425

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)
November 9, 2004

VISX, INCORPORATED

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation) 1-10694
(Commission File Number) 06-1161793
(IRS Employer
Identification No.)

3400 Central Expressway
Santa Clara, CA 95051-0703
(Address of principal executive offices, including zip code)

(408) 733-2020
(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

x Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
	Item 5.03. AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL YEAR
	Item 8.01. OTHER EVENTS
	Item 9.01. Financial Statements and Exhibits
SIGNATURES
EXHIBIT INDEX
EXHIBIT 3.1
EXHIBIT 10.1
EXHIBIT 10.2
EXHIBIT 10.3
EXHIBIT 10.4
EXHIBIT 10.5
EXHIBIT 10.6
EXHIBIT 10.7

ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On November 9, 2004, the board of directors of the Registrant approved amendments to the following option plans to delete the applicable provisions regarding the termination of options awarded under those plans upon a change of control: the 1987 (Taunton) Stock Option Plan, the 1993 Flexible Stock Incentive Plan, the 1995 Stock Plan, the 1995 Director Option And Stock Deferral Plan, and the 1996 Supplemental Stock Plan.

The information set forth above does not purport to be complete and is qualified in its entirety by reference to the full text of the amended and restated option plans, copies of which are filed herewith as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5, respectively, all of which are incorporated in this Item 1.01 by reference. These exhibits include all amendments to these plans made to date, including the February 25, 1999 amendments that were not previously filed.

Item 5.03. AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL YEAR

On June 3, 1999, the Registrant filed a Certificate of Amendment (the “Amendment”) to its Restated Certificate of Incorporation to, among other things, increase its total number of shares of all classes of stock that the Registrant is authorized to issue from 90,000,000 to 180,000,000 shares of Common Stock. The Amendment was disclosed, and ultimately approved by, the Registrant’s stockholders in the Registrant’s proxy statement filed on April 2, 1999.

The information set forth above does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, a copy of which was not filed previously through an inadvertent oversight but is filed herewith as Exhibit 3.1 and is incorporated in this Item 5.03 by reference.

Item 8.01. OTHER EVENTS

Litigation.

On or about November 12, 2004, two putative class action lawsuits were filed in the Superior Court of the State of California in the County of Santa Clara against VISX and the VISX board of directors. The cases are captioned William Kinchy vs. VISX, Inc., et seq., Case No. 104CV030447 and Douglas Shearer vs. VISX, Inc.,et seq., Case No. 104CV030452. The complaints allege that, among other things, the VISX board of directors breached their fiduciary duties of loyalty and due care by deciding to sell VISX to AMO without undertaking sufficient effort to obtain the best offer possible for stockholders. The complaints further allege that the consideration to be paid in the merger is unfair and inadequate, and that VISX’s board of directors breached their fiduciary duties of care, loyalty, and candor to VISX’s public stockholders in connection with the merger. The complaints seek, among other things, an injunction prohibiting VISX from consummating the merger and rescission against the merger and any of the terms of the merger agreement, as well as attorneys’ fees and costs. VISX believes the complaints are without merit and intends to vigorously defend itself against these actions.

Change of Control Severance Agreements.

As disclosed in the Registrant’s proxy statements filed on March 30, 2000, March 22, 2001, April 1, 2002, April 17, 2003 and April 9, 2004, from time-to-time, the Registrant has entered into change of control severance agreements (“Change of Control Agreements”) with its executive officers. The earliest of these agreements were entered into on May 12, 1999 between the Registrant and Derek A. Bertocci and Elizabeth H. Davila. Over time, the Registrant has amended and restated the forms of its Change of Control Agreements and, currently, each of the executive officers is subject to an agreement with same terms and conditions as the form of Change of Control Agreement that is filed as Exhibit 10.6 to this Current Report on Form 8-K. The following is a list of the Registrant’s executive officers who are parties to agreements with terms and conditions identical to the current form of Change of Control Agreement and the date on which the executive first entered into a Change of Control Agreement with the Registrant: Derek A. Bertocci, May 12, 1999; Elizabeth H. Davila, May 12, 1999; Donald L. Fagen, February 1, 2001; Carol F. H. Harner, Ph.D.,

May 12, 1999; Theresa A. Johnson, October 22, 2003, Catherine E. Murphy, September 24, 2001; Douglas H. Post, May 12, 1999; John F. Runkel, Jr., January 29, 2001; Alan F. Russell, Ph.D., June 12, 2001; and Joaquin V. Wolff, January 1, 2001.

Lease.

On July 16, 1992, the Registrant entered into a lease with Sobrato Interests (the “Sobrato Lease”), which covers approximately 52,344 rentable square feet of real property located at 3400 Central Expressway in Santa Clara, California, with a current monthly rent of $146,939. The Sobrato Lease was amended on October 2, 1992, March 8, 1996 and March 29, 2002.

The information set forth above does not purport to be complete and is qualified in its entirety by reference to the full text of the form of the Change of Control Agreement and the Sobrato Lease, copies of which are filed herewith as Exhibits 10.6 and 10.7, respectively, both of which are incorporated in this Item 8.01 by reference. Neither the form of Change of Control Agreement nor the Sobrato Lease referenced above have been filed previously.

Item 9.01. Financial Statements and Exhibits

(c) Exhibits.

Exhibit
No.	Description
3.1	Certificate of Amendment of Restated Certificate of Incorporation of VISX, Incorporated dated as of June 3, 1999.
10.1	1987 (Taunton) Stock Option Plan as amended November 9, 2004.
10.2	1993 Flexible Stock Incentive Plan as amended November 9, 2004.
10.3	1995 Stock Plan as amended November 9, 2004.
10.4	1995 Director Option and Stock Deferral Plan as amended November 9, 2004.
10.5	1996 Supplemental Stock Plan as amended November 9, 2004.
10.6	Form of Change of Control Severance Agreement.
10.7	Lease dated as of July 16, 1992 by and between Sobrato Interests and VISX, Incorporated and amended on October 2, 1992, March 8, 1996 and March 29, 2002.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

VISX, INCORPORATED
By:	/s/ John F. Runkel, Jr.
	John F. Runkel, Jr.
	Senior Vice President of Business Development and General Counsel

Date: November 18, 2004

EXHIBIT INDEX

Exhibit
No.	Description
3.1	Certificate of Amendment of Restated Certificate of Incorporation of VISX, Incorporated dated as of June 3, 1999.
10.1	1987 (Taunton) Stock Option Plan as amended November 9, 2004.
10.2	1993 Flexible Stock Incentive Plan as amended November 9, 2004.
10.3	1995 Stock Plan as amended November 9, 2004.
10.4	1995 Director Option and Stock Deferral Plan as amended November 9, 2004.
10.5	1996 Supplemental Stock Plan as amended November 9, 2004.
10.6	Form of Change of Control Severance Agreement.
10.7	Lease dated as of July 16, 1992 by and between Sobrato Interests and VISX, Incorporated and amended on October 2, 1992, March 8, 1996 and March 29, 2002.

EX-3.1

                                                                     Exhibit 3.1

                                                                          PAGE 1

                               State of Delaware

                        Office of the Secretary of State

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

     I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY

CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT

OF "VISX, INCORPORATED", FILED IN THIS OFFICE ON THE THIRD DAY OF JUNE, A.D.

1999, AT 10 O'CLOCK A.M.

     A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE

COUNTY RECORDER OF DEEDS.





                                   /s/ Edward J. Freel
                                   ---------------------------------------------
                                   Edward J. Freel, Secretary of State

                               [SEAL OF DELAWARE]

2162938 8100                       AUTHENTICATION:   9784848

991222296                                    DATE:   06-04-99

                            CERTIFICATE OF AMENDMENT

                                       OF

                     RESTATED CERTIFICATE OF INCORPORATION

                                       OF

                               VISX, INCORPORATED

      VISX, INCORPORATED (the "Company"), a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:

      FIRST: That at a meeting of the Board of Directors of the Company
resolutions were duly adopted setting forth a proposed amendment to the
Restated Certificate of Incorporation of said corporation, declaring said
amendment to be advisable and calling a meeting of the stockholders of said
corporation for consideration thereof. The resolution setting forth the
proposed amendment is as follows:

      RESOLVED, that the Restated Certificate of Incorporation of VISX,
Incorporated be amended by changing the fourth Article thereof so that, as
amended, said Article shall be and read as follows:

      "IV.  The total number of shares of all classes of stock that the
Company is authorized to issue is one hundred eighty million (180,000,000)
shares of Common Stock with a par value of $0.01 per share."

      SECOND: That thereafter, pursuant to resolution of its Board of
Directors, an annual meeting of the stockholders of said corporation was duly
called and held, upon notice in accordance with Section 222 of the General
Corporation Law of the State of Delaware at which meeting the necessary number
of shares as required by statute were voted in favor of the amendment.

      THIRD: That the aforesaid amendment was duly adopted in accordance with
the applicable provisions of Section 242 of the General Corporation Law of the
State of Delaware.

      IN WITNESS WHEREOF, said corporation has caused this certificate to be
signed by Mark B. Logan, its Chairman of the Board and Chief Executive Officer,
this 28th day of May, 1999.

                                       By: /s/ Mark B. Logan
                                           ------------------------------------
                                           Mark B. Logan
                                           Chairman of the Board and Chief
                                           Executive Officer

EX-10.1

                                                                    EXHIBIT 10.1

                           TAUNTON TECHNOLOGIES, INC.
                                STOCK OPTION PLAN

                      (As amended through November 9, 2004)

         SECTION 1. Establishment. There is hereby established the Stock Option
Plan, pursuant to which employees and any other persons who perform substantial
services for or on behalf of TAUNTON TECHNOLOGIES, INC. (the "Company") and its
subsidiaries may be granted options to purchase shares of common stock of the
Company, par value $.01 per share ("Common Stock"), and thereby share in the
future growth of the business. The subsidiaries of the Company included in this
Plan (the "Subsidiaries") shall be any subsidiary of the Company as defined in
Section 425 of the Internal Revenue Code of 1986, as amended (the "Code").

         SECTION 2. Status of Options. The options which may be granted pursuant
to this Plan will constitute either incentive stock options within the meaning
of Section 422A of the Code ("Incentive Stock Options") or options which are not
Incentive Stock Options ("Non-incentive Stock Options"). Incentive Stock Options
and Non-incentive Stock Options shall be collectively referred to herein as
"Options".

         SECTION 3. Eligibility. All employees of the Company or any of its
Subsidiaries (including officers, whether or not they are members of the Board
of Directors) who are employed at the time of the adoption of this Plan or
thereafter, and any other persons who perform substantial services for or on
behalf of the Company or any of its Subsidiaries (collectively, the "optionees")
shall be eligible to be granted Non-incentive Stock Options to purchase shares
of Common Stock under this Plan. All employees of the Company or any of its
Subsidiaries who are employed at the time of adoption of this Plan or thereafter
shall be eligible to be granted Incentive Stock Options under this Plan.
Notwithstanding any provision hereof, no person who, at the relevant time is a
member of the "Committee" (as defined in Section 2(a)), shall be eligible to
receive Options under this Plan.

         SECTION 4. Number of Shares covered by Options; No Preemptive Rights.
The total number of shares which may be issued and sold pursuant to Options
granted under this Plan shall .be 330,000 shares of Common Stock (or the number
and kind of shares of stock or other securities which, in accordance with
Section 7 of this Plan, shall be substituted for such shares of Common Stock or
to which said shares shall be adjusted; hereinafter, all references to shares of
Common Stock are deemed to be references to said shares or shares so adjusted.)
The issuance of said shares shall be free from any preemptive or preferential
right of subscription or purchase on the part of any stockholder.

         SECTION 5. Administration.

                  (a) This Plan shall be administered by the committee (the
"Committee") referred to in paragraph (b) of this Section. Subject to the
express provisions of this Plan, the Committee shall have complete authority, in
its discretion, to interpret this Plan, to prescribe, amend and rescind

rules and regulations relating to it, to determine the terms and provisions of
the respective option agreements (which need not be identical), to determine the
optionees to whom, and the times and the prices at which, Options shall be
granted, the option periods, the number of shares of the Common Stock to be
subject to each Option and to identify each Option as either an Incentive Stock
Option or a Non-incentive Stock Option, and to make all other determinations
necessary or advisable for the administration of the Plan. Each Option shall be
clearly identified at the time of grant as to its status. In making such
determinations, the Committee may take into account the nature of the services
rendered by the respective optionees, their present and potential contributions
to the success of the Company and such other factors as the Committee, in its
discretion, shall deem relevant. The Committee's determination on all of the
matters referred to in this Section 5 shall be conclusive. Nothing contained in
this Plan shall be deemed to give any optionee any right to be granted an Option
to purchase shares of Common Stock except to the extent and upon such terms and
conditions as may be determined by the Committee.

                  (b) The Committee shall consist of from two (2) to five (5)
individuals who shall be members of the Board. Each member of the Committee
shall be a person who is not, and who, during the period of one year ending on
the date of his appointment to the Committee, has not been, eligible for
selection as a person to whom stock options, warrants or similar rights
(including stock appreciation rights) may be granted under this Plan and/or any
other plan of the Company. The Committee shall be appointed by the Board, which
may at any time, and from time to time, remove any member of the Committee, with
or without cause, appoint additional members to the Committee and fill
vacancies, however caused, in the Committee. A majority of the members of the
Committee shall constitute a quorum and determinations of the Committee shall be
made by a majority of the members present at a meeting duly called and held. An/
decision or determination of the Committee reduced to writing and signed by all
of the members of the Committee shall be fully as effective as if it had been
made at a meeting duly called and held.

                  (c) Notwithstanding any provision hereof to the contrary the
Committee shall have sole and exclusive authority with respect to the grant of
Options to directors.

         SECTION 6. Terms of Options. Each Option granted under this Plan shall
be evidenced by a Stock Option Agreement which shall be executed by the Company
and by the person to whom such Option is granted, and shall be subject to the
following terms and conditions:

                  (a) The price at which shares of Common Stock covered by each
Option may be purchased pursuant thereto shall be determined in each case on the
date of grant by the Committee, but shall be an amount not less than the par
value, if any, of such shares and, in the case of an Incentive Stock Option, not
less than the fair market value of such shares on the date of grant.
Non-incentive Options may be issued with an exercise price of less than fair
market value on the date of the grant only if the Committee shall have
affirmatively determined that such lower price was reasonably necessary to
attract or retain a key employee or employees. For purposes of this Section, the
fair market value of shares of Common Stock on any day shall be (i) in the event
the Common Stock is not publicly traded, the fair market value on such day as
determined in good faith by the Committee or (ii) in the event the Common Stock
is publicly traded, the last sale price of a share of Common Stock as reported
by the principal quotation service on which the Common Stock is listed, if
available, or, if last sale prices are not reported with respect to the Common
Stock, the mean of the

                                                                             -2-

high bid and low asked prices of a share of Common Stock as reported by such
principal quotation service, or, if there is no such report by such quotation
service for such day, such fair market value shall be the average of (i) the
last sale price (or, if last sale prices are not reported with respect to the
Common Stock, the mean of the high bid and low asked prices) on the day next
preceding such day for which there was a report and (ii) the last sale price
(or, if last sale prices are not reported with respect to the Common Stock, the
mean of the high bid and low asked prices) on the day next succeeding such day
for which there was a report, or as otherwise determined by the Committee in its
discretion pursuant to any reasonable method contemplated by Section 422A of the
Code and any regulations issued pursuant to that Section. The option price of
the shares to be purchased pursuant to each Option shall be paid in full in cash
at the time of the exercise of the Option.


                  (b) The terms and conditions of each Stock Option Agreement
shall be as determined by the Committee but not inconsistent with the Stock
Option Plan. Each Stock Option Agreement shall provide that such Option may be
exercised by the optionee, in such parts and at such times as may be specified
in such Agreement, within a period not exceeding ten years after the date on
which the Option is granted with respect to Incentive Stock Options and ten
years and thirty days after such date with respect to Non-Incentive Stock
Options (hereinafter called, in each case, the "Option Period"). Each Incentive
Stock Option Agreement shall provide that such Incentive Stock Option may only
be exercised during the continuance of the employee's employment by the Company
or any of its Subsidiaries or during the period of thirty days after the
termination of such employment to the extent that the right to exercise such
Option had accrued at the date of such termination; provided, however, that if
Options as to 100 or more shares are held by an optionee, then such Options may
not be exercised for less than 100 shares at any one time, and if Options for
less than 100 shares are held by an optionee, then Options for all such shares
must be exercised at one time; and provided, further, that, if the optionee,
while still employed by the Company or any of its Subsidiaries, shall die within
the Option Period, the Incentive Stock Option may be exercised, to the extent
specified in the Incentive Stock Option Agreement, and as herein provided, but
only prior to the first to occur of:

                           (i) the expiration of the period of ninety days after
the date of the optionee's death, or

                           (ii) the expiration of the Option Period,

by the person or persons entitled to do so under the optionee's will, or, if the
optionee shall fail to make testamentary disposition of said Option, or shall
die intestate, by the optionee's legal representative or representatives.

                  (c) Each Option granted under this Plan shall by its terms be
non-transferable by the optionee except by will or by the laws of descent and
distribution, and each Option shall by its terms be exercisable during the
optionee's lifetime only by him.

