APPROVAL AND ADOPTION OF AMENDMENT TO
                           THE 1999 STOCK OPTION PLAN
 
         On March 30, 2004, the Board of Directors unanimously approved an
amendment (the "Amendment") to the 1999 Plan to increase the number of shares of
Common Stock issuable thereunder from 2,400,000 to 3,200,000, and recommended
that the 1999 Plan, as so amended, be submitted to the Company's stockholders
for approval at the 2004 Annual Meeting of Stockholders.
 
         The 1999 Plan, which originally provided for the granting of options to
purchase up to an aggregate of 600,000 shares of the Company's authorized but
unissued Common Stock (subject to adjustment in certain cases, including stock
splits, recapitalization and reorganizations) to our officers, directors,
employees and consultants, was adopted in March 1999 and amended to increase the
number of shares reserved for issuance thereunder from 600,000 shares to
1,400,000 shares at the Annual Stockholders Meeting held on August 1, 2000. The
1999 Plan was also amended to increase the number of shares reserved for
issuance from 1,400,000 to 1,900,000 shares at the Annual Stockholders Meeting
held on August 1, 2001, and then further amended to increase the number of
shares reserved for issuance thereunder from 1,900,000 to 2,400,000 shares at
the Annual Stockholders Meeting held on August 1, 2002. The proposed Amendment
to the 1999 Plan will increase the number of shares reserved for issuance under
the 1999 Stock Option Plan by 800,000 shares from 2,400,000 to 3,200,000 shares.
 
PURPOSE OF THE AMENDMENT
 
         The Company believes that it has been able to attract highly qualified
personnel in part through the use of option grants, and that it is desirable to
have the continued flexibility to attract additional personnel, if needed, and
to retain and reward exceptional performance by employees through additional
option grants. The Company believes that options should be widely distributed.
The Company has used the 1999 Plan for this purpose. As of April 16, 2004,
options to purchase 1,999,180 shares of Common Stock were outstanding and thus,
options for only 209,445 shares of Common Stock remain available for grant.
Accordingly, the Board of Directors approved the Amendment in order to maintain
the 1999 Plan as a continuing source of employee and director incentives.
 
         The following summary of the 1999 Plan and proposed amendment, is
subject in its entirety to the specific language of the 1999 Plan, a copy of
which is available to any stockholder upon request.
 
ADMINISTRATION OF THE 1999 PLAN
 
         The Company's Compensation Committee selects the officers, key
employees and non-employee directors of the Company ("Optionees") to whom
options may be granted and determines the vesting and other terms of the option
agreements representing such options ("Options"), including whether the Options
are either incentive stock options ("Incentive Options") within the meaning of
Section 422(b) of the Internal Revenue Code of 1986, as amended (the "Code"), or
Options that do not constitute incentive stock options ("Non-statutory Stock
Options").
 
OPTION GRANTS
 
         Options granted pursuant to the 1999 Plan are evidenced by agreements
in such form as the Compensation Committee approves. All Options granted under
the 1999 Plan are clearly identified in the agreement evidencing such Options as
either Incentive Options or as Non-statutory Stock Options or a combination of
both.
 
AMENDMENT OF THE 1999 PLAN
 
      In general, the Board of Directors has complete and exclusive power and
authority to amend or modify the 1999 Plan in any or all respects whatsoever.
Notwithstanding the foregoing, the Board of Directors shall not, without the
approval of the Company's stockholders, amend the 1999 Plan so as to (i)
increase the maximum number of shares issuable under the 1999 Plan, (ii)
materially increase the benefits accruing to individuals who participate in the
1999 Plan or (iii) materially modify the eligibility requirements for
participation in the 1999 Plan. The Board of Directors may amend the 1999 Plan,
subject to the limitations cited above, in such manner as it deems necessary to
permit the granting of Options meeting the requirements of future amendments or
issued regulations, if any, to the Code or to the Securities Exchange Act of
1934, as amended.
 
TERMINATION OF SERVICE
 
      If an Optionee ceases to remain in service for any reason other than death
or permanent disability then the period during which each outstanding Option
held by an Optionee, to the extent otherwise exercisable, remains exercisable
will be limited to a three-month period following the date of cessation of
service. If an Optionee dies or is permanently disabled, the exercisable period
for otherwise exercisable Options is limited to twelve months following the
later of the date of the Optionee's cessation of service or death. The
Compensation Committee has the power and authority to extend such time either at
the time the Option is granted or at any time while the Option remains
outstanding as it deems appropriate under the circumstances.
 
INCENTIVE OPTIONS
 
      The exercise price of an Incentive Option shall be the fair market value
of a share of Common Stock as defined in the 1999 Plan. Incentive Options will
not be granted to any individual if, at the time of the proposed grant, the
individual owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or any of its "subsidiary
corporations" (within the meaning of section 424 of the Code), unless (i) the
exercise price of such Incentive Option is at least 110% of the fair market
value of a share of the Company's stock at the time such Incentive Option is
granted and (ii) such Incentive Option is not exercisable after the expiration
of five years from the date such Incentive Option is granted. The individual
receiving an Incentive Option must be an employee of the Company. There will be
no grants after 10 years from the date the Plan is adopted or the date the plan
is approved by the stockholders, whichever is earlier. An Incentive Option is
not transferable other than by will or the laws of descent and distribution. It
is only exercisable during the Optionee's lifetime by the Optionee.
 
FEDERAL INCOME TAX CONSEQUENCES
 
      The federal income tax treatment of Incentive Options and Non-Statutory
Options are as follows:
 
         Incentive Options. No taxable income is recognized by the Optionee at
the time of the Option grant, and no taxable income is generally recognized at
the time the Option is exercised. The Optionee will, however, recognize taxable
income in the year in which the purchased shares are sold or otherwise made
subject of a taxable disposition. For federal tax purposes dispositions are
divided into two categories: (i) qualifying and (ii) disqualifying. A qualifying
disposition occurs if the sale or other disposition is made after the Optionee
has held the shares for more than two years after the Option grant date and more
than one year after the exercise date. If either of these two holding periods is
not satisfied, then a disqualifying disposition will result.
 
         Upon a qualifying disposition, the Optionee will recognize long-term
capital gain in an amount equal to the excess of (i) the amount realized upon
the sale or other disposition of the purchased shares or (ii) the exercise price
paid for the shares. If there is a disqualifying disposition of the shares, then
the excess of (i) the fair market value of those shares on the exercise date
over (ii) the exercise price paid for the shares will be taxable as ordinary
income to the Optionee. Any additional gain or loss recognized upon the
disposition will be recognized as a capital gain or loss by the Optionee.
 
         If the Optionee makes a disqualifying disposition of the purchased
shares, then the Company will be entitled to an income tax deduction, for the
taxable year in which such disposition occurs, equal to the excess of (i) the
fair market value of such shares on the option exercise date over (ii) the
exercise price paid for the shares. If the Optionee makes a qualifying
disposition, the Company will not be entitled to any income tax deduction.
 
         Non-Statutory Options. No taxable income is recognized by an Optionee
upon the grant of a non-statutory option. The Optionee will in general recognize
ordinary income, in the year in which the option is exercised, equal to the
excess of the fair market value of the purchased shares on the exercise date
over the exercise price paid for the shares and the Optionee will be required to
satisfy the tax withholding requirements applicable to such income.
 
         If the shares acquired upon exercise of the non-statutory option are
unvested and subject to repurchase by the Company in the event of the Optionee's
termination of service prior to vesting in those shares, then the Optionee will
not recognize any taxable income at the time of exercise but will have to report
as ordinary income, as and when the Company's repurchase right lapses, an amount
equal to the excess of (i) the fair market value of the shares on the date the
repurchase right lapses over (ii) the exercise price paid for the shares. The
Optionee may, however, elect under Section 83(b) of the Code to include as
ordinary income in the year of exercise of the Option an amount equal to the
excess of (i) the fair market value of the purchases shares on the exercise date
over (ii) the exercise price paid for such shares. If the Section 83(b) election
is made, the Optionee will not recognize any additional income as and when the
repurchase rights lapses.
 
         The Company will be entitled to an income tax deduction equal to the
amount of ordinary income recognized by the Optionee with respect to the
exercised non-statutory Option. The deduction will in general be allowed for the
taxable year of the Company in which such ordinary income is recognized by the
Optionee.
 
OTHER TERMS
 
         The Compensation Committee has the authority to accelerate the vesting
schedule of, release from restrictions on, transfer of and/or terminate
repurchase or forfeiture rights with respect to any outstanding award. The
Compensation Committee also may require each person to whom any shares are
issued under the 1999 Plan to enter into an agreement which restricts or
prohibits the sale of any stock of the Company by such person for a reasonable
period of time following a public offering of any shares of stock by the
Company.
 
REQUIRED VOTE
 
         The affirmative vote of the holders of a majority of the shares of
Common Stock present and entitled to vote on this item at the Meeting is
required to approve the Amendment to the 1999 Plan.
 
 
         THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT
TO THE 1999 STOCK OPTION PLAN INCREASING THE NUMBER OF SHARES RESERVED FOR
ISSUANCE FROM 2,400,000 SHARES TO 3,200,000 SHARES.