1996 Employee Stock Purchase Plan - Onsale Inc.


                 ONSALE, INC. 1996 EMPLOYEE STOCK PURCHASE PLAN

                   As Amended and Restated March 16, 1998


     1.  ESTABLISHMENT OF PLAN.  ONSALE, Inc. (the "COMPANY") proposes to grant
options for purchase of the Company's Common Stock to eligible employees of the
Company and its Subsidiaries (as hereinafter defined) pursuant to this Employee
Stock Purchase Plan (this "PLAN").  For purposes of this Plan, "PARENT
CORPORATION" and "SUBSIDIARY" (collectively, "SUBSIDIARIES") shall have the same
meanings as "parent corporation" and "subsidiary corporation" in Sections 424(e)
and 424(f), respectively, of the Internal Revenue Code of 1986, as amended (the
"CODE").  The Company intends this Plan to qualify as an "employee stock
purchase plan" under Section 423 of the Code (including any amendments to or
replacements of such Section), and this Plan shall be so construed.  Any term
not expressly defined in this Plan but defined for purposes of Section 423 of
the Code shall have the same definition herein.  A total of 300,000 shares of
the Company's Common Stock is reserved for issuance under this Plan.  In
addition, on each January 1, the aggregate number of shares of the Company's
Common Stock reserved for issuance under the Plan shall be increased
automatically by a number of shares equal to one and one-half percent (1.5%) of
the total outstanding shares of the Company as of the immediately preceding
December 31; provided, however, that the aggregate amount of shares reserved for
issuance under this Plan shall not exceed 1,500,000 shares of the Company's
Common Stock.  Such total number of shares shall be subject to adjustments
effected in accordance with Section 14 of this Plan.

     2.  PURPOSE.  The purpose of this Plan is to provide employees of the
Company and Subsidiaries designated by the Board of Directors of the Company
(the "BOARD") as eligible to participate in this Plan with a convenient means of
acquiring an equity interest in the Company through payroll deductions, to
enhance such employees' sense of participation in the affairs of the Company and
Subsidiaries, and to provide an incentive for continued employment.

     3.  ADMINISTRATION.  This Plan shall be administered by the Board or by a
committee of not less than two members of the Board appointed to administer this
Plan (the "COMMITTEE").  As used in this Plan, references to the "Committee"
shall mean either such committee or the Board if no committee has been
established.  Subject to the provisions of this Plan and the limitations of
Section 423 of the Code or any successor provision in the Code, all questions of
interpretation or application of this Plan shall be determined by the Board and
its decisions shall be final and binding upon all participants.  Members of the
Board shall receive no compensation for their services in connection with the
administration of this Plan, other than standard fees as established from time
to time by the Board for services rendered by Board members serving on Board
committees.  All expenses incurred in connection with the administration of this
Plan shall be paid by the Company.

     4.  ELIGIBILITY.  Any employee of the Company or the Subsidiaries is
eligible to participate in an Offering Period (as hereinafter defined) under
this Plan except the following:

       (a)  employees who are not employed by the Company or Subsidiaries
fifteen (15) days before the beginning of such Offering Period, except that
employees who are employed on the effective date of the registration statement
filed by the Company with the Securities and Exchange Commission ("SEC") under
the Securities Act of 1933, as amended (the "SECURITIES ACT") registering the
initial public offering of the Company's Common Stock shall be eligible to
participate in the first Offering Period under the Plan;

       (b)  employees who are customarily employed for less than twenty (20)
hours per week;

       (c)  employees who are customarily employed for less than five (5) months
in a calendar year;

       (d)  employees who, together with any other person whose stock would be
attributed to such employee pursuant to Section 424(d) of the Code, own stock or
hold options to purchase stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company or any of
its Subsidiaries or 

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* Subject to stockholder approval scheduled for May 18, 1998.

 
who, as a result of being granted an option under this Plan with respect to such
Offering Period, would own stock or hold options to purchase stock possessing
five percent (5%) or more of the total combined voting power or value of all
classes of stock of the Company or any of its Subsidiaries; and

       (e)  individuals who provide services to the Company as independent
contractors whether or not reclassified as common law employees, unless the
Company withholds or is required to withhold U.S. Federal employment taxes for
such individuals pursuant to Section 3402 of the Code.