                  (d) Notwithstanding the foregoing, if an Incentive Stock
Option is granted to a person at any time when such person owns, within the
meaning of Section 425(d) of the Code, more than 10% of the total combined
voting power of all classes of stock of the employer corporation (or a parent or
subsidiary of such corporation within the meaning of Section 425 of the Code)
the price at

                                                                             -3-

which each share of Common Stock covered by such Incentive Stock Option may be
purchased pursuant to such Incentive Stock Option shall not be less than 110% of
the fair market value (determined as in paragraph (a) of this Section) of the
shares of Common Stock at the time the Incentive Stock Option is granted, and
such Incentive Stock Option must be exercised within a period specified in the
Incentive Stock Option Agreement which does not exceed five years after the date
on which such Incentive Stock Option is granted.

                  (e) Notwithstanding the foregoing, the aggregate fair market
value (as determined under Section 6(a) as of the time such Incentive Stock
Options are granted) of shares of Common Stock subject to Incentive Stock
Options which are first exercisable by any employee during any calendar year
(under all stock option plans of the employee's employer corporation and its
parent and subsidiary corporation within the meaning of Section 425 of the Code)
shall not exceed $100,000.

                  (f) The Stock Option Agreement entered into pursuant hereto
may contain such other terms, provisions and conditions not inconsistent
herewith as shall be determined by the Committee including, without limitation,
provisions (i) requiring the giving of satisfactory assurances by the optionee
that the shares are purchased for investment and not with a view to resale in
connection with a distribution of such shares* and will not be transferred in
violation of applicable securities laws, (ii) restricting the transferability of
such shares during a specified period and (iii) requiring the resale of such
shares to the Company at the option price if the employment of the employee
terminates prior to a specified time.

                  (g) In the discretion of the Committee, a single Stock Option
Agreement may include both Incentive Stock Options and Non-Incentive Stock
Options, or those Options may be included in separate Stock Option Agreements.

         SECTION 7. Adjustment of Number of Shares.

                  (a) In the event that a dividend shall be declared upon the
shares of Common Stock payable in shares of Common Stock, the number of shares
of Common Stock then subject to any Option granted hereunder, and the number of
shares reserved for issuance pursuant to this Plan but not yet covered by an
Option, shall be adjusted by adding to each of such shares the number of shares
which would be distributable thereon if such share had been outstanding on the
date fixed for determining the stockholders entitled to receive such stock
dividend. In the event that the outstanding shares of Common Stock shall be
changed into or exchanged for a different number or kind of shares of stock or
other securities of the Company or of another corporation, whether through
reorganization, recapitalization, stock split-up, combination of shares, merger
or consolidation, then there shall be substituted for each share of Common Stock
subject to any such Option and for each share of Common Stock reserved for
issuance pursuant to the Plan but not yet covered by an Option, the number and
kind of shares of stock or other securities into which each outstanding share of
Common Stock shall be so changed or for which each such share shall be
exchanged; provided, however, that in the event that such change or exchange
results from a merger or consolidation, and in the judgment of the Board of
Directors such substitution cannot be effected or would be inappropriate, or if
- -the Company shall sell all or substantially all of its assets, the Company
shall use reasonable efforts to effect some other adjustment of each then
outstanding Option which the Board of Directors, in its sole discretion, shall
deem equitable. In the event that

                                                                             -4-

there shall be any change, other than as specified above in this Section 7, in
the number or kind of outstanding shares of Common Stock or of any stock or
other securities into which such shares of Common Stock shall have been changed
or for which they shall have been exchanged, then, if the Board of Directors
shall determine that such change equitably requires an adjustment in the number
or kind of shares theretofore reserved for issuance pursuant to the Plan but not
yet covered by an Option and of the shares then subject to Options, such
adjustment shall be made by the Board of Directors and shall be effective and
binding for all purposes of this Plan and of each Stock Option Agreement.

                  (b) In the case of any substitution or adjustment pursuant to
this Section, the option price in each Stock Option Agreement for each share
covered thereby prior to such substitution or adjustment will be the total
option price for all shares of stock or other securities which shall have been
substituted for each such share or to which such share shall have been adjusted
pursuant to this Section 7. No adjustment or substitution provided for in this
Section 7 shall require the Company, in any Stock Option Agreement, to sell a
fractional share, and the total substitution or adjustment with respect to each
Stock Option Agreement shall be limited accordingly.

                  (c) Notwithstanding the foregoing, if any adjustment in the
number of shares which may be issued and sold pursuant to Options is required by
the Code or regulations issued pursuant thereto to be approved by the
stockholders in order to enable the Company to issue Incentive Stock Options
pursuant to this Plan, then no such adjustment shall be made without the
approval of the stockholders. In addition, if the adjustments or substitution
pursuant to this Section 7 will cause Incentive Stock Options to fail to
continue to qualify as Incentive Stock Options or will result in a modification,
extension or renewal of such Incentive Stock Options within the meaning of
Section 425 of the Code, the Board of Directors shall use reasonable efforts to
effect such other adjustment of each then outstanding option as the Board of
Directors, in its sole discretion, shall deem equitable.

                  (d) Notwithstanding subsection (a) of this Section 7, in the
event of a Change of Control (as defined below), each optionee shall fully vest
in and have the right to exercise his or her Option as to all of the shares of
Common Stock then subject to the Option, including shares of Common Stock
subject to the Option as to which it would not otherwise be vested or
exercisable.

         A "Change of Control" means the occurrence of any of the following
events:

                  (i) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
other than the Company, a subsidiary of the Company or a Company employee
benefit plan, including any trustee of such plan acting as trustee, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing twenty
percent (20%) or more of the combined voting power of the Company's then
outstanding securities entitled to vote generally in the election of directors;
or

                  (ii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent

                                                                             -5-

(either by remaining outstanding or by being converted into voting securities of
the surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
of the Company approve an agreement for the sale or disposition by the Company
of all or substantially all the Company's assets; or

                  (iii) a change in the composition of the Board of Directors of
the Company, as a result of which fewer than a majority of the directors are
Incumbent Directors. "Incumbent Directors" shall mean directors who either (A)
are directors of the Company as of the date this amendment to the Plan is
approved by the Board of Directors, or (B) are elected, or nominated for
election, to the Board of Directors of the Company with the affirmative votes of
at least a majority of the Incumbent Directors and whose election or nomination
was not in connection with any transaction described in (i) or (ii) above or in
connection with an actual or threatened proxy contest relating to the election
of directors of the Company.

         SECTION 8. Amendments. This Plan may be terminated or amended from time
to time by vote of the Board of Directors; provided, however, that no amendment
which shall (i) change the total number of shares which may be issued and sold
pursuant to Options granted under this Plan, (ii) change the designation of
employees eligible to receive Incentive Stock Options or the class of employees
or other persons eligible to receive Options, (iii) decrease the minimum option
price stated in Section 6(a) of this Plan, (iv) extend the period during which
an option may be granted or exercised beyond the maximum period specified in
this Plan or (v) withdraw the authority to administer this Plan from the
Committee, shall be effective without the approval of the stockholders.

         SECTION 9. Termination. Except to the extent necessary to govern
outstanding Options, this Plan shall terminate on, and no additional Options
shall be granted after, ten years from the date the Plan is adopted, or ten
years from the date the Plan is approved by the stockholders, whichever is
earlier.


                                                                             -6-

EX-10.2

                                                                    EXHIBIT 10.2

                               VISX, INCORPORATED

                       1993 FLEXIBLE STOCK INCENTIVE PLAN

                   (as amended and restated November 9, 2004)


         1. Establishment, Purpose, and Definitions.

                  (a) There is hereby adopted the 1993 Flexible Stock Incentive
Plan (the "Plan") of VISX, INCORPORATED (the "Company").

                  (b) The purpose of the Plan is to provide a means whereby
eligible individuals (as defined in paragraph 4, below) can acquire Common Stock
of the Company (the "Stock"). The Plan provides employees (including officers
and directors who are employees) of the Company and of its Affiliates an
opportunity to purchase shares of Stock pursuant to options which may qualify as
incentive stock options (referred to as "incentive stock options") under Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"), and
employees, officers, directors, independent contractors, and consultants of the
Company and of its Affiliates an opportunity to purchase shares of Stock
pursuant to options which are not described in Sections 422 or 423 of the Code
(referred to as "nonqualified stock options"). The Plan also provides for the
sale or bonus of Stock to eligible individuals in connection with the
performance of services for the Company or its Affiliates. Finally, the Plan
authorizes the grant of stock appreciation rights ("SARs"), either separately or
in tandem with stock options, entitling holders to cash compensation measured by
appreciation in the value of the Stock.

                  (c) The term "Affiliates" as used in the Plan means parent or
subsidiary corporations, as defined in Sections 424(e) and (f) of the Code (but
substituting "the Company" for "employer corporation"), including parents or
subsidiaries which become such after adoption of the Plan.

         2. Administration of the Plan.

                  (a) The Plan shall be administered by the Board of Directors
of the Company (the "Board"). The Board may delegate the responsibility for
administering the Plan to a committee, under such terms and conditions as the
Board shall determine (the "Committee"). The Committee shall consist of two or
more members of the Board or such lesser number of members of the Board as
permitted by Rule 16b-3 promulgated under the Securities Exchange Act of 1934,
as amended ("Rule 16b-3"). None of the members of the Committee shall receive,
while serving on the Committee, or during the one-year period preceding
appointment to the Committee, a grant or award of equity securities tinder (i)
the Plan or (ii) any other plan of the Company or its affiliates under which the
participants are entitled to acquire Stock (including restricted Stock), stock
options, stock bonuses, related rights or stock appreciation rights of the
Company or any of its affiliates, other than pursuant to transactions in any
such other plan which do not disqualify a director from being a disinterested
person under Rule 16b-3. The limitations set forth in this Section 2(a) shall
automatically incorporate any additional requirements that may in the future be
necessary for the



Plan to comply with Rule 16b-3. Members of the Committee shall serve at the
pleasure of the Board. The Committee shall select one of its members as
chairman, and shall hold meetings at such times and places as it may determine.
A majority of the Committee shall constitute a quorum and acts of the Committee
at which a quorum is present or acts reduced to or approved in owriting by all
the members of the Committee, shall be the valid acts of the Committee. If the
Board does not delegate administration of the Plan to the Committee, then each
reference in this Plan to "the Committee" shall be construed to refer to the
Board.

                  (b) The Committee shall determine which eligible individuals
(as defined in paragraph 4, below) shall be granted options under the Plan, the
timing of such grants, the terms thereof (including any restrictions on the
Stock), and the number of shares subject to such options.

                  (c) The Committee may amend the terms of any outstanding
option granted under this Plan, but any amendment which would adversely affect
the Optionee's rights under an outstanding option shall not be made without the
Optionee's written consent The Committee may, with the Optionee's written
consent cancel any outstanding stock option or accept any outstanding stock
option in exchange for a new option.

                  (d) The Committee shall also determine which eligible
individuals (as defined in paragraph 4, below) shall be issued Stock or SARs
under the Plan, the timing of such grants, the terms thereof (including any
restrictions), and the number of shares or SARs to be granted. The Stock shall
be issued for such consideration (if any) as the Committee deems appropriate.
Stock issued subject to restrictions shall be evidenced by a written agreement
(the "Restricted Stock Purchase Agreement" or the "Restricted Stock Bonus
Agreement"). The Committee may amend any Restricted Stock Purchase Agreement but
any amendment which would adversely affect the stockholder's rights to the Stock
shall not be made without his or her written consent

                  (e) The Committee shall have the sole authority, in its
absolute discretion, to adopt amend, and rescind such rules and regulations as,
in its opinion, may be advisable for the administration of the Plan, to construe
and interpret the Plan, the rules and the regulations, and the instruments
evidencing options or Stock granted under the Plan and to make all other
determinations deemed necessary or advisable for the administration of the Plan.
All decisions, determinations, and interpretations of the Committee shall be
binding on all participants.

         3. Stock Subject to the Plan.

                  (a) An aggregate of not more than 1,000,000 shares of Stock
shall be available for the grant of stock options or the issuance of Stock under
the Plan, If an option is surrendered (except surrender for shares of Stock) or
for any other reason ceases to be exercisable in whole or in part the shares
which were subject to such option but as to which the option had not been
exercised shall continue to be available under the Plan. Any Stock which the
Company retains upon exercise of an option in order to satisfy the exercise
price for such option or any withholding taxes due with respect to such option
exercise shall be treated as issued to the optionee and shall thereafter not be
available under the Plan.

                                                                             -2-



                  (b) If there is any change in the Stock subject to the Plan,
an Option Agreement/ a Restricted Stock Purchase Agreement, a Restricted Stock
Bonus Agreement or a SAR Agreement through merger, consolidation,
reorganization, recapitalization, reincorporation, stock split, stock dividend
(in excess of two percent), or other change in the corporate structure of the
Company, the Committee shall make appropriate adjustments in order to preserve
but not to increase the benefits to the individual, including adjustments to the
aggregate number, kind of shares and price, per share subject to the Plan, the
Option Agreement the Restricted Stock Purchase Agreement the Restricted Stock
Bonus Agreement or the SAR Agreement

         4. Eligible Individuals.

                  (a) Individuals who shall be eligible to have granted to them
the options, Stock, or SARs provided for by the Plan shall be such employees,
officers, directors, independent contractors and consultants of the Company or
an Affiliate as the Committee, in its discretion, shall designate from time to
time. Notwithstanding the foregoing, only employees of the Company or an
Affiliate (including officers and directors who are bona fide employees) shall
be eligible to receive incentive stock options.

                  (b) Sections 4(b)-(g) herein shall become effective at the
earlier of the following dates: (1) immediately after the close of the Annual
Meeting of the Company's Stockholders to be held in 1994, or (2) when the number
of shares available for the grant of options under the VEX, Incorporated 1990
Stock Option Plan is insufficient to grant to non-employee members of the Board
the Automatic Options provided in that Plan. At the first Annual Meeting of the
Company's Stockholders that takes place after the effective date of this
provision, and on the date of each subsequent Annual Meeting, each individual
who is elected or reelected at such Annual Meeting to serve as a non-employee
member of the Board (including any individual who may have already received one
or more automatic option grants under the Plan) shall automatically be granted
an option under the Plan to purchase an additional 2,000 shares of the Company's
Common Stock (subject to adjustment under paragraph 3(b)) upon the terms and
conditions specified below. In addition, any individual who (i) after the
effective date of this provision is elected to serve as a non-employee member of
the Board at a time other than an Annual Meeting of the Company's Stockholders
and (ii) has not previously received an automatic option grant under this
Section shall upon assumption of such office automatically be granted an option
under the Plan to purchase 2,000 shares of the Company's Common Stock (subject
to adjustment under paragraph 3(b)) upon the terms and conditions specified
below. A non-employee member of the Board for the purposes of this Section is an
individual who, at the time of his assumption of office as a director, is not an
employee of the Company or its Subsidiaries.

                  (c) The option price per share of the Automatic Option shall
be equal to one hundred percent (100%) of the average of the fair market value
of one share of the Company's Common Stock for the ten (10) trading days
preceding the Automatic Option grant date.

                  (d) The Automatic Option shall have a maximum term of ten (10)
years measured from the Automatic Option grant date and shall be exercisable for
all or any part of the covered shares immediately upon the expiration of six (6)
months after the date the option is granted.

                                                                             -3-



                  (e) The shares purchased under the option will be subject to
repurchase by the Company at the original exercise price in the event the
Optionee ceases to be a member of the Board. The repurchase right however, will
lapse, and the Optionee will vest in the shares purchasable under the option/ in
a series of five (5) equal annual installments, beginning one year after the
Automatic Option grant date, provided the optionee continues to serve as a
member of the Board. In addition/ the Company's repurchase right shall lapse in
its entirety should one or more of the following events occur while the optionee
is a member of the Board: (1) the optionee's death, (2) the optionee's permanent
disability, (3) a stockholder-approved Corporate Transaction as defined in
Section 15, or (4) a Change in Control. A Change in Control shall be deemed to
occur:

                           (i) if any "person," as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), other than the Company, a subsidiary of the Company or a
Company employee benefit plan, including any trustee of such plan acting as
trustee, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the combined voting power of the
Company's then outstanding securities entitled to vote generally in the election
of directors; or

                           (ii) if the stockholders of the Company approve a
merger or consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
of the Company approve an agreement for the sale or disposition by the Company
of all or substantially all the Company's assets; or

                           (iii) upon a change in the composition of the Board
of Directors of the Company, as a result of which fewer than a majority of the
directors are Incumbent Directors. "Incumbent Directors" shall mean directors
who either (A) are directors of the Company as of the date this amendment to the
Plan is approved by the Board of Directors, or (B) are elected, or nominated for
election, to the Board of Directors of the Company with the affirmative votes of
at least a majority of the Incumbent Directors and whose election or nomination
was not in connection with any transaction described in (i) or (ii) above or in
connection with an actual or threatened proxy contest relating to the election
of directors of the Company.

                  (f) In the event of a Change in Control/the optionee shall
have the right, exercisable during the thirty (30)-day period following the
Change in Control/ to surrender each Automatic Option which has been outstanding
under the Plan for at least six (6) months in exchange for a cash payment from
the Company in an amount equal to the excess of (i) the fair market value (on
the date of such surrender) of the shares of Common Stock purchasable under the
surrendered option, over (ii) the aggregate option price payable for such
shares. For purposes of this Section, the fair market value per share of Common
Stock subject to the surrendered option shall be deemed to be equal to the
greater of (a) the fair market value per share on the date of such surrender/ as
determined by the Committee, or (b) the highest reported price per share paid by
the acquiring entity in effecting the Change in Control.

