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EXHIBIT 10.11
STOCK OPTION PLAN OF 2000
OF
PERFECTDATA CORPORATION
SECTION 1. PURPOSE OF THE PLAN. The purpose of this Stock Option Plan of 2000
(the "Plan") is to promote the growth and general prosperity of PerfectData
Corporation, a California corporation (the "Company"), by permitting the Company
to grant options to purchase shares of the Company's Common Stock, no par value
(the "Common Stock"), to directors, officers, employees and consultants of the
Company and, when and if incorporated, subsidiaries thereof. The Plan is
designed to help attract and retain superior personnel for positions of
substantial responsibility with the Company and, if incorporated, its
subsidiaries and to provide directors, officers, employees and consultants with
an additional incentive to contribute to the success of the Company and, if
incorporated, its subsidiaries.
SECTION 2. DEFINITIONS. In addition to the definitions used in Section 1 hereof,
as used herein, the following definitions shall apply:
(a) "Administrator" means the Board, its Compensation Committee or any
other Committee appointed to act in lieu of the Compensation Committee pursuant
to Section 4 of the Plan.
(b) "Applicable Laws" means the legal requirements relating to the
administration of stock option plans under applicable United States state
corporate laws, United States federal and applicable state securities laws, the
Code, any Stock Exchange or Nasdaq rules or regulations and the applicable laws
of any other country or jurisdiction where Options are granted under the Plan,
as such laws, rules, regulations and requirements shall be in effect from time
to time.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the Compensation Committee appointed by the Board or
any other Committee appointed by the Board to act in lieu of the Compensation
Committee in accordance with Section 4(a) of the Plan.
(f) "Consultant" means any person, including an advisor, who is engaged by
the Company or any Subsidiary to render services in a capacity other than as an
Employee and is compensated for such services and any director or officer of the
Company, whether compensated for such services or not, who is not an Employee.
(g) "Continuous Status as an Employee or Consultant" means the absence of
any interruption or termination of service as an Employee or Consultant.
Continuous Status as an Employee or Consultant shall not be considered
interrupted in the case of: (i) sick leave; (ii) military leave; (iii) any other
leave of absence approved by the Administrator, provided that such leave is for
a period of not more than 90 days, unless reemployment upon the expiration of
such
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leave is guaranteed by contract or statute, or unless provided otherwise
pursuant to any Company policy adopted from time to time; or (iv) transfers
between locations of the Company or between the Company, its Subsidiaries or
their respective successors. For purposes of this Plan, a change in status from
an Employee to a Consultant or from a Consultant to an Employee will not
constitute an interruption of Continuous Status as an Employee or Consultant.
(h) "Employee" means any person, including officers and directors, employed
by the Company or any Subsidiary of the Company, with the status of employment
determined based upon such minimum number of hours or periods worked as shall be
determined by the Administrator in its discretion, subject to any requirements
of the Code. The payment by the Company of a director's fee to a director shall
not be sufficient to constitute "employment" of such director by the Company.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(j) "Fair Market Value" means, as of any date, the fair market value of the
Common Stock determined as follows:
(i) If the Common Stock is listed on any established Stock Exchange or
traded on the Nasdaq System (whether its National Market System or its SmallCap
Market), its Fair Market Value shall be the closing sales price for the Common
Stock (or the closing bid price, if no sales were reported) as quoted on such
Exchange or the Nasdaq System, or, if traded on more than one Exchange, the
Exchange with the greatest volume of trading in the Common Stock on the date of
determination or, if such date is not a market trading day, on the last market
trading day prior to the time of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASD's OTC Bulletin Board or
regularly quoted by a recognized securities dealer but selling prices are not
reported, its Fair Market Value shall be the mean between the high bid and low
asked prices for the Common Stock on the date of determination or, if such date
is not a market trading day, on the last market trading day prior to the time of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable; or
(iii) In the absence of an established market for the Common Stock,
the Fair Market Value thereof shall be determined in good faith by the
Administrator.
(k) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code, or any
successor provision, as designated in the applicable written Option Agreement.
(l) "Nasdaq" means The Nasdaq Stock Market, Inc.
