ADAPTEC INC, S-8, 1996-09-16

ADAPTEC INC
S-8, 1996-09-16
COMPUTER COMMUNICATIONS EQUIPMENT

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 16, 1996
REGISTRATION NO. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

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

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

ADAPTEC, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C>
CALIFORNIA 94-2748530
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
------------------------

DATA KINESIS, INC. 1996 STOCK OPTION/STOCK ISSUANCE PLAN
(FULL TITLE OF THE PLAN)
------------------------

F. GRANT SAVIERS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
691 SOUTH MILPITAS BOULEVARD
MILPITAS, CA 95035
(408) 945-8600
(NAME, ADDRESS AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------

COPIES TO:

DENNIS R. DEBROECK, ESQ.
FENWICK & WEST
TWO PALO ALTO SQUARE
PALO ALTO, CALIFORNIA 94306
------------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
============================================================================================
<S> <C> <C> <C> <C>
PROPOSED MAXIMUM PROPOSED MAXIMUM
AMOUNT OFFERING PRICE AGGREGATE
TITLE OF SECURITIES TO BE PER OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED SHARE PRICE REGISTRATION FEE
- -------------------------------------------------------------------------------------------------
Common Stock, no par value... 293,414(1) $0.7689(2) $225,600.00(3) $100.00
============================================================================================
</TABLE>

(1) Shares issuable upon exercise of outstanding options assumed as of September
16, 1996 under the Data Kinesis, Inc. 1996 Stock Option/Stock Issuance Plan.

(2) Weighted-average exercise price of outstanding options set forth above,
rounded to four decimal places.

(3) Aggregate Offering Price based upon the number and exercise prices of all
outstanding options.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2

ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.

The following documents filed with the Securities and Exchange Commission
(the "Commission") are incorporated herein by reference:

(a) The Registrant's latest Annual Report on Form 10-K, file no.
0-15071 filed on June 21, 1996, filed pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which
contains audited financial statements for the Registrant's fiscal year
ended March 31, 1996.

(b) The Registrant's Quarterly Report on Form 10-Q, file no. 0-15071
filed on August 9, 1996, which contains the Registrant's unaudited
financial statements at June 30, 1996.

(c) Items 1 and 2 of the Registrant's Registration Statement on Form
8-A filed on July 20, 1992 with the Commission under Section 12(g) of the
Exchange Act.

All documents subsequently filed by the Registrant 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 registered hereby
have been sold or which deregisters all securities then remaining unsold, shall
be deemed incorporated by reference herein and to be a part hereof from the date
of the filing of such documents.

ITEM 4. DESCRIPTION OF SECURITIES.

Not Applicable.

ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.

Not Applicable.

ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 317 of the California General Corporation law makes provisions for
the indemnification of officers, directors, and other corporate agents in terms
sufficiently broad to indemnify such persons, under certain circumstances, for
liabilities (including reimbursement of expenses incurred) arising under the
Securities Act of 1933, as amended (the "Securities Act"). The Registration has
entered into indemnification agreements to such effect with its officers and
directors.

Article IV of Registrant's Articles of Incorporation and Article VI of the
Bylaws of Registrant provide that the Registrant shall indemnify certain agents
of the Registrant to the maximum extent permitted by the California Corporations
Code. Persons covered by this indemnification provision include current and
former directors, officers, employees and other agents of the Registrant as well
as persons who serve at the request of the Registrant as directors, officers,
employees or agents of another enterprise.

The Registrant shall have the power, to the extent and in the manner
permitted by Section 317 of the California Corporations Code, to indemnify each
of its employees and agents (other than directors and officers) against
expenses, judgments, fines, settlements, and other amounts actually and
reasonably incurred in connection with any proceeding arising by reason of the
fact that such person is or was an agent of the Company. For this purpose, an
"employee" or "agent" of the Registrant includes any person (i) who is or was an
employee or agent of Registrant, (ii) who is or was serving at the request of
Registrant as an employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, or (iii) who was an employee or agent of a
corporation which was a predecessor corporation of Registrant or of another
enterprise at the request of such predecessor corporation.

The Registrant has entered into separate indemnification agreements with
its directors and officers, which may require the Registrant, among other
things, to indemnify them against certain liabilities that may arise by reason
of their status or service as directors or officers (other than liabilities
arising from willful misconduct of a culpable nature), and to advance their
expenses incurred as a result of any proceeding against them as to which they
could be indemnified.

1
<PAGE> 3

ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.

Not Applicable.

ITEM 8. EXHIBITS.

<TABLE>
<S> <C> <C>
4.01 First Amended and Restated Common Shares Rights Agreement between
Registrant and Chemical Trust Company as Rights Agents, dated June 30,
1992. (Incorporated by reference to Exhibit 1.1 to Amendment No. 3 on Form
8-A (filed July 20, 1992) to Registrant's Registration Statement (No.
0-15071 on Form 8-A filed on May 11, 1992).
4.02 Data Kinesis, Inc. 1996 Stock Option/Stock Issuance Plan.
4.03 Data Kinesis, Inc. 1996 Stock Option/Stock Issuance Plan, Amendment Number 1, Effective
as of August 2, 1996 (the "Amendment").
4.04 Form of Stock Option Agreement for use in connection with the 1996 Data Kinesis, Inc. Stock
Option/Stock Issuance Plan, as amended by the Amendment.
4.05 Form of Stock Purchase Agreement for use in connection with the Data Kinesis, Inc. 1996 Stock
Option/Stock Issuance Plan, as amended by the Amendment.
5.01 Opinion of Fenwick & West.
23.01 Consent of Price Waterhouse LLP.
23.02 Consent of Arthur Andersen LLP.
23.03 Consent of Fenwick & West (included in Exhibit 5.01).
24.01 Power of Attorney (see page 5).
</TABLE>

ITEM 9. UNDERTAKINGS.

(A) The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to include
any material information with respect to the plan of distribution not
previously disclosed in this Registration Statement or any material change
to such information in this Registration Statement.

(2) 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 statements relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

(3) 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.

(B) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's 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 therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(C) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the California General Corporations Code, the Restated
Articles of Incorporation of the Registrant, the Bylaws of the Registrant,
Indemnification Agreements entered into between the Registrant and its officers
and directors, or otherwise, the Registrant has been advised that in the opinion
of the 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
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by

2
<PAGE> 4

such director, officer or controlling person in connection with the securities
being registered, the Registrant 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.

3
<PAGE> 5

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Adaptec, Inc., a corporation organized and existing under the laws of the State
of California, 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 Milpitas, State of California, on this 13th day
of September, 1996.

ADAPTEC, INC.

By: /s/ F. GRANT SAVIERS

------------------------------------
F. Grant Saviers
Chief Executive Officer, President
and Director

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints F. Grant Saviers and Paul G. Hansen, jointly and
severally, his attorneys-in-fact, each with the power of substitution, for him
in any and all capacities, to sign any amendments to this Registration Statement
on Form S-8, and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may 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 date indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ---------------------------- -------------------
<S> <C> <C>
/s/ F. GRANT SAVIERS Chief Executive Officer, September 13, 1996
- ------------------------------------------ President and Director
F. Grant Saviers (Principal Executive
Officer)
/s/ PAUL G. HANSEN Vice President of Finance, September 13, 1996
- ------------------------------------------ Chief Financial Officer
Paul G. Hansen (Principal Financial
Officer) and Assistant
Secretary
/s/ ANDREW J. BROWN Corporate Controller September 13, 1996
- ------------------------------------------ (Principal Accounting
Andrew J. Brown Officer)
/s/ JOHN G. ADLER Chairman of the Board and September 13, 1996
- ------------------------------------------ Director
John G. Adler
Director September , 1996
- ------------------------------------------
Laurence B. Boucher
/s/ CARL J. CONTI Director September 13, 1996
- ------------------------------------------
Carl J. Conti
</TABLE>

4
<PAGE> 6

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ---------------------------- -------------------
<S> <C> <C>
- ------------------------------------------ Director September , 1996
John East
/s/ ROBERT J. LOARIE Director September 13, 1996
- ------------------------------------------
Robert J. Loarie
/s/ B. J. MOORE Director September 13, 1996
- ------------------------------------------
B. J. Moore
/s/ W. FERRELL SANDERS director September 13 , 1996
- ------------------------------------------
W. Ferrell Sanders
/s/ PHILLIP E. WHITE Director September 13 , 1996
- ------------------------------------------
Phillip E. White
</TABLE>

5
<PAGE> 7

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ---------------------------------------------------------------------------- ----
<C> <S> <C>
4.01 First Amended and Restated Common Shares Rights Agreement between Registrant
and Chemical Trust Company as Rights Agents, dated June 30, 1992.
(Incorporated by reference to Exhibit 1.1 to Amendment No. 3 on Form 8
(filed July 20, 1992) to Registrant's Registration Statement (No. 0-15071 on
Form 8-A filed on May 11, 1992).............................................
4.02 Data Kinesis, Inc. 1996 Stock Option/Stock Issuance Plan,...................
4.03 Data Kinesis, Inc. 1996 Stock Option/Stock Issuance Plan, Amendment Number 1,
Effective as of August 2, 1996...............................................
4.04 Form of Stock Option Agreement for use in connection with the 1996 Data
Kinesis, Inc. Stock Option/ Stock Issuance Plan, as amended by the Amendment.
4.05 Form of Stock Purchase Agreement for use in connection with the Data Kinesis,
Inc. 1996 Stock Option/ Stock Issuance Plan, as amended by the Amendment....
5.01 Opinion of Fenwick & West...................................................
23.01 Consent of Price Waterhouse LLP.............................................
23.02 Consent of Arthur Andersen LLP..............................................
23.03 Consent of Fenwick & West (included in Exhibit 5.01)........................
24.01 Power of Attorney (see page 5)..............................................
</TABLE>

<PAGE> 1
EXHIBIT 4.02

DATA KINESIS, INC.
1996 STOCK OPTION/STOCK ISSUANCE PLAN

ARTICLE ONE

GENERAL PROVISIONS

I. PURPOSE OF THE PLAN

This 1996 Stock Option/Stock Issuance Plan is intended to
promote the interests of Data Kinesis, Inc., a California corporation, by
providing eligible persons with the opportunity to acquire a proprietary
interest, or otherwise increase their proprietary interest, in the Corporation
as an incentive for them to remain in the service of the Corporation.

Capitalized terms herein shall have the meanings assigned to
such terms in the attached Appendix.

II. STRUCTURE OF THE PLAN

A. The Plan shall be divided into two (2) separate equity
programs:

(i) the Option Grant Program under which
eligible persons may, at the discretion of the Plan Administrator, be
granted options to purchase shares of Common Stock, and

(ii) the Stock Issuance Program under which
eligible persons may, at the discretion of the Plan Administrator, be
issued shares of Common Stock directly, either through the immediate
purchase of such shares or as a bonus for services rendered the
Corporation (or any Parent or Subsidiary).

B. The provisions of Articles One and Four shall apply to
both the equity programs under the Plan and shall accordingly govern the
interests of all persons under the Plan.

III. ADMINISTRATION OF THE PLAN

B. The Plan shall be administered by the Board. However,
any or all administrative functions otherwise exercisable by the Board may be
delegated to the Committee. Members of the Committee shall serve for such
period of time as the Board may determine and shall be subject to removal by
the Board at any time. The Board may also at any time terminate the functions
of the Committee and reassume all powers and authority previously delegated to
the Committee.

<PAGE> 2
B. The Plan Administrator shall have full power and
authority (subject to the provisions of the Plan) to establish such rules and
regulations as it may deem appropriate for proper administration of the Plan
and to make such determinations under, and issue such interpretations of, the
Plan and any outstanding options or stock issuances thereunder as it may deem
necessary or advisable. Decisions of the Plan Administrator shall be final and
binding on all parties who have an interest in the Plan or any option or stock
issuance thereunder.

IV. ELIGIBILITY

A. The persons eligible to participate in the Plan are as
follows:

(i) Employees,

(ii) non-employee members of the Board or
the non-employee members of the board of directors of any Parent or
Subsidiary, and

(iii) consultants who provide services to
the Corporation (or any Parent or Subsidiary).

B. The Plan Administrator shall have full authority to
determine, (i) with respect to the option grants under the Option Grant
Program, which eligible persons are to receive option grants, the time or times
when such option grants are to be made, the number of shares to be covered by
each such grant, the status of the granted option as either an Incentive Option
or a Non-Statutory Option, the time or times at which each option is to become
exercisable, the vesting schedule (if any) applicable to the option shares and
the maximum term for which the option is to remain outstanding, and (ii) with
respect to stock issuances under the Stock Issuance Program, which eligible
persons are to receive stock issuances, the time or times when such issuances
are to be made, the number of shares to be issued to each Participant, the
vesting schedule (if any) applicable to the issued shares and the consideration
to be paid by the Participant for such shares.

C. The Plan Administrator shall have the absolute
discretion either to grant options in accordance with the Option Grant Program
or to effect stock issuances in accordance with the Stock Issuance Program.

V. STOCK SUBJECT TO THE PLAN

A. The stock issuable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock. The maximum number of
shares of Common Stock which may be issued over the term of the Plan shall not
exceed 429,134 shares.

B. Shares of Common Stock subject to outstanding options
shall be available for subsequent issuance under the Plan to the extent the
options expire or terminate for any reason prior to exercise in full. All
shares issued under the Plan, whether or not those shares

<PAGE> 3
are subsequently repurchased by the Corporation pursuant to its repurchase
rights under the Plan, shall reduce on a share-for-basis the number of shares
of Common Stock available for subsequent issuance under the Plan.