         5.  OFFERING DATES.  The offering periods of this Plan (each, an
"OFFERING PERIOD") shall be of twenty-four (24) months duration commencing on
February 1 and August 1 of each year and ending on January 31 and July 31 of
each year; provided, however, that notwithstanding the foregoing, the first such
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Offering Period shall commence on the first business day on which price
quotations for the Company's Common Stock are available on the Nasdaq National
Market (the "FIRST OFFERING DATE") and shall end on January 31, 1999.  Except
for the first Offering Period, each Offering Period shall consist of four (4)
six-month purchase periods (individually, a "PURCHASE PERIOD") during which
payroll deductions of the participants are accumulated under this Plan.  The
first Offering Period shall consist of no fewer than three Purchase Periods, any
of which may be greater or less than six months as determined by the Committee.
The first business day of each Offering Period is referred to as the "OFFERING
DATE".  The last business day of each Purchase Period is referred to as the
"PURCHASE DATE".  The Board shall have the power to change the duration of
Offering Periods or Purchase Periods with respect to offerings without
shareholder approval if such change is announced at least fifteen (15) days
prior to the scheduled beginning of the first Offering Period or Purchase Period
to be affected.

     6.  PARTICIPATION IN THIS PLAN.  Eligible employees may become participants
in an Offering Period under this Plan on the first Offering Date after
satisfying the eligibility requirements by delivering a subscription agreement
to the Company's treasury department (the "TREASURY DEPARTMENT") not later than
fifteen (15) days before such Offering Date unless a later time for filing the
subscription agreement authorizing payroll deductions is set by the Board for
all eligible employees with respect to a given Offering Period.  An eligible
employee who does not deliver a subscription agreement to the Treasury
Department by such date after becoming eligible to participate in such Offering
Period shall not participate in that Offering Period or any subsequent Offering
Period unless such employee enrolls in this Plan by filing a subscription
agreement with the Treasury Department not later than fifteen (15) days
preceding a subsequent Offering Date.  Once an employee becomes a participant in
an Offering Period, such employee will automatically participate in the Offering
Period commencing immediately following the last day of the prior Offering
Period unless the employee withdraws or is deemed to withdraw from this Plan or
terminates further participation in the Offering Period as set forth in Section
11 below.  Such participant is not required to file any additional subscription
agreement in order to continue participation in this Plan.

     7.  GRANT OF OPTION ON ENROLLMENT.  Enrollment by an eligible employee in
this Plan with respect to an Offering Period will constitute the grant (as of
the Offering Date) by the Company to such employee of an option to purchase on
the Purchase Date up to that number of shares of Common Stock of the Company
determined by dividing (a) the amount accumulated in such employee's payroll
deduction account during such Purchase Period by (b) the lower of (i) eighty-
five percent (85%) of the fair market value of a share of the Company's Common
Stock on the Offering Date (but in no event less than the par value of a share
of the Company's Common Stock), or (ii) eighty-five percent (85%) of the fair
market value of a share of the Company's Common Stock on the Purchase Date (but
in no event less than the par value of a share of the Company's Common Stock),
provided, however, that the number of shares of the Company's Common Stock
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subject to any option granted pursuant to this Plan shall not exceed the lesser
of (a) the maximum number of shares set by the Board pursuant to Section 10(c)
below with respect to the applicable Purchase Date, or (b) the maximum number of
shares which may be purchased pursuant to Section 10(b) below with respect to
the applicable Purchase Date.  The fair market value of a share of the Company's
Common Stock shall be determined as provided in Section 8 hereof.

     8.  PURCHASE PRICE.  The purchase price per share at which a share of
Common Stock will be sold in any Offering Period shall be eighty-five percent
(85%) of the lesser of:

       (a)  The fair market value on the Offering Date; or

       (b)  The fair market value on the Purchase Date.

