise of an Option granted to any officer, Director or Consultant, the
Company's right to repurchase such Shares upon termination of the Participant's
Continuous Service Status for Cause shall be made at the Participant's original
cost for the Shares and shall be effected pursuant to such terms and conditions,
and at such time, as the Administrator shall determine. Nothing in this Section
10(b)(iv) shall in any way limit the Company's right to purchase unvested Shares
issued upon exercise of an Option as set forth in the applicable Option
Agreement.

      11. Stock Purchase Rights.

      (a) Rights to Purchase. When the Administrator determines that it will
offer Stock Purchase Rights under the Plan, it shall advise the offeree in
writing of the terms, conditions and restrictions related to the offer,
including the number of Shares that such person shall be entitled to purchase,
the price to be paid, and the time within which such person must accept such
offer. In the case of a Stock Purchase Right granted prior to the date, if any,
on which the Common Stock becomes a Listed Security and if required by the
Applicable Laws at that time, the purchase price of Shares subject to such Stock
Purchase Rights shall not be less than 85% of the Fair Market Value of the
Shares as of the date of the offer, or, in the case of a Ten Percent Holder, the
price shall not be less than 100% of the Fair Market Value of the Shares as of
the date of the offer. If the Applicable Laws do not impose the requirements set
forth in the preceding sentence and with respect to any Stock Purchase Rights
granted after the date, if any, on which the Common Stock becomes a Listed
Security, the purchase price of Shares subject to Stock Purchase Rights shall be
as determined by the Administrator. The offer to purchase Shares subject to
Stock Purchase Rights shall be accepted by execution of a Restricted Stock
Purchase Agreement in the form determined by the Administrator.

      (b) Repurchase Option.

      (i) General. 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 for any reason (including death or disability). Subject to any
requirements of the Applicable Laws (including without limitation Section
260.140.42(h) of the Rules of the California Corporations Commissioner), the
terms of the Company's repurchase option (including without limitation the price
at which, and the consideration for which, it may be exercised, and the events
upon which it shall lapse) shall be as determined by the Administrator in its
sole discretion and reflected in the Restricted Stock Purchase Agreement.

                                       11
<PAGE>

      (ii) Leave of Absence. The Administrator shall have the discretion to
determine whether and to what extent the lapsing of Company repurchase rights
shall be tolled during any unpaid leave of absence; provided, however, that in
the absence of such determination, such lapsing shall be tolled during any such
unpaid leave (unless otherwise required by the Applicable Laws). In the event of
military leave, the lapsing of Company repurchase rights shall toll during any
unpaid portion of such leave, provided that, upon a Participant's returning from
military leave (under conditions that would entitle him or her to protection
upon such return under the Uniform Services Employment and Reemployment Rights
Act), he or she shall be given "vesting" credit with respect to Shares purchased
pursuant to the Restricted Stock Purchase Agreement to the same extent as would
have applied had the Participant continued to provide services to the Company
throughout the leave on the same terms as he or she was providing services
immediately prior to such leave.

      (iii) Termination for Cause. In the event of termination of a
Participant's Continuous Service Status for Cause, the Company shall have the
right to repurchase from the Participant vested Shares issued upon exercise of a
Stock Purchase Right granted to any person other than an officer, Director or
Consultant prior to the date, if any, upon which the Common Stock becomes a
Listed Security upon the following terms: (A) the repurchase must be made within
90 days of termination of the Participant's Continuous Service Status for Cause
at the Fair Market Value of the Shares as of the date of termination, (B)
consideration for the repurchase consists of cash or cancellation of purchase
money indebtedness, and (C) the repurchase right terminates upon the effective
date of the Company's initial public offering of its Common Stock. With respect
to vested Shares issued upon exercise of a Stock Purchase Right granted to any
officer, Director or Consultant, the Company's right to repurchase such Shares
upon termination of such Participant's Continuous Service Status for Cause shall
be made at the Participant's original cost for the Shares and shall be effected
pursuant to such terms and conditions, and at such time, as the Administrator
shall determine. Nothing in this Section 11(b)(ii) shall in any way limit the
Company's right to purchase unvested Shares as set forth in the applicable
Restricted Stock Purchase Agreement.