C. Should any change be made to the Common Stock by reason
of any stock split, stock dividend, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding Common Stock as a
class without the Corporation's receipt of consideration, appropriate
adjustments shall be made to (i) the maximum number and/or class of securities
issuable under the Plan and (ii) the number and/or class of securities and the
exercise price per share in effect under each outstanding option in order to
prevent the dilution or enlargement of benefits thereunder. The adjustments
determined by the Plan Administrator shall be final, binding and conclusive. In
no event shall any such adjustments be made in connection with the conversion
of one or more outstanding shares of the Corporation's preferred stock into
shares of Common Stock.

<PAGE> 4
ARTICLE TWO

OPTION GRANT PROGRAM

I. OPTION TERMS

Each option shall be evidenced by one or more documents in the
form approved by the Plan Administrator; provided, however, that each such
document shall comply with the terms specified below. Each document evidencing
an Incentive Option shall, in addition, be subject to the provisions of the
Plan applicable to such options.

A. Exercise Price

1. The exercise price per share shall be fixed by
the Plan Administrator and shall not be less than the book value and shall not
be less than eighty-five percent (85%) of the Fair Market Value per share of
Common Stock on the option grant date.

2. The exercise price shall become immediately due
upon exercise of the option and shall, subject to the provisions of Section I
of Article Four and the documents evidencing the option, be payable in cash or
check made payable to the Corporation. Should the Common Stock be registered
under Section 12(g) of the 1934 Act at the time the option is exercised, then
the exercise price may also be paid as follows:

(i) in shares of Common Stock held for the requisite
period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the
Exercise Date, or

(ii) to the extent the option is exercised for
vested shares, through a special sale and remittance procedure pursuant
to which the Optionee shall concurrently provide irrevocable written
instructions (a) to a Corporation-designated brokerage firm to effect
the immediate sale of the purchased shares and remit to the Corporation,
out of the sale proceeds available on the settlement date, sufficient
funds to cover the aggregate exercise price payable for the purchased
shares plus all applicable Federal, state and local income and
employment taxes required to be withheld by the Corporation by reason of
such exercise and (b) to the Corporation to deliver the certificates for
the purchased shares directly to such brokerage firm in order to
complete the sale transaction.

Except to the extent such sale and remittance procedure is
utilized, payment of the exercise price for the purchased shares must be made
on the Exercise Date.

B. Exercise and Term of Options. Each option shall be
exercisable at such time or times, during such period and for such number of
shares as shall be determined by the

<PAGE> 5
Plan Administrator and set for the in the documents evidencing the option.
However, no option shall have a term in excess of ten (10) years measured from
the option grant date.

C. Effect of Termination of Service. The following
provisions shall govern the exercise of any options held by the Optionee at the
time of cessation of Service or death:

(i) Should the Optionee cease to remain in Service
for any reason other than Disability or death, then the Optionee shall
have a period of three (3) months following the date of such cessation
of Service during which to exercise each outstanding option held by such
Optionee.

(ii) Should such Service terminate by reason of
Disability, then the Optionee shall have a period of six (6) months
following the date of such cessation of Service during which to exercise
each outstanding option held by such Optionee. However, should such
Disability be deemed to constitute Permanent Disability, then the period
during which each outstanding option held by the Optionee is to remain
exercisable shall be extended by an additional six (6) months so that
the exercise period shall be the twelve (12)-month period following the
date of the Optionee's cessation of Service by reason of such Permanent
Disability.

(iii) Should the Optionee die while holding one or
more outstanding options, then the personal representative of the
Optionee's estate or the person or persons to whom the option is
transferred pursuant to the Optionee's will or in accordance with the
laws of descent and distribution shall have a period of twelve (12)
months following the date of the Optionee's death during which to
exercise each such option.

(iv) Under no circumstances, however, shall any such
option be exercisable after the specified expiration of the option term.

(v) During the applicable post-Service exercise
period, the option may not be exercised in the aggregate for more than
the number of vested shares for which the option is exercisable on the
date of the Optionee's cessation of Service. Upon the expiration of the
applicable exercise period or (if earlier) upon the expiration of the
option term, the option shall terminate and cease to be outstanding for
any vested shares for which the option has not been exercised. However,
the option shall, immediately upon the Optionee's cessation of Service,
terminate and cease to be outstanding to the extent it is not
exercisable for vested shares on the date of such cessation of Service.

D. Shareholder Rights. The holder of an option shall have
no shareholder rights with respect to the shares subject to the option until
such person shall have exercised the option, paid the exercise price and become
a holder of record of the purchased shares.

<PAGE> 6
E. Unvested Shares. The Plan Administrator shall have the
discretion to grant options which are exercisable for unvested shares of Common
Stock. Should the Optionee cease Service while holding such unvested shares,
the Corporation shall have the right to repurchase, at the exercise price paid
per share, all or (at the discretion of the Corporation and with the consent of
the Optionee) any of those unvested shares. The terms upon which such
repurchase right shall be exercisable (including the period and procedure for
exercise and the appropriate vesting schedule for the purchased shares) shall
be established by the Plan Administrator and set forth in the document
evidencing such repurchase right. The Plan Administrator may not impose a
vesting schedule upon any option grant or any shares of Common Stock subject to
the option which is more restrictive than twenty percent (20%) per year
vesting, beginning one (1) year after the option grant date. However, this
minimum vesting requirement shall not be applicable with respect to any option
granted to a Highly-Compensated Person.

F. First Refusal Rights. Until such time as the Common
Stock is first registered under Section 12(g) of the 1934 Act, the Corporation
shall have the right of first refusal with respect to any proposed disposition
by the Optionee (or any successor in interest) of any shares of Common Stock
issued under the Option Grant Program. Such right of first refusal shall be
exercisable in accordance with the terms established by the Plan Administrator
and set forth in the document evidencing such right.

G. Limited Transferability of Options. During the lifetime
of the Optionee, the option shall be exercisable only by the Optionee and shall
not be assignable or transferable other than by will or by the laws of descent
and distribution following the Optionee's death. However, a Non-Statutory
Option may be assigned in accordance with the terms of a court order such as a
Qualified Domestic Relations Order. The assigned option may only be exercised
by the person or persons who acquire a proprietary interest in the option
pursuant to such Qualified Domestic Relations Order. The terms applicable to
the assigned option (or portion thereof) shall be the same as those in effect
for the option immediately prior to such assignment and shall be set forth in
such documents issued to the assignee as the Plan Administrator may deem
appropriate.

II. INCENTIVE OPTIONS

The terms specified below shall be applicable to all Incentive
Options. Except as modified by the provisions of this Section II, all the
provisions of Articles One, Two and Four shall be applicable to Incentive
Options. Options which are specifically designated as Non-Statutory Options
shall not be subject to the terms of this Section II.

A. Eligibility. Incentive Options may only be granted to
Employees.

B. Exercise Price. The exercise price per share shall not
be less than one hundred percent (100%) of the Fair Market Value per share of
Common Stock on the option grant date.

<PAGE> 7
C. Dollar Limitation. The aggregate Fair Market Value of
the shares of Common Stock (determined as of the respective date or dates of
grant) for which one or more options granted to any Employee under the Plan (or
any other option plan of the Corporation or any Parent or Subsidiary) may for
the first time become exercisable as Incentive Options during any one (1)
calendar year shall not exceed the sum of One Hundred Thousand Dollars
($100,000). To the extent the Employee holds two (2) or more such options which
become exercisable for the first time in the same calendar year, the foregoing
limitation on the exercisability of such options as Incentive Options shall be
applied on the basis of the order in which such options are granted.

D. 10% Shareholder. If any Employee to whom an Incentive
Option is granted is a 10% Shareholder, then (i) the option term shall not
exceed five (5) years measured from the option grant date and (ii) the exercise
price per share shall not be less than one hundred ten percent (110%) of the
Fair Market Value per share of Common Stock on the option grant date.

III. CORPORATE TRANSACTION

A. In the event of any Corporate Transaction, the Board of
Directors shall, in its discretion, take any one or more of the following
actions, as to outstanding options (i) provide that such options shall be
assumed, or equivalent options substituted, by the successor corporation (or
parent thereof), provided, however, that any such options shall meet the
requirements of Section 424(a) of the Code; (ii) provide that any and all
outstanding options shall become exercisable in full within a reasonable time
and with reasonable notice to the optionees, and may provide that all
unexercised options shall terminate; (iii) terminate each outstanding option in
exchange for a cash payment as determined in accordance with the terms of
the Corporate Transaction; or (iv) terminate each outstanding option in exchange
for a cash payment as determined in accordance with the fair market value of
the Common Stock. The fair market value shall be determined by the Board.

B. Each option which is assumed in connection with a
Corporate Transaction shall be appropriately adjusted, immediately after such
Corporate Transaction, to apply to the number and class of securities which
would have been issuable to the Optionee in the consummation of such Corporate
Transaction, had the option been exercised immediately prior to such Corporate
Transaction. Appropriate adjustments shall also be made to (i) the number and
class of securities available for issuance under the Plan following the
consummation of such Corporate Transaction and (ii) the exercise price payable
per share under each outstanding option, provided the aggregate exercise price
payable for such securities shall remain the same.

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

<PAGE> 8
IV. CANCELLATION AND REGRANT OF OPTIONS

The Plan Administrator shall have the authority to effect, at
any time and from time to time, with the consent of the affected option
holders, the cancellation of any or all outstanding options under the Option
Grant Program and to grant in substitution therefor new options covering the
same or different number of shares of Common Stock but with an exercise price
per share based on the Fair Market Value per share of Common Stock on the new
option grant date.

V. ADDITIONAL AUTHORITY

The Plan Administrator shall have the discretion, exercisable
either at the time an option is granted or at any time while the option remains
outstanding, to:

(i) extend the period of time for which the option
is to remain exercisable following the Optionee's cessation of Service
or death from the limited period otherwise in effect for that option to
such greater period of time as the Plan Administrator shall deem
appropriate, but in no event beyond the expiration of the option term,
and/or

(ii) permit the option to be exercised, during the
applicable post-Service exercise period, not only with respect to the
number of vested shares of Common Stock for which such option is
exercisable at the time of the Optionee's cessation of Service or death
but also with respect to one or more additional installments in which
the Optionee would have vested under the option had the Optionee
continued in Service.

<PAGE> 9
ARTICLE THREE

STOCK ISSUANCE PROGRAM

I. STOCK ISSUANCE TERMS

Shares of Common Stock may be issued under the Stock Issuance
Program through direct and immediate issuances without any intervening option
grants. Each such stock issuance shall be evidenced by a Stock Issuance
Agreement which complies with the terms specified below.

A. Purchase Price.

1. The purchase price per share shall be fixed by
the Plan Administrator in accordance with the following provisions:

(i) The purchase price per share shall not
be less than eighty-five percent (85%) of the Fair Market Value per
share of Common Stock on the stock issuance date.

(ii) If the person to whom the stock
issuance is made is a 10% Shareholder, then the purchase price per share
shall not be less than one hundred ten percent (110%) of the Fair Market
Value per share of Common Stock on the stock issuance date.

2. Subject to the provisions of Section I of
Article Four, shares of Common Stock may be issued under the Stock Issuance
Program for one or both of the following items of consideration which the Plan
Administrator may deem appropriate in each individual instance:

(i) cash or check made payable to the
Corporation, or

(ii) past services rendered to the
Corporation (or any Parent or Subsidiary).

B. Vesting Provisions.

1. Shares of Common Stock issued under the Stock
Issuance Program may, in the discretion of the Plan Administrator, be fully and
immediately vested upon issuance or may vest in one or more installments over
the Participant's period of Service or upon attainment of specified performance
objectives. The elements of the vesting schedule applicable to any unvested
shares of Common Stock issued under the Stock Issuance Program, namely:

<PAGE> 10
(i) the Service period to be completed by
the Participant or the performance objectives to be attained,

(ii) the number of installments in which the
shares are to vest,

(iii) the interval or intervals (if any)
which are to lapse between installments, and

(iv) the effect which death, Disability or
other event designated by the Plan Administrator is to have upon the
vesting schedule,

shall be determined by the Plan Administrator and incorporated into the Stock
Issuance Agreement. The Plan Administrator may not impose a vesting schedule
upon any stock issuance effected under the Stock Issuance Program which is more
restrictive than twenty percent (20%) per year vesting, beginning one (1) year
after the stock issuance date. However, this minimum vesting requirement shall
not be applicable with respect to any stock issued to a Highly-Compensated
Person.

2. Any new, substituted or additional securities
or other property (including money paid other than as a regular cash dividend)
which the Participant may have the right to receive with respect to the
Participant's unvested shares of Common Stock by reason of any stock dividend,
stock split, recapitalization, combination of shares, exchange of shares or
other change affecting the outstanding Common Stock as a class without the
Corporation's receipt of consideration shall be issued subject to (i) the same
vesting requirements applicable to the Participant's unvested shares of Common
Stock and (ii) such escrow arrangements as the Plan Administrator shall deem
appropriate.

3. The Participant shall have full shareholder
rights with respect to any shares of Common Stock issued to the Participant
under the Stock Issuance Program, whether or not the Participant's interest in
those shares is vested. Accordingly, the Participant shall have the right to
vote such shares and to receive any regular cash dividends paid on such shares.

4. Should the Participant cease to remain in
Service while holding one or more unvested shares of Common Stock issued under
the Stock Issuance Program or should the performance objectives not be attained
with respect to one or more such unvested shares of Common Stock, then those
shares shall be immediately surrendered to the Corporation for cancellation,
and the Participant shall have no further shareholder rights with respect to
those shares. To the extent the surrendered shares were previously issued to
the Participant for consideration paid in cash or cash equivalent (including
the Participant's purchase-money indebtedness), the Corporation shall repay to
the Participant the cash consideration paid for the surrendered shares and
shall cancel the unpaid principal balance of any outstanding purchase-money
note of the Participant attributable to such surrendered shares.