                                      -2-

 
       For purposes of this Plan, the term "FAIR MARKET VALUE" means, as of any
date, the value of a share of the Company's Common Stock determined as follows:

         (a)  if such Common Stock is then quoted on the Nasdaq National Market,
              its closing price on the Nasdaq National Market on the date of
              determination as reported in The Wall Street Journal;
                                           ----------------------- 

         (b)  if such Common Stock is publicly traded and is then listed on a
              national securities exchange, its closing price on the date of
              determination on the principal national securities exchange on
              which the Common Stock is listed or admitted to trading as
              reported in The Wall Street Journal;
                          ----------------------- 

         (c)  if such Common Stock is publicly traded but is not quoted on the
              Nasdaq National Market nor listed or admitted to trading on a
              national securities exchange, the average of the closing bid and
              asked prices on the date of determination as reported in The Wall
                                                                       --------
              Street Journal; or
              --------------    

         (d)  if none of the foregoing is applicable, by the Board in good
              faith, which in the case of the First Offering Date will be the
              price per share at which shares of the Company's Common Stock are
              initially offered for sale to the public by the Company's
              underwriters in the initial public offering of the Company's
              Common Stock pursuant to a registration statement filed with the
              SEC under the Securities Act.

     9.  PAYMENT OF PURCHASE PRICE; CHANGES IN PAYROLL DEDUCTIONS; ISSUANCE OF
SHARES.

       (a)  The purchase price of the shares is accumulated by regular payroll
deductions made during each Offering Period.  The deductions are made as a
percentage of the participant's compensation in one percent (1%) increments not
less than two percent (2%), nor greater than fifteen percent (15%) or such lower
limit set by the Committee.  Compensation shall mean base salary, provided
however, that for purposes of determining a participant's base salary, any
election by such participant to reduce his or her regular cash remuneration
under Sections 125 or 401(k) of the Code shall be treated as if the participant
did not make such election.  Payroll deductions shall commence on the first
payday following the Offering Date and shall continue to the end of the Offering
Period unless sooner altered or terminated as provided in this Plan.

       (b)  A participant may lower (but not increase) the rate of payroll
deductions during an Offering Period by filing with the Treasury Department a
new authorization for payroll deductions, in which case the new rate shall
become effective for the next payroll period commencing more than fifteen (15)
days after the Treasury Department's receipt of the authorization and shall
continue for the remainder of the Offering Period unless changed as described
below.  Such change in the rate of payroll deductions may be made at any time
during an Offering Period, but not more than one (1) change may be made
effective during any Offering Period.  A participant may increase or decrease
the rate of payroll deductions for any subsequent Offering Period by filing with
the Treasury Department a new authorization for payroll deductions not later
than fifteen (15) days before the beginning of such Offering Period.

       (c)  All payroll deductions made for a participant are credited to his or
her account under this Plan and are deposited with the general funds of the
Company.  No interest accrues on the payroll deductions.  All payroll deductions
received or held by the Company may be used by the Company for any corporate
purpose, and the Company shall not be obligated to segregate such payroll
deductions.

       (d)  On each Purchase Date, so long as this Plan remains in effect and
provided that the participant has not submitted a signed and completed
withdrawal form before that date which notifies the Company that the participant
wishes to withdraw from that Offering Period under this Plan and have all
payroll deductions accumulated in the account maintained on behalf of the
participant as of that date returned to the participant, the Company shall apply
the funds then in the participant's account to the purchase of whole shares of
Common Stock reserved under the option granted to such participant with respect
to the Offering Period to the extent that such option is exercisable on the
Purchase Date.  The purchase price per share shall be as specified in Section 8
of this Plan.  Any cash remaining in a 

                                      -3-

 
participant's account after such purchase of shares shall be refunded to such
participant in cash, without interest; provided, however that any amount
remaining in such participant's account on a Purchase Date which is less than
the amount necessary to purchase a full share of Common Stock of the Company
shall be carried forward, without interest, into the next Purchase Period or
Offering Period, as the case may be. In the event that this Plan has been
oversubscribed, all funds not used to purchase shares on the Purchase Date shall
be returned to the participant, without interest. No Common Stock shall be
purchased on a Purchase Date on behalf of any employee whose participation in
this Plan has terminated prior to such Purchase Date.