      (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. In
addition, the provisions of Restricted Stock Purchase Agreements need not be the
same with respect to each purchaser.

      (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 14 of the Plan.

      12. Taxes.

      (a) As a condition of the grant, vesting or exercise of an Option or Stock
Purchase Right granted under the Plan, the Participant (or in the case of the
Participant's death, the person exercising the Option or Stock Purchase Right)
shall make such arrangements as the

                                       12
<PAGE>

Administrator may require for the satisfaction of any applicable federal, state,
local or foreign withholding tax obligations that may arise in connection with
such grant, vesting or exercise of the Option or Stock Purchase Right or the
issuance of Shares. The Company shall not be required to issue any Shares under
the Plan until such obligations are satisfied. If the Administrator allows the
withholding or surrender of Shares to satisfy a Participant's tax withholding
obligations under this Section 12 (whether pursuant to Section 12(c), (d) or
(e), or otherwise), the Administrator shall not allow Shares to be withheld in
an amount that exceeds the minimum statutory withholding rates for federal and
state tax purposes, including payroll taxes.

      (b) In the case of an Employee and in the absence of any other
arrangement, the Employee shall be deemed to have directed the Company to
withhold or collect from his or her compensation an amount sufficient to satisfy
such tax obligations from the next payroll payment otherwise payable after the
date of an exercise of the Option or Stock Purchase Right.

      (c) This Section 12(c) shall apply only after the date, if any, upon which
the Common Stock becomes a Listed Security. In the case of Participant other
than an Employee (or in the case of an Employee where the next payroll payment
is not sufficient to satisfy such tax obligations, with respect to any remaining
tax obligations), in the absence of any other arrangement and to the extent
permitted under the Applicable Laws, the Participant shall be deemed to have
elected to have the Company withhold from the Shares to be issued upon exercise
of the Option or Stock Purchase Right that number of Shares having a Fair Market
Value determined as of the applicable Tax Date (as defined below) equal to the
amount required to be withheld. For purposes of this Section 12, 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 under the Applicable Laws (the
"Tax Date").

      (d) If permitted by the Administrator, in its discretion, a Participant
may satisfy his or her tax withholding obligations upon exercise of an Option or
Stock Purchase Right by surrendering to the Company Shares that have a Fair
Market Value determined as of the applicable Tax Date equal to the amount
required to be withheld. In the case of shares previously acquired from the
Company that are surrendered under this Section 12(d), such Shares must have
been owned by the Participant for more than six (6) months on the date of
surrender (or such other period of time as is required for the Company to avoid
adverse accounting charges).

      (e) Any election or deemed election by a Participant to have Shares
withheld to satisfy tax withholding obligations under Section 12(c) or (d) above
shall be irrevocable as to the particular Shares as to which the election is
made and shall be subject to the consent or disapproval of the Administrator.
Any election by a Participant under Section 12(d) above must be made on or prior
to the applicable Tax Date.

      (f) In the event an election to have Shares withheld is made by a
Participant and the Tax Date is deferred under Section 83 of the Code because no
election is filed under Section 83(b) of the Code, the Participant shall receive
the full number of Shares with respect to which the Option or Stock Purchase
Right is exercised but such Participant shall be unconditionally obligated to
tender back to the Company the proper number of Shares on the Tax Date.

                                       13
<PAGE>

      13. Non-Transferability of Options and Stock Purchase Rights.

      (a) General. Except as set forth in this Section 13, Options and Stock
Purchase Rights may not be sold, pledged, assigned, hypothecated, transferred or
disposed of in any manner other than by will or by the laws of descent or
distribution. The designation of a beneficiary by an Optionee will not
constitute a transfer. An Option or Stock Purchase Right may be exercised,
during the lifetime of the holder of an Option or Stock Purchase Right, only by
such holder or a transferee permitted by this Section 13.