                                                                             -4-



                  (g) Except for the Automatic Option grants under this Section/
those non-employee members of the Board who serve on the Committee shall not be
eligible to receive any additional option grants under this Plan or any other
stock plan of the Company or its subsidiaries. At any time mat the number of
non-employee members of the Board serving on the Committee is not sufficient to
comply with Rule 16b-3 under the Securities Exchange Act of 1934, one or more
additional members of the Board shall be designated to serve on the Committee
beginning on the date on which each such member is first "disinterested" as
defined in Rule 16b-3. The designated Board member or members shall be
ineligible for option grants, other than Automatic Options under this Section.

         5. The Option Price. The exercise price of the Stock covered by each
incentive stock option shall be not less than the per share fair market value of
such Stock on the date the option is granted. The exercise price of the Stock
covered by each nonqualified stock option other than Automatic Options shall be
as determined by the Committee. Notwithstanding the foregoing, in the case of an
incentive stock option granted to a person possessing more than ten percent of
the combined voting power of the Company or an Affiliate, the exercise price
shall be not less than 110 percent of the fair market value of the Stock on the
date the option is granted. The exercise price of an option shall be subject to
adjustment to the extent provided in paragraph 3(b), above.

         6. Terms and Conditions of Options.

                  (a) Each option granted pursuant to the Plan will be evidenced
by a written Stock Option Agreement executed by the Company and the person to
whom such option is granted.

                  (b) The Committee shall determine the term of each option/
other than Automatic Options, granted under the Plan; provided, however, that
the term of an incentive stock option shall not be for more than 10 years and
that; in the case of an incentive stock option granted to a person possessing
more than ten percent of the combined voting power of the Company or an
Affiliate, the term shall be for no more than five years.

                  (c) In the case of incentive stock options/ the aggregate fair
market value (determined as of the time such option is granted) of the Stock
with respect to which incentive stock options are exercisable for the first time
by an eligible employee in any calendar year (under this Plan and any other
plans of the Company or its Affiliates) shall not exceed $100,000.

                  (d) The Stock Option Agreement may contain such other terms,
provisions and conditions consistent with this plan as the Committee may
determine. If an option or any part thereof is intended to qualify as an
incentive stock option, the Stock Option Agreement shall contain those terms and
conditions which are necessary to so qualify it.

         7. Terms and Conditions of Stock Purchases and Bonuses.

                  (a) Each sale or grant of stock pursuant to the Plan will be
evidenced by a written Restricted Stock Purchase Agreement or Restricted Stock
Bonus Agreement executed by the Company and the person to whom such stock is
sold or granted.

                                                                             -5-



                  (b) The Restricted Stock Purchase Agreement or Restricted
Stock Bonus Agreement may contain such other terms, provisions and conditions
consistent with this plan as the Committee may determine/ including not by way
of limitation, restrictions on transfer, forfeiture provisions, repurchase
provisions and vesting provisions.

         8. Terms and Conditions of SARs. The Committee may, under such terms
and conditions as it deems appropriate, authorize the issuance of SARs evidenced
by a written SAR agreement (which, in the case of tandem options/ may be part of
the option agreement to which the SAR relates) executed by the Company and the
person to whom such SAR is granted. The SAR agreement may contain such terms,
provisions and conditions consistent with this Plan as the Committee may
determine.

         9. Use of Proceeds. Cash proceeds realized from the issuance of Stock
under the Plan shall constitute general funds of the Company.

         10. Amendment, Suspension, or Termination of the Plan.

                  (a) The Board may at any time amend, suspend or terminate the
Plan as it deems advisable; provided that such amendment suspension or
termination complies with all applicable requirements of state and federal law,
including any applicable requirement mat the Plan or an amendment to the Plan be
approved by the Company's stockholders, and provided further that, except as
provided in paragraph 3(b), above, the Board shall in no event amend the Plan in
the following respects without the consent of stockholders then sufficient to
approve the Plan in the first instance:

                           (i) To increase the maximum number of shares subject
to incentive stock options issued under the Plan; or

                           (ii) To change the designation or class of persons
eligible to receive incentive stock options under the Plan.

                  (b) No option may be granted nor any Stock issued under the
Plan during any suspension or after the termination of the Plan, and no
amendment suspension or termination of the Plan shall, without the affected
individual's consent, alter or impair any rights or obligations under any option
previously granted under the Plan. The Plan shall terminate with respect to the
grant of incentive stock options on February 2, 2003, unless previously
terminated by the Board pursuant to this paragraph 10.

         11. Assignability. Each option granted pursuant to this Plan shall/
during Optionee's lifetime, be exercisable only by him, and neither the option
nor any right hereunder shall be transferable by Optionee by operation of law or
otherwise other than by will or the laws of descent and distribution. Stock
subject to a Restricted Stock Purchase Agreement or a Restricted Stock Bonus
Agreement shall be transferable only as provided in such Agreement

         12. Payment Upon Exercise of Options. Payment of the purchase price
upon exercise of any option granted under this Plan shall be made in cash;
provided, however, that the Committee, in its sole discretion, may permit an
Optionee to pay the option price in whole or in part (i) with shares

                                                                             -6-



of Stock owned by the Optionee; (ii) by delivery on a form prescribed by the
Committee of an irrevocable direction to a securities broker approved by the
Committee to sell shares and deliver all or a portion of the proceeds to the
Company in payment for the Stock; (iii) by delivery of the Optionee's promissory
note with such recourse, interest, security, and redemption provisions as the
Committee in its discretion determines appropriate; or (iv) in any combination
of the foregoing. Any Stock used to exercise options shall be valued at its fair
market value on the date of the exercise of the option. In addition, the
Committee, in its sole discretion, may authorize the surrender by an Optionee of
all or part of an unexercised option and authorize a payment in consideration
thereof of an amount equal to the difference between the aggregate fair market
value of the Stock subject to such option and the aggregate option price of such
Stock. In the Committee's discretion, such payment may be made in cash, shares
of Stock with a fair market value on the date of surrender equal to the payment
amount, or some combination thereof.

         13. Withholding Taxes. No Stock shall be granted or sold under the Plan
to any participant, and no SAR may be exercised, until the participant has made
arrangements acceptable to the Committee for the satisfaction of federal, state
and local income and employment tax withholding obligations, including without
limitation obligations incident to the receipt of Stock under the Plan, the
lapsing of restrictions applicable to such Stock, the failure to satisfy the
conditions for treatment as incentive stock options under applicable tax law, or
the receipt of cash payments. Upon exercise of a stock option or lapsing of
restriction on stock issued under the Plan, the Company shall withhold from the
Optionee or, at the Committee's discretion, require the Stockholder to surrender
shares of the Company's Stock sufficient to satisfy federal, state and local
income and employment tax withholding obligations.

         14. Restrictions on Transfer of Shares. The Stock acquired pursuant to
the Plan shall be subject to such restrictions and agreements regarding sale,
assignment, encumbrances, or other transfer as are in effect among the
stockholders of the Company at the time such Stock is acquired, as well as to
such other restrictions as the Committee shall deem advisable.

         15. Corporate Transaction.

                  (a) For purposes of this Section 15, a "Corporate Transaction"
shall include any of the following stockholder-approved transactions to which
the Company is a party:

                           (i) a merger or consolidation in which the Company is
not the surviving entity, except for a transaction the principal purpose of
which is to change the state of the Company's incorporation;

                           (ii) the sale, transfer or other disposition of all
or substantially all of the assets of the Company in liquidation or dissolution
of the Company; or

                           (iii) any reverse merger in which the Company is the
surviving entity but in which securities assessing more than fifty percent (50%)
of the total combined voting power of the Company's outstanding securities are
transferred to holders different from those who held such securities immediately
prior to such merger.

                                                                             -7-



                  (b) Subject to Section 17, in the event of any Corporate
Transaction, any option, restricted stock or SAR shall vest in its entirety and
become exercisable, or with respect to restricted stock be released from
restrictions on transfer and repurchase rights, immediately prior to the
specified effective date of the Corporate Transaction unless assumed by the
successor corporation or its parent company pursuant to options, restricted
stock agreements or SARs providing substantially equal value and having
substantially equivalent provisions as the options/ restricted stock agreements
or SARs granted pursuant to this Plan. This section 15(b) shall not apply to
Automatic Options or to restricted stock purchased by the exercise of Automatic
Options, both of which are governed by Section 4(e) in the event of a Corporate
Transaction.

         16. Stockholder Approval. This Plan shall only become effective with
regard to incentive stock options upon its approval by a majority of the
stockholders voting (in person or by proxy) at a stockholders' meeting held
within 12 months of the Board's adoption of the Plan. The Committee may grant
incentive stock options under the Plan prior to the stockholders' meeting, but
until stockholder approval of the Plan is obtained, no incentive stock option
shall be exercisable.

         17. Change in Control. In the event of a Change in Control, any option,
restricted stock, or SAR shall vest in its entirety and become exercisable, or
with respect to restricted stock, be released from the restrictions on transfer
and repurchase rights. This Section 17 shall not apply to Automatic Options or
to restricted stock purchased by the exercise of Automatic Options, both of
which are governed by the terms and conditions in Section 4(e) in the event of a
Change in Control.

                                                                             -8-

EX-10.3

                                                                    Exhibit 10.3

                               VISX, INCORPORATED

                                 1995 STOCK PLAN

                          (AS AMENDED NOVEMBER 9, 2004)

      1. Purposes of the Plan. The purposes of this Stock Plan are:

            -     to attract and retain the best available personnel for
                  positions of substantial responsibility,

            -     to provide additional incentive to Employees and Consultants,
                  and

            -     to promote the success of the Company's business.

Options granted under the Plan may be Incentive Stock Options or Nonstatutory
Stock Options, as determined by the Administrator at the time of grant. Stock
Rights may also be granted under the Plan.

      2. Definitions. As used herein, the following definitions shall apply:

            (a) "Administrator" means the Board or any of its Committees as
shall be administering the Plan, in accordance with Section 4 of the Plan.

            (b) "Applicable Laws" means the legal requirements relating to the
administration of stock option plans under state corporate and securities laws
and the Code.

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

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

            (e) "Committee" means a Committee appointed by the Board in
accordance with Section 4 of the Plan.

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

            (g) "Company" means VISX, Incorporated, a Delaware corporation.

            (h) "Consultant" means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services and who is compensated
for such services. The term "Consultant" shall not include Directors who are
paid only a director's fee by the Company or who are not compensated by the
Company for their services as Directors.

            (i) "Continuous Status as an Employee or Consultant" means that the
employment or consulting relationship with the Company, any Parent, or
Subsidiary, is not interrupted or terminated. Continuous Status as an Employee
or Consultant shall not be considered

interrupted in the case of (i) any leave of absence approved by the Company or
(ii) transfers between locations of the Company or between the Company, its
Parent, any Subsidiary, or any successor. A leave of absence approved by the
Company shall include sick leave, military leave, or any other personal leave
approved by an authorized representative of the Company. For purposes of
Incentive Stock Options, no such leave may exceed ninety days, unless
reemployment upon expiration of such leave is guaranteed by statute or contract.
If reemployment upon expiration of a leave of absence approved by the Company is
not so guaranteed, on the 181st day of such leave any Incentive Stock Option
held by the Optionee shall cease to be treated as an Incentive Stock Option and
shall be treated for tax purposes as a Nonstatutory Stock Option.

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

            (k) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.

            (l) "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. Neither
service as a Director nor payment of a director's fee by the Company shall be
sufficient to constitute "employment" by the Company.

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

            (n) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:

                  (i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, the Fair Market Value of a Share of
Common Stock shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such system or exchange (or the
exchange with the greatest volume of trading in Common Stock) on the last market
trading day prior to the day 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 NASDAQ System (but
not on the Nasdaq National Market thereof) or is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the last market trading day prior
to the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;

                  (iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

            (o) "Incentive Stock Option" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.


                                      -2-

            (p) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.

            (q) "Notice of Grant" means a written notice evidencing certain
terms and conditions of an individual Option or Stock Right grant. In the case
of Options, the Notice of Grant is part of the Option Agreement.

            (r) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated

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

            (t) "Option Agreement" means a written agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions of the Plan.

            (u) "Optioned Stock" means the Common Stock subject to an Option or
Stock Right.

            (v) "Optionee" means an Employee or Consultant who holds an
outstanding Option or Stock Right.

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

            (x) "Plan" means this 1995 Stock Plan.

            (y) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of Stock Rights under Section 11 below.

            (z) "Restricted Stock Award Agreement" means a written agreement
between the Company and the Optionee evidencing the terms and restrictions
applying to stock awarded under a Stock Right. The Restricted Stock Award
Agreement is subject to the terms and conditions of the Plan and the Notice of
Grant.

            (aa) "Restricted Stock Purchase Agreement" means a written agreement
between the Company and the Optionee evidencing the terms and restrictions
applying to stock purchased under a Stock Right. The Restricted Stock Purchase
Agreement is subject to the terms and conditions of the Plan and the Notice of
Grant.

            (bb) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.

            (cc) "Section 16(b)" means Section 16(b) of the Securities Exchange
Act of 1934, as amended.


                                      -3-

            (dd) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.

            (ee) "Stock Right" means the right to purchase or receive as an
award Common Stock pursuant to Section 11 of the Plan, as evidenced by a Notice
of Grant.

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


      3. Stock Subject to the Plan. Subject to the provisions to Section 11 of
the Plan, the total number of Shares reserved and available for issuance under
the Plan is 10% of the Shares issued and outstanding on the date of adoption of
the Plan, less the number of Shares issued under the VISX. Incorporated 1996
Supplemental Stock Option Plan prior to the date the Plan is approved by the
Company's shareholders, which number shall be increased on the first day of each
new fiscal year of the Company from and including the 1996 fiscal year by a
number of Shares equal to 3% of the number of Shares outstanding as of the last
business day preceding each such first day of each new fiscal year. However,
notwithstanding the preceding sentence, the maximum number of Shares available
for issuance pursuant to Incentive Stock Options is 10% of the Shares issued and
outstanding on the date of adoption of the Plan, less the number of Shares
issued under the VISX. Incorporated 1996 Supplemental Stock Option Plan prior to
the date the Plan is approved by the Company's shareholders, which number shall
be increased on the first day of each new fiscal year of the Company from and
including the 1996 fiscal year by a number of Shares equal to 3% of the number
of Shares outstanding as of the date of adoption of the Plan.

            If an Option or Stock Right expires or becomes unexercisable without
having been exercised in full, the unpurchased Shares which were subject thereto
shall become available for future grant or sale under the Plan (unless the Plan
has terminated); provided, however, that Shares that have actually been issued
under the Plan, whether upon exercise of an Option or Right, shall not be
returned to the Plan and shall not become available for future distribution
under the Plan, except that if Shares of Restricted Stock are repurchased or
reacquired by the Company at their original purchase price, and the original
purchaser of such Shares did not receive any benefits of ownership of such
Shares, such Shares shall become available for future grant under the Plan. For
purposes of the preceding sentence, voting rights shall not be considered a
benefit of Share ownership.

      4. Administration of the Plan.

            (a) Procedure.

                  (i) Multiple Administrative Bodies. If permitted by Rule
16b-3, the Plan may be administered by different bodies with respect to
Directors, Officers who are not Directors, and Employees who are neither
Directors nor Officers.

                  (ii) Administration With Respect to Directors and Officers
Subject to Section 16(b). With respect to Option or Stock Right grants made to
Employees who are also Officers or Directors subject to Section 16(b) of the
Exchange Act, the Plan shall be administered by (A) the Board, if the Board may
administer the Plan in a manner complying with the rules under


                                      -4-

Rule 16b-3 relating to the disinterested administration of employee benefit
plans under which Section 16(b) exempt discretionary grants and awards of equity
securities are to be made, or (B) a committee designated by the Board to
administer the Plan, which committee shall be constituted to comply with the
rules under Rule 16b-3 relating to the disinterested administration of employee
benefit plans under which Section 16(b) exempt discretionary grants and awards
of equity securities are to be made. Once appointed, 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 the Committee and
appoint additional members, remove members (with or without cause) and
substitute new members, fill vacancies (however caused), and remove all members
of the Committee and thereafter directly administer the Plan, all to the extent
permitted by the rules under Rule 16b-3 relating to the disinterested
administration of employee benefit plans under which Section 16(b) exempt
discretionary grants and awards of equity securities are to be made.

                  (iii) Administration With Respect to Other Persons. With
respect to Option or Stock Right grants made to Employees or Consultants who are
neither Directors nor Officers of the Company, the Plan shall be administered by
(A) the Board or (B) a committee designated by the Board, which committee shall
be constituted to satisfy Applicable Laws. Once appointed, such Committee shall
serve in its designated capacity until otherwise directed by the Board. The
Board may increase the size of the Committee and appoint additional members,
remove members (with or without cause) and substitute new members, fill
vacancies (however caused), and remove all members of the Committee and
thereafter directly administer the Plan, all to the extent permitted by
Applicable Laws.