10.

<PAGE> 11
5. The Plan Administrator may in its discretion
waive the surrender and cancellation of one or more unvested shares of Common
Stock (or other assets attributable thereto) which would otherwise occur upon
the non-completion of the vesting schedule applicable to such shares. Such
waiver shall result in the immediate vesting of the Participant's interest in
the shares of Common Stock as to which the waiver applies. Such waiver may be
effected at any time, whether before or after the Participant's cessation of
Service or the attainment or non-attainment of the applicable performance
objectives.

C. First Refusal Rights. Until such time as the Common
Stock is first registered under Section 12(g) of the 1934 Act, the Corporation
shall have the right of first refusal with respect to any proposed disposition
by the Participant (or any successor in interest) of any shares of Common Stock
issued under the Stock Issuance Program. Such right of first refusal shall be
exercisable in accordance with the terms established by the Plan Administrator
and set forth in the document evidencing such right.

II. CORPORATE TRANSACTION

All of the outstanding repurchase rights under the Stock
Issuance Program shall terminate automatically in the event of any Corporate
Transaction, except to the extent the repurchase rights are assigned to the
successor corporation (or parent thereof) in connection with such Corporate
Transaction.

III. SHARE ESCROW/LEGENDS

Unvested shares may, in the Plan Administrator's discretion, be
held in escrow by the Corporation until the Participant's interest in such
shares vests or may be issued directly to the Participant with restrictive
legends on the certificates evidencing those unvested shares.

11.

<PAGE> 12
ARTICLE FOUR

MISCELLANEOUS

I. FINANCING

The Plan Administrator may permit any Optionee or Participant to
pay the option exercise price or the purchase price for shares issued to such
person under the Plan by delivering a recourse promissory note payable in one
or more installments. The terms of any such promissory note (including the
interest rate and the terms of repayment) shall be established by the option
agreement. Promissory notes may be authorized with or without security or
collateral. However, any promissory notes delivered by a consultant must be
secured by property other than the purchased shares of Common Stock. In all
events, the maximum credit available to the Optionee or Participant may not
exceed the sum of (i) the aggregate option exercise price or purchase price
payable for the purchased shares plus (ii) any Federal, state and local income
and employment tax liability incurred by the Optionee or the Participant in
connection with the option exercise or share purchase.

II. EFFECTIVE DATE AND TERM OF THE PLAN

A. The Plan shall become effective when adopted by the Board, but
no option granted under the Plan may be exercised, and no shares shall be issued
under the Plan, until the Plan is approved by the Corporation's shareholders.
If such shareholder approval is not obtained within twelve (12) months after
the date of the Board's adoption of the Plan, then all options previously
granted under the Plan shall terminate and cease to be outstanding, and no
further options shall be granted and no shares shall be issued under the Plan.
Subject to such limitation, the Plan Administrator may grant options and issue
shares under the Plan at any time after the effective date of the Plan and
before the date fixed herein for termination of the Plan.

B. The Plan shall terminate upon the earliest of (i) the
expiration of the ten (10)-year period measured from the date the Plan is
adopted by the Board, (ii) the date on which all shares available for issuance
under the Plan shall have been issued pursuant to the exercise of options or
the issuance of shares (whether vested or unvested) under the Plan or (iii) the
termination of all outstanding options in connection with a Corporate
Transaction. Upon such Plan termination, all options and unvested stock
issuances outstanding under the Plan shall continue to have full force and
effect in accordance with the provisions of the documents evidencing such
options or issuances.

III. AMENDMENT OF THE PLAN

A. The Board shall have complete and exclusive power and authority
to amend or modify the Plan in any or all respects. However, no such amendment
or modification shall adversely affect the rights and obligations with respect
to options or unvested stock issuances

12.

<PAGE> 13
at the time outstanding under the Plan, unless the Optionee or the Participant
consents to such amendment or modification. In addition, the Board shall not,
without the approval of the Corporation's shareholders, (i) increase the
maximum number of shares issuable under the Plan, except for permissible
adjustments in the event of certain changes in the Corporation's
capitalization, (ii) materially modify the eligibility requirements for Plan
participation or (iii) materially increase the benefits accruing to Plan
participants.

B. Options to purchase shares of Common Stock may be granted under
the Plan and shares of Common Stock may be issued under the Plan that are in
each instance in excess of the number of shares then available for issuance
under the Plan, provided any excess shares actually issued under the Plan are
held in escrow until there is obtained shareholder approval of an amendment
sufficiently increasing the number of shares of Common Stock available for
issuance under the Plan. If such shareholder approval is not obtained within
twelve (12) months after the date the first such excess issuances are made,
then (i) any unexercised options granted on the basis of such excess shares
shall terminate and cease to be outstanding and (ii) the Corporation shall
promptly refund to the Optionees and the Participants the exercise or purchase
price paid for any excess shares issued under the Plan and held in escrow,
together with interest (at the applicable Short-Term Federal Rate) for the
period the shares were held in escrow, and such shares shall thereupon be
automatically cancelled and cease to be outstanding.

IV. USE OF PROCEEDS

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

V. WITHHOLDING

The Corporation's obligation to deliver shares of Common Stock
upon the exercise of any options or upon the issuance or vesting of any shares
issued under the Plan shall be subject to the satisfaction of all applicable
Federal, state and local income and employment tax withholding requirements.

VI. REGULATORY APPROVALS

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

VII. NO EMPLOYMENT OR SERVICE RIGHTS

Nothing in the Plan shall confer upon the Optionee or the
Participant any right to continue in Service for any period of specific
duration or interfere with or otherwise restrict

13.
<PAGE> 14
in any way the rights of the Corporation (or any Parent or Subsidiary employing
or retaining such person) or of the Optionee or the Participant, which rights
are hereby expressly reserved by each, to terminate such person's Service at
any time for any reason, with or without cause.

VIII. FINANCIAL REPORTS

The Corporation shall deliver a balance sheet and an income
statement at least annually to each individual holding an outstanding option
under and each Participant in the Plan, unless such individual is a key
Employee whose duties in connection with the Corporation (or any Parent or
Subsidiary) assure such individual access to equivalent information.

14.
<PAGE> 15
APPENDIX

The following definitions shall be in effect under the Plan:

A. BOARD shall mean the Corporation's Board of Directors.

B. CODE shall mean the Internal Revenue Code of 1986, as amended.

C. COMMITTEE shall mean a committee of two (2) or more Board members
appointed by the Board to exercise one or more administrative functions under
the Plan.

D. COMMON STOCK shall mean the Corporation's common stock.

E. CORPORATE TRANSACTION shall mean either of the following
shareholder-approved transactions to which the Corporation is a party:

(i) a merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of
the Corporation's outstanding securities are transferred to a person or
persons different from the persons holding those securities immediately
prior to such transaction, or

(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation
or dissolution of the Corporation.

F. CORPORATION shall mean Data Kinesis, Inc., a California corporation.

G. DISABILITY shall mean the inability of the Optionee or the
Participant to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment and shall be determined by
the Plan Administrator on the basis of such medical evidence as the Plan
Administrator deems warranted under the circumstances. Disability shall be
deemed to constitute PERMANENT DISABILITY in the event that such Disability is
expected to result in death or has lasted or can be expected to last for a
continuous period of twelve (12) months or more.

H. DOMESTIC RELATIONS ORDER shall mean any judgment, decree or order
(including approval of a property settlement agreement) which provides or
otherwise conveys, pursuant to applicable State domestic relations laws
(including community property laws), marital property rights to any spouse or
former spouse of the Optionee.

A-1.
<PAGE> 16
I. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.

J. EXERCISE DATE shall mean the date on which the Corporation shall
have received written notice of the option exercise.

K. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:

(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question, as such price
is reported by the National Association of Securities Dealers on the
Nasdaq National Market or any successor system. If there is no closing
selling price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.

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

(iii) If the Common Stock is at the time neither listed on any
Stock Exchange nor traded on the Nasdaq National Market, then the Fair
Market Value shall be determined by the Plan Administrator after taking
into account such factors as the Plan Administrator shall deem
appropriate.

L. HIGHLY-COMPENSATED PERSON shall mean an Optionee or Participant
(i) whose compensation per calendar year from the Corporation (or any Parent or
Subsidiary) equals or exceeds Sixty Thousand Dollars ($60,000) in the aggregate
and (ii) who has previously received one or more option grants or stock
issuances under the Plan.

M. INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.

N. 1934 ACT shall mean the Securities Exchange Act of 1934, as amended.

O. NON-STATUTORY OPTION shall mean an option not intended to satisfy
the requirements of Code Section 422.

A-2.
<PAGE> 17
P. OPTION GRANT PROGRAM shall mean the option grant program in effect
under the Plan.

Q. OPTIONEE shall mean any person to whom an option is granted under
the Option Grant Program.

R. PARENT shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

S. PARTICIPANT shall mean any person who is issued shares of Common
Stock under the Stock Issuance Program.

T. PLAN shall mean the Corporation's 1995 Stock Option/Stock Issuance
Plan, as set forth in this document.

U. PLAN ADMINISTRATOR shall mean either the Board or the Committee, to
the extent the Committee is at the time responsible for the administration of
the Plan.

V. QUALIFIED DOMESTIC RELATIONS ORDER shall mean a Domestic Relations
Order which substantially complies with the requirements of Code Section
414(p). The Plan Administrator shall have the sole discretion to determine
whether a Domestic Relations Order is a Qualified Relations Order.

W. SERVICE shall mean the provision of services to the Corporation (or
any Parent or Subsidiary) by a person in the capacity of an Employee, a
non-employee member of the board of directors or a consultant, except to the
extent otherwise specifically provided in the documents evidencing the option
grant or stock issuance.

X. STOCK EXCHANGE shall mean either the American Stock Exchange or the
New York Stock Exchange.

Y. STOCK ISSUANCE AGREEMENT shall mean the agreement entered into by
the Corporation and the Participant at the time of issuance of shares of Common
Stock under the Stock Issuance Program.

Z. STOCK ISSUANCE PROGRAM shall mean the stock issuance program in
effect under the Plan.

A-3.
<PAGE> 18
possessing fifty percent (50%) or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.

AB. 10% SHAREHOLDER shall mean the owner of stock (as determined under
Code Section 424(d)) possessing ten percent (10%) or more of the total combined
voting power of all classes of stock of the Corporation (or any Parent or
Subsidiary).

A-4.

<PAGE> 1
EXHIBIT 4.03

DATA KINESIS, INC.
1996 STOCK OPTION/STOCK ISSUANCE PLAN

AMENDMENT NUMBER 1 - EFFECTIVE AS OF AUGUST 2, 1996

The Data Kinesis, Inc. 1996 Stock Option/Stock Issuance Plan (the
"Plan") is hereby amended, effective as of the 2nd day of August, 1996,
as follows:

1. Article Two, Section IIIA of the Plan is hereby amended in its
entirety to read as follows:

A. In the event of any Corporate Transaction, the
Board of Directors shall, in its discretion, take any one or
more of the following actions as to outstanding options (i)
provide that such options shall be assumed, or equivalent
options substituted, by the successor corporation (or parent
thereof); (ii) provide that any and all outstanding options
shall become exercisable in full within a reasonable time
and with reasonable notice to the optionees, and may provide
that all unexercised options shall terminate; (iii) terminate
each outstanding option in exchange for a cash payment as
determined in accordance with the terms of the Corporate
Transaction; or (iv) terminate each outstanding option in
exchange for a cash payment as determined in accordance with
the fair market value of the Common Stock. The fair market
value shall be determined by the Board.

2. Article Two, Section IIIB of the Plan is hereby amended in its
entirety to read as follows:

B. Each option which is assumed or substituted in
connection with a Corporate Transaction shall be appropriately
adjusted, immediately after such Corporate Transaction, to
apply to the number and class of securities which would have
been issuable to the Optionee in the consummation of such
Corporate Transaction, had the option been exercised immediately
prior to such Corporate Transaction. Appropriate adjustments
shall also be made to (i) the number and class of securities
available for issuance under the Plan following the
consummation of such Corporate Transaction and (ii) the exercise
price payable per share under each outstanding option, provided
the aggregate exercise price payable for such securities shall
remain the same. Subject to the consent in writing of each
Optionee prior to the consummation of a Corporate Transaction,
the Plan Administrator shall have the absolute discretion,
exercisable in connection with such Corporate Transaction, to
provide for the adjustment of the outstanding options under
the Plan in connection with their assumption or substitution
in accordance with a formula different to that described
under this Section IIIB.

<PAGE> 2
3. All capitalized terms in this Plan Amendment shall have the
meanings assigned to such terms in the Plan. To the extent that there is a
conflict between the provisions of the Plan and the provisions of this Plan
Amendment, the provisions of this Plan Amendment shall take precedence.

4. Except as modified by this Plan Amendment, the terms and
provisions of the Plan shall continue in full force and effect.

IN WITNESS WHEREOF, Data Kinesis, Inc. has caused this Plan Amendment
to be executed on its behalf by its duly-authorized officer as of the 2nd day
of August, 1996.

DATA KINESIS, INC.

By: /s/ Richard L. Napolitano
-------------------------
Richard L. Napolitano

Title: President

<PAGE> 1
EXHIBIT 4.04

DATA KINESIS, INC.
STOCK OPTION AGREEMENT

RECITALS

I. The Board has adopted the Plan for the purpose of retaining the
services of selected Employees, non-employee members of the Board or the board
of directors of any Parent or Subsidiary and consultants who provide services to
the Corporation (or any Parent or Subsidiary).