       (e)  As promptly as practicable after the Purchase Date, the Company
shall issue shares for the participant's benefit representing the shares
purchased upon exercise of his or her option.

       (f)  During a participant's lifetime, such participant's option to
purchase shares hereunder is exercisable only by him or her.  The participant
will have no interest or voting right in shares covered by his or her option
until such option has been exercised.

     10.  LIMITATIONS ON SHARES TO BE PURCHASED.

       (a)  No participant shall be entitled to purchase stock under this Plan
at a rate which, when aggregated with his or her rights to purchase stock under
all other employee stock purchase plans of the Company or any Subsidiary,
exceeds $25,000 in fair market value, determined as of the Offering Date (or
such other limit as may be imposed by the Code) for each calendar year in which
the employee participates in this Plan.

       (b)  No more than two hundred percent (200%) of the number of shares
determined by using eighty-five percent (85%) of the fair market value of a
share of the Company's Common Stock on the Offering Date as the denominator may
be purchased by a participant on any single Purchase Date.

       (c)  No participant shall be entitled to purchase more than the Maximum
Share Amount (as defined below) on any single Purchase Date.  Not less than
thirty (30) days prior to the commencement of any Offering Period, the Committee
may, in its sole discretion, set a maximum number of shares which may be
purchased by any employee at any single Purchase Date (hereinafter the "MAXIMUM
SHARE AMOUNT").  Until otherwise determined by the Committee, the Maximum Share
Amount shall be 1,500 shares.  In no event shall the Maximum Share Amount exceed
the amounts permitted under Section 10(b) above.  If a new Maximum Share Amount
is set, then all participants must be notified of such Maximum Share Amount not
less than fifteen (15) days prior to the commencement of the next Offering
Period.  Once the Maximum Share Amount is set, it shall continue to apply with
respect to all succeeding Purchase Dates and Offering Periods unless revised by
the Committee as set forth above.

       (d)  If the number of shares to be purchased on a Purchase Date by all
employees participating in this Plan exceeds the number of shares then available
for issuance under this Plan, then the Company will make a pro rata allocation
of the remaining shares in as uniform a manner as shall be reasonably
practicable and as the Committee shall determine to be equitable.  In such
event, the Company shall give written notice of such reduction of the number of
shares to be purchased under a participant's option to each participant affected
thereby.

       (e)  Any payroll deductions accumulated in a participant's account which
are not used to purchase stock due to the limitations in this Section 10 shall
be returned to the participant as soon as practicable after the end of the
applicable Purchase Period, without interest.

     11.  WITHDRAWAL.

       (a)  Each participant may withdraw from an Offering Period under this
Plan by signing and delivering to the Treasury Department a written notice to
that effect on a form provided for such purpose.  Such withdrawal may be elected
at any time at least fifteen (15) days prior to the end of an Offering Period.

       (b)  Upon withdrawal from this Plan, the accumulated payroll deductions
shall be returned to the withdrawn participant, without interest, and his or her
interest in this Plan shall terminate.  In the event a participant voluntarily
elects to withdraw from this Plan, he or she may not resume his or her
participation in this Plan during the same Offering Period, but he or she may
participate in any Offering Period under this Plan which commences on a date

                                      -4-

 
subsequent to such withdrawal by filing a new authorization for payroll
deductions in the same manner as set forth above for initial participation in
this Plan.

       (c)  If the purchase price on the first day of any current Offering
Period in which a participant is enrolled is higher than the purchase price on
the first day of any subsequent Offering Period, the Company will automatically
enroll such participant in the subsequent Offering Period.  Any funds
accumulated in a participant's account prior to the first day of such subsequent
Offering Period will be applied to the purchase of shares on the Purchase Date
immediately prior to the first day of such subsequent Offering Period.  A
participant does not need to file any forms with the Company to automatically be
enrolled in the subsequent Offering Period

     12.  TERMINATION OF EMPLOYMENT.  Termination of a participant's employment
for any reason, including retirement, death or the failure of a participant to
remain an eligible employee, immediately terminates his or her participation in
this Plan.  In such event, the payroll deductions credited to the participant's
account will be returned to him or her or, in the case of his or her death, to
his or her legal representative, without interest.  For purposes of this Section
12, an employee will not be deemed to have terminated employment or failed to
remain in the continuous employ of the Company in the case of sick leave,
military leave, or any other leave of absence approved by the Board; provided
                                                                     --------
that such leave is for a period of not more than ninety (90) days or
reemployment upon the expiration of such leave is guaranteed by contract or
statute.