      (b) Limited Transferability Rights. Notwithstanding anything else in this
Section 13, the Administrator may in its discretion grant Nonstatutory Stock
Options that may be transferred by instrument to an inter vivos or testamentary
trust in which the Options are to be passed to beneficiaries upon the death of
the trustor (settlor) or by gift or pursuant to domestic relations orders to
"Immediate Family Members" (as defined below) of the Optionee. "Immediate
Family" means any child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law (including
adoptive relationships), a trust in which these persons have more than fifty
percent of the beneficial interest, a foundation in which these persons (or the
Optionee) control the management of assets, and any other entity in which these
persons (or the Optionee) own more than fifty percent of the voting interests.

      14. Adjustments Upon Changes in Capitalization, Merger or Certain Other
Transactions.

      (a) Changes in Capitalization. Subject to any action required under
Applicable Laws by the stockholders of the Company, the number of Shares of
Common Stock covered by each outstanding award, the number of Shares set forth
in Section 3 above, and the number of Shares of Common Stock that have been
authorized for issuance under the Plan but as to which no awards have yet been
granted or that have been returned to the Plan upon cancellation or expiration
of an award, as well as the price per Share of Common Stock covered by each such
outstanding award, 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, recapitalization 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
Administrator, 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 award.

      (b) Dissolution or Liquidation. In the event of the dissolution or
liquidation of the Company, each Option and Stock Purchase Right will terminate
immediately prior to the consummation of such action, unless otherwise
determined by the Administrator.

                                       14
<PAGE>

      (c) Corporate Transaction. In the event of a Corporate Transaction
(including without limitation a Change of Control), each outstanding Option or
Stock Purchase Right shall be assumed or an equivalent option or right shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation (the "Successor Corporation"), unless the Successor
Corporation does not agree to assume the award or to substitute an equivalent
option or right, in which case such Option or Stock Purchase Right shall
terminate upon the consummation of the transaction.

      Notwithstanding the above, in the event (i) of a Change of Control, and
(ii) a Participant holding an Option or Stock Purchase Right assumed or
substituted by the Successor Corporation in the Change of Control, or holding
Restricted Stock issued upon exercise of an Option or Stock Purchase Right with
respect to which the Successor Corporation has succeeded to a repurchase right
as a result of the Change of Control, is Involuntarily Terminated by the
Successor Corporation without Cause at the time of, or following consummation
of, the transaction, then any assumed or substituted Option or Stock Purchase
Right held by the terminated Participant at the time of termination shall
accelerate and become fully vested, and any repurchase right applicable to any
Shares shall lapse. The acceleration of vesting and lapse of repurchase rights
provided for in the previous sentence shall occur immediately prior to the
effective date of termination of the Participant's Continuous Service Status.

      For purposes of this Section 14(c), an Option or a Stock Purchase Right
shall be considered assumed, without limitation, if, at the time of issuance of
the stock or other consideration upon a Corporate Transaction or a Change of
Control, as the case may be, each holder of an Option or Stock Purchase Right
would be entitled to receive upon exercise of the award the same number and kind
of shares of stock or the same amount of property, cash or securities as such
holder would have been entitled to receive upon the occurrence of the
transaction if the holder had been, immediately prior to such transaction, the
holder of the number of Shares of Common Stock covered by the award at such time
(after giving effect to any adjustments in the number of Shares covered by the
Option or Stock Purchase Right as provided for in this Section 14); provided
that if such consideration received in the transaction is not solely common
stock of the Successor Corporation, the Administrator may, with the consent of
the Successor Corporation, provide for the consideration to be received upon
exercise of the award to be solely common stock of the Successor Corporation
equal to the Fair Market Value of the per Share consideration received by
holders of Common Stock in the transaction.