(m) "NASD" means the National Association of Securities Dealers, Inc.
(n) "Nonqualified Stock Option" means an Option not intended to qualify as
an Incentive Stock Option as designated in the applicable written Option
Agreement.
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(o) "Option" means a stock option granted pursuant to the Plan.
(p) "Option Agreement" means a written agreement between an Optionee and
the Company reflecting the terms of an Option granted under the Plan and
includes any documents attached to such Option Agreement, including, but not
limited to, a notice of stock option grant and a form of exercise notice.
(q) "Optioned Stock" means the Common Stock subject to an Option.
(r) "Optionee" means an Employee or Consultant who is granted an Option.
(s) "Reporting Person" means an officer, director, or greater than 10%
stockholder of the Company within the meaning of Rule 16a-2 under the Exchange
Act, or any successor provision, who is required to file reports pursuant to
Rule 16a-3 under the Exchange Act.
(t) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act, as
the same may be amended from time to time, or any successor provision.
(u) "Securities Act" means the Securities Act of 1933, as amended.
(v) "Share" means a share of the Common Stock, as adjusted in accordance
with Section 11 of the Plan.
(w) "Stock Exchange" means any national securities exchange on which prices
for the Common Stock are quoted at any given time.
(x) "Subsidiary" means a "subsidiary corporation," whether now or hereafter
existing, as defined in Section 424(f) of the Code, or any successor provision.
SECTION 3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 11 of
the Plan, the maximum aggregate number of Shares that may be optioned and sold
under the Plan is 1,000,000 shares of the Common Stock. The Shares may be
authorized, but unissued, or reacquired shares of the Common Stock. If an Option
should expire or become unexercisable for any reason without having been
exercised in full, the unpurchased Shares that were subject thereto shall,
unless the Plan shall have been terminated, become available for future grant
under the Plan. In addition, any Shares which are retained by the Company upon
exercise of an Option in order to satisfy the exercise price for such Option or
any withholding taxes due with respect to such exercise shall be treated as not
issued and shall continue to be available for future grant under the Plan.
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SECTION 4. ADMINISTRATION OF THE PLAN.
(a) PLAN PROCEDURE
(i) MULTIPLE ADMINISTRATION BODIES. If permitted by Rule 16b-3, grants
under the Plan may be made by different bodies with respect to directors,
non-director officers and Employees or Consultants who are not Reporting
Persons.
(ii) ADMINISTRATION WITH RESPECT TO REPORTING PERSONS. With respect to
grants of Options to Employees or Consultants who are Reporting Persons, such
grants shall be made by (A) the Board if the Board may make grants to Reporting
Persons under the Plan in compliance with Rule 16b-3, or (B) the Compensation
Committee designated by the Board unless the Board designates another Committee
to make grants to Reporting Persons under the Plan, which Compensation Committee
or other Committee shall be constituted in such a manner as to permit grants
under the Plan to comply with Rule 16b-3. Once appointed, either such Committee
shall continue to serve in its designated capacity until otherwise directed by
the Board. From time to time the Board may increase the size of either such
Committee and appoint additional members thereof, remove members (with or
without cause) and appoint new members in substitution therefor, fill vacancies,
however caused, and remove all members of either such Committee and thereafter
directly make grants to Reporting Persons under the Plan, all to the extent
permitted by Rule 16b-3.
(iii) ADMINISTRATION WITH RESPECT TO OTHER CONSULTANTS AND OTHER
EMPLOYEES. With respect to grants of Options to Employees or Consultants who are
not Reporting Persons, the Plan shall be administered by (A) the Board or (B)
the Compensation Committee designated by the Board unless the Board designates
another Committee, which Compensation Committee or other Committee shall be
constituted in such a manner as to satisfy the Applicable Laws. Once appointed,
either such Committee shall continue to serve in its designated capacity until
otherwise directed by the Board. From time to time the Board may increase the
size of either such Committee and appoint additional members thereof, remove
members (with or without cause) and appoint new members in substitution
therefor, fill vacancies, however caused, and remove all members of either such
Committee and thereafter directly administer the Plan, all to the extent
permitted by the Applicable Laws.