            (b) Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, 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(n) of the Plan;

                  (ii) to select the Consultants and Employees to whom Options
and Stock Rights may be granted hereunder;

                  (iii) to determine whether and to what extent Options and
Stock Rights or any combination thereof, are granted hereunder;

                  (iv) to determine the number of shares of Common Stock to be
covered by each Option and Stock Right 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. Such terms and
conditions include, but are not limited to, the exercise price, the time or
times when Options or Stock Rights may be exercised (which may be based on
performance criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Option or Stock
Right or the shares of Common Stock


                                      -5-

relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;

                  (vii) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan;

                  (viii) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;

                  (ix) to modify or amend each Option or Stock Right (subject to
Section 15(c) of the Plan), including the discretionary authority to extend the
post-termination exercisability period of Options longer than is otherwise
provided for in the Plan;

                  (x) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option or Stock Right
previously granted by the Administrator;

                  (xi) to determine the terms and restrictions applicable to
Options and Stock Rights and any Restricted Stock; and

                  (xii) to make all other determinations deemed necessary or
advisable for administering the Plan.

            (c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Stock Rights.

      5. Eligibility. Nonstatutory Stock Options and Stock Rights may be granted
to Employees and Consultants. Incentive Stock Options may be granted only to
Employees. If otherwise eligible, an Employee or Consultant who has been granted
an Option or Stock Right may be granted additional Options or Stock Rights.

      6. Limitations.

            (a) Each Option shall be designated in the written option agreement
as either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds S 100.000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.

            (b) Neither the Plan nor any Option or Stock Right shall confer upon
an Optionee any right with respect to continuing the Optionee's employment or
consulting relationship with the


                                      -6-

Company, nor shall they interfere in any way with the Optionee's right or the
Company's right to terminate such employment or consulting relationship at any
time, with or without cause.

            (c) The following limitations shall apply to grants of Options and
Stock Rights to Employees:

                  (i) No Employee shall be granted, in any fiscal year of the
Company, Options and Stock Rights to purchase more than 500,000 Shares.

                  (ii) In connection with his or her initial employment, an
Employee may be granted Options and Stock Rights to purchase up to an additional
500,000 Shares which shall not count against the limit set forth in subsection
(i) above.

                  (iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 13.

      7. Term of Plan. Subject to Section 19 of the Plan, the Plan shall become
effective upon the earlier to occur of its adoption by the Board or its approval
by the stockholders of the Company as described in Section 19 of the Plan. It
shall continue in effect for a term of five (5) years unless terminated earlier
under Section 15 of the Plan.

      8. Term of Option. The term of each Option shall be stated in the Notice
of Grant; provided, however, that in the case of an Incentive Stock Option, the
term shall be ten (10) years from the date of grant or such shorter term as may
be provided in the Notice of Grant. Moreover, in the case of an Incentive Stock
Option granted to an Optionee who, at the time the Incentive Stock Option is
granted, owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary, the term of
the Incentive Stock Option shall be five (5) years from the date of grant or
such shorter term as may be provided in the Notice of Grant.

      9. Option Exercise Price and Consideration.

            (a) Exercise Price. The per share exercise price for the Shares to
be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

                  (i) In the case of an Incentive Stock Option

                        (A) granted to an Employee who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, 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 Employee other than an Employee
described in paragraph (A) immediately above, the per Share exercise price shall
be no less than 100% of the Fair Market Value per Share on the date of grant.


                                      -7-

                 (ii) In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be determined by the Administrator.

            (b) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised. In so doing, the Administrator may specify that an
Option may not be exercised until the completion of a service period.

            (c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:

                  (i) cash;

                  (ii) check;

                  (iii) promissory note;

                  (iv) other Shares which (A) in the case of Shares acquired
upon exercise of an option, have been owned by the Optionee for more than six
months on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;

                  (v) 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;

                  (vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;

                  (vii) any combination of the foregoing methods of payment: or

                  (viii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.

      10. Exercise of Option.

            (a) Procedure for Exercise; Rights as a Stockholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement.

            An Option may not be exercised for a fraction of a Share.


                                      -8-

            An Option shall be deemed exercised when the Company receives: (i)
written notice of exercise (in accordance with the Option Agreement) from the
person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the stock
certificate evidencing such Shares is issued (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a
stockholder shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such
stock certificate promptly after the Option is exercised. 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 13 of the
Plan.

            Exercising an Option in any manner shall decrease the number of
Shares thereafter 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) Termination of Employment or Consulting Relationship. Upon
termination of an Optionee's Continuous Status as an Employee or Consultant,
other than upon the Optionee's death or Disability, the Optionee may exercise
his or her Option, but only within such period of time as is specified in the
Notice of Grant, and only to the extent that the Optionee was entitled to
exercise it at the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Notice of Grant). In
the absence of a specified time in the Notice of Grant, the Option shall remain
exercisable for three (3) months following the Optionee's termination. In the
case of an Incentive Stock Option, such period of time for exercise shall not
exceed three (3) months from the date of termination. If, on the date of
termination, the Optionee is not entitled to exercise the Optionee's entire
Option, the Shares covered by the unexercisable portion of the Option shall
revert to the Plan. If, after termination, the Optionee does not exercise his or
her Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

            Notwithstanding the above, in the event of an Optionee's change in
status from Consultant to Employee or Employee to Consultant, an Optionee's
Continuous Status as an Employee or Consultant shall not automatically terminate
solely as a result of such change in status. However, in such event, an
Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory
Stock Option three months and one day following such change of status.

            (c) Disability of Optionee. In the event that an Optionee's
Continuous Status as an Employee or Consultant terminates as a result of the
Optionee's Disability, the Optionee may exercise his or her Option at any time
within twelve (12) months from the date of such termination, but only to the
extent that the Optionee was entitled to exercise it at the date of such
termination (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant). If, at the date of termination, the
Optionee is not entitled to exercise his or her entire Option, the Shares
covered by the unexercisable portion of the Option shall revert to the Plan. If,
after


                                      -9-

termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.

            (d) Death of Optionee. In the event of the death of an Optionee, the
Option may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the expiration of the term of such Option
as set forth in the Notice of Grant), by the Optionee's estate or by a person
who acquired the right to exercise the Option by bequest or inheritance, but
only to the extent that the Optionee was entitled to exercise the Option at the
date of death. If, at the time of death, the Optionee was not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall immediately revert to the Plan. If, after death, the
Optionee's estate or a person who acquired the right to exercise the Option by
bequest or inheritance does not exercise the Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

            (e) Rule 16b-3. Options granted to individuals subject to Section 16
of the Exchange Act ("Insiders") must comply with the applicable provisions of
Rule 16b-3 and shall contain such additional conditions or restrictions as may
be required thereunder to qualify for the maximum exemption from Section 16 of
the Exchange Act with respect to Plan transactions.

      11. Stock Rights.

            (a) Rights to Purchase. Stock Rights may be issued either alone, in
addition to, or in tandem with other awards granted under the Plan and/or cash
awards made outside of the Plan. After the Administrator determines that it will
offer Stock Rights under the Plan, it shall advise the offeree in writing, by
means of a Notice of Grant, of the terms, conditions and restrictions related to
the offer, including the number of Shares that the offeree shall be entitled to
purchase or receive, the price to be paid (if any), and the time within which
the offeree must accept such offer, which shall in no event exceed six (6)
months from the date upon which the Administrator made the determination to
grant the Stock Right. The offer shall be accepted by execution of a Restricted
Stock Award Agreement or a Restricted Stock Purchase Agreement in such form as
the Administrator shall determine and if so required by the Administrator. The
number of Shares subject to grants of Stock Rights shall not exceed five percent
(5%) of the total number of Shares authorized under the Plan.

            (b) Repurchase/Reacquisition Option. Unless the Administrator
determines otherwise, the Restricted Stock Award Agreement or the Restricted
Stock Purchase Agreement, as the case may be, shall grant the Company a
repurchase or reacquisition option exercisable upon the voluntary or involuntary
termination of the purchaser's employment with the Company for any reason
(including death or Disability). The purchase price for Shares repurchased
pursuant to the Restricted Stock Purchase Agreement shall be the Fair Market
Value of the Shares at the date of grant of the Stock Right and may be paid by
cancellation of any indebtedness of the purchaser to the Company. Reacquisition
of Shares pursuant to the Restricted Stock Award Agreement shall require no
consideration to be paid by the Company. The repurchase/reacquisition option
shall lapse at a rate determined by the Administrator.

            (c) Rule 16b-3. Stock Rights granted to Insiders, and Shares
purchased or received by Insiders in connection with Stock Rights, shall be
subject to any restrictions applicable


                                      -10-

thereto in compliance with Rule 16b-3. An Insider may only purchase Shares
pursuant to the grant of a Stock Right, and may only sell Shares purchased
pursuant to the grant of a Stock Right, during such time or times as are
permitted by Rule 16b-3.

            (d) Other Provisions. The Restricted Stock Award Agreement or the
Restricted Stock Purchase Agreement, as applicable, shall contain such other
terms, provisions and conditions not inconsistent with the Plan as may be
determined by the Administrator in its sole discretion. In addition, the
provisions of Restricted Stock Award Agreements and Restricted Stock Purchase
Agreements need not be the same with respect to each purchaser.

            (e) Rights as a Stockholder. Once the Stock Right is exercised, the
purchaser shall have the rights equivalent to those of a stockholder, and shall
be a stockholder when his or her purchase is entered upon the records of the
duly authorized transfer agent of the Company. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the Stock
Right is exercised, except as provided in Section 13 of the Plan.

      12. Non-Transferability of Options and Stock Rights. An Option or Stock
Right 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.

      13. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.

            (a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and Stock Right, and the number of shares of Common
Stock which have been authorized for issuance under the Plan but as to which no
Options or Stock Rights have yet been granted or which have been returned to the
Plan upon cancellation or expiration of an Option or Stock Right, as well as the
price per share of Common Stock covered by each such outstanding Option or Stock
Right, 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 or reclassification of the Common
Stock, or any other increase or decrease in the number of issued shares of
Common Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, 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 or Stock Right.

            (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option or Stock
Right has not been previously exercised, it will terminate immediately prior to
the consummation of such proposed action. The Board may, in the exercise of its
sole discretion in such instances, declare that any Option or Stock Right shall
terminate as of a date fixed by the Board and give each Optionee the right to
exercise his


                                      -11-

or her Option or Stock Right as to all or any part of the Optioned Stock,
including Shares as to which the Option or Stock Right would not otherwise be
exercisable.

            (c) Merger or Asset Sale. Subject to Section 13(d), in the event of
a merger of the Company with or into another corporation, or the sale of
substantially all of the assets of the Company, each outstanding Option and
Stock Right shall be assumed or an equivalent option or right substituted by the
successor corporation or a Parent or Subsidiary of the successor corporation. In
the event that the successor corporation refuses to assume or substitute for the
Option or Stock Right, the Optionee shall have the right to exercise the Option
or Stock Right as to all of the Optioned Stock, including Shares as to which it
would not otherwise be exercisable. If an Option or Stock Right is exercisable
in lieu of assumption or substitution in the event of a merger or sale of
assets, the Administrator shall notify the Optionee that the Option or Stock
Right shall be fully exercisable for a period of fifteen (15) days from the date
of such notice, and the Option or Stock Right shall terminate upon the
expiration of such period. For the purposes of this paragraph, the Option or
Stock Right shall be considered assumed if, following the merger or sale of
assets, the option or right confers the right to purchase or receive, for each
Share of Optioned Stock subject to the Option or Stock Right immediately prior
to the merger or sale of assets, the consideration (whether stock, cash, or
other securities or property) received in the merger or sale of assets by
holders of Common Stock for each Share held on the effective date of the
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or sale of
assets was not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation, provide
for the consideration to be received upon the exercise of the Option or Stock
Right, for each Share of Optioned Stock subject to the Option or Stock Right, to
be solely common stock of the successor corporation or its Parent equal in fair
market value to the per share consideration received by holders of Common Stock
in the merger or sale of assets.

            (d) Change of Control. In the event of a Change of Control (as
defined below), the Optionee shall fully vest in and have the right to exercise
the Option or Stock Right as to all of the Optioned Stock, including Shares as
to which it would not otherwise be vested or exercisable.

            A "Change of Control" means the occurrence of any of the following
events:

                  (i) any "person." as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
other than the Company, a subsidiary of the Company or a Company employee
benefit plan, including any trustee of such plan acting as trustee, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing twenty
percent (20%) or more of the combined voting power of the Company's then
outstanding securities entitled to vote generally in the election of directors;
or

                  (ii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity)


                                      -12-

at least fifty percent (50%) of the total voting power represented by the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or the stockholders of the Company approve an
agreement for the sale or disposition by the Company of all or substantially all
the Company's assets; or

                  (iii) a change in the composition of the Board of Directors of
the Company, as a result of which fewer than a majority of the directors are
Incumbent Directors. "Incumbent Directors" shall mean directors who either (A)
are directors of the Company as of the date this amendment to the Plan is
approved by the Board of Directors, or (B) are elected, or nominated for
election, to the Board of Directors of the Company with the affirmative votes of
at least a majority of the Incumbent Directors and whose election or nomination
was not in connection with any transaction described in (i) or (ii) above or in
connection with an actual or threatened proxy contest relating to the election
of directors of the Company.

      14. Date of Grant. The date of grant of an Option or Stock Right shall be,
for all purposes, the date on which the Administrator makes the determination
granting such Option or Stock Right, or such other later date as is determined
by the Administrator. Notice of the determination shall be provided to each
Optionee within a reasonable time after the date of such grant.

      15. Amendment and Termination of the Plan.

            (a) Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.

            (b) Stockholder Approval. The Company shall obtain stockholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Rule 16b-3 or with Section 422 of the Code (or any successor Rule or
statute or other applicable law, Rule or regulation, including the requirements
of any exchange or quotation system on which the Common Stock is listed or
quoted). Such stockholder approval, if required, shall be obtained in such a
manner and to such a degree as is required by the applicable law, Rule or
regulation.

            (c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.

      16. Conditions Upon Issuance of Shares.

            (a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option or Stock Right unless the exercise of such Option or Stock
Right and the issuance and delivery of such Shares shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, Applicable Laws, and the requirements of any stock exchange or
quotation system upon which the Shares may then be listed or quoted, and shall
be further subject to the approval of counsel for the Company with respect to
such compliance.


                                      -13-

            (b) Investment Representations. As a condition to the exercise of an
Option or Stock Right, the Company may require the person exercising such Option
or Stock Right 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.

      17. Liability of Company.

            (a) Inability to Obtain Authority. 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 in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

            (b) Grants Exceeding Allotted Shares. If the Optioned Stock covered
by an Option or Stock Right exceeds, as of the date of grant, the number of
Shares which may be issued under the Plan without additional stockholder
approval, such Option or Stock Right shall be void with respect to such excess
Optioned Stock, unless stockholder approval of an amendment sufficiently
increasing the number of Shares subject to the Plan is timely obtained in
accordance with Section 15(b) of the Plan.

      18. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

      19. Stockholder Approval. Continuance of the Plan shall be subject to
approval by the stockholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such stockholder approval shall be obtained
in the manner and to the degree required under applicable federal and state law.


                                    * * * * *


                                      -14-

EX-10.4

                                                                    Exhibit 10.4

                               VISX, INCORPORATED

                  1995 DIRECTOR OPTION AND STOCK DEFERRAL PLAN

                   AMENDED AND RESTATED AS OF NOVEMBER 7, 2004


      1. PURPOSES OF THE PLAN. The purposes of this 1995 Director Option and
Stock Deferral Plan are to attract and retain the best available personnel for
service as Outside Directors (as defined herein) of the Company, to provide
additional incentive to the Outside Directors of the Company to serve as
Directors, and to encourage their continued service on the Board.

      All options granted hereunder shall be nonstatutory stock options. Outside
Directors may also elect to convert their annual retainer into deferred phantom
stock hereunder.

      2. DEFINITIONS. As used herein, the following definitions shall apply:

         (a) "BOARD" means the Board of Directors of the Company.

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

         (c) "COMMON STOCK" means the Common Stock of the Company.

         (d) "COMPANY" means VISX, Incorporated, a Delaware corporation.

         (e) "CONTINUOUS STATUS AS A DIRECTOR" means the absence of any
interruption or termination of service as a Director.

         (f) "DEFERRED PHANTOM STOCK" means phantom units of Company Common
Stock under the Outside Director Stock Deferral Plan.

         (g) "DIRECTOR" means a member of the Board.

         (h) "EMPLOYEE" means any person, including officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a Director's fee by the Company shall not be sufficient in and of itself to
constitute "employment" 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 value of Common
Stock determined as follows:

            (i) If the Common Stock is listed on any established stock exchange
or a national market system, including without limitation the New York Stock
Exchange, the Fair Market Value of a Share of Common Stock shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such system or exchange (or the exchange with the greatest volume of
trading in Common Stock) on the day of determination, as reported in THE WALL
STREET JOURNAL or such other source as the Board deems reliable;

            (ii) If the Common Stock is quoted on any established stock exchange
or regularly quoted by a recognized securities dealer but selling prices are not
reported, the Fair Market




Value of a Share of Common Stock shall be the mean between the high bid and low
asked prices for the Common Stock on the day of determination, as reported in
THE WALL STREET JOURNAL or such other source as the Board 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 Board.

         (k) "NEW OUTSIDE DIRECTOR" means an Outside Director who first becomes
a Director at or after the Company's 2003 annual meeting of stockholders.

         (l) "OPTION" means a stock option granted pursuant to the Plan.

         (m) "OPTIONED STOCK" means the Common Stock subject to an Option.

         (n) "OPTIONEE" means an Outside Director who receives an Option.

         (o) "OUTSIDE DIRECTOR" means a Director who is not an Employee.

         (p) "OUTSIDE DIRECTOR STOCK DEFERRAL PLAN" means the Outside Director
Stock Deferral Plan attached hereto as Appendix A.