A. Optionee is to render valuable services to the Corporation (or
a Parent or Subsidiary), and this Agreement is executed pursuant to, and is
intended to carry out the purposes of the Plan in connection with the
Corporation's grant of an option to Optionee.

B. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.

NOW, THEREFORE, it is hereby agreed as follows:

1. GRANT OF OPTION. The Corporation hereby grants to
Optionee, as of the Grant Date, an option to purchase up to the number of Option
Shares specified in the Grant Notice. The Option Shares shall be purchasable
from time to time during the option term specified in Paragraph 2 at the
Exercise Price.

2. OPTION TERM. This option shall have a term of ten (10)
years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5, 6 or 17.

3. LIMITED TRANSFERABILITY. This option shall be neither
transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution following Optionee's death and may be exercised,
during Optionee's lifetime, only by Optionee. However, if this option is
designated a Non-Statutory Option in the Grant Notice, then this option may
also be assigned in accordance with the terms of a Qualified Domestic Relations
Order. If so assigned, the assigned option shall be exercisable only by the
person or persons who acquire a proprietary interest in the option pursuant to
such Qualified Domestic Relations Order. The terms applicable to the assigned
option (or portion thereof) shall be the same as those in effect for this
option immediately prior to such assignment and shall be set forth in such
documents issued to the assignee as the Plan Administrator may deem
appropriate.

4. DATES OF EXERCISE. This option shall become exercisable
for the Option Shares in one or more installments as specified in the Grant
Notice. As the option becomes exercisable for such installments, those
installments shall accumulate and the option shall remain

<PAGE> 2
exercisable for the accumulated installments until the Expiration Date or
sooner termination of the option term under Paragraph 5, 6 or 17.

5. CESSATION OF SERVICE. The option term specified in
Paragraph 2 shall terminate (and this option shall cease to be outstanding)
prior to the Expiration Date should any of the following provisions become
applicable:

(a) Should Optionee cease to remain in Service for any
reason (other than death or Disability) while this option is outstanding, then
Optionee shall have a period of three (3) months (commencing with the date of
such cessation of Service) during which to exercise this option, but in no
event shall this option be exercisable at any time after the Expiration Date.

(b) Should Optionee die while this option is
outstanding, then the personal representative of Optionee's estate or the
person or persons to whom the option is transferred pursuant to Optionee's will
or in accordance with the laws of descent and distribution shall have the right
to exercise this option. Such right shall lapse and this option shall cease to
be outstanding upon the earlier of (i) the expiration of the twelve (12)-month
period measured from the date of Optionee's death or (ii) the Expiration Date.

(c) Should Optionee cease Service by reason of
Disability while this option is outstanding, then Optionee shall have a period
of six (6) months (commencing with the date of such cessation of Service)
during which to exercise this option. However, should such Disability be deemed
to constitute Permanent Disability, then the period during which this option is
to remain exercisable shall be extended by an additional six (6) months so that
the exercise period shall be the twelve (12)-month period following the date of
Optionee's cessation of Service by reason of such Permanent Disability. In no
event shall this option be exercisable at any time after the Expiration Date.

Note: Exercise of this option on a date later than three (3) months
following cessation of Service due to Disability will result in loss
of favorable Incentive Option treatment, unless such Disability
constitutes Permanent Disability. In the event that Incentive Option
treatment is not available, this option will be taxed as a
Non-Statutory Option upon exercise.

(d) During the limited period of post-Service
exercisability, this option may not be exercised in the aggregate for more than
the number of vested Option Shares for which the option is exercisable at the
time of Optionee's cessation of Service. Upon the expiration of such limited
exercise period or (if earlier) upon the Expiration Date, this option shall
terminate and cease to be outstanding for any vested Option Shares for which
the option has not been exercised. To the extent Optionee is not vested in the
Option Shares at the time of Optionee's cessation of Service, this option shall
immediately terminate and cease to be outstanding with respect to those shares.

2.
<PAGE> 3
6. SPECIAL TERMINATION OF OPTION.

(a) In the event of a Corporate Transaction, as
determined by the Board of Directors according to the Plan, this option may
terminate and cease to be outstanding, except to the extent assumed by the
successor corporation or parent thereof.

(b) If this option is assumed in connection with a
Corporate Transaction, then this option shall be appropriately adjusted,
immediately after such Corporate Transaction, to apply to the number and class
of securities which would have been issuable to Optionee in consummation of
such Corporate Transaction had the option been exercised immediately prior to
such Corporate Transaction, and appropriate adjustments shall also be made to
the Exercise Price, provided the aggregate Exercise Price shall remain the
same.

(c) This Agreement shall not in any way affect the right
of the Corporation to adjust, reclassify, reorganize or otherwise change its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.

7. ADJUSTMENT IN OPTION SHARES. Should any change be made to the
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other charge affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price
in order to reflect such change and thereby preclude a dilution or enlargement
of benefits hereunder.

8. SHAREHOLDER RIGHTS. The holder of this option shall not have any
shareholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of
record of the purchased shares.

9. MANNER OF EXERCISING OPTION.

(a) In order to exercise this option with respect to all or
any part of the Option Shares for which this option is at the time exercisable,
Optionee (or any other person or persons exercising the option) must take the
following actions:

(i) Execute and deliver to the Corporation a
Purchase Agreement for the Option Shares for which the option is
exercised.

(ii) Pay the aggregate Exercise Price for the
purchased shares in one or more of the following forms:

(A) cash or check made payable to the
Corporation; or

3.
<PAGE> 4

(B) a promissory note payable to the Corporation, but only to
the extent approved by the Plan Administrator in accordance with
Paragraph 14.

Should the Common Stock be registered under Section 12(g) of the 1934
Act at the time the option is exercised, then the Exercise Price may
also be paid as follows:

(C) in shares of Common Stock held by Optionee (or any other
person or persons exercising the option) for the requisite period
necessary to avoid a charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date;
or

(D) to the extent the option is exercised for vested Option
Shares, through a special sale and remittance procedure pursuant to
which Optionee (or any other person or persons exercising the option)
shall concurrently provide irrevocable written instructions (a) to a
Corporation-designated brokerage firm to effect the immediate sale of
the purchased shares and remit to the Corporation, out of the sale
proceeds available on the settlement date, sufficient funds to cover the
aggregate Exercise Price payable for the purchased shares plus all
applicable Federal, state and local income and employment taxes required
to be withheld by the Corporation by reason of such exercise and (b) to
the Corporation to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the sale.

Except to the extent the sale and remittance procedure is utilized in
connection with the option exercise, payment of the Exercise Price must
accompany the Purchase Agreement delivered to the Corporation in
connection with the option exercise.

(iii) Furnish to the Corporation appropriate documentation that
the person or persons exercising the option (if other than Optionee) have the
right to exercise this option.

(iv) Execute and deliver to the Corporation such written
representations as may be requested by the Corporation in order for it to comply
with the applicable requirements of Federal and state securities laws.

(v) Make appropriate arrangements with the Corporation (or
Parent or Subsidiary employing or retaining Optionee) for the satisfaction of
all Federal, state and local income and employment tax withholding requirements
applicable to the option exercise.

<PAGE> 5

(b) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option Shares,
with the appropriate legends affixed thereto.

10. REPURCHASE RIGHTS. ALL OPTION SHARES ACQUIRED UPON THE EXERCISE OF
THIS OPTION SHALL BE SUBJECT TO CERTAIN RIGHTS OF THE CORPORATION AND ITS
ASSIGNS TO REPURCHASE THOSE SHARES IN ACCORDANCE WITH THE TERMS SPECIFIED IN
THE PURCHASE AGREEMENT.

11. COMPLIANCE WITH LAWS AND REGULATIONS.

(a) The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange (or the Nasdaq National Market if
applicable) on which the Common Stock may be listed for trading at the time of
such exercise and issuance.

(b) The inability of the Corporation to obtain approval from
any regulatory body having authority deemed by the Corporation to be necessary
to the lawful issuance and sale of any Common Stock pursuant to this option
shall relieve the Corporation of any liability with respect to the non-issuance
or sale of the Common Stock as to which such approval shall not have been
obtained. The Corporation, however, shall use its best efforts to obtain all
such approvals.

12. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided in
Paragraphs 3 and 6, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the Corporation and its successors and assigns and
Optionee, Optionee's assigns and the legal representatives, heirs and legatees
of Optionee's estate.

13. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to
be given or delivered to Optionee shall be in writing and addressed to Optionee
at the address indicated below Optionee's signature line on the Grant Notice.
All notices shall be deemed effective upon personal delivery or upon deposit in
the U.S. mail, postage prepaid and properly addressed to the party to be
notified.

14. FINANCING. The Plan Administrator may, in its absolute discretion
and without any obligation to do so, permit Optionee to pay the Exercise Price
for the purchased Option Shares by delivering a promissory note. The terms of
any such promissory note (including the

5.
<PAGE> 6
interest rate, the requirements for collateral and the terms of repayment)
shall be established by the Plan Administrator in its sole discretion.(1)

15. CONSTRUCTION. This Agreement and the option evidenced hereby are
made and granted pursuant to the Plan and are in all respects limited by and
subject to the terms of the Plan. All decisions of the Plan Administrator with
respect to any question or issue arising under the Plan or this Agreement shall
be conclusive and binding on all persons having an interest in this option.

16. GOVERNING LAW. The interpretation, performance and enforcement of
this Agreement shall be governed by the laws of the State of California without
resort to that State's conflict-of-laws rules.

17. SHAREHOLDER APPROVAL.

(a) The grant of this option is subject to approval of the
Plan by the Corporation's shareholders within twelve (12) months after the
adoption of the Plan by the Board. Notwithstanding any provision of this
Agreement to the contrary, this option may not be exercised in whole or in part
until such shareholder approval is obtained. In the event that such shareholder
approval is not obtained, then this option shall terminate in its entirety and
Optionee shall have no further rights to acquire any Option Shares hereunder.

(b) If the Option Shares covered by this Agreement exceed, as
of the Grant Date, the number of shares of Common Stock which may without
shareholder approval be issued under the Plan, then this option shall be void
with respect to such excess shares, unless shareholder approval of an amendment
sufficiently increasing the number of shares of Common stock issuable under the
Plan is obtained in accordance with the provisions of the Plan.

18. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE OPTION. In the event
this option is designated an Incentive Option in the Grant Notice, the
following terms and conditions shall also apply to the grant:

(a) This option shall cease to qualify for favorable tax
treatment as an Incentive Option if (and to the extent) this option is
exercised for one or more Option Shares: (i) more than three (3) months after
the date Optionee ceases to be an Employee for any reason other than death or
Permanent Disability or (ii) more that twelve (12) months after the date
Optionee ceases to be an Employee by reason of Permanent Disability.

- --------------
(1) Authorization of payment of the Exercise Price by a promissory note under
such provisions may, under currently proposed Treasury Regulations, result in
the loss of incentive stock option treatment under the Federal tax laws.

6.
<PAGE> 7

(b) This option shall not become exercisable in the calendar
year in which granted if (and to the extent) the aggregate Fair Market Value
(determined at the Grant Date) of the Common Stock for which this option would
otherwise first become exercisable in such calendar year would, when added to
the aggregate value (determined as of the respective date or dates of grant) of
the Common Stock and any other securities for which one or more other Incentive
Options granted to Optionee prior to the Grant Date (whether under the Plan or
any other option plan of the Corporation or any Parent or Subsidiary) first
become exercisable during the same calendar year, exceed One Hundred Thousand
Dollars ($100,000) in the aggregate. To the extent the exercisability of this
option is deferred by reason of the foregoing limitation, the deferred portion
shall become exercisable in the first calendar year or years thereafter in which
the One Hundred Thousand Dollar ($100,000) limitation of this Paragraph 18(b)
would not be contravened, but such deferral shall in all events end immediately
prior to the effective date of a Corporate Transaction in which this option is
not to be assumed, whereupon the option shall become immediately exercisable as
a Non-Statutory Option for the deferred portion of the Option Shares.

(c) Should Optionee hold, in addition to this option, one or
more other options to purchase Common Stock which become exercisable for the
first time in the same calendar year as this option, then the foregoing
limitations on the exercisability of such options as Incentive Options shall be
applied on the basis of the order in which such options are granted.

7.
<PAGE> 8
APPENDIX

The following definitions shall be in effect under the Agreement:

I. AGREEMENT shall mean this Stock Option Agreement.

A. BOARD shall mean the Corporation's Board of Directors.

B. CODE shall mean the Internal Revenue Code of 1986, as amended.

C. COMMON STOCK shall mean the Corporation's common stock.

D. CORPORATE TRANSACTION shall mean either of the following
shareholder-approved transactions to which the Corporation is a party:

(i) a merger or consolidation in which securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or
persons different from the persons holding those securities immediately
prior to such transaction, or

(ii) the sale, transfer or other disposition of all or substantially
all of the Corporation's assets in complete liquidation or dissolution
of the Corporation.

E. CORPORATION shall mean Data Kinesis, Inc., a California corporation.

F. DISABILITY shall mean the inability of Optionee to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment and shall be determined by the Plan Administrator on the basis
of such medical evidence as the Plan Administrator deems warranted under the
circumstances. Disability shall be deemed to constitute PERMANENT DISABILITY in
the event that such Disability is expected to result in death or has lasted or
can be expected to last for a continuous period of twelve (12) months or more.

G. DOMESTIC RELATIONS ORDER shall mean any judgment, decree or order
(including approval of a property settlement agreement) which provides or
otherwise conveys, pursuant to applicable State domestic relations laws
(including community property laws), marital property rights to any spouse or
former spouse of the Optionee.

H. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.

A-1.

<PAGE> 9
I. EXERCISE DATE shall mean the date on which the option shall have
been exercised in accordance with Paragraph 9 of the Agreement.

J. EXERCISE PRICE shall mean the exercise price per share as specified
in the Grant Notice.

K. EXPIRATION DATE shall mean the date on which the option expires as
specified in the Grant Notice.

L. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:

(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question, as the price is
reported by the National Association of Securities Dealers on the Nasdaq
National Market or any successor system. If there is no closing selling
price for the Common Stock on the date in question, then the Fair Market
Value shall be the closing selling price on the last preceding date for
which such quotation exists.

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

M. GRANT DATE shall mean the date of grant of the option as specified
in the Grant Notice.

N. GRANT NOTICE shall mean the Notice of Grant of Stock Option
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.

O. INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.

A-2.
<PAGE> 10
P. 1934 ACT shall mean the Securities Exchange Act of 1934, as amended.

Q. NON-STATUTORY OPTION shall mean an option not intended to satisfy
the requirements of Code Section 422.

R. OPTION SHARES shall mean the number of shares of Common Stock
subject to the option.

S. OPTIONEE shall mean the person to whom the option is granted as
specified in the Grant Notice.

T. PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

U. PLAN shall mean the Corporation's 1996 Stock Option/Stock Issuance
Plan.

V. PLAN ADMINISTRATOR shall mean either the Board or a committee of
Board members, to the extent the committee is at the time responsible for the
administration of the Plan.

W. PURCHASE AGREEMENT shall mean the stock purchase agreement in
substantially the form of Exhibit B to the Grant Notice.

X. QUALIFIED DOMESTIC RELATIONS ORDER shall mean a Domestic Relations
Order which substantially complies with the requirements of Code Section
414(p). The Plan Administrator shall have the sole discretion to determine
whether a Domestic Relations Order is a Qualified Domestic Relations Order.

Y. SERVICE shall mean the provision of services to the Corporation (or
any Parent or Subsidiary) by a person in the capacity of an Employee, a
non-employee member of the board of directors or a consultant.

Z. STOCK EXCHANGE shall mean the American Stock Exchange or the New
York Stock Exchange.

AA. SUBSIDIARY shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.

A-3.
<PAGE> 11
Grant No. _______________

DATA KINESIS, INC.
NOTICE OF GRANT OF STOCK OPTION

Notice is hereby given of the following option grant (the "Option") to
purchase shares of the Common Stock of Data Kinesis, Inc., (the "Corporation"):

Optionee:______________________________________________________________

Grant Date:____________________________________________________________

Vesting Commencement Date:_____________________________________________

Exercise Price: $_________________ per share

Number of Option Shares: _________________ shares

Expiration Date:________________________________________________________

Type of Option: ____ Incentive Stock Option

____ Non-Statutory Stock Option

Date Exercisable: Immediately Exercisable

Vesting Schedule: The Option Shares shall be unvested and subject to
repurchase by the Corporation at the Exercise Price paid per share.
Optionee shall acquire a vested interest in, and the Corporation's
repurchase right will accordingly lapse with respect to the Option
Shares in equal quarterly installments over
Optionee's period of continued Service, with the first such installment
to vest upon Optionee's completion of measured
from the Vesting Commencement Date. In no event shall any additional
Option Shares vest after Optionee's cessation of Service.

Optionee understands and agrees that the Option is granted subject to
and in accordance with the terms of the Data Kinesis, Inc. 1996 Stock Option/
Stock Issuance Plan (the "Plan"). Optionee further agrees to be bound by the
terms of the Option as set forth in the Stock Option Agreement attached hereto
as Exhibit A. Optionee understands that any Option Shares purchased under the
Option will be subject to the terms set forth in the Stock Purchase Agreement
attached hereto as Exhibit B.

Optionee hereby acknowledges receipt of a copy of the Plan in the form
attached hereto as Exhibit C.

<PAGE> 12
REPURCHASE RIGHTS. OPTIONEE HEREBY AGREES THAT ALL OPTION SHARES
ACQUIRED UPON THE EXERCISE OF THE OPTION SHALL BE SUBJECT TO CERTAIN
REPURCHASE RIGHTS AND RIGHTS OF FIRST REFUSAL EXERCISABLE BY THE CORPORATION
AND ITS ASSIGNS, THE TERMS OF SUCH RIGHTS ARE SPECIFIED IN THE ATTACHED STOCK
PURCHASE AGREEMENT.

No Employment or Service Contract. Nothing in this Notice or in the
Plan shall confer upon Optionee any right to continue in Service for any period
of specific duration or interfere with or otherwise restrict in any way the
rights of the Corporation (or any Parent or Subsidiary employing or retaining
Optionee) or of Optionee, which rights are hereby expressly reserved by each,
to terminate Optionee's Service at any time for any reason, with or without
cause.

Definitions. All capitalized terms in this Notice shall have the
meaning assigned to them in this Notice or in the attached Stock Option
Agreement.

___________________, 199_
Date

DATA KINESIS, INC.

By: ____________________________

Title: _________________________

________________________________
OPTIONEE

Address:________________________

________________________________

ATTACHMENTS
Exhibit A - Stock Option Agreement
Exhibit B - Stock Purchase Agreement
Exhibit C - 1996 Stock Option/Stock Issuance Plan

<PAGE> 1
EXHIBIT 4.05

DATA KINESIS, INC.
STOCK PURCHASE AGREEMENT

AGREEMENT made as of this ___ day of ___________ 19__, by and among
Data Kinesis, Inc., a California corporation, ____________________________,
Optionee under the Corporation's 1996 Stock Option/Stock Issuance Plan, and
_________________, Optionee's spouse.

All capitalized terms in this Agreement shall have the meaning assigned
to them in this Agreement or in the attached Appendix.

I. EXERCISE OF OPTION

1. EXERCISE. Optionee hereby purchases ________ shares of Common
Stock (the "Purchased Shares") pursuant to that certain option (the "Option")
granted Optionee on _______________________, 199_ (the "Grant Date") to purchase
up to ________________ shares of Common Stock under the Plan at the exercise
price of $_____ per share (the "Exercise Price").

2. PAYMENT. Concurrently with the delivery of this Agreement to
the Corporation, Optionee shall pay the Exercise Price for the Purchased Shares
in accordance with the provisions of the Option Agreement and shall deliver
whatever additional documents may be required by the Option Agreement as a
condition for exercise, together with a duly-executed blank Assignment Separate
from Certificate (in the form attached hereto as Exhibit I) with respect to the
Purchased Shares.

3. DELIVERY OF CERTIFICATES. The certificates representing any
Purchased Shares which are subject to the Repurchase Right shall be held in
escrow in accordance with the provisions of this Agreement.

4. SHAREHOLDER RIGHTS. Until such time as the Corporation
exercises the Repurchase Right, the First Refusal Right or the Special Purchase
Right, Optionee (or any successor in interest) shall have all the rights of a
shareholder (including voting, dividend and liquidation rights) with respect to
the Purchased Shares, including the Purchased Shares held in escrow hereunder,
subject, however, to the transfer restrictions of Articles B and C.

A. SECURITIES LAW COMPLIANCE

1. RESTRICTED SECURITIES. The Purchased Shares have not been
registered under the 1933 Act and are being issued to Optionee in reliance upon
the exemption from such registration provided by SEC Rule 701 for stock
issuances under compensatory benefit plans such as the Plan. Optionee hereby
confirms that Optionee has been informed that the Purchased Shares are
restricted securities under the 1933 Act and may not be resold or transferred
unless the Purchased Shares are
<PAGE> 2
first registered under the Federal securities laws or unless an exemption from
such registration is available. Accordingly, Optionee hereby acknowledges that
Optionee is prepared to hold the Purchased Shares for an indefinite period and
that Optionee is aware that SEC Rule 144 issued under the 1933 Act which exempts
certain resales of unrestricted securities is not presently available to exempt
the resale of the Purchased Shares from the registration requirements of the
1933 Act.

2. RESTRICTIONS ON DISPOSITION OF PURCHASED SHARES. Optionee shall
make no disposition of the Purchased Shares (other than a Permitted Transfer)
unless and until there is compliance with all of the following requirements:

(i) Optionee shall have provided the Corporation with a
written summary of the terms and conditions of the proposed disposition.

(ii) Optionee shall have complied with all requirements of
this Agreement applicable to the disposition of the Purchased Shares.

(iii) Optionee shall have provided the Corporation with
written assurances, in form and substance satisfactory to the Corporation, that
(a) the proposed disposition does not require registration of the Purchased
Shares under the 1933 Act or (b) all appropriate action necessary for
compliance with the registration requirements of the 1933 Act or any exemption
from registration available under the 1933 Act (including Rule 144) has been
taken.

(iv) Optionee shall have provided the Corporation with
written assurances, in form and substance satisfactory to the Corporation, that
the proposed disposition will not result in the contravention of any transfer
restrictions applicable to the Purchased Shares pursuant to the provisions of
the Rules of the California Corporations Commissioner identified in Paragraph
B.4.

The Corporation shall not be required (i) to transfer on its books any
Purchased Shares which have been sold or transferred in violation of the
provisions of this Agreement or (ii) to treat as the owner of the Purchased
Shares, or otherwise to accord voting, dividend or liquidation rights to, any
transferee to whom the Purchased Shares have been transferred in contravention
of this Agreement.

3. RESTRICTIVE LEGENDS. The stock certificates for the Purchased
Shares shall be endorsed with one or more of the following restrictive legends:

(i) "The shares represented by this certificate have not
been registered under the Securities Act of 1933. The shares may not be
sold or offered for sale in the absence of (a) an effective
registration statement for the shares under such Act, (b) a 'no action'
letter of the Securities and Exchange Commission with

2.
<PAGE> 3
respect to such sale or offer or (c) satisfactory assurances to the
Corporation that registration under such Act is not required with
respect to such sale or offer."

(ii) "It is unlawful to consummate a sale or transfer of this
security, or any interest therein, or to receive any consideration
therefor, without the prior written consent of the Commissioner of
Corporations of the State of California, except as permitted in the
Commissioner's Rules."

(iii) "The shares represented by this certificate are subject
to certain repurchase rights and rights of first refusal granted to the
Corporation and accordingly may not be sold, assigned, transferred,
encumbered, or in any manner disposed of except in conformity with the
terms of a written agreement dated ________________, 199_ between the
Corporation and the registered holder of the shares (or the predecessor
in interest to the shares). A copy of such agreement is maintained at
the Corporation's principal corporate offices."

4. RECEIPT OF COMMISSIONER RULES. Optionee hereby acknowledges
receipt of a copy of Section 260.141.11 of the Rules of the California
Corporations Commissioner, a copy of which is attached as Exhibit II to this
Agreement.

B. TRANSFER RESTRICTIONS

1. RESTRICTION ON TRANSFER. Except for any Permitted Transfer,
Optionee shall not transfer, assign, encumber or otherwise dispose of any of
the Purchased Shares which are subject to the Repurchase Right. In addition,
Purchased Shares which are released from the Repurchase Right shall not be
transferred, assigned, encumbered or otherwise disposed of in contravention of
the First Refusal Right, the Market Stand-Off or the Special Purchase Right.

2. TRANSFEREE OBLIGATIONS. Each person (other than the
Corporation) to whom the Purchased Shares are transferred by means of a
Permitted Transfer must, as a condition precedent to the validity of such
transfer, acknowledge in writing to the Corporation that such person is bound
by the provisions of this Agreement and that the transferred shares are subject
to (i) the Repurchase Right, (ii) the First Refusal Right and (iii) the Market
Stand-Off, to the same extent such shares would be so subject if retained by
Optionee.

3. MARKET STAND-OFF

(a) In connection with any underwritten public offering by the
Corporation of its equity securities pursuant to an effective registration
statement filed under the 1933 Act, including the Corporation's initial public
offering, Owner shall not sell, make any short sale of, loan, hypothecate,
pledge, grant any option for the purchase of, or otherwise dispose or transfer
for value or otherwise agree to engage in any of the foregoing transactions
with respect to, any Purchased Shares without the prior written consent of the
Corporation or its underwriters. Such restriction (the "Market Stand-Off")
shall be in effect for such period of time from and after the effective date
of the

3.
<PAGE> 4
final prospectus for the offering as may be requested by the Corporation or
such underwriters. In no event, however, shall such period exceed one hundred
eighty (180) days and the Market Stand-Off shall in all events terminate two
(2) years after the effective date of the Corporation's initial public offering.

(b) Owner shall be subject to the Market Stand-Off
provided and only if the officers and directors of the Corporation are also
subject to similar restrictions.

(c) Any new, substituted or additional securities
which are by reason of any Recapitalization or Reorganization, distributed with
respect to the Purchased Shares shall be immediately subject to the Market
Stand-Off, to the same extent the Purchased Shares are at such time covered by
such provisions.

(d) In order to enforce the Market Stand-Off, the
Corporation may impose stop-transfer instructions with respect to the Purchased
Shares until the end of the applicable stand-off period.

C. REPURCHASE RIGHT

1. GRANT. The Corporation is hereby granted the right (the
"Repurchase Right"), exercisable at any time during the sixty (60)-day period
following the date Optionee ceases for any reason to remain in Service or (if
later) during the sixty (60)-day period following the execution date of this
Agreement, to repurchase at the Exercise Price all or (at the discretion of the
Corporation and with the consent of Optionee) any portion of the Purchased
Shares in which Optionee is not, at the time of his or her cessation of
Service, vested in accordance with the Vesting Schedule (such shares to be
hereinafter referred to as the "Unvested Shares").

2. EXERCISE OF THE REPURCHASE RIGHT. The Repurchase Right
shall be exercisable by written notice delivered to each Owner of the Unvested
Shares prior to the expiration of the sixty (60)-day exercise period. The
notice shall indicate the number of Unvested Shares to be repurchased and the
date on which the repurchase is to be effected, such date to be not more than
thirty (30) days after the date of such notice. The certificates representing
the Unvested Shares to be repurchased shall be delivered to the Corporation
prior to the close of business on the date specified for the repurchase.
Concurrently with the receipt of such stock certificates, the Corporation shall
pay to Owner, in cash or cash equivalents (including the cancellation of any
purchase-money indebtedness), an amount equal to the Exercise Price previously
paid for the Unvested Shares which are to be repurchased from Owner.

3. TERMINATION OF THE REPURCHASE RIGHT. The Repurchase
Right shall terminate with respect to any Unvested Shares for which it is not
timely exercised under Paragraph D.2. In addition, the Repurchase Right shall
terminate and cease to be exercisable with respect to any and all Purchased
Shares in which Optionee vests in accordance with the Vesting Schedule. All

4.
<PAGE> 5
Purchased Shares as to which the Repurchase Right lapses shall, however, remain
subject to (i) the First Refusal Right, (ii) the Market Stand-Off and (iii) the
Special Purchase Right.

4. AGGREGATE VESTING LIMITATION. If the Option is exercised in
more than one increment so that Optionee is a party to one or more other Stock
Purchase Agreements (the "Prior Purchase Agreements") which are executed prior
to the date of this Agreement, then the total number of Purchased Shares as to
which Optionee shall be deemed to have a fully-vested interest under this
Agreement and all Prior Purchase Agreements shall not exceed in the aggregate
the number of Purchased Shares in which Optionee would otherwise at the time
be vested, in accordance with the Vesting Schedule, had all the Purchased
Shares (including those acquired under the Prior Purchase Agreements) been
acquired exclusively under this Agreement.

5. RECAPITALIZATION. Any new, substituted or additional
securities or other property (including cash paid other than as a regular cash
dividend) which is by reason of any Recapitalization distributed with respect
to the Purchased Shares shall be immediately subject to the Repurchase Right,
but only to the extent the Purchased Shares are at the time covered by such
right. Appropriate adjustments to reflect such distribution shall be made to
the number and/or class of Purchased Shares subject to this Agreement and to
the price per share to be paid upon the exercise of the Repurchase Right in
order to reflect the effect of any such Recapitalization upon the Corporation's
capital structure; provided, however, that the aggregate purchase price shall
remain the same.

6. CORPORATION TRANSACTION.

(a) Immediately prior to the consummation of any
Corporate Transaction, the Repurchase Right shall automatically lapse in its
entirety, except to the extent the Repurchase Right is to be assigned to the
successor corporation (or parent thereof) in connection with the Corporate
Transaction.

(b) To the extent the Repurchase Right remains in
effect following a Corporate Transaction, such right shall apply to the new
capital stock or other property (including any cash payments) received in
exchange for the Purchased Shares in consummation of the Corporate Transaction,
but only to the extent the Purchased Shares are at the time covered by such
right. Appropriate adjustments shall be made to the price per share payable
upon exercise of the Repurchase Right to reflect the effect of the Corporate
Transaction upon the Corporation's capital structure; provided, however, that
the aggregate purchase price shall remain the same.

D. RIGHT OF FIRST REFUSAL

1. GRANT. The Corporation is hereby granted the right of first
refusal (the "First Refusal Right"), exercisable in connection with any
proposed transfer of the Purchased Shares in which Optionee has vested in
accordance with the Vesting Schedule. For purposes of this Article E,

5.
<PAGE> 6
the term "transfer" shall include any sale, assignment, pledge, encumbrance or
other disposition of the Purchased Shares intended to be made by Owner, but
shall not include any Permitted Transfer.

2. NOTICE OF INTENDED DISPOSITION. In the event any Owner of Purchased
Shares in which Optionee has vested desires to accept a bona fide third-party
offer for the transfer of any or all of such shares (the Purchased Shares
subject to such offer to be hereinafter referred to as the "Target Shares"),
Owner shall promptly (i) deliver to the Corporation written notice (the
"Disposition Notice") of the terms of the offer, including the purchase price
and the identity of the third-party offeror, and (ii) provide satisfactory
proof that the disposition of the Target Shares to such third-party offeror
would not be in contravention of the provisions set forth in Articles B and C.

3. EXERCISE OF THE FIRST REFUSAL RIGHT. The Corporation shall, for a
period of twenty-five (25) days following receipt of the Disposition Notice,
have the right to repurchase any or all of the Target Shares subject to the
Disposition Notice upon the same terms as those specified therein or upon such
other terms (not materially different from those specified in the Disposition
Notice) to which Owner consents. Such right shall be exercisable by delivery of
written notice (the "Exercise Notice") to Owner prior to the expiration of the
twenty-five (25)-day exercise period. If such right is exercised with respect
to all the Target Shares, then the Corporation shall effect the repurchase of
such shares, including payment of the purchase price, not more than five (5)
business days after delivery of the Exercise Notice; and at such time the
certificates representing the Target Shares shall be delivered to the
Corporation.

Should the purchase price specified in the Disposition Notice be
payable in property other than cash or evidences of indebtedness, the
Corporation shall have the right to pay the purchase price in the form of cash
equal in amount to the value of such property. If Owner and the Corporation
cannot agree on such cash value within ten (10) days after the Corporation's
receipt of the Disposition Notice, the valuation shall be made by an appraiser
of recognized standing selected by Owner and the Corporation or, if they cannot
agree on an appraiser within twenty (20) days after the Corporation's receipt
of the Disposition Notice, each shall select an appraiser of recognized
standing and the two (2) appraisers shall designate a third appraiser of
recognized standing, whose appraisal shall be determinative of such value. The
cost of such appraisal shall be shared equally by Owner and Corporation. The
closing shall then be held on the later of (i) the fifth (5th) business day
following delivery of the Exercise Notice or (ii) the fifth (5th) business day
after such valuation shall have been made.

4. NON-EXERCISE OF THE FIRST REFUSAL RIGHT. In the event the Exercise
Notice is not given to Owner prior to the expiration of the twenty-five
(25)-day exercise period, Owner shall have a period of thirty (30) days
thereafter in which to sell or otherwise dispose of the Target Shares to the
third-party offeror identified in the Disposition Notice upon terms (including
the purchase price) no more favorable to such third-party offeror than those
specified in the Disposition Notice; provided, however, that any such sale or
disposition must not be effected in contravention of the provisions of Articles
B and C. The third-party offeror shall acquire the Target Shares free and clear
of the Repurchase Right and the First Refusal Right, but the acquired shares
shall remain subject to

6.
<PAGE> 7
the provisions of Article B and Paragraph C.3. In the event Owner does not
effect such sale or disposition of the Target Shares within the specified
thirty (30)-day period, the First Refusal Right shall continue to be applicable
to any subsequent disposition of the Target Shares by Owner until such right
lapses.

5. PARTIAL EXERCISE OF THE FIRST REFUSAL RIGHT. In the event the
Corporation makes a timely exercise of the First Refusal Right with respect to
a portion, but not all, of the Target Shares specified in the Disposition
Notice, Owner shall have the option, exercisable by written notice to the
Corporation delivered within five (5) business days after Owner's receipt of
the Exercise Notice, to effect the sale of the Target Shares pursuant to either
of the following alternatives:

(i) sale or other disposition of all the Target Shares to the
third-party offeror identified in the Disposition Notice, but in full
compliance with the requirements of Paragraph E.4, as if the
Corporation did not exercise the First Refusal Right; or

(ii) sale to the Corporation of the portion of the Target Shares
which the Corporation has elected to purchase, such sale to be effected
in substantial conformity with the provisions of Paragraph E.3. The
First Refusal Right shall continue to be applicable to any subsequent
disposition of the remaining Target Shares until such right lapses.

Failure of Owner to deliver timely notification to the Corporation
shall be deemed to be an election by Owner to sell the Target Shares pursuant
to alternative (i) above.

6. RECAPITALIZATION/REORGANIZATION.

(a) Any new, substituted or additional securities or other property
which is by reason of any Recapitalization distributed with respect to the
Purchased Shares shall be immediately subject to the First Refusal Right, but
only to the extent the Purchased Shares are at the time covered by such right.

(b) In the event of a Reorganization, the First Refusal Right shall
remain in full force and effect and shall apply to the new capital stock or
other property received in exchange for the Purchased Shares in consummation of
the Reorganization, but only to the extent the Purchased Shares are at the time
covered by such right.

7. LAPSE. The First Refusal Right shall lapse upon the earliest to
occur of (i) the first date on which shares of the Common Stock are held of
record by more than five hundred (500) persons, (ii) a determination is made by
the Board that a public market exists for the outstanding shares of Common
Stock or (iii) a firm commitment underwritten public offering, pursuant to an
effective registration statement under the 1933 Act, covering the offer and
sale of the Common Stock

7.
<PAGE> 8
in the aggregate amount of at least ten million dollars ($10,000,000). However,
the Market Stand-Off shall continue to remain in full force and effect
following the lapse of the First Refusal Right.

E. MARITAL DISSOLUTION OR LEGAL SEPARATION

1. GRANT. In connection with the dissolution of Optionee's marriage
or the legal separation of Optionee and Optionee's spouse, the Corporation
shall have the right (the "Special Purchase Right") to purchase from Optionee's
spouse, in accordance with the provisions of Paragraph F.3, all or any portion
of the Purchased Shares which would otherwise be awarded to such spouse in
settlement of any community property or other marital property rights such
spouse may have in such shares.

2. NOTICE OF DECREE OR AGREEMENT. Optionee shall promptly provide the
Corporation with written notice (the "Dissolution Notice") of (i) the entry of
any judicial decree or order resolving the property rights of Optionee and
Optionee's spouse in connection with their marital dissolution or legal
separation or (ii) the execution of any contract or agreement relating to the
distribution or division of such property rights. The Dissolution Notice shall
be accompanied by a copy of the actual decree or order of dissolution or
contract or agreement between Optionee and Optionee's spouse which provides for
the award to the spouse of one or more Purchased Shares in settlement of any
community property or other marital property rights such spouse may have in
such shares.

3. EXERCISE OF THE SPECIAL PURCHASE RIGHT. The Special Purchase Right
shall be exercisable by delivery of written notice (the "Purchase Notice") to
Optionee and Optionee's spouse within thirty (30) days after the Corporation's
receipt of the Dissolution Notice. The Purchase Notice shall indicate the
number of shares to be purchased by the Corporation, the date such purchase is
to be effected (such date to be not less than five (5) business days, nor more
than ten (10) business days, after the date of the Purchase Notice) and the
Fair Market Value to be paid for such Purchased Shares. Optionee (or Optionee's
spouse, to the extent such spouse has physical possession of the Purchased
Shares) shall, prior to the close of business on the date specified for the
purchase, deliver to the Corporation the certificates representing the shares
to be purchased. The Corporation shall, concurrently with the receipt of the
stock certificates, pay to Optionee's spouse (in cash or cash equivalents) an
amount equal to the Fair Market Value specified for such shares in the Purchase
Notice.

If Optionee's spouse does not agree with the Fair Market Value
specified for the shares in the Purchase Notice, then the spouse shall promptly
notify the Corporation in writing of such disagreement and the fair market
value of such shares shall thereupon be determined by an appraiser of
recognized standing selected by the Corporation and the spouse. If they cannot
agree on an appraiser within twenty (20) days after the date of the Purchase
Notice, each shall select an appraiser of recognized standing, and the two (2)
appraisers shall designate a third appraiser of recognized standing whose
appraisal shall be determinative of such value. The cost of the appraisal shall
be shared equally by the Corporation and Optionee's spouse. The closing shall
then be held on

8.
<PAGE> 9
the fifth (5th) business day following the completion of such appraisal;
provided, however, that if the appraised value is more than twenty-five percent
(25%) greater than the Fair Market Value specified for the shares in the
Purchase Notice, the Corporation shall have the right, exercisable prior to the
expiration of such five (5) business-day period, to rescind the exercise of the
Special Purchase Right and thereby revoke its election to purchase the shares
awarded to the spouse. In the event the Corporation so revokes its election,
the Corporation shall bear the entire cost of the appraisal.

4. LAPSE. The Special Purchase Right shall lapse upon the earlier to
occur of (i) the lapse of the First Refusal Right or (ii) the expiration of the
exercise period specified in Paragraph F.3, to the extent the Special Purchase
Right is not timely exercised in accordance with such paragraph.

F. ESCROW

1. DEPOSIT. Upon issuance, the certificates for the Purchased Shares
which are subject to the Repurchase Right shall be deposited in escrow with the
Corporation to be held in accordance with the provisions of this Article G.
Each deposited certificate shall be accompanied by a duly-executed Assignment
Separate from Certificate in the form of Exhibit I. The deposited certificates,
together with any other assets or securities from time to time deposited with
the Corporation pursuant to the requirements of this Agreement, shall remain in
escrow until such time or times as the certificates (or other assets and
securities) are to be released or otherwise surrendered for cancellation in
accordance with Paragraph G.3. Upon delivery of the certificates (or other
assets and securities) to the Corporation, Owner shall be issued a receipt
acknowledging the number of Purchased Shares (or other assets and securities)
delivered in escrow.

2. RECAPITALIZATION/REORGANIZATION. Any new, substituted or
additional securities or other property which is by reason of any
Recapitalization or Reorganization distributed with respect to the Purchased
Shares shall be immediately delivered to the Corporation to be held in escrow
under this Article G, but only to the extent the Purchased Shares are at the
time subject to the escrow requirements hereunder. However, all regular cash
dividends on the Purchased Shares (or other securities at the time held in
escrow) shall be paid directly to Owner and shall not be held in escrow.

3. RELEASE/SURRENDER. The Purchased Shares, together with any other
assets or securities held in escrow hereunder, shall be subject to the following
terms relating to their release from escrow or their surrender to the
Corporation for repurchase and cancellation:

(i) Should the Corporation elect to exercise the
Repurchase Right with respect to any Unvested Shares, then the
escrowed certificates for those Unvested Shares (together with
any other assets or securities attributable thereto) shall be
surrendered to the Corporation concurrently with the payment
to Owner of an amount equal to the aggregate Exercise Price
for such Unvested Shares, and

<PAGE> 10
Owner shall cease to have any further rights or claims with respect to
such Unvested Shares (or other assets or securities attributable
thereto).

(ii) Should the Corporation elect to exercise the First Refusal
Right with respect to any Target Shares held at the time in escrow
hereunder, then the escrowed certificates for those Target Shares
(together with any other assets or securities attributable thereto)
shall be surrendered to the Corporation concurrently with the payment
of the Paragraph E.3 purchase price for such Target Shares to Owner,
and Owner shall cease to have any further rights or claims with respect
to such Target Shares (or other assets or securities attributable
thereto).

(iii) Should the Corporation elect not to exercise the
Repurchase Right with respect to any Unvested Shares or the First
Refusal Right with respect to any Target Shares held at the time in
escrow hereunder, then the escrowed certificates for those shares
(together with any other assets or securities attributable thereto)
shall be immediately released to Owner.

(iv) As the Purchased Shares (or any other assets or securities
attributable thereto) vest in accordance with the Vesting Schedule, the
certificates for those vested shares (as well as all other vested assets
and securities) shall be released from escrow upon Owner's request, but
not more frequently than once every six (6) months.

(v) All Purchased Shares which vest (and any other vested
assets and securities attributable thereto) shall be released within
thirty (30) days after the earlier to occur of (a) Optionee's cessation
of Service or (b) the lapse of the First Refusal Right.

(vi) All Purchased Shares (or other assets or securities)
released from escrow shall nevertheless remain subject to (a) the First
Refusal Right, to the extent such right has not otherwise lapsed, (b)
the Market Stand-Off, until such restriction terminates, and (c) the
Special Purchase Right, to the extent such right has not otherwise
lapsed.

G. SPECIAL TAX ELECTION

The acquisition of the Purchased Shares may result in adverse tax
consequences which may be avoided by filing an election under Code Section
83(b). Such election must be filed within thirty (30) days after the date of
this Agreement. A description of the tax consequences applicable to the
acquisition of the Purchased Shares and the form for making the Code Section
83(b) election are set forth in Exhibit III. OPTIONEE SHOULD CONSULT WITH HIS
OR HER TAX ADVISOR TO DETERMINE THE TAX CONSEQUENCES OF ACQUIRING THE PURCHASED
SHARES AND THE ADVANTAGES AND DISADVANTAGES OF FILING

10.
<PAGE> 11
THE CODE SECTION 83(b) ELECTION, OPTIONEE ACKNOWLEDGES THAT IT IS OPTIONEE'S
SOLE RESPONSIBILITY, AND NOT THE CORPORATION'S, TO FILE A TIMELY ELECTION UNDER
CODE SECTION 83(b), EVEN IF OPTIONEE REQUESTS THE CORPORATION OR ITS
REPRESENTATIVES TO MAKE THIS FILING ON HIS OR HER BEHALF.

H. GENERAL PROVISIONS

1. ASSIGNMENT. The Corporation may assign the Repurchase
Right, the First Refusal Right and/or the Special Purchase Right to any person
or entity selected by the Board, including (without limitation) one or more
shareholders of the Corporation.

If the assignee of the Repurchase Right is other than (i) a
wholly owned subsidiary of the Corporation or (ii) the parent corporation
owning one hundred percent (100%) of the Corporation's outstanding capital
stock, then such assignee must make a cash payment to the Corporation, upon the
assignment of the Repurchase Right, in an amount equal to the excess (if any)
of (i) the Fair Market Value of the Purchased Shares at the time subject to the
assigned Repurchase Right over (ii) the aggregate repurchase price payable for
the Purchased Shares.

2. NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this
Agreement or in the Plan shall confer upon Optionee any right to continue in
Service for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Corporation (or any Parent or Subsidiary
employing or retaining Optionee) or of Optionee, which rights are hereby
expressly reserved by each, to terminate Optionee's Service at any time for any
reason, with or without cause.

3. NOTICES. Any notice required to be given under this
Agreement shall be in writing and shall be deemed effective upon personal
delivery or upon deposit in the U.S. mail, registered or certified, postage
prepaid and properly addressed to the party entitled to such notice at the
address indicated below such party's signature line on this Agreement or at
such other address as such party may designate by ten (10) days advance written
notice under this paragraph to all other parties to this Agreement.

4. NO WAIVER. The failure of the Corporation in any instance
to exercise the Repurchase Right, the First Refusal Right or the Special
Purchase Right shall not constitute a waiver of any other repurchase rights
and/or rights of first refusal that may subsequently arise under the provisions
of this Agreement or any other agreement between the Corporation and Optionee
or Optionee's spouse. No waiver of any breach or condition of this Agreement
shall be deemed to be a waiver of any other or subsequent breach or condition,
whether of like or different nature.

5. CANCELLATION OF SHARES. If the Corporation shall make
available, at the time and place and in the amount and form provided in this
Agreement, the consideration for the Purchased Shares to be repurchased in
accordance with the provisions of this Agreement, then from and after such
time, the person from whom such shares are to be repurchased shall no longer
have

11.
<PAGE> 12
any rights as a holder of such shares (other than the right to receive payment
of such consideration in accordance with this Agreement). Such shares shall be
deemed purchased in accordance with the applicable provisions hereof, and the
Corporation shall be deemed the owner and holder of such shares, whether or not
the certificates therefor have been delivered as required by this Agreement.

I. MISCELLANEOUS PROVISIONS

1. OPTIONEE UNDERTAKING. Optionee hereby agrees to take whatever
additional action and execute whatever additional documents the Corporation may
deem necessary or advisable in order to carry out or effect one or more of
the obligations or restrictions imposed on either Optionee or the Purchased
Shares pursuant to the provisions of this Agreement.

2. AGREEMENT IS ENTIRE CONTRACT. This Agreement constitutes the
entire contract between the parties hereto with regard to the subject matter
hereof. This Agreement is made pursuant to the provisions of the Plan and shall
in all respects be construed in conformity with the terms of the Plan.

3. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California without resort
to that State's conflict-of-laws rules.

4. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.

5. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
inure to the benefit of, and be binding upon, the Corporation and its
successors and assigns and upon Optionee, Optionee's assigns and the legal
representatives, heirs and legatees of Optionee's estate, whether or not any
such person shall have become a party to this Agreement and have agreed in
writing to join herein and be bound by the terms hereof.

6. POWER OF ATTORNEY. Optionee's spouse hereby appoints Optionee
his or her true and lawful attorney in fact, for him or her and in his or her
name, place and stead, and for his or her use and benefit, to agree to any
amendment or modification of this Agreement and to execute such further
instruments and take such further actions as may reasonably be necessary to
carry out the intent of this Agreement. Optionee's spouse further gives and
grants unto Optionee as his or her attorney in fact full power and authority to
do and perform every act necessary and proper to be done in the exercise of any
of the foregoing powers as fully as he or she might or could do if personally

12.
<PAGE> 13
present, with full power of substitution and revocation, hereby ratifying and
confirming all that Optionee shall lawfully do and cause to be done by virtue
of this power of attorney.

IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first indicated above.

DATA KINESIS, INC.

By: _____________________________________
Richard L. Napolitano
President
Title: __________________________________

Address: 85 Pine Street Extension
________________________________
Nashua, NH 03060
_________________________________________

_________________________________________
OPTIONEE

Address: ________________________________

_________________________________________

13.
<PAGE> 14
SPOUSAL ACKNOWLEDGMENT

The undersigned spouse of Optionee has read and hereby approves the
foregoing Stock Purchase Agreement. In consideration of the Corporation's
granting Optionee the right to acquire the Purchased Shares in accordance with
the terms of such Agreement, the undersigned hereby agrees to be irrevocably
bound by all the terms of such Agreement, including (without limitation) the
right of the Corporation (or its assigns) to purchase any Purchased Shares in
which Optionee is not vested and the right of the Corporation (or its assigns)
to purchase any and all interest or right the undersigned may otherwise have in
the Purchased Shares pursuant to community property laws or other marital
property rights.

___________________________________
OPTIONEE'S SPOUSE

ADDRESS: __________________________
___________________________________

14.
<PAGE> 15
EXHIBIT I

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED ___________________ hereby sell(s), assign(s) and

transfer(s) unto Data Kinesis, Inc. (the "Corporation"), ____________ (_____)

shares of the Common Stock of the Corporation standing in his or her name on

the books of the Corporation represented by Certificate No. _______________

herewith and do hereby irrevocably constitute and appoint ___________________

Attorney to transfer the said stock on the books of the Corporation with full

power of substitution in the premises.

Dated: _______________

Signature ____________________________________

INSTRUCTION: Please do not fill in any blanks other than the signature line.
Please sign exactly as you would like your name to appear on the issued stock
certificate. The purpose of this assignment is to enable the Corporation to
exercise the Repurchase Right without requiring additional signatures on the
part of Optionee.

<PAGE> 16
EXHIBIT II

SECTION 260.141.11
TITLE 10, CALIFORNIA ADMINISTRATIVE CODE

260.141.11 Restriction on Transfer. (a) The issuer of any security upon
which a restriction on transfer has been imposed pursuant to Sections
260.102.6, 260.141.10 or 260.534 shall cause a copy of this section to be
delivered to each issuee or transferee of such security at the time the
certificate evidencing the security is delivered to the issuee or transferee.

(b) It is unlawful for the holder of any such security to
consummate a sale or transfer of such security, or any interest therein,
without the prior written consent of the Commissioner (until this condition is
removed pursuant to Section 260.141.12 of these rules), except:

(1) to the issuer;

(2) pursuant to the order or process of any court;

(3) to any person described in Subdivision (i) of Section 25102 of
the Code or Section 260.105.14 of these rules;

(4) to the transferor's ancestors, descendants or spouse, or any
custodian or trustee for the account of the transferor or the transferor's
ancestors, descendants, or spouse; or to a transferee by a trustee or custodian
for the account of the transferee or the transferee's ancestors, descendants or
spouse;

(5) to holders of securities of the same class of the same issuer;

(6) by way of gift or donation inter vivos or on death;

(7) by or through a broker-dealer licensed under the Code (either
acting as such or as a finder) to a resident of a foreign state, territory or
country who is neither domiciled in this state to the knowledge of the
broker-dealer, nor actually present in this state if the sale of such
securities is not in violation of any securities law of the foreign state,
territory or country concerned;

(8) to a broker-dealer licensed under the Code in a principal
transaction, or as an underwriter or member of an underwriting syndicate or
selling group;

(9) if the interest sold or transferred is a pledge or other lien
given by the purchaser to the seller upon a sale of the security for which the
Commissioner's written consent is obtained or under this rule not required;

(10) by way of a sale qualified under Sections 25111, 25112, 25113
or 25121 of the Code, of the securities to be transferred, provided that no
order under Section 25140 or Subdivision (a) of Section 25143 is in effect with
respect to such qualification;

II-1.

<PAGE> 17
(11) by a corporation to a wholly owned subsidiary of such
corporation, or by a wholly owned subsidiary of a corporation to such
corporation;

(12) by way of an exchange qualified under Section 25111, 25112 or
25113 of the Code, provided that no order under Section 25140 or Subdivision
(a) of Section 25143 is in effect with respect to such qualification;

(13) between residents of foreign states, territories or countries
who are neither domiciled nor actually present in this state;

(14) to the State Controller pursuant to the Unclaimed Property Law
or to the administrator of the unclaimed property law of another state; or

(15) by the State Controller pursuant to the Unclaimed Property Law
or by the administrator of the unclaimed property law of another state if, in
either such case, such person (i) discloses to potential purchasers at the sale
that transfer of the securities is restricted under this rule, (ii) delivers to
each purchaser a copy of this rule, and (iii) advises the Commissioner of the
name of each purchaser;

(16) by a trustee to a successor trustee when such transfer does not
involve a change in the beneficial ownership of the securities;

(17) by way of an offer and sale of outstanding securities in an
issuer transaction that is subject to the qualification requirement of Section
25110 of the Code but exempt from that qualification requirement by subdivision
(f) of Section 25102; provided that any such transfer is on the condition that
any certificate evidencing the security issued to such transferee shall contain
the legend required by this section.

(c) The certificates representing all such securities subject to
such a restriction on transfer, whether upon initial issuance or upon any
transfer thereof, shall bear on their face a legend, prominently stamped or
printed thereon in capital letters of not less than 10-point size, reading as
follows:

"IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY
INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA,
EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES."

II-2.
<PAGE> 18
EXHIBIT III

FEDERAL INCOME TAX CONSEQUENCES AND
SECTION 83(b) TAX ELECTION

II. Federal Income Tax Consequences and Section 83(b) Election For Exercise
of Non-Statutory Option. If the Purchased Shares are acquired pursuant to the
exercise of a Non-Statutory Option, as specified in the Grant Notice, then
under Code Section 83, the excess of the Fair Market Value of the Purchased
Shares on the date any forfeiture restrictions applicable to such shares lapse
over the Exercise Price paid for such shares will be reportable as ordinary
income on the lapse date. For this purpose, the term "forfeiture restrictions"
includes the right of the Corporation to repurchase the Purchased Shares
pursuant to the Repurchase Right. However, Optionee may elect under Code
Section 83(b) to be taxed at the time the Purchased Shares are acquired, rather
than when and as such Purchased Shares cease to be subject to such forfeiture
restrictions. Such election must be filed with the Internal Revenue Service
within thirty (30) days after the date of the Agreement. Even if the Fair
Market Value of the Purchased Shares on the date of the Agreement equals the
Exercise Price paid (and thus no tax is payable), the election must be made to
avoid adverse tax consequences in the future. The form for making this election
is attached as part of this exhibit. FAILURE TO MAKE THIS FILING WITHIN THE
APPLICABLE THIRTY (30)-DAY PERIOD WILL RESULT IN THE RECOGNITION OF ORDINARY
INCOME BY OPTIONEE AS THE FORFEITURE RESTRICTIONS LAPSE.

III. Federal Income Tax Consequences and Conditional Section 83(b)
Election For Exercise of Incentive Option. If the Purchased Shares are acquired
pursuant to the exercise of an Incentive Option, as specified in the Grant
Notice,then the following tax principles shall be applicable to the Purchased
Shares:

(i) For regular tax purposes, no taxable income
will be recognized at the time the Option is exercised.

(ii) The excess of (a) the Fair Market Value of the
Purchased Shares on the date the Option is exercised or (if later) on
the date any forfeiture restrictions applicable to the Purchased Shares
lapse over (b) the Exercise Price paid for the Purchased Shares will be
includible in Optionee's taxable income for alternative minimum tax
purposes.

(iii) If Optionee makes a disqualifying disposition of
the Purchased Shares, then Optionee will recognize ordinary income in
the year of such disposition equal in amount to the excess of (a) the
Fair Market Value of the Purchased Shares on the date the Option is
exercised or (if later) on the date any forfeiture restrictions
applicable to the Purchased Shares lapse over (b) the Exercise Price
paid for the Purchased Shares. Any additional gain recognized upon the
disqualifying disposition will be either short-term or long-term capital
gain depending upon the period for which the Purchased Shares are held
prior to the disposition.

III-1.

<PAGE> 19
(iv) For purposes of the foregoing, the term
"forfeiture restrictions" will include the right of the Corporation to
repurchase the Purchased Shares pursuant to the Repurchase Right. The
term "disqualifying disposition" means any sale or other disposition(1)
of the Purchased Shares within two (2) years after the Grant Date or
within one (1) year after the exercise date of the Option.

(v) In the absence of final Treasury Regulations
relating to Incentive Options, it is not certain whether Optionee may,
in connection with the exercise of the Option for any Purchased Shares
at the time subject to forfeiture restrictions, file a protective
election under Code Section 83(b) which would limit (a) Optionee's
alternative minimum taxable income upon exercise and (b) Optionee's
ordinary income upon a disqualifying disposition to the excess of the
Fair Market Value of the Purchased Shares on the date the Option is
exercised over the Exercise Price paid for the Purchased Shares.
Accordingly, such election if properly filed will only be allowed to the
extent the final Treasury Regulations permit such a protective election.
Page 2 of the attached form for making the election should be filed with
any election made in connection with the exercise of an Incentive
Option.

- ----------------------------
(1) Generally, a disposition of shares purchased under an Incentive Option
includes any transfer of legal title, including a transfer by sale, exchange or
gift, but does not include a transfer to the Optionee's spouse, a transfer into
joint ownership with right of survivorship if Optionee remains one of the joint
owners, a pledge, a transfer by bequest or inheritance or certain tax free
exchanges permitted under the Code.

III-2.

<PAGE> 20
SECTION 83(b) ELECTION

This statement is being made under Section 83(b) of the Internal
Revenue Code, pursuant to Treas. Reg. Section 1.83-2.

(1) The taxpayer who performed the services is:

Name:
Address:
Taxpayer Ident. No.:

(2) The property with respect to which the election is being made is _______
shares of the common stock of Data Kinesis, Inc.

(3) The property was issued on __________, 199__.

(4) The taxable year in which the election is being made is the calendar year
199__.

(5) The property is subject to a repurchase right pursuant to which the issuer
has the right to acquire the property at the original purchase price if for
any reason taxpayer's employment with the issuer is terminated. The
issuer's repurchase right lapses in a series of annual and monthly
installments over a four (4)-year period ending on ________, 199__.

(6) The fair market value at the time of transfer (determined without regard to
any restriction other than a restriction which by its terms will never
lapse) is $________ per share.

(7) The amount paid for such property is $________ per share.

(8) A copy of this statement was furnished to Data Kinesis, Inc. for whom
taxpayer rendered the services underlying the transfer of property.

(9) This statement is executed on _________________, 199__.

- ---------------------------------- --------------------------------------
Spouse (if any) Taxpayer

This election must be filed with the Internal Revenue Service Center with which
taxpayer files his or her Federal income tax returns and must be made within
thirty (30) days after the execution date of the Stock Purchase Agreement. This
filing should be made by registered or certified mail, return receipt
requested. Optionee must retain two (2) copies of the completed form for filing
with his or her Federal and state tax returns for the current tax year and an
additional copy for his or her records.
<PAGE> 21
The property described in the above Section 83(b) election is comprised of
shares of common stock acquired pursuant to the exercise of an incentive stock
option under Section 422 of the Internal Revenue Code (the "Code").
Accordingly, it is the intent of the Taxpayer to utilize this election to
achieve the following tax results:

1. The purpose of this election is to have the alternative minimum
taxable income attributable to the purchased shares measured by the amount by
which the fair market value of such shares at the time of their transfer to the
Taxpayer exceeds the purchase price paid for the shares. In the absence of this
election, such alternative minimum taxable income would be measured by the
spread between the fair market value of the purchased shares and the purchase
price which exists on the various lapse dates in effect for the forfeiture
restrictions applicable to such shares. The election is to be effective to the
full extent permitted under the Code.

2. Section 421(a)(1) of the Code expressly excludes from income any
excess of the fair market value of the purchased shares over the amount paid
for such shares. Accordingly, this election is also intended to be effective in
the event there is a "disqualifying disposition" of the shares, within the
meaning of Section 421(b) of the Code, which would otherwise render the
provisions of Section 83(a) of the Code applicable at that time. Consequently,
the Taxpayer hereby elects to have the amount of disqualifying disposition
income measured by the excess of the fair market value of the purchased shares
on the date of transfer to the Taxpayer over the amount paid for such shares.
Since Section 421(a) presently applies to the shares which are the subject of
this Section 83(b) election, no taxable income is actually recognized for
regular tax purposes at this time, and no income taxes are payable, by the
Taxpayer as a result of this election.

THIS PAGE 2 IS TO BE ATTACHED TO ANY SECTION 83(b) ELECTION FILED IN CONNECTION
WITH THE EXERCISE OF AN INCENTIVE STOCK OPTION UNDER THE FEDERAL TAX LAWS.

2.
<PAGE> 22
APPENDIX

The following definitions shall be in effect under the Agreement:

A. AGREEMENT shall mean this Stock Purchase Agreement.

B. BOARD shall mean the Corporation's Board of Directors.

C. CODE shall mean the Internal Revenue Code of 1986, as amended.

D. COMMON STOCK shall mean the Corporation's common stock.

E. CORPORATE TRANSACTION shall mean either of the following shareholder-approved
transactions:

(i) a merger or consolidation in which securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities are transferred to a person or persons different
from the persons holding those securities immediately prior to such
transaction, or

(ii) the sale, transfer or other disposition of all or substantially all of
the Corporation's assets in complete liquidation or dissolution of the
Corporation.

F. CORPORATION shall mean Data Kinesis, Inc., a California corporation.

G. DISPOSITION NOTICE shall have the meaning assigned to such term in Paragraph
E.2.

H. DISSOLUTION NOTICE shall have the meaning assigned to such term in Paragraph
F.2.

I. EXERCISE NOTICE shall have the meaning assigned to such term in Paragraph
E.3.

J. EXERCISE PRICE shall have the meaning assigned to such term in Paragraph A.1.

K. FAIR MARKET VALUE of a share of Common Stock on any relevant date, prior to
the initial public offering of the Common Stock, shall be determined by the
Plan Administrator after taking into account such factors as it shall deem
appropriate.

L. FIRST REFUSAL RIGHT shall mean the right granted to the Corporation in
accordance with Article E.

M. GRANT DATE shall have the meaning assigned to such term in Paragraph A.1.

N. GRANT NOTICE shall mean the Notice of Grant of Stock Option pursuant to which
Optionee has been informed of the basic terms of the Option.

O. INCENTIVE OPTION shall mean an option which satisfies the requirements of
Code Section 422.

P. MARKET STAND-OFF shall mean the market stand-off restriction specified in
Paragraph C.3.

Q. 1933 ACT shall mean the Securities Act of 1933, as amended.

A-1.
<PAGE> 23
R. NON-STATUTORY OPTION shall mean an option not intended to satisfy the
requirements of Code Section 422.

S. OPTION shall have the meaning assigned to such term in Paragraph A-1.

T. OPTION AGREEMENT shall mean all agreements and other documents
evidencing the Option.

U. OPTIONEE shall mean the person to whom the Option is granted under
the Plan.

V. OWNER shall mean Optionee and all subsequent holders of the Purchased
Shares who derive their chain of ownership through a Permitted Transfer
of Optionee.

W. PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided
each corporation in the unbroken chain (other than the Corporation)
owns, at the time of the determination, stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

X. PERMITTED TRANSFER shall mean (i) a gratuitous transfer of the
Purchased Shares, provided and only if Optionee obtains the
Corporation's prior written consent to such transfer, (ii) a transfer
of title to the Purchased Shares effected pursuant to Optionee's
will or the laws of intestate succession following Optionee's death
or (iii) a transfer to the Corporation in pledge as security for
any purchase-money indebtedness incurred by Optionee in connection
with the acquisition of the Purchased Shares.

Y. PLAN shall mean the Corporation's 1996 Stock Option/Stock Issuance
Plan.

Z. PLAN ADMINISTRATOR shall mean either the Board or a committee of Board
members, to the extent the committee is at the time responsible for
administration of the Plan.

AA. PRIOR PURCHASE AGREEMENT shall have the meaning assigned to such term
in Paragraph D.4.

BB. PURCHASE NOTICE shall have the meaning assigned to such term in
Paragraph F.3.

CC. PURCHASED SHARES shall have the meaning assigned to such term in
Paragraph A.1.

DD. RECAPITALIZATION shall mean any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or
other change affecting the Corporation's outstanding Common Stock
as a class without the Corporation's receipt of consideration.

EE. REORGANIZATION shall mean any of the following transactions:

(i) a merger or consolidation in which the Corporation is
not the surviving entity,

(ii) a sale, transfer or other disposition of all or substantially
all of the Corporation's assets,

(iii) a reverse merger in which the Corporation is the surviving
entity but in which the Corporation's outstanding voting securities
are transferred in whole or in part to a person or persons different
from the persons holding those securities immediately prior to the
merger, or

A-2.
<PAGE> 24
(iv) any transaction effected primarily to change the state in which the
Corporation is incorporated or to create a holding company structure.

FF. REPURCHASE RIGHT shall mean the right granted to the Corporation in
accordance with Article D.

GG. SEC shall mean the Securities and Exchange Commission.

HH. SERVICE shall mean the provision of services to the Corporation (or any
Parent or Subsidiary) by a person in the capacity of an employee, subject
to the control and direction of the employer entity as to both the work to
be performed and the manner and method of performance, a non-employee member
of the board of directors or a consultant.

II. SPECIAL PURCHASE RIGHT shall mean the right granted to the Corporation in
accordance with Article F.

JJ. SUBSIDIARY shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at
the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

KK. TARGET SHARES shall have the meaning assigned to such term in Paragraph E.2.

LL. VESTING SCHEDULE shall mean the vesting schedule specified in the Grant
Notice.

MM. UNVESTED SHARES shall have the meaning assigned to such term in Paragraph
D.1.

A-3.

<PAGE> 1

EXHIBIT 5.01

September 16, 1996

Adaptec, Inc.
691 South Milpitas Blvd.
Milpitas, CA 95035

Gentlemen/Ladies:

At your request, we have examined the Registration Statement on Form S-8
(the "Registration Statement") to be filed by you with the Securities and
Exchange Commission on or about September 16, 1996 in connection with the
registration under the Securities Act of 1933, as amended, of an aggregate of
293,414 shares of your Common Stock (the "Common Stock") to be sold by you
pursuant to the stock options assumed by you with respect to the 1996 Stock
Option/Stock Issuance Plan of your wholly-owned subsidiary Data Kinesis, Inc.
("DKI") (the "Plan").

As your counsel, we have examined the proceedings taken by you in
connection with the assumption of the Plan and the assumption of options
thereunder.

It is our opinion that the 293,414 shares of Common Stock that may be
issued and sold by you pursuant to the stock options granted under the Plan and
assumed by you, when issued and sold in the manner referred to in the relevant
Prospectus associated with the Registration Statement, the Plan and accompanying
stock options, will be legally issued, fully paid and non-assessable.

We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to all references to us, if any, in the
Registration Statement and any amendments thereto which have been approved by
us.

Very truly yours,

/s/ FENWICK & WEST LLP

<PAGE> 1

EXHIBIT 23.01

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated April 22, 1996, which appears on page
51 of the 1996 Annual Report to Shareholders of Adaptec, Inc., which is
incorporated by reference in Adaptec, Inc.'s Annual Report on Form 10-K for the
year ended March 31, 1996.

/s/ PRICE WATERHOUSE LLP

San Jose, California
September 13, 1996

<PAGE> 1

EXHIBIT 23.02

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement or our report dated April 25, 1994
included in Adaptec, Inc.'s Form 10-K for the year ended March 31, 1996.

/s/ ARTHUR ANDERSEN LLP

San Jose, California
September 13, 1996