(b) POWER OF THE ADMINISTRATOR. Subject to the provisions of the Plan,
Applicable Laws and in, the case of a Committee, the specific duties delegated
by the Board to such Committee, and subject to the approval of any relevant
authorities, including the approval, if required, of any Stock Exchange or
Nasdaq, the Administrator shall have the authority, in its discretion:
(i) to determine the Fair Market Value of the Common Stock in
accordance with Section 2(j) of the Plan;
(ii) to select the Consultants and Employees to whom Options may from
time to time be granted hereunder;
(iii) to determine whether and to what extent Options are granted
hereunder;
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(iv) to determine the number of shares of the Common Stock to be
covered by each such Option granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any award granted hereunder;
(vii) to determine the consideration to be paid upon exercise of an
Option consistent with Section 8(b) hereof;
(viii) to reduce the exercise price of any Option to the then current
Fair Market Value if the Fair Market Value of the Common Stock covered by such
Option shall have declined since the date the Option was granted;
(ix) to construe and interpret the terms of the Plan and Options
granted pursuant to the Plan; and
(x) in order to fulfill the purposes of the Plan and without amending
the Plan, to modify grants of Options to participants who are foreign nationals
or employed outside of the United States in order to recognize differences in
local law, tax policies or customs.
(c) EFFECT OF ADMINISTRATOR'S DECISION. All decisions, determinations and
interpretations of the Administrator shall be final and binding on all holders
of Options.
SECTION 5. ELIGIBILITY.
(a) RECIPIENTS OF GRANTS. Nonqualified Stock Options may be granted to
Employees and Consultants. Incentive Stock Options may be granted only to
Employees. An Employee or Consultant who has been granted an Option may, if he
or she is otherwise eligible, be granted additional Options.
(b) TYPE OF OPTION. Each Option shall be designated in the Option Agreement
as either an Incentive Stock Option or a Nonqualified Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair Market
Value of Shares with respect to which Options designated as Incentive Stock
Options are exercisable for the first time by any Optionee during any calendar
year (under all plans of the Company or any Subsidiary) exceeds $100,000, such
Options shall be treated as Nonqualified Stock Options with respect to the
excess Shares. For purposes of this Section 5(b), Incentive Stock Options shall
be taken into account in the order in which they were granted and the Fair
Market Value of the Shares subject to an Incentive Stock Option shall be
determined as of the date of the grant of such Option.
(c) NO EFFECT ON EMPLOYMENT OR CONSULTING RIGHTS. The Plan shall not confer
upon the holder of any Option any right with respect to continuation of
employment or consulting relationship with the Company, nor shall it interfere
in any way with such holder's
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right or the Company's right to terminate his or her employment or consulting
relationship at any time, with or without cause.
(d) CONSULTANT ELIGIBILITY. To be eligible to receive an Option under the
Plan, a Consultant other than a director or officer must be a natural person and
must provide BONA FIDE services to the Company or a Subsidiary which are not in
connection with the offer or sale of securities of the Company in a capital
raising transaction and do not directly or indirectly promote or maintain a
market for the Company's securities.
SECTION 6. TERM OF PLAN. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company as described in Section 18 of the Plan. It shall
continue in effect for a term of ten years unless sooner terminated under
Section 14 of the Plan.
SECTION 7. TERM OF OPTION. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that the term shall be no more than ten
years from the date of grant thereof or such shorter term as may be provided in
the Option Agreement and provided further that, in the case of an Incentive
Stock Option granted to an Optionee who, at the time the Option is granted, owns
stock representing more than 10% of the total combined voting power of all
classes of stock of the Company or any Subsidiary, the term of the Option shall
be five years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement.
SECTION 8. OPTION EXERCISE PRICE AND CONSIDERATION.
(a) PER SHARE EXERCISE PRICE. The per share exercise price for the Shares
to be issued pursuant to exercise of an Option shall be such price as is
determined by the Administrator and set forth in the applicable Option
Agreement, but shall be subject to the following:
(i) In the case of an Incentive Stock Option that is:
(A) granted to an Employee who, at the time of the grant of such
Incentive Stock Option, owns stock representing more than 10% of the total
combined voting power of all classes of stock of the Company or any Subsidiary,
the per Share exercise price shall be no less than 110% of the Fair Market Value
per Share on the date of grant.
(B) granted to any other Employee, the per Share exercise price
shall be no less than 100% of the Fair Market Value per Share on the date of
grant.
(ii) In the case of a Nonqualified Stock Option, the per Share
exercise price shall be no less than 85% of the Fair Market Value per Share on
the date of grant if required by Applicable Laws and, if not so required, shall
be such price as is determined by the Administrator.
(b) CONSIDERATION. The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be determined
by the Administrator. The consideration may consist entirely of (i) cash, (ii)
check, (iii) promissory note (subject to the provisions of Applicable Laws),
(iv) other Shares that (A), in the case of Shares acquired upon
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exercise of an Option, have been owned by the Optionee for more than six months
on the date of surrender or such other period as may be required to avoid a
charge to the Company's earnings, and (B) have a Fair Market Value on the date
of surrender equal to the aggregate exercise price of the Shares as to which
such Option shall be exercised, (v) authorization for the Company to retain from
the total number of Shares as to which the Option is exercised that number of
Shares having a Fair Market Value on the date of exercise equal to the exercise
price for the total number of Shares as to which the Option is exercised, (vi)
delivery of a properly executed exercise notice together with such other
documentation as the Administrator and the broker, if applicable, shall require
to effect an exercise of the Option and delivery to the Company of the sale or
loan proceeds required to pay the exercise price and any applicable income or
employment taxes, (vii) delivery of an irrevocable subscription agreement for
the Shares that irrevocably obligates the Optionee to take and pay for the
Shares not more than twelve months after the date of delivery of the
subscription agreement, (viii) any combination of the foregoing methods of
payment, or (ix) such other consideration and method of payment for the issuance
of Shares to the extent permitted under the Applicable Laws. In making its
determination as to the type of consideration to accept, the Administrator shall
consider if acceptance of such consideration may be reasonably expected to
benefit the Company.
SECTION 9. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE. Any Option granted hereunder shall be
exercisable at such times and under such conditions as determined by the
Administrator and reflected in the Option Agreement, which may include vesting
requirements and/or performance criteria with respect to the Company and/or the
Optionee.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and the Company has
received full payment for the Shares with respect to which the Option is
exercised. Full payment may, as authorized by the Administrator, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares that thereafter may be available, both for purposes of the Plan
and for sale under the Option, by the number of Shares as to which the Option is
exercised.
(b) FRACTIONAL SHARES. An Option may not be exercised for a fraction of a
Share. Any fraction of a Share shall be lowered to the nearest whole Share.
(c) RIGHTS AS SHAREHOLDERS. Until the issuance (as evidenced by the
appropriate entry on the books of a duly authorized transfer agent of the
Company) of the stock certificate evidencing the Shares issuable upon exercise
of an Option, no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. The Company shall cause to be issued such stock
certificate promptly upon exercise of the Option. No adjustment will be made for
a dividend or other right for which the record date is prior to the date the
stock certificate is issued, except as provided in Section 11 of the Plan.
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(d) TERMINATION OF EMPLOYMENT OR CONSULTING RELATIONSHIP. Subject to
Section 9(e) below, in the event of termination of an Optionee's Continuous
Status as an Employee or Consultant with the Company, such Optionee may, but
only within three months (or such other period of time not less than 30 days as
is determined by the Administrator, with such determination in the case of an
Incentive Stock Option being made at the time of grant of the Option and not
exceeding three months) after the date of such termination (but in no event
later than the expiration date of the term of such Option as set forth in the
Option Agreement), exercise his or her Option to the extent that the Optionee
was entitled to exercise it at the date of such termination. To the extent that
the Optionee was not entitled to exercise the Option at the date of such
termination, or if the Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate. No
termination shall be deemed to occur and this Section 9(d) shall not apply if
(i) the Optionee is a Consultant who becomes an Employee, or (ii) the Optionee
is an Employee who becomes a Consultant.