         (q) "PARENT" means a "parent corporation", whether now or hereafter
existing, as defined in Section 424(e) of the Code.

         (r) "PLAN" means this VISX, Incorporated 1995 Director Option and Stock
Deferral Plan, including the Outside Director Stock Deferral Plan attached
hereto as Appendix A.

         (s) "QUALIFYING RETIREMENT" means an Outside Director's termination
from the Board, including pursuant to the Outside Director's death or disability
(as defined in Section 22(e)(3) of the Code), if such termination follows (i)
five full terms of Board membership and attainment of age 62 or greater, or (ii)
ten full terms of Board membership.

         (t) "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 10 of the Plan.

         (u) "SUBSIDIARY" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.

      3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 10 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan or deferred as Deferred Phantom Stock into the Outside Director
Stock Deferral Plan is seven hundred and seventy-five thousand (775,000) Shares
(the "Pool") of Common Stock. The Shares may be authorized but unissued, or
reacquired Common Stock.

                  If an Option should expire or become unexercisable for any
reason without having been exercised in full, the unpurchased Shares which were
subject thereto shall, unless the Plan shall have been terminated, become
available for future grant under the Plan; provided, however, that Shares that
have actually been issued under the Plan shall not be returned to the Plan and
shall not become available for future distribution under the Plan.


                                       2


      4. ADMINISTRATION AND INITIAL AND ANNUAL GRANT OF OPTIONS UNDER THE PLAN.

         (a) PROCEDURE FOR INITIAL AND ANNUAL GRANTS. Outside Directors shall
receive initial and annual grants as follows:

            (i) No person shall have any discretion to select which Outside
Directors shall be granted Options or to determine the number of Shares.

            (ii) Each New Outside Director shall be automatically granted an
Option to purchase Twenty-Five Thousand (25,000) Shares (a "First Option") on
the date on which such person first becomes a Director, whether through election
by the stockholders of the Company or appointment by the Board to fill a
vacancy; provided, however, that an Employee Director who ceases to be an
Employee but who remains a Director shall not receive a First Option.

            (iii) Each Outside Director shall be automatically granted an Option
to purchase Ten Thousand (10,000) Shares (a "Subsequent Option") on the date
such Outside Director is re-elected to the Board commencing with the Company's
2003 annual meeting of stockholders, if on such date he or she shall have served
on the Board for at least six (6) months.

            (iv) The terms of a First Option granted hereunder shall be as
follows:

               (A) the term of the First Option shall be ten (10) years.

               (B) the First Option shall be exercisable only while the Outside
Director remains a Director of the Company, except as set forth in Section 9
hereof.

               (C) the exercise price per Share shall be 100% of the Fair Market
Value per Share on the date of grant of the First Option. In the event that the
date of grant of the First Option is not a trading day, the exercise price per
Share shall be the Fair Market Value on the next trading day immediately
following the date of grant of the First Option.

               (D) the First Option shall vest as to 1/3 of the Shares subject
to the First Option on each anniversary of the date of grant, so as to be 100%
vested on the third anniversary of the date of grant, subject to continued
service as an Outside Director.

            (v) The terms of a Subsequent Option granted hereunder shall be as
follows:

               (A) the term of the Subsequent Option shall be ten (10) years.

               (B) the Subsequent Option shall be exercisable only while the
Outside Director remains a Director of the Company, except as set forth in
Section 9 hereof.

               (C) the exercise price per Share shall be 100% of the Fair Market
Value per Share on the date of grant of the Subsequent Option. In the event that
the date of grant of the Subsequent Option is not a trading day, the exercise
price per Share shall be the Fair Market Value on the next trading day
immediately following the date of grant of the Subsequent Option.

               (D) the Subsequent Option shall be 100% vested upon the date of
grant.


                                       3


            (vi) In the event that any Option granted under the Plan would cause
the number of Shares subject to outstanding Options plus the number of Shares
previously purchased under Options to exceed the Pool, then the remaining Shares
available for Option grant shall be granted under Options to the Outside
Directors on a pro rata basis. No further grants shall be made until such time,
if any, as additional Shares become available for grant under the Plan through
action of the stockholders to increase the number of Shares which may be issued
under the Plan or through cancellation or expiration of Options previously
granted hereunder.

      5. ELECTION TO RECEIVE ANNUAL RETAINER IN STOCK OPTIONS OR DEFERRED
PHANTOM STOCK.

         (a) IRREVOCABLE ELECTION. On the date of each annual meeting of
stockholders of the Company during the term of this Plan, commencing with the
2003 annual stockholders meeting, each Outside Director may make an election to
receive (an "Election") (i) Options in lieu of 50% or 100% of his or her annual
cash retainer for the year following the meeting or (ii) Deferred Phantom Stock
in lieu of 50% or 100% of his or her annual cash retainer for the year following
the meeting. The Election must be in writing and delivered to the Secretary of
the Company prior to the date of such annual stockholders meeting. Any Election
made by an Outside Director pursuant to this Section 5 shall be irrevocable.

         (b) RETAINER OPTION GRANTS. On the date of each annual meeting of
stockholders of the Company, each Outside Director who has made an Election to
receive Stock Options in lieu of 50% or 100% of his or her annual cash retainer
shall automatically receive a Stock Option covering the number of Shares
determined by dividing (1) the product of (a) the amount of the annual cash
retainer covered by such Election, multiplied by (b) 3, by (2) the Fair Market
Value of a Share on that date, rounded to the nearest whole Share, provided that
sufficient Shares are available under the Plan for the grant of such Stock
Option (the "Retainer Option").

            (i) The terms of a Retainer Option granted hereunder shall be as
follows:

               (A) the term of the Retainer Option shall be ten (10) years.

               (B) the Retainer Option shall be exercisable only while the
Outside Director remains a Director of the Company, except as set forth in
Section 9 hereof.

               (C) the exercise price per Share shall be 100% of the Fair Market
Value per Share on the date of grant of the Retainer Option. In the event that
the date of grant of the Retainer Option is not a trading day, the exercise
price per Share shall be the Fair Market Value on the next trading day
immediately following the date of grant of the Retainer Option.

               (D) the Retainer Option shall be fully vested as to 25% of the
Shares subject to the Retainer Option on the date of grant and shall vest with
respect to an additional 25% of such Shares every ninety (90) days following the
date of grant, so as to be 100% vested on the date that is 270 days following
the date of grant, subject to continued service as on Outside Director.

         (c) DEFERRED PHANTOM STOCK. On the date of each annual meeting of
stockholders of the Company, Outside Directors who has made an Election to
receive Deferred Phantom Stock in lieu of 50% or 100% of their annual cash
retainer shall automatically have their account under the Outside Director Stock
Deferral Plan credited with the number of Deferred Phantom Stock units
determined by dividing (i) the amount of the annual cash retainer covered by
such Election by (ii) the Fair Market Value of a Share on that date, rounded to
the nearest whole Share, provided that sufficient Shares


                                       4


are available under the Plan for the crediting of such Deferred Phantom Stock
units. The Deferred Phantom Stock units shall be fully vested as to 25% of units
on the date of grant and shall vest with respect to an additional 25% of such
units every ninety (90) days following the date of grant, so as to be 100%
vested on the date that is 270 days following the date of grant, subject to
continued service as on Outside Director. The Deferred Phantom Stock units shall
be held subject to the terms and conditions of the Outside Director Stock
Deferral Plan and the elections made thereunder.

      6. ELIGIBILITY. Options and Deferred Phantom Stock may be granted only to
Outside Directors. An Outside Director who has been granted an Option or
Deferred Phantom Stock may, if he or she is otherwise eligible, be granted
additional Options or Deferred Phantom Stock in accordance with the provisions
of the Plan.

      The Plan shall not confer upon any Outside Director any right with respect
to continuation of service as a Director or nomination to serve as a Director,
nor shall it interfere in any way with any rights which the Director or the
Company may have to terminate his or her directorship at any time.

      7. TERM OF PLAN. The Plan shall become effective upon the earlier to occur
of its adoption by the Board or its approval by the stockholders of the Company.
It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 11 of the Plan.

      8. FORM OF CONSIDERATION. The consideration to be paid for the Shares to
be issued upon exercise of an Option, including the method of payment, shall
consist of (i) cash, (ii) check, (iii) other shares which (x) in the case of
Shares acquired upon exercise of an Option, have been owned by the Optionee for
more than six (6) months on the date of surrender, and (y) have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised, (iv) delivery of a properly
executed exercise notice together with such other documentation as the Company
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, or (v) any combination of the foregoing methods of payment.

      9. EXERCISE OF OPTION.

         (a) PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER. Any Option granted
hereunder shall be exercisable at such times as are set forth in Sections 4 and
5 hereof.

         An Option may not be exercised for a fraction of a Share.

         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 full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may consist of any consideration and method of payment
allowable under Section 8 of the Plan. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Shares, no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
A share certificate or electronic notice covering the number of Shares so
acquired shall be issued to the Optionee as soon as practicable after exercise
of the Option. No adjustment shall be made for a dividend or other right for
which the record date is prior to the date the stock certificate or electronic
notice is issued, except as provided in Section 11 of the Plan.


                                       5


         Exercise of an Option in any manner shall result in a decrease in the
number of Shares which 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) RULE 16b-3. Options and Deferred Phantom Stock granted to Outside
Directors must comply with the applicable provisions of Rule 16b-3 promulgated
under the Exchange Act or any successor thereto and shall contain such
additional conditions or restrictions as may be required thereunder to qualify
Plan transactions, and other transactions by Outside Directors that otherwise
could be matched with Plan transactions, for the maximum exemption from Section
16 of the Exchange Act.

         (c) TERMINATION OF CONTINUOUS STATUS AS A DIRECTOR. In the event an
Optionee's Continuous Status as a Director terminates (other than upon the
Optionee's death or total and permanent disability (as defined in Section
22(e)(3) of the Code) or Qualifying Retirement), the Optionee may exercise his
or her Option, but only within three (3) months from the date of such
termination, and only to the extent that the Optionee was entitled to exercise
it on the date of such termination (but in no event later than the expiration of
its ten (10) year term). To the extent that the Optionee was not entitled to
exercise an Option on the date of such termination, and to the extent that the
Optionee does not exercise such Option (to the extent otherwise so entitled)
within the time specified herein, the Option shall terminate.

         (d) DISABILITY OF OPTIONEE. In the event Optionee's Continuous Status
as a Director terminates as a result of total and permanent disability (as
defined in Section 22(e)(3) of the Code), the Optionee may exercise his or her
Option, but only within twelve (12) months from the date of such termination,
and only to the extent that the Optionee was entitled to exercise it on the date
of such termination (but in no event later than the expiration of its ten (10)
year term). To the extent that the Optionee was not entitled to exercise an
Option on the date of termination, or if he or she does not exercise such Option
(to the extent otherwise so entitled) within the time specified herein, the
Option shall terminate.

         (e) DEATH OF OPTIONEE. In the event of an Optionee's death, the
Optionee's estate or a person who acquired the right to exercise the Option by
bequest or inheritance may exercise the Option, but only within twelve (12)
months following the date of death, and only to the extent that the Optionee was
entitled to exercise it on the date of death (but in no event later than the
expiration of its ten (10) year term). To the extent that the Optionee was not
entitled to exercise an Option on the date of death, and to the extent that the
Optionee's estate or a person who acquired the right to exercise such Option
does not exercise such Option (to the extent otherwise so entitled) within the
time specified herein, the Option shall terminate.

         (f) QUALIFYING RETIREMENT OF OPTIONEE. Notwithstanding the provisions
set forth in Section 9(d) of the Plan, in the event of an Optionee's Qualifying
Retirement, the Optionee may exercise his or her Option, but only within the
lesser of (i) five years from the date of the Qualifying Retirement, or (ii) the
original ten (10) year term of the Option following the date of termination, and
only to the extent that the Optionee was entitled to exercise it on the date of
termination. To the extent that the Optionee was not entitled to exercise an
Option on the date of termination, or if he or she does not exercise such Option
(to the extent otherwise so entitled) within the time specified herein, the
Option shall terminate.

      10. NON-TRANSFERABILITY OF OPTIONS. Options hereunder 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.


                                       6


      11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER, ASSET
SALE OR CHANGE OF CONTROL.

         (a) CHANGES IN CAPITALIZATION. Subject to any required action by the
stockholders of the Company, the number of Shares covered by each outstanding
Option or share of Deferred Phantom Stock, the number of Shares which have been
authorized for issuance under the Plan but as to which no Options or Deferred
Phantom Stock units have yet been granted or credited or which have been
returned to the Plan upon cancellation or expiration of an Option, as well as
the price per Share covered by each such outstanding Option, and the number of
Shares issuable pursuant to the automatic grant provisions of Section 4 hereof
shall be proportionately adjusted for any increase or decrease in the number of
issued Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued Shares 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." 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
subject to an Option or the number of Deferred Phantom Stock units credited to
an account.

         (b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option has not
been previously exercised, it will terminate immediately prior to the
consummation of such proposed action.

         (c) MERGER OR ASSET SALE. Subject to Section 11(d), in the event of a
merger of the Company with or into another corporation, or the sale of
substantially all of the assets of the Company, each outstanding Option shall be
assumed or an equivalent option shall be substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation does not agree to assume the Option or to
substitute an equivalent option, each outstanding Option shall become fully
vested and exercisable, including as to Shares as to which it would not
otherwise be exercisable. If an Option becomes fully vested and exercisable in
the event of a merger or sale of assets, the Board shall notify the Optionee
that the Option shall be fully exercisable for a period of thirty (30) days from
the date of such notice, and the Option shall terminate upon the expiration of
such period. For the purposes of this paragraph, the Option shall be considered
assumed if, following the merger or sale of assets, the option or right confers
the right to purchase, for each Share of Optioned Stock subject to the Option
immediately prior to the merger or sale of assets, the consideration (whether
stock, cash, or other securities or property) received in the merger or sale of
assets by holders of Common Stock for each Share held on the effective date of
the transaction (and if holders were offered a choice of consideration, the type
of consideration chosen by the holders of a majority of the outstanding Shares).

         (d) CHANGE OF CONTROL. In the event of a Change of Control (as defined
below), each Outside Director (i) shall fully vest in and have the right to
exercise each Option as to all of the Optioned Stock, including Shares as to
which it would not otherwise be vested or exercisable and (ii) shall fully vest
in each Deferred Phantom Stock unit.

         A "Change of Control" means the occurrence of any of the following
events:

            (i) any "person," as such term is used in Sections 13(d) and 14(d)
of the Exchange Act, other than the Company, a subsidiary of the Company or a
Company employee benefit plan, including any trustee of such plan acting as
trustee, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing


                                       7


twenty percent (20%) or more of the combined voting power of the Company's then
outstanding securities entitled to vote generally in the election of directors;
or

            (ii) a merger or consolidation of the Company or any direct or
indirect subsidiary of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
of the Company approve an agreement for the sale or disposition by the Company
of all or substantially all the Company's assets; or

            (iii) a change in the composition of the Board, as a result of which
fewer than a majority of the directors are Incumbent Directors. "Incumbent
Directors" shall mean directors who either (A) are Directors as of the date this
amendment to the Plan is approved by the Board, or (B) are elected, or nominated
for election, to the Board with the affirmative votes of at least a majority of
the Incumbent Directors AND whose election or nomination was not in connection
with any transaction described in (i) or (ii) above or in connection with an
actual or threatened proxy contest relating to the election of directors of the
Company.

      12. AMENDMENT AND TERMINATION OF THE PLAN.

         (a) AMENDMENT AND TERMINATION. Except as set forth in Section 4, the
Board may at any time amend, alter, suspend, or discontinue the Plan, but no
amendment, alteration, suspension, or discontinuation shall be made which would
impair the rights of any Optionee or Outside Director Stock Deferral Plan
participant under any grant theretofore made, without his or her consent,
provided that the Board may not amend the Plan to permit the repricing,
including by way of exchange, of any Option without stockholder approval. In
addition, to the extent necessary and desirable to comply with Rule 16b-3 under
the Exchange Act (or any other applicable law or regulation), the Company shall
obtain stockholder approval of any Plan amendment in such a manner and to such a
degree as required.

         (b) EFFECT OF AMENDMENT OR TERMINATION. Any such adverse amendment
without consent or termination of the Plan shall not affect Options or Deferred
Phantom Stock units already granted or credited and such Options and Deferred
Phantom Stock units shall remain in full force and effect as if this Plan had
not been amended or terminated.

      13. TIME OF GRANTING OPTIONS. The date of grant of an Option shall, for
all purposes, be the date determined in accordance with Section 4 hereof.

      14. 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 of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, state securities laws, and the requirements of any stock exchange
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.

          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


                                       8


opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.

          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 in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.

      15. 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.