      (d) Certain Distributions. In the event of any distribution to the
Company's stockholders of securities of any other entity or other assets (other
than dividends payable in cash or stock of the Company) without receipt of
consideration by the Company, the Administrator may, in its discretion,
appropriately adjust the price per Share of Common Stock covered by each
outstanding Option or Stock Purchase Right to reflect the effect of such
distribution.

      15. Time of Granting Options and Stock Purchase Rights. The date of grant
of an Option or Stock Purchase Right shall, for all purposes, be the date on
which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Administrator,
provided that in the case of any Incentive Stock Option, the grant date shall be
the later of the date on which the Administrator makes the determination
granting such Incentive Stock Option or the date of commencement of the
Optionee's

                                       15
<PAGE>

employment relationship with the Company. Notice of the determination shall be
given to each Employee or Consultant to whom an Option or Stock Purchase Right
is so granted within a reasonable time after the date of such grant.

      16. Amendment and Termination of the Plan.

      (a) Authority to Amend or Terminate. The Board may at any time amend,
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation (other than an adjustment pursuant to Section 14 above) shall
be made that would materially and adversely affect the rights of any Optionee or
holder of Stock Purchase Rights under any outstanding grant, without his or her
consent. In addition, to the extent necessary and desirable to comply with the
Applicable Laws, the Company shall obtain stockholder approval of any Plan
amendment in such a manner and to such a degree as required.

      (b) Effect of Amendment or Termination. Except as to amendments which the
Administrator has the authority under the Plan to make unilaterally, no
amendment or termination of the Plan shall materially and adversely affect
Options or Stock Purchase Rights already granted, unless mutually agreed
otherwise between the Optionee or holder of the Stock Purchase Rights and the
Administrator, which agreement must be in writing and signed by the Optionee or
holder and the Company.

      17. Conditions Upon Issuance of Shares. Notwithstanding any other
provision of the Plan or any agreement entered into by the Company pursuant to
the Plan, the Company shall not be obligated, and shall have no liability for
failure, to issue or deliver any Shares under the Plan unless such issuance or
delivery would comply with the Applicable Laws, with such compliance determined
by the Company in consultation with its legal counsel. As a condition to the
exercise of an Option or Stock Purchase Right, the Company may require the
person exercising the award 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 by law. Shares issued
upon exercise of awards granted prior to the date on which the Common Stock
becomes a Listed Security shall be subject to a right of first refusal in favor
of the Company pursuant to which the Participant will be required to offer
Shares to the Company before selling or transferring them to any third party on
such terms and subject to such conditions as is reflected in the applicable
Option Agreement or Restricted Stock Purchase Agreement.

      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. Agreements. Options and Stock Purchase Rights shall be evidenced by
Option Agreements and Restricted Stock Purchase Agreements, respectively, in
such form(s) as the Administrator shall from time to time approve.

      20. Stockholder Approval. If required by the Applicable Laws, continuance
of the Plan shall be subject to approval by the stockholders of the Company
within twelve (12) months

                                       16
<PAGE>

before or after the date the Plan is adopted. Such stockholder approval shall be
obtained in the manner and to the degree required under the Applicable Laws.

      21. Information and Documents to Optionees and Purchasers. Prior to the
date, if any, upon which the Common Stock becomes a Listed Security and if
required by the Applicable Laws, the Company shall provide financial statements
at least annually to each Optionee and to each individual who acquired Shares
pursuant to the Plan, during the period such Optionee or purchaser has one or
more Options or Stock Purchase Rights outstanding, and in the case of an
individual who acquired Shares pursuant to the Plan, during the period such
individual owns such Shares. The Company shall not be required to provide such
information if the issuance of Options or Stock Purchase Rights under the Plan
is limited to key employees whose duties in connection with the Company assure
their access to equivalent information.

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