(e) DISABILITY OF OPTIONEE.
(i) Notwithstanding Section 9(d) above, in the event of termination of
an Optionee's Continuous Status as an Employee or Consultant as a result of his
or her total and permanent disability (within the meaning of Section 22(e)(3) of
the Code), such Optionee may, but only within 12 months from the date of such
termination (but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise the Option to the extent
otherwise entitled to exercise it at the date of such termination. To the extent
that the Optionee was not entitled to exercise the Option at the date of
termination, or if the Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.
(ii) In the event of termination of an Optionee's Continuous Status as
an Employee or Consultant as a result of a disability which does not fall within
the meaning of total and permanent disability (as set forth in Section 22(e)(3)
of the Code), such Optionee may, but only within six months from the date of
such termination (but in no event later than the expiration date of the term of
such Option as set forth in the Option Agreement), exercise the Option to the
extent otherwise entitled to exercise it at the date of such termination.
However, to the extent that such Optionee fails to exercise an Option which is
an Incentive Stock Option (within the meaning of Section 422 of the Code) within
three months of the date of such termination, the Option will not qualify for
Incentive Stock Option treatment under the Code. To the extent that the Optionee
was not entitled to exercise the Option at the date of termination, or if the
Optionee does not exercise such Option to the extent so entitled within six
months or three months, as the case may be, from the date of termination, the
Option shall terminate.
(f) DEATH OF OPTIONEE. In the event of the death of an Optionee during the
period of Continuous Status as an Employee or Consultant since the date of grant
of the Option, or within 30 days following termination of the Optionee's
Continuous Status as an Employee or Consultant, the Option may be exercised, at
any time within 12 months following the date of death (but in no event later
than the expiration date of the term of such Option as set forth in the Option
Agreement), by such Optionee's estate or by a person who acquired the right to
exercise
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the Option by bequest or inheritance, but only to the extent of the right to
exercise that had accrued at the date of death or, if earlier, the date of
termination of the Optionee's Continuous Status as an Employee or Consultant. To
the extent that the Optionee was not entitled to exercise the Option at the date
of death or termination, as the case may be, or if the Optionee does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate.
(g) Anything in subsections (d), (e) and (f) of this Section 9
notwithstanding and always subject to Applicable Laws, particularly the Code in
the case of an Incentive Stock Option, the Administrator may provide in the
Option Agreement for a different date of termination (but in no event later than
the expiration date of the term of the Option) and may provide for termination
in the event of certain events which the Administrator shall define as Cause or
as shall be so defined in any employment or consulting agreement between the
Company and the Optionee.
(h) RULE 16b-3. Options granted to Reporting Persons shall comply with Rule
16b-3 and shall contain such additional conditions or restrictions as may be
required thereunder to qualify for the maximum exemption for Plan transactions.
SECTION 10. STOCK WITHHOLDING TO SATISFY WITHHOLDING TAX OBLIGATIONS. At the
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this Section 10. When an Optionee incurs tax liability in
connection with an Option, which tax liability is subject to tax withholding
under applicable tax laws, and the Optionee is obligated to pay the Company an
amount required to be withheld under applicable tax laws, the Optionee may
satisfy the withholding tax obligation by one or some combination of the
following methods: (a) by cash or check payment, (b) out of the Optionee's
current compensation, (c) if permitted by the Administrator, in its discretion,
by surrendering to the Company Shares that (i), in the case of Shares previously
acquired from the Company, have been owned by the Optionee for more than six
months on the date of surrender, and (ii) have a Fair Market Value on the date
of surrender equal to or more than the Optionee's marginal tax rate times the
ordinary income recognized, or (d) by electing to have the Company withhold from
the Shares to be issued upon exercise of the Option, if any, that number of
Shares having a Fair Market Value equal to the amount required to be withheld.
For this purpose, the Fair Market Value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be determined
(the "Tax Date").
Any surrender by a Reporting Person of previously owned Shares to satisfy
tax withholding obligations arising upon exercise of this Option must comply
with the applicable provisions of Rule 16b-3.
All elections by an Optionee to have Shares withheld to satisfy tax
withholding obligations shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable Tax Date;
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(b) once made, the election shall be irrevocable as to the particular
Shares of the Option as to which the election is made; and
(c) all elections shall be subject to the consent or disapproval of the
Administrator.
SECTION 11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, MERGER OR CERTAIN OTHER
TRANSACTIONS.
(a) CHANGE IN CAPITALIZATION. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock that have been
authorized for issuance under the Plan but as to which no Options have yet been
granted or that have been returned to the Plan upon cancellation or expiration
of an Option, as well as the exercise price per share of Common Stock covered by
each such outstanding Option, shall be proportionately adjusted for any increase
or decrease in the number of issued shares of Common Stock resulting from a
stock split, reverse stock split, stock dividend, combination, recapitalization
or reclassification of the Common Stock, or any other increase or decrease in
the number of issued shares of the Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the
Administrator, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option.
(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify the Optionee at least
15 days prior to such proposed action. To the extent it has not been previously
exercised, the Option will terminate immediately prior to the consummation of
such proposed action.
(c) MERGER OR SALE OF ASSETS. In the event of a proposed sale of all or
substantially all of the Company's assets or a merger of the Company with or
into another corporation where the successor corporation issues its securities
to the Company's stockholders, each outstanding Option shall be assumed or an
equivalent option shall be substituted by such successor corporation or a parent
or subsidiary of such successor corporation, unless the successor corporation
does not agree to assume the Option or to substitute an equivalent option, in
which case such Option shall terminate upon the consummation of the merger or
sale of assets.
(d) CERTAIN DISTRIBUTIONS. In the event of any distribution to the
Company's shareholders of securities of any other entity or other assets (other
than dividends payable in cash or stock of the Company) without receipt of
consideration by the Company, the Administrator may, in its discretion,
appropriately adjust the price per share of Common Stock covered by each
outstanding Option to reflect the effect of such distribution.
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SECTION 12. NON-TRANSFERABILITY OF OPTIONS. Options may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised during the
lifetime of the Optionee only by the Optionee.
SECTION 13. TIME OF GRANTING OPTIONS. The date of grant of an Option shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Administrator;
provided, however, that in the case of any Incentive Stock Option, the grant
date shall be the later of the date on which the Administrator makes the
determination granting such Incentive Stock Option or the date of commencement
of the Optionee's employment relationship with the Company. Notice of the
determination shall be given to each Employee or Consultant to whom an Option is
so granted within a reasonable time after the date of such grant.
SECTION 14. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AUTHORITY TO AMEND OR TERMINATE. The Board may at any time amend,
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation shall be made that would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Rule 16b-3 or with Section 422
of the Code (or any other applicable law or regulation, including the
requirements of any Stock Exchange or Nasdaq), the Company shall obtain
shareholder approval of any Plan amendment in such a manner and to such a degree
as required.
(b) EFFECT OF AMENDMENT OR TERMINATION. No amendment or termination of the
Plan shall adversely affect Options already granted, unless mutually agreed
otherwise between the Optionee and the Board, which agreement must be in writing
and signed by the Optionee and the Company.
SECTION 15. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act,
the Exchange Act, the rules and regulations promulgated under the Securities Act
or the Exchange Act, and the requirements of any Stock Exchange or Nasdaq.
As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by law.
SECTION 16. RESERVATION OF SHARES. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability
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in respect of the failure to issue or sell such Shares as to which such
requisite authority shall not have been obtained.
SECTION 17. OPTION AGREEMENTS. Options shall be evidenced by written Option
Agreements in such form(s) as the Administrator shall approve from time to time.
SECTION 18. SHAREHOLDER APPROVAL. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within 12 months before or after the
date the Plan is adopted. Such shareholder approval shall be obtained in the
degree and manner required under applicable state and federal law and the rules
of any Stock Exchange upon which the Common Stock is listed or Nasdaq if the
Common Stock is traded therein. All Options issued under the Plan shall become
void in the event such approval is not obtained.
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