      16. OPTION AGREEMENT. Options shall be evidenced by written option
agreements in such form as the Board shall approve.


                                       9



                    APPENDIX A TO THE 1995 DIRECTOR PLAN

                               VISX, INCORPORATED

                    OUTSIDE DIRECTOR STOCK DEFERRAL PLAN

                                TABLE OF CONTENTS

                                                                            PAGE
                              ARTICLE I DEFINITIONS

1.1   "BOARD OF DIRECTORS"...................................................1

1.2   "COMMITTEE"............................................................1

1.3   "CREDITED INVESTMENT RETURN (LOSS)"....................................1

1.4   "DEFERRAL ACCOUNT".....................................................1

1.5   "DEFERRAL AMOUNT"......................................................1

1.6   "DEFERRAL ELECTION"....................................................1

1.7   "PARTICIPANT"..........................................................1

1.8   "PLAN".................................................................2

                             ARTICLE II ELIGIBILITY

2.1   ELIGIBLE PERSONS.......................................................2

2.2   COMMENCEMENT OF PARTICIPATION..........................................2

2.3   TERMINATION OF PARTICIPATION...........................................2

                       ARTICLE III DEFERRED PHANTOM STOCK

3.1   PHANTOM STOCK DEFERRALS................................................2

3.2   NO WITHDRAWAL..........................................................2

     ARTICLE IV CREDITED INVESTMENT RETURN (LOSS) ON DEFERRAL ACCOUNTS

4.1   DEFERRAL ACCOUNT.......................................................3

4.2   CREDITED INVESTMENT RETURN (LOSS)......................................3

                               ARTICLE V BENEFITS

5.1   DISTRIBUTION OF BENEFITS...............................................3

5.2   CHANGE OF DISTRIBUTION ELECTION........................................3

5.3   PAYMENT TO ESTATE......................................................3

5.4   AUTOMATIC LUMP-SUM DISTRIBUTION FOR ACCOUNTS BELOW $25,000.............3

5.5   TAX WITHHOLDING........................................................4

       ARTICLE VI OBLIGATION TO PAY SUPPLEMENTAL PARTICIPANT BENEFITS

6.1   BENEFITS PAID FROM GENERAL CORPORATE ASSETS; PAYMENT IN STOCK..........4

6.2   NO SECURED INTEREST....................................................4

                           ARTICLE VII ADMINISTRATION

7.1   ADMINISTRATION OF THE PLAN.............................................4

7.2   INDEMNIFICATION........................................................4


                                       ii

                           ARTICLE VIII MISCELLANEOUS

8.1   NONTRANSFERABILITY.....................................................4

8.2   BINDING EFFECT.........................................................5

8.3   REIMBURSEMENT OF COSTS.................................................5

8.4   ARBITRATION............................................................5

8.5   APPLICABLE LAW.........................................................5

8.6   ENTIRE AGREEMENT.......................................................5

8.7   Termination or Amendment of Plan.......................................5


                                      iii

                               VISX, INCORPORATED

                      OUTSIDE DIRECTOR STOCK DEFERRAL PLAN

            This VISX, Incorporated Outside Director Stock Deferral Plan is
adopted effective as of the date of the Company's 2003 annual meeting of
stockholders.

                                    ARTICLE I

                                   DEFINITIONS

            Whenever used herein, the masculine pronoun shall be deemed to
include the feminine, and the singular to include the plural, unless the context
clearly indicates otherwise, and the following definitions shall govern the Plan
(capitalized terms not defined below shall have the same defined meaning as
specified in the 1995 Director Option and Stock Deferral Plan):

            1.1   "BOARD OF DIRECTORS"

            or "BOARD" means the Board of Directors of VISX, Incorporated.

            1.2   "COMMITTEE"

            means an independent Committee appointed by the Board to administer
this Plan and to take such other actions as may be specified herein.

            1.3 "CREDITED INVESTMENT RETURN (LOSS)"

            means the hypothetical investment return which shall be credited to
a Participant's Deferral Account pursuant to Article IV.

            1.4   "DEFERRAL ACCOUNT"

            means the book entry account established under this Plan for each
Participant to which shall be credited (or debited) such Participant's Deferral
Amount and Credited Investment Return (Loss) and which shall be reduced by any
distributions made to such Participant and any charges which may be imposed on
such Deferral Account pursuant to the terms of this Plan.

            1.5   "DEFERRAL AMOUNT"

            means the Deferred Phantom Stock Amount which Participant elects to
contribute pursuant to Article III.

            1.6   "DEFERRAL ELECTION"

            means the form of Deferred Phantom Stock Election as prescribed by
the Committee, as modified from time to time.

            1.7   "PARTICIPANT"

            means a present or former Outside Director (or estate or
beneficiaries of an Outside Director) who has a Deferral Account under this
Plan.

            1.8   "PLAN"

            shall mean this VISX, Incorporated Outside Director Stock Deferral
Plan, as it may be amended from time to time.

                                   ARTICLE II

                                   ELIGIBILITY

            2.1   ELIGIBLE PERSONS

            . Eligibility for participation in this Plan shall be limited to
Outside Directors who have elected to receive Deferred Phantom Stock in lieu of
their annual retainer under the Company's 1995 Director Option and Stock
Deferral Plan and their estates and beneficiaries.

            2.2   COMMENCEMENT OF PARTICIPATION

            . A Participant may begin participation in this Plan immediately
following the submission of an irrevocable Deferral Election in accordance with
the terms of the 1995 Director Option and Stock Deferral Plan.

            2.3   TERMINATION OF PARTICIPATION

            . Active participation in this Plan shall end when a Participant's
Board service terminates for any reason. No contributions to this Plan shall be
made with respect to a Participant's Deferral Account after such termination
date. Upon termination of Board service, a Participant shall remain an inactive
Participant in the Plan until all of the benefits to which he or she is entitled
hereunder have been paid in full.

                                  ARTICLE III

                             DEFERRED PHANTOM STOCK

            3.1   PHANTOM STOCK DEFERRALS.

                  (a)   Upon submitting a Deferral Election to the Company, in
lieu of his or her annual retainer, a Participant's Deferral Account under this
Plan shall be credited with a number of Deferred Phantom Stock shares determined
in accordance with Section 5(c) of the 1995 Director Option and Stock Deferral
Plan. The Participant shall satisfy the self-employment tax obligations arising
from the credit of Deferred Phantom Stock to his or her Deferral Account.

                  (b)   A Participant's Deferral Election shall be irrevocable,
except as provided in Section 5.2 of this Plan.

            3.2   NO WITHDRAWAL

            . Except as provided in Section 5.3 below, Deferral Amounts may not
be withdrawn by a Participant and shall be paid only in accordance with the
provisions of this Plan.


                                       2

                                   ARTICLE IV

             CREDITED INVESTMENT RETURN (LOSS) ON DEFERRAL ACCOUNTS

            4.1   DEFERRAL ACCOUNT.

                  (a)   A Deferral Account shall be established and maintained
for each Participant.

            4.2   CREDITED INVESTMENT RETURN (LOSS)

            . Each Participant's Deferral Account shall be credited (or debited)
monthly with the Credited Investment Return (Loss) attributable to his or her
Deferral Account. The Credited Investment Return (Loss) is the amount which the
Participant's Deferral Account would have earned if the amounts credited to the
Deferral Account had, in fact, been invested in the Common Stock, purchased at
the closing sales price on the date of the applicable Board meeting (as
specified in Section 5(c) of the 1995 Director Option and Stock Deferral Plan),
and assuming reinvestment of all dividends back into such Common Stock at the
Common Stock closing sales price on the date of the dividend distribution.

                                   ARTICLE V

                                    BENEFITS

            5.1   DISTRIBUTION OF BENEFITS

            . Benefits shall be distributed in accordance with the elections
specified within a Participant's Deferral Election.

            5.2   CHANGE OF DISTRIBUTION ELECTION

            . A Participant may file an amended election to change his or her
distribution election at any time which is more than one (1) year prior to the
applicable specified fixed date at which payment of benefits would otherwise
commence. Any amended election which is filed within one (1) year of the
applicable specified date at which payment of benefits shall commence shall be
void and without effect and the most recently effective election shall control
instead.

            5.3   PAYMENT TO ESTATE

            . In the event a Participant dies after installment payments have
begun but before all of the installments are paid, the undistributed
installments shall be paid to his or her estate as they become due.

            5.4   AUTOMATIC LUMP-SUM DISTRIBUTION FOR ACCOUNTS BELOW $25,000

            . Notwithstanding any other provisions of this Plan or the
provisions of a Participant's Deferral Election, in the event that a Participant
has less than twenty-five thousand dollars ($25,000) credited to his or her
Deferral Account as of the date of his or her termination of Board service, 100%
of


                                        3

his or her Deferral Account shall be distributed to him or her in a single
lump-sum distribution within a reasonable amount of time following the date of
such termination of service.

            5.5   TAX WITHHOLDING

            . All distributions under this Plan shall be subject to all
applicable withholding for state and federal income tax and to any other
federal, state or local tax which may be applicable thereto.

                                   ARTICLE VI

               OBLIGATION TO PAY SUPPLEMENTAL PARTICIPANT BENEFITS

            6.1   BENEFITS PAID FROM GENERAL CORPORATE ASSETS; PAYMENT IN STOCK

            . All benefits payable to a Participant hereunder, shall be paid by
the Company in shares of Common Stock.

            6.2   NO SECURED INTEREST

            . Deferral Accounts shall be subject to the claims of creditors of
the Company. Each Participant is a general unsecured creditor of the Company
with respect to the promises of the Company made herein.

                                  ARTICLE VII

                                 ADMINISTRATION

            7.1   ADMINISTRATION OF THE PLAN

            . This Plan shall be administered by the Committee. The Committee
shall have full power and discretionary authority to administer, construe and
interpret the Plan, to establish procedures for administering this Plan, to
prescribe forms, and take any and all necessary or desirable actions in
connection with this Plan. The Committee's interpretation and construction of
this Plan shall be conclusive and binding on all persons. The Committee may
appoint a plan administrator or any other agent and delegate to them such powers
and duties in connection with the administration of this Plan as the Committee
may from time to time prescribe.

            7.2   INDEMNIFICATION

            . The Committee and each of its members are indemnified by the
Company against any and all liabilities incurred by reason of any action taken
in good faith pursuant to the provisions of this Plan.

                                  ARTICLE VIII

                                  MISCELLANEOUS

            8.1   NONTRANSFERABILITY


                                       4

            . The right of each Participant or any other person to the payment
of any benefits under this Plan shall not be assigned, transferred, pledged or
encumbered.

            8.2   BINDING EFFECT

            . This Plan shall be binding upon and inure to the benefit of the
Company, its successors and assigns and each Participant and his or her heirs,
executors, administrators and legal representatives.

            8.3   REIMBURSEMENT OF COSTS

            . If the Company, a Participant or a successor in interest to either
of the foregoing, brings legal action to enforce any of the provisions of this
Plan, including an action described in Section 8.4 of this Plan, the prevailing
party in such legal action shall be reimbursed by the other party for the
prevailing party's costs of such legal action including, without limitation,
reasonable fees of attorneys, accountants and similar advisors and expert
witnesses.

            8.4   ARBITRATION

            . Any dispute or claim relating to or arising out of this Plan shall
be fully and finally resolved by binding arbitration conducted by the American
Arbitration Association in Santa Clara, California.

            8.5   APPLICABLE LAW

            . This Plan shall be construed in accordance with and governed by
the laws of the State of California.

            8.6   ENTIRE AGREEMENT

            . This Plan, 1995 Director Option and Stock Deferral Plan and each
applicable Deferral Election constitute the entire understanding and agreement
with respect to this Plan, and there are no agreements, understandings,
restrictions, representations or warranties among any Participant and the
Company other than those as set forth or provided for therein.

            8.7   Termination or Amendment of Plan

            .

                  (a) This Plan may be amended by the Company at any time in its
sole discretion by resolution by the Board; provided, however, that no amendment
may be made which would alter the irrevocable nature of a Deferral Election or
which would reduce the amount credited to an Participant's Deferral Account on
the date of such amendment.

                  (b) Notwithstanding the foregoing paragraph or any other
provision in this Plan to the contrary, the Company reserves the right to
terminate the Plan in its entirety at any time upon fifteen (15) days notice to
Outside Directors. If this Plan is terminated, all benefits shall be paid
pursuant to the provisions of Article 5 as if such Participant had voluntarily
terminated Board service on the date of Plan termination.


                                       5

            IN WITNESS WHEREOF, the Company has caused this Plan to be executed
by a duly authorized officer effective as of the Effective Date.

                                    VISX, INCORPORATED




                                    By:
                                         -------------------------------------


                                       6

EX-10.5

                                                                    Exhibit 10.5

                                VISX INCORPORATED

                          1996 SUPPLEMENTAL STOCK PLAN

                   (as amended and restated November 9, 2004)

      1.    Purposes of the Plan. The purposes of this Stock Plan are:

            -     to attract and retain the best available personnel for
                  positions of substantial responsibility,

            -     to provide additional incentive to Employees and Consultants,
                  and

            -     to promote the success of the Company's business.

      Options granted under the Plan are Nonstatutory Stock Options. Stock
Purchase Rights may also be granted under the Plan.

      2.    Definitions. As used herein, the following definitions shall apply:

            (a)   "Administrator" means the Board or any of its Committees as
shall be administering the Plan, in accordance with Section 4 of the Plan.

            (b)   "Applicable Laws" means the legal requirements relating to the
administration of: tock option plans under state corporate and securities laws
and the Code.

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

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

            (e)   "Committee" means a Committee appointed by the Board in
accordance with Section 4 of the Plan.

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

            (g)   "Company" means VISX Incorporated, a Delaware corporation.

            (h)   "Consultant" means any person, including an advisor, engaged
by the Company or a Parent or Subsidiary to render services and who is
compensated for such services. The term "Consultant" shall not include
Directors.

            (i)   "Continuous Status as an Employee or Consultant" means that
the employment or consulting relationship with the Company, any Parent, or
Subsidiary, is not interrupted or terminated. Continuous Status as an Employee
or Consultant shall not be considered

interrupted in the case of (i) any leave of absence approved by the Company or
(ii) transfers between locations of the Company or between the Company, its
Parent, any Subsidiary, or any successor. A leave of absence approved by the
Company shall include sick leave, military leave, or any other personal leave
approved by an authorized representative of the Company.

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

            (k)   "Disability" means total and permanent disability as defined
in Section 22(e)(3) of the Code.

            (l)   "Employee" means any person, excluding Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. Neither
service as a Director nor payment of a director's fee by the Company shall be
sufficient to constitute "employment" by the Company.

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

            (n)   "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:

                  (i)   If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
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 regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination, as reported in The WALL STREET JOURNAL or such other source as
the Administrator deems reliable;

                  (iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

            (o)   "Nonstatutory Stock Option" means an Option not intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.

            (p)   "Notice of Grant" means a written notice evidencing certain
terms and conditions of an individual Option or Stock Purchase Right grant. The
Notice of Grant is part of the Option Agreement.

                                                                             -2-


            (q)   "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

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

            (s)   "Option Agreement" means a written agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of the
Plan.

            (t)   "Option Exchange Program" means a program whereby outstanding
options are surrendered in exchange for options with a lower exercise price.

            (u)   "Optioned Stock" means the Common Stock subject to an Option
or Stock Purchase Right.

            (v)   "Optionee" means an Employee or Consultant who holds an
outstanding Option or Stock Purchase Right.

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

            (x)   "Plan" means this 1996 Supplemental Stock Plan.

            (y)   "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of Stock Purchase Rights under Section 11 below.

            (z)   "Restricted Stock Purchase Agreement" means a written
agreement between the Company and the Optionee evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right. The
Restricted Stock Purchase Agreement is subject to the terms and conditions of
the Plan and the Notice of Grant.

            (aa)  "Share" means a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.

            (bb)  "Stock Purchase Right" means the right to purchase Common
Stock pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant .

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

      3.    Stock Subject to the Plan. Subject to the provisions of Section 13
of the Plan, the maximum aggregate number of Shares which may be optioned and
sold under the Plan is 1,517,346 Shares. The Shares may be authorized, but
unissued, or reacquired Common Stock.

      If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares

                                                                             -3-


which were subject thereto shall become available for future grant or sale under
the Plan (unless the Plan has terminated).

      4.    Administration of the Plan.

            (a)   The Plan shall be administered by (A) the Board or (B) a
committee designated by the Board, which committee shall be constituted to
satisfy Applicable Laws. Once appointed, such Committee shall serve in its
designated capacity until otherwise directed by the Board. The Board may
increase the size of the Committee and appoint additional members, remove
members (with or without cause) and substitute new members, fill vacancies
(however caused), and remove all members of the Committee and thereafter
directly administer the Plan, all to the extent permitted by Applicable Laws.

            (b)   Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, 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(n) of the Plan;

                  (ii)  to select the Consultants and Employees to whom Options
and Stock Purchase Rights may be granted hereunder;

                  (iii) to determine whether and to what extent Options and
Stock Purchase Rights or any combination thereof, are granted hereunder;

                  (iv)  to determine the number of shares of Common Stock to be
covered by each Option and Stock Purchase Right 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. Such terms and
conditions include, but are not limited to, the exercise price, the time or
times when Options or Stock Purchase Rights may be exercised (which may be based
on performance criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Option or Stock
Purchase Right or the shares of Common Stock relating thereto, based in each
case on such factors as the Administrator, in its sole discretion, shall
determine;

                  (vii) to reduce the exercise price of any Option or Stock
Purchase Right to the then current Fair Market Value if the Fair Market Value of
the Common Stock covered by such Option or Stock Purchase Right shall have
declined since the date the Option or Stock Purchase Right was granted;

                                                                             -4-


                  (viii) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan;

                  (ix)  to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;

                  (x)   to modify or amend each Option or Stock Purchase Right
(subject to Section 15(b) of the Plan), including the discretionary authority to
extend the post-termination exercisability period of Options longer than is
otherwise provided for in the Plan;

                  (xi)  to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator;

                  (xii) to institute an Option Exchange Program;

                  (xiii) to determine the terms and restrictions applicable to
Options and Stock Purchase Rights and any Restricted Stock; and (xiv) to make
all other determinations deemed necessary or advisable for administering the
Plan.