     13.  RETURN OF PAYROLL DEDUCTIONS.  In the event a participant's interest
in this Plan is terminated by withdrawal, termination of employment or
otherwise, or in the event this Plan is terminated by the Board, the Company
shall promptly deliver to the participant all payroll deductions credited to
such participant's account.  No interest shall accrue on the payroll deductions
of a participant in this Plan.

     14.  CAPITAL CHANGES.  Subject to any required action by the shareholders
of the Company, the number of shares of Common Stock covered by each option
under this Plan which has not yet been exercised and the number of shares of
Common Stock which have been authorized for issuance under this Plan but have
not yet been placed under option (collectively, the "RESERVES"), as well as the
price per share of Common Stock covered by each option under this Plan which has
not yet been exercised, shall be proportionately adjusted for any increase or
decrease in the number of issued and outstanding shares of Common Stock of the
Company resulting from a stock split or the payment of a stock dividend (but
only on the Common Stock) or any other increase or decrease in the number of
issued and outstanding shares of Common Stock effected without receipt of any
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
Committee, whose determination shall be final, binding and conclusive.  Except
as expressly provided herein, no issue 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.

    In the event of the proposed dissolution or liquidation of the Company, the
Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Committee.  The Committee may,
in the exercise of its sole discretion in such instances, declare that the
options under this Plan shall terminate as of a date fixed by the Committee and
give each participant the right to exercise his or her option as to all of the
optioned stock, including shares which would not otherwise be exercisable.  In
the event of (i) a merger or consolidation in which the Company is not the
surviving corporation (other than a merger or consolidation with a wholly-owned
subsidiary, a reincorporation of the Company in a different jurisdiction, or
other transaction in which there is no substantial change in the stockholders of
the Company or their relative stock holdings and the options under this Plan are
assumed, converted or replaced by the successor corporation, which assumption
will be binding on all participants), (ii) a merger in which the Company is the
surviving corporation but after which the stockholders of the Company
immediately prior to such merger (other than any stockholder that merges, or
which owns or controls another corporation that merges, with the Company in such
merger) cease to own their shares or other equity interest in the Company, (iii)
the sale of substantially all of the assets of the Company, or (iv) the
acquisition, sale, or transfer of more than 50% of the outstanding shares of the
Company by tender offer or similar transaction, each option under this Plan
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
Committee determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, that the participant shall have the right to
exercise the option as to all of the optioned stock.  If the Committee makes an
option exercisable in lieu of assumption or substitution in the event of a
merger, 

                                      -5-

 
consolidation or sale of assets, the Committee shall notify the participant that
the option shall be fully exercisable for a period of twenty (20) days from the
date of such notice, and the option will terminate upon the expiration of such
period.

    The Committee may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per share of Common Stock covered by each outstanding option, in the event that
the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of its outstanding Common
Stock, or in the event of the Company being consolidated with or merged into any
other corporation.

     15.  NONASSIGNABILITY.  Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under this Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 22 hereof) by the participant.  Any such
attempt at assignment, transfer, pledge or other disposition shall be void and
without effect.

     16.  REPORTS.  Individual accounts will be maintained for each participant
in this Plan.  Each participant shall receive promptly after the end of each
Purchase Period a report of his or her account setting forth the total payroll
deductions accumulated, the number of shares purchased, the per share price
thereof and the remaining cash balance, if any, carried forward to the next
Purchase Period or Offering Period, as the case may be.

     17.  NOTICE OF DISPOSITION.  Each participant shall notify the Company if
the participant disposes of any of the shares purchased in any Offering Period
pursuant to this Plan if such disposition occurs within two (2) years from the
Offering Date or within one (1) year from the Purchase Date on which such shares
were purchased (the "NOTICE PERIOD").  Unless such participant is disposing of
any of such shares during the Notice Period, such participant shall keep the
certificates representing such shares in his or her name (and not in the name of
a nominee) during the Notice Period.  The Company may, at any time during the
Notice Period, place a legend or legends on any certificate representing shares
acquired pursuant to this Plan requesting the Company's transfer agent to notify
the Company of any transfer of the shares.  The obligation of the participant to
provide such notice shall continue notwithstanding the placement of any such
legend on the certificates.

     18.  NO RIGHTS TO CONTINUED EMPLOYMENT.  Neither this Plan nor the grant of
any option hereunder shall confer any right on any employee to remain in the
employ of the Company or any Subsidiary, or restrict the right of the Company or
any Subsidiary to terminate such employee's employment.

     19.  EQUAL RIGHTS AND PRIVILEGES.  All eligible employees shall have equal
rights and privileges with respect to this Plan so that this Plan qualifies as
an "employee stock purchase plan" within the meaning of Section 423 or any
successor provision of the Code and the related regulations.  Any provision of
this Plan which is inconsistent with Section 423 or any successor provision of
the Code shall, without further act or amendment by the Company or the Board, be
reformed to comply with the requirements of Section 423.  This Section 19 shall
take precedence over all other provisions in this Plan.

     20.  NOTICES.  All notices or other communications by a participant to the
Company under or in connection with this Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.

     21.  TERM; SHAREHOLDER APPROVAL.  After this Plan is adopted by the Board,
this Plan will become effective on the date that is the First Offering Date (as
defined above); provided, however, that if the First Offering Date does not
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occur on or before December 31, 1997, this Plan will terminate having never
become effective.  This Plan shall be approved by the shareholders of the
Company, in any manner permitted by applicable corporate law, within twelve (12)
months before or after the date this Plan is adopted by the Board.  No purchase
of shares pursuant to this Plan shall occur prior to such shareholder approval.
This Plan shall continue until the earlier to occur of (a) termination of this
Plan by the Board (which termination may be effected by the Board at any time),
(b) issuance of all of the shares of Common Stock reserved for issuance under
this Plan, or (c) ten (10) years from the adoption of this Plan by the Board.

                                      -6-

 
     22.  DESIGNATION OF BENEFICIARY.

         (a)  A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account under
this Plan in the event of such participant's death subsequent to the end of an
Purchase Period but prior to delivery to him of such shares and cash.  In
addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant's account under this Plan in the event
of such participant's death prior to a Purchase Date.

         (b)  Such designation of beneficiary may be changed by the participant
at any time by written notice.  In the event of the death of a participant and
in the absence of a beneficiary validly designated under this Plan who is living
at the time of such participant's death, the Company shall deliver such shares
or cash to the executor or administrator of the estate of the participant, or if
no such executor or administrator has been appointed (to the knowledge of the
Company), the Company, in its discretion, may deliver such shares or cash to the
spouse or to any one or more dependents or relatives of the participant, or if
no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.

     23.  CONDITIONS UPON ISSUANCE OF SHARES; LIMITATION ON SALE OF SHARES.
Shares shall not be issued with respect to an option unless the exercise of such
option and the issuance and delivery of such shares pursuant thereto shall
comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act, the Securities Exchange Act of 1934, the
rules and regulations promulgated thereunder, and the requirements of any stock
exchange or automated quotation system upon which the shares may then be listed,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.

     24.  APPLICABLE LAW.  The Plan shall be governed by the substantive laws
(excluding the conflict of laws rules) of the State of California.

     25.  AMENDMENT OR TERMINATION OF THIS PLAN.  The Board may at any time
amend, terminate or extend the term of this Plan, except that any such
termination cannot affect options previously granted under this Plan, nor may
any amendment make any change in an option previously granted which would
adversely affect the right of any participant, nor may any amendment be made
without approval of the shareholders of the Company obtained in accordance with
Section 21 hereof within twelve (12) months of the adoption of such amendment
(or earlier if required by Section 21) if such amendment would:

         (a)  increase the number of shares that may be issued under this Plan;
or

         (b)  change the designation of the employees (or class of employees)
eligible for participation in this Plan.

                                      -7-