            (c)   Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Stock Purchase Rights.

      5.    Eligibility. Nonstatutory Stock Options and Stock Purchase Rights
may be granted to Employees and Consultants. If otherwise eligible, an Employee
or Consultant who has been granted an Option or Stock Purchase Right may be
granted additional Options or Stock Purchase Rights. Notwithstanding anything to
the contrary contained in the Plan, Options and Stock Purchase Rights may not be
granted to Officers or Directors under the Plan.

      6.    Limitations. Neither the Plan nor any Option or Stock Purchase Right
shall confer upon an Optionee any right with respect to continuing the
Optionee's employment or consulting relationship with the Company, nor shall
they interfere in any way with the Optionee's right or the Company's right to
terminate such employment or consulting relationship at any time, with or
without cause.

      7.    Term of Plan. The Plan shall become effective upon its adoption by
the Board. It shall continue in effect until the next shareholders' meeting of
the Company at which an increase in the number of Shares reserved for issuance
under the Company's 1995 Stock Plan is approved by the Company's shareholders.

      8.    Term of Option. The term of each Option shall be stated in the
Notice of Grant.

                                                                             -5-


      9.    Option Exercise Price and Consideration.

            (a)   Exercise Price. The per share exercise price for the Shares to
be issued pursuant to exercise of an Option shall be determined by the
Administrator.

            (b)   Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised. In so doing, the Administrator may specify that an
Option may not be exercised until the completion of a service period.

            (c)   Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. Such consideration may consist entirely of:

                  (i)   cash;

                  (ii)  check;

                  (iii) promissory note;

                  (iv)  other Shares which (A) in the case of Shares acquired
upon exercise of an option, have been owned by the Optionee for more than six
months on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;

                  (v)   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 die sale or loan proceeds required to pay the exercise price;

                  (vi)  a reduction in the amount of any Company liability to
the Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation program or
arrangement;

                  (vii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws; or

                  (viii) any combination of the foregoing methods of payment.

      10.   Exercise of Option.

            (a)   Procedure for Exercise: Rights as a Shareholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement.

                                                                             -6-


                  An Option may not be exercised for a fraction of a Share.

                  An Option shall be deemed exercised when the Company receives:
(i) written notice of exercise (in accordance with the Option Agreement) from
the person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the stock
certificate evidencing such Shares is issued (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such
stock certificate promptly after the Option is exercised. 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 13 of the
Plan.

                  Exercising an Option in any manner shall decrease the number
of Shares thereafter 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)   Termination of Employment or Consulting Relationship. Upon
termination of an Optionee's Continuous Status as an Employee or Consultant,
other than upon the Optionee's death or Disability, the Optionee may exercise
his or her Option, but only within such period of time as is specified in the
Notice of Grant, and only to the extent that the Optionee was entitled to
exercise it at the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Notice of Grant). In
the absence of a specified time in the Notice of Grant, the Option shall remain
exercisable for three (3) months following the Optionee's termination. If, on
the date of termination, the Optionee is not entitled to exercise the Optionee's
entire Option, the Shares covered by the unexercisable portion of the Option
shall revert to the Plan. If, after termination, the Optionee does not exercise
his or her Option within the time specified by the Administrator, the Option
shall terminate, and the Shares covered by such Option shall revert to the Plan.
Notwithstanding the above, in the event of an Optionee's change in status from
Consultant to Employee or Employee to Consultant, an Optionee's Continuous
Status as an Employee or Consultant shall not terminate solely as a result of
such change in status.

            (c)   Disability of Optionee. In the event that an Optionee's
Continuous Status as an Employee or Consultant terminates as a result of the
Optionee's Disability, the Optionee may exercise his or her Option at any time
within twelve (12) months from the date of such termination, but only to the
extent that the Optionee was entitled to exercise it at the date of such
termination (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant). If, at the date of termination, the
Optionee is not entitled to exercise his or her entire Option, the Shares
covered by the unexercisable portion of the Option shall revert to the Plan. If,
after termination, the Optionee does not exercise his or her Option within the
time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.
                                                                             -7-


            (d)   Death of Optionee. In the event of the death of an Optionee,
the Option may be exercised at any time within twelve (12) months following the
date of death (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant), by the Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or inheritance,
but only to the extent that the Optionee was entitled to exercise the Option at
the date of death. If, at the time of death, the Optionee was not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall immediately revert to the Plan. If, after death, the
Optionee's estate or a person who acquired the right to exercise the Option by
bequest or inheritance does not exercise the Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

            (e)   Buyout Provisions. The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.

      11.   Stock Purchase Rights.

            (a)   Rights to Purchase. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing, by means of a Notice of Grant, of the terms, conditions and
restrictions related to the offer, including the number of Shares that the
offeree shall be entitled to purchase, the price to be paid, and the time within
which the offeree must accept such offer, which shall in no event exceed six (6)
months from the date upon which the Administrator made the determination to
grant the Stock Purchase Right The offer shall be accepted by execution of a
Restricted Stock Purchase Agreement in the form determined by the Administrator.

            (b)   Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at a rate determined by the
Administrator.

            (c)   Other Provisions. The Restricted Stock Purchase Agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion. In
addition, the provisions of Restricted Stock Purchase Agreements need not be the
same with respect to each purchaser.

            (d)   Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.

                                                                             -8-


      12.   Non-Transferability of Options and Stock Purchase Rights. An Option
or Stock Purchase Right 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.

      13.   Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.

            (a)   Changes 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 Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, 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 or rectification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
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 or Stock
Purchase Right.

            (b)   Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and in
the manner contemplated. To the extent it has not been previously exercised, an
Option will terminate immediately prior to the consummation of such proposed
action.

            (c)   Merger or Asset Sale. Subject to Section 13(d), in the event
of a merger of the Company with or into another corporation, or the sale of
substantially all of the assets of the Company, each outstanding Option and
Stock Purchase Right shall be assumed or an equivalent option or right
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation. In the event that the successor corporation refuses to
assume or substitute for the Option or Stock Purchase Right, the Optionee shall
have the right to exercise the Option or Stock Purchase Right as to all of the
Optioned Stock, including Shares as to which it would not otherwise be
exercisable. If an Option or Stock Purchase Right is exercisable in lieu of
assumption or

                                                                             -9-


substitution in the event of a merger or sale of assets, the Administrator shall
notify the Optionee that the Option or Stock Purchase Right shall be fully
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option or Stock Purchase Right shall terminate upon the expiration of such
period. For the purposes of this paragraph, the Option or Stock Purchase Right
shall be considered assumed if, following the merger or sale of assets, the
option or right confers the right to purchase or receive, for each Share of
Optioned Stock subject to the Option or Stock Purchase Right immediately prior
to the merger or sale of assets, the consideration (whether stock, cash, or
other securities or property) received in the merger or sale of assets by
holders of Common Stock for each Share held on the effective date of the
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or sale of
assets was not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation, provide
for the consideration to be received upon the exercise of the Option or Stock
Purchase Right, for each Share of Optioned Stock subject to the Option or Stock
Purchase Right, to be solely common stock of the successor corporation or its
Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger or sale of assets.

            (d)   Change of Control. In the event of a Change of Control (as
defined below), the Optionee shall fully vest in and have the right to exercise
the Option or Stock Purchase Right as to all of the Optioned Stock, including
Shares as to which it would not otherwise be vested or exercisable.

            A "Change of Control" means the occurrence of any of the following
events:

                  (i)   any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
other than the Company, a subsidiary of the Company or a Company employee
benefit plan, including any trustee of such plan acting as trustee, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing twenty
percent (20%) or more of the combined voting power of the Company's then
outstanding securities entitled to vote generally in the election of directors;
or

                  (ii)  the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
of the Company approve an agreement for the sale or disposition by the Company
of all or substantially all the Company's assets; or

                  (iii) a change in the composition of the Board of Directors of
the Company, as a result of which fewer than a majority of the directors are
Incumbent Directors. "Incumbent Directors" shall mean directors who either (A)
are directors of the Company as of the date this

                                                                            -10-


amendment to the Plan is approved by the Board of Directors, or (B) are elected,
or nominated for election, to the Board of Directors of the Company with the
affirmative votes of at least a majority of the Incumbent Directors and whose
election or nomination was not in connection with any transaction described in
(i) or (ii) above or in connection with an actual or threatened proxy contest
relating to the election of directors of the Company.

      14.   Date of Grant. The date of grant of an Option or Stock Purchase
Right shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the determination shall be
provided to each Optionee within a reasonable time after the date of such grant.

      15.   Amendment and Termination of the Plan.

            (a)   Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.

            (b)   Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.

      16.   Conditions Upon Issuance of Shares.

            (a)   Legal Compliance. Snares shall not be issued pursuant to the
exercise of an Option or Stock Purchase Right unless the exercise of such Option
or Stock Purchase Right and the issuance and delivery of such Shares shall
comply with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, Applicable Laws, and the requirements of any stock
exchange or quotation system upon which the Shares may then be listed or quoted,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.

            (b)   Investment Representations. As a condition to the exercise of
an Option or Stock Purchase Right, the Company may require the person exercising
such Option or Stock Purchase Right 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.

      17.   Liability of Company. 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 in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.

                                                                            -11-


      18.   Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

                                                                            -12-

EX-10.6

                                                                    EXHIBIT 10.6

                               VISX, INCORPORATED
                     CHANGE OF CONTROL SEVERANCE AGREEMENT

      This Change of Control Severance Agreement (the "Agreement"), is made and
entered into effective as of [DATE], (the "Effective Date"), by and between
[EMPLOYEE NAME] (the "Employee") and VISX, Incorporated, a Delaware corporation
(the "Company"). Certain capitalized terms used in this Agreement are defined in
Section 1 below.

                                   RECITALS

      A. It is expected that the Company from time to time will consider the
possibility of a Change of Control. The Board of Directors of the Company (the
"Board") recognizes that such consideration can be a distraction to the Employee
and can cause the Employee to consider alternative employment opportunities.

      B. The Board believes that it is in the best interests of the Company and
its shareholders to provide the Employee with an incentive to continue his
employment and to maximize the value of the Company upon a Change of Control for
the benefit of its shareholders.

      C. In order to provide the Employee with enhanced financial security and
sufficient encouragement to remain with the Company notwithstanding the
possibility of a Change of Control, the Board believes that it is imperative to
provide the Employee with severance benefits upon certain terminations of the
Employee's employment following a Change of Control.

                                   AGREEMENT

      In consideration of the mutual covenants herein contained and the
continued employment of Employee by the Company, the parties agree as follows:

      1. Definition of Terms. The following terms referred to in this Agreement
shall have the following meanings:

            (a) Cause. "Cause" for termination by the Company of the Employee's
employment shall mean (i) the willful and continued failure by the Employee to
substantially perform the Employee's duties with the Company (other than any
such failure resulting from the Employee's incapacity due to physical or mental
illness) after a written demand for substantial performance is delivered to the
Employee by the Board, which demand specifically identifies the manner in which
the Board believes that the Employee has not substantially performed the
Employee's duties, or (ii) the willful engaging by the Employee in conduct which
is demonstrably and materially injurious to the Company or its subsidiaries,
monetarily or otherwise. For purposes of clauses (i) and (ii) of this
definition, (x) no act, or failure to act, on the Employee's part shall be
deemed "willful" unless done, or omitted to be done, by the Employee not in good
faith and without reasonable belief that the Employee's act, or failure to act,
was in the best interest of the Company and (y) in the event of a dispute
concerning the application of this provision, no claim by the Company that Cause
exists shall be given effect unless the Company establishes to the Board by
clear and convincing evidence that Cause exists.



      (b) Change of Control. "Change of Control" shall mean the occurrence of
any of the following events:

            (i) there is consummated a merger or consolidation of the Company or
any subsidiary of the Company with any other corporation or business entity,
other than a merger or consolidation which results in the directors of the
Company immediately prior to such merger or consolidation continuing to
constitute at least a majority of the board of directors of the Company, the
surviving entity or any parent thereof, as the case may be;

            (ii) any approval by the shareholders of the Company of a plan of
complete liquidation of the Company or there is consummated a sale or
disposition by the Company of all or substantially all of the Company's assets;

            (iii) any "Person," (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than the Company, any trustee or other fiduciary holding securities under
an employee benefit plan of the Company or any subsidiary of the Company, or any
company owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their beneficial ownership of stock of the
Company)) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 20% or more (excluding in the securities beneficially owned by such
person any securities acquired directly from the Company or its Affiliates) of
the combined voting power of the Company's then outstanding securities; or

            (iv) a change in the composition of the Board, as a result of which
fewer than a majority of the directors are Incumbent Directors. "Incumbent
Directors" shall mean (A) individuals who, on the Effective Date of this
Agreement, constitute the Board and (B) any new director (other than a director
whose initial assumption of office is in connection with an actual or threatened
election contest, including but not limited to a consent solicitation, relating
to the election of directors of the Company) whose appointment or election by
the Board or nomination for election by the Company's shareholders was approved
or recommended by a vote of at least a majority of the directors then still in
office who either were directors on the Effective Date or whose appointment,
election or nomination for election was previously so approved or recommended.

      (c) Compensation Continuation Period. "Compensation Continuation Period"
shall mean the period of time commencing with termination of the Employee's
employment as a result of Involuntary Termination at anytime within twenty-four
(24) months after a Change of Control and ending with the expiration of
thirty-six (36) months following the date of the Employee's termination.

      (d) Current Compensation. "Current Compensation" shall mean an amount
equal to the greater of (i) the sum of the Employee's highest annual rate of
base salary in effect during the fiscal year in which a Change of Control occurs
plus Employee's target bonus for such fiscal year assuming 100% individual and
Company performance; or (ii) the sum of the Employee's highest annual rate of
base salary in effect during the fiscal year of Employee's termination plus
Employee's target bonus for such fiscal year assuming 100% individual and
Company performance.



      (e) Involuntary Termination. "Involuntary Termination" shall mean (i)
without the Employee's express written consent, a significant reduction of the
Employee's duties, position or responsibilities relative to the Employee's
duties, position or responsibilities in effect immediately prior to such
reduction, or the removal of the Employee from such position, duties and
responsibilities, unless the Employee is provided with comparable duties,
position and responsibilities; (ii) without the Employee's express written
consent, a substantial reduction of the facilities and perquisites (including
office space and location) available to the Employee immediately prior to such
reduction; (iii) a reduction by the Company of the Employee's base salary as in
effect immediately prior to such reduction; (iv) a material reduction by the
Company in the kind or level of employee benefits to which the Employee is
entitled immediately prior to such reduction with the result that the Employee's
overall benefits package is significantly reduced; provided, however, that a
reduction of the Employee's benefits to a level greater than or equal to those
available to similarly situated employees of the Company and employees of any
entity in control of the Company shall not constitute an Involuntary
Termination; (v) without the Employee's express written consent, the relocation
of the Employee to a facility or a location more than thirty-five (35) miles
from his location immediately prior to such Change of Control; (vi) any
termination of the Employee by the Company which is not effected for Cause; or
(vii) the failure of the Company to obtain the assumption of this Agreement by
any successors contemplated in Section 6 below.

      (f) Potential Change of Control. A "Potential Change of Control" shall be
deemed to have occurred if the event set forth in any one of the following
paragraphs shall have occurred:

            (i) the Company enters into an agreement, the consummation of which
            would result in the occurrence of a Change of Control;

            (ii) any Person becomes the beneficial owner, directly or
            indirectly, of securities of the Company representing 15% or more of
            either the then outstanding shares of common stock of the Company or
            the combined voting power of the Company's then outstanding
            securities (not including in the securities beneficially owned by
            such Person any securities acquired directly from the Company or its
            affiliates); or

            (iii) the Board adopts a resolution to the effect that, for purposes
            of this Agreement, a Potential Change of Control has occurred.

provided, however, clause (ii) above shall not apply to any Person who, as of
the Effective Date, is the beneficial owner of 15% or more of either the
outstanding shares of common stock of the Company or the combined voting power
of the Company's outstanding securities.

      (g) Termination Date. "Termination Date" shall mean the effective date of
any notice of termination delivered by one party to the other hereunder.

      2. Term of Agreement. This Agreement shall terminate upon the date that
all obligations of the parties hereto under this Agreement have been satisfied.

      3. At-Will Employment. The Company and the Employee acknowledge that the
Employee's employment is and shall continue to be at-will, as defined under
applicable law. If the Employee's



employment terminates for any reason, the Employee shall not be entitled to any
payments, benefits, damages, awards or compensation other than as provided by
this Agreement, or as may otherwise be established under the Company's then
existing employee benefit plans or policies at the time of termination.

      4. Severance Benefits.

            (a) Termination Following A Change of Control.

                  (i) Involuntary Termination. If the Employee's employment with
the Company terminates as a result of an Involuntary Termination at any time
within twenty-four (24) months after a Change of Control, then the Employee
shall be entitled to receive from the Company:

                  (1) A cash lump sum payment, within 15 days following the
                      Termination Date, in an amount equal to the sum of (I)
                      three times the Current Compensation, plus (II) three
                      times the amount that would have been contributed by the
                      Company to VISX, Inc. 401(k) Plan on the Employee's behalf
                      during the three years immediately following the
                      Termination Date, determined as if the Employee made the
                      maximum permissible contributions thereto, plus (III) a
                      pro rata bonus for the fiscal year in which the
                      Termination Date occurs, determined by multiplying the
                      Employee's target bonus for such year by a fraction, the
                      numerator of which is the number of days in such fiscal
                      year through and including the Termination Date and the
                      denominator of which is 365;

                  (2) during the Compensation Continuation Period, life,
                      disability, accident and health insurance benefits
                      substantially similar to those provided to the Employee
                      and [HIS/HER] dependents immediately prior to the
                      Termination Date (or, if more favorable to the Employee,
                      those provided to the Employee and [HIS/HER] dependents
                      immediately prior to the occurrence of the Change of
                      Control), at no greater cost to the Employee than the cost
                      to the Employee immediately prior to the applicable date;

                  (3) during the Compensation Continuation Period, continuation
                      of all perquisites substantially similar to those provided
                      to the Employee and [HIS/HER] dependents immediately prior
                      to the Termination Date (or, if more favorable to the
                      Employee, those provided to the Employee and [HIS/HER]
                      dependents immediately prior to the occurrence of the
                      Change of Control); and

                  (4) outplacement services suitable to the Employee's position
                      for the duration of the Compensation Continuation Period
                      or, if earlier, until the first acceptance by the Employee
                      of an offer of employment.



For purposes of this Section 4(a)(i), an Involuntary Termination shall also be
deemed to have occurred (and the Employee's employment shall be deemed to have
been terminated by the Company without Cause within 24 months after the
occurrence of a Change of Control) if the Employee's employment is terminated by
the Company without Cause following the occurrence and during the pendency of a
Potential Change of Control (whether or not a Change of Control ever occurs) and
such termination either (i) is at the request or direction of a Person who has
entered into an agreement with the Company the consummation of which would
constitute a Change of Control or (ii) is otherwise reasonably demonstrated by
the Employee to be in anticipation of or in connection with a Change of Control.

                  (ii) Other Termination. If the Employee's employment with the
Company terminates other than as a result of an Involuntary Termination at any
time within twenty-four (24) months after a Change of Control, then the Employee
shall not be entitled to receive severance or other benefits hereunder, but may
be eligible for those benefits (if any) as may then be established under the
Company's then existing severance and benefits plans and policies at the
Termination Date.

            (b) Termination Apart from a Change of Control. If the Employee's
employment with the Company terminates for any or no reason (other than a
termination which occurs or is deemed to have occurred within twenty-four (24)
months following a Change of Control), then the Employee shall not be entitled
to receive severance or other benefits hereunder, but may be eligible for those
benefits (if any) as may then be established under the Company's then existing
severance and benefits plans and policies at the Termination Date.

            (c) Accrued Wages and Vacation; Expenses. Without regard to the
reason for, or the timing of, Employee's termination of employment: (i) the
Company shall pay the Employee any unpaid base salary due for periods prior to
the Termination Date; (ii) the Company shall pay the Employee all of the
Employee's accrued and unused vacation through the Termination Date; and (iii)
following submission of proper expense reports by the Employee, the Company
shall reimburse the Employee for all expenses reasonably and necessarily
incurred by the Employee in connection with the business of the Company prior to
the Termination Date. These payments shall be made promptly upon termination and
within the period of time mandated by law.

      5. Additional Payments. (a) Whether or not the Employee becomes entitled
to the benefits set forth in Section 4(a)(i) hereof, if any of the payments or
benefits received or to be received by the Employee in connection with a Change
of Control or the Employee's termination of employment (whether pursuant to this
Agreement or any other agreement with the Company, any Person whose actions
result in a Change of Control or any Person affiliated with the Company or such
Person) (such payments or benefits, excluding the Gross-Up Payment, as defined
below, hereinafter referred to as the "Total Payments") will be subject to the
excise tax imposed by Section 4999 of the Code (the "Excise Tax"), the Company
shall pay to the Employee an additional amount (the "Gross-Up Payment") such
that the net amount retained by the Employee, after deduction of any Excise Tax
on the Total Payments and any federal, state and local income and employment
taxes and Excise Tax upon the Gross-Up Payment, shall be equal to the Total
Payments.

            (b) For purposes of determining whether any of the Total Payments
will be subject to the Excise Tax and the amount of such Excise Tax, (i) all of
the Total Payments shall be



treated as "parachute payments" (within the meaning of section 280G(b)(2) of the
Code) unless, in the opinion of tax counsel ("Tax Counsel") reasonably
acceptable to the Employee and selected by the accounting firm which was,
immediately prior to the Change of Control, the Company's independent auditor
(the "Auditor"), such payments or benefits (in whole or in part) do not
constitute parachute payments, including by reason of section 280G(b)(4)(A) of
the Code, (ii) all "excess parachute payments" within the meaning of section
280G(b)(1) of the Code shall be treated as subject to the Excise Tax unless, in
the opinion of Tax Counsel, such excess parachute payments (in whole or in part)
represent reasonable compensation for services actually rendered (within the
meaning of section 280G(b)(4)(B) of the Code) in excess of the Base Amount
allocable to such reasonable compensation, or are otherwise not subject to the
Excise Tax, and (iii) the value of any noncash benefits or any deferred payment
or benefit shall be determined by the Auditor in accordance with the principles
of sections 280G(d)(3) and (4) of the Code. For purposes of determining the
amount of the Gross-Up Payment, the Employee shall be deemed to pay federal
income tax at the highest marginal rate of federal income taxation in the
calendar year in which the Gross-Up Payment is to be made and state and local
income taxes at the highest marginal rate of taxation in the state and locality
of the Employee's residence on the Termination Date (or if there is no
Termination Date, then the date on which the Gross-Up Payment is calculated for
purposes of this Section 5), net of the maximum reduction in federal income
taxes which could be obtained from deduction of such state and local taxes.

            (c) In the event that the Excise Tax is finally determined to be
less than the amount taken into account hereunder in calculating the Gross-Up
Payment, the Employee shall repay to the Company, within five (5) business days
following the time that the amount of such reduction in the Excise Tax is
finally determined, the portion of the Gross-Up Payment attributable to such
reduction (plus that portion of the Gross-Up Payment attributable to the Excise
Tax and federal, state and local income and employment taxes imposed on the
Gross-Up Payment being repaid by the Employee), to the extent that such
repayment results in a reduction in the Excise Tax and a dollar-for-dollar
reduction in the Employee's taxable income and wages for purposes of federal,
state and local income and employment taxes, plus interest on the amount of such
repayment at 120% of the rate provided in section 1274(b)(2)(B) of the Code. In
the event that the Excise Tax is determined to exceed the amount taken into
account hereunder in calculating the Gross-Up Payment (including by reason of
any payment the existence or amount of which cannot be determined at the time of
the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in
respect of such excess (plus any interest, penalties or additions payable by the
Executive with respect to such excess) within five (5) business days following
the time that the amount of such excess is finally determined. The Employee and
the Company shall each reasonably cooperate with the other in connection with
any administrative or judicial proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total Payments.

      6. Successors.

            (a) Company's Successors. Any successor to the Company (whether
direct or indirect and whether by purchase, lease, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company's business
and/or assets shall assume the Company's obligations under this Agreement and
agree expressly to perform the Company's obligations under this Agreement in the
same manner and to the same extent as the Company would be required to perform
such obligations in the absence of a succession. For all purposes under this
Agreement, the



term "Company" shall include any successor to the Company's business and/or
assets which executes and delivers the assumption agreement described in this
subsection (a) or which becomes bound by the terms of this Agreement by
operation of law.

            (b) Employee's Successors. Without the written consent of the
Company, Employee shall not assign or transfer this Agreement or any right or
obligation under this Agreement to any other person or entity. Notwithstanding
the foregoing, the terms of this Agreement and all rights of Employee hereunder
shall inure to the benefit of, and be enforceable by, Employee's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.

      7. Notices.

            (a) General. Notices and all other communications contemplated by
this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by U.S. registered or certified mail,
return receipt requested and postage prepaid. In the case of the Employee,
mailed notices shall be addressed to him at the home address that he most
recently communicated to the Company in writing. In the case of the Company,
mailed notices shall be addressed to its corporate headquarters, and all notices
shall be directed to the attention of its Secretary.

            (b) Notice of Termination. Any termination by the Company for Cause
or by the Employee as a result of a voluntary resignation or an Involuntary
Termination shall be communicated by a notice of termination to the other party
hereto given in accordance with this Section. Such notice shall indicate the
specific termination provision in this Agreement relied upon, shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination under the provision so indicated, and shall specify the Termination
Date (which shall be not more than thirty (30) days after the giving of such
notice). The failure by the Employee to include in the notice any fact or
circumstance which contributes to a showing of Involuntary Termination shall not
waive any right of the Employee hereunder or preclude the Employee from
asserting such fact or circumstance in enforcing his rights hereunder.

            (c) Dispute Concerning Termination. If within fifteen (15) days
after any notice of termination is given, or, if later, prior to the Termination
Date (as determined without regard to this Section 7(c), the party receiving
such notice of termination notifies the other party that a dispute exists
concerning the termination, the Termination Date shall be extended until the
date on which the dispute is finally resolved, either by mutual written
agreement of the parties or by a final judgment, order or decree of an
arbitrator or a court of competent jurisdiction (which is not appealable or with
respect to which the time for appeal therefrom has expired and no appeal has
been perfected); provided, however, that the Termination Date shall be extended
by a notice of dispute given by the Employee only if such notice is given in
good faith and the Employee pursues the resolution of such dispute with
reasonable diligence.

            (d) Compensation During Dispute. If a purported termination occurs
(or is deemed to have occurred) following a Change of Control and the
Termination Date is extended in accordance with Section 7(c) hereof, the Company
shall continue to pay the Employee the full compensation in effect when the
notice giving rise to the dispute was given (including, but not limited to,
salary) and continue the Employee as a participant in all compensation, benefit
and insurance plans in which



the Employee was participating when the notice giving rise to the dispute was
given, until the Termination Date, as determined in accordance with Section 7(c)
hereof. Amounts paid under this Section 7(d) are in addition to all other
amounts due under this Agreement and shall not be offset against or reduce any
other amounts due under this Agreement.

            (d) Legal Fees. The Company also shall pay to the Employee all legal
fees and expenses incurred by the Employee in disputing in good faith any issue
hereunder relating to the termination of the Employee's employment, in seeking
in good faith to obtain or enforce any benefit or right provided by this
Agreement or in connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the Code to any payment or
benefit provided hereunder. Such payments shall be made within five (5) business
days after delivery of the Employee's written requests for payment accompanied
with such evidence of fees and expenses incurred as the Company reasonably may
require.

      8. Arbitration.

            (a) To the extent permitted by law, any dispute or controversy
arising out of, relating to, or in connection with this Agreement, or the
interpretation, validity, construction, performance, breach, or termination
thereof, shall be settled by binding arbitration to be held in San Francisco,
California, in accordance with the National Rules for the Resolution of
Employment Disputes then in effect of the American Arbitration Association (the
"Rules"). The arbitrator may grant injunctions or other relief in such dispute
or controversy. The decision of the arbitrator shall be final, conclusive and
binding on the parties to the arbitration. Judgment may be entered on the
arbitrator's decision in any court having jurisdiction.

            (b) The arbitrator(s) shall apply California law to the merits of
any dispute or claim, without reference to conflicts of law rules. The
arbitration proceedings shall be governed by federal arbitration law and by the
Rules, without reference to state arbitration law. Employee hereby consents to
the personal jurisdiction of the state and federal courts located in California
for any action or proceeding arising from or relating to this Agreement or
relating to any arbitration in which the parties are participants.

            (c) Employee understands that nothing in this Section modifies
Employee's at-will employment status. Either Employee or the Company can
terminate the employment relationship at any time, with or without cause.

            (d) EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES
ARBITRATION. EMPLOYEE UNDERSTANDS THAT SUBMITTING ANY CLAIMS ARISING OUT OF,
RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION,
VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF, TO BINDING
ARBITRATION CONSTITUTES A WAIVER OF EMPLOYEE'S RIGHT TO A JURY TRIAL.

      9. Miscellaneous Provisions.

            (a) Confidentiality. The Parties hereto each agree to use their best
efforts to maintain in confidence the underlying facts leading up to this
Agreement, the existence of this Agreement and the contents and terms of this
Agreement.



            (b) No Duty to Mitigate. The Employee shall not be required to
mitigate the amount of any payment contemplated by this Agreement, nor shall any
such payment be reduced by any earnings that the Employee may receive from any
other source.

            (c) Waiver. No provision of this Agreement may be modified, waived
or discharged unless the modification, waiver or discharge is agreed to in
writing and signed by the Employee and by an authorized officer of the Company
(other than the Employee). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other party
shall be considered a waiver of any other condition or provision or of the same
condition or provision at another time.

            (d) Integration. This Agreement, the stock option agreements related
to the Employee's stock options, and the Company's written policies and
procedures represent the entire agreement and understanding between the parties
as to the subject matter herein and supersede all prior or contemporaneous
agreements, whether written or oral.

            (e) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the internal substantive
laws, but not the conflicts of law rules, of the State of California.

            (f) Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.

            (g) Employment Taxes. All payments made pursuant to this Agreement
shall be subject to withholding of applicable income and employment taxes.

            (h) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.

      IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
first above written.

COMPANY:                       VISX, INCORPORATED

                               By:_______________________________
                               Name: Liz Davila
                               Title: President, CEO & Chairman of the Board

EMPLOYEE:                      __________________________________
                               [NAME]
                               [ADDRESS]
                               [CITY, STATE, ZIP]

EX-10.7

                                                                    Exhibit 10.7

                                     [LOGO]

                                 Lease between
              Sobrato Interests, a California limited partnership
                                      and
                               VISX, Incorporated



Section                                                                  Page  #
- -------                                                                  -------
                                                                      
Parties.....................................................................   1
Premises....................................................................   1
Use.........................................................................   1
Term and Rental.............................................................   1
    Rental Adjustment.......................................................   2
Security Deposit............................................................   2
Late Charges................................................................   2
Construction and Possession.................................................   3
Acceptance of Possession and Covenants to Surrender.........................   4
Uses Prohibited.............................................................   4
Alterations and Additions...................................................   5
Maintenance of Premises.....................................................   5
    Landlord and Tenant's Obligations Regarding Common Area Costs...........   5
    Common Area Costs.......................................................   5
    Tenant's Allocable Share................................................   6
    Waiver of Liability.....................................................   6
    Tenant's Obligations....................................................   6
    Landlord's Obligations..................................................   7
Hazard Insurance............................................................   7
    Tenant's Use............................................................   7
    Landlord's Insurance....................................................   7
    Tenant's Insurance......................................................   7
    Waiver..................................................................   7
Taxes.......................................................................   8
Utilities...................................................................   8
Abandonment.................................................................   8
Free From Liens.............................................................   8
Compliance With Governmental Regulations....................................   9
Toxic Waste and Environmental Damage........................................   9
     Tenant's Responsibility................................................   9
     Tenant's Indemnity Regarding Hazardous Materials.......................   9
     Environmental Monitoring...............................................  10
Indemnity...................................................................  10
Advertisements and Signs....................................................  10
Attorney's Fees.............................................................  10
Tenant's Default............................................................  10
     Remedies...............................................................  11
     Right to Re-enter......................................................  11
     Abandonment............................................................  11
     No Termination.........................................................  12
Surrender of Lease..........................................................  12
Habitual Default............................................................  12
Landlord's Default..........................................................  12
Notices.....................................................................  13
Entry by Landlord...........................................................  13
Destruction of Premises.....................................................  13
     Destruction by an Insured Casualty.....................................  13



     Destruction by an Uninsured Casualty ................................... 13
Assignment or Sublease ...................................................... 14
     Consent by Landlord .................................................... 14
     Assignment or Subletting Consideration ................................. 14
     No Release ............................................................. 15
     Effect of Default ...................................................... 15
Condemnation ................................................................ 15
Effects of Conveyance ....................................................... 16
Subordination ............................................................... 16
Waiver ...................................................................... 16
Holding Over ................................................................ 16
Successors and Assigns ...................................................... 16
Estoppel Certificates ....................................................... 16
Option to Extend the Lease Term ............................................. 17
     Grant and Exercise of Option ........................................... 17
     Determination of Fair Market Rental .................................... 17
     Resolution of a Disagreement over the Fair Market Rental ............... 18
     Tenant's Right to Rescind Exercise of Option ........................... 18
Options ..................................................................... 18
Quiet Enjoyment ............................................................. 18
Brokers ..................................................................... 18
Landlord's Liability ........................................................ 19
Authority of Parties ........................................................ 19
     Corporate Authority .................................................... 19
     Limited Partnerships ................................................... 19
Transportation Demand Management Programs ................................... 19
Right of First Offer ........................................................ 19
Miscellaneous Provisions .................................................... 20
     Rent ................................................................... 20
     Management Fee ......................................................... 20
     Performance by Landlord ................................................ 20
     Interest ............................................................... 20
     Rights and Remedies .................................................... 20
     Survival of Indemnities ................................................ 20
     Severability ........................................................... 20
     Choice of Law .......................................................... 20
     Time ................................................................... 20
     Entire Agreement ....................................................... 20
     Representations ........................................................ 20
     Headings ............................................................... 20
Exhibit "A" ................................................................. 22
Exhibit "B" ................................................................. 23
Exhibit "C" ................................................................. 24
Exhibit "D" ................................................................. 25
Exhibit "E" ................................................................. 26
Exhibit "F" ................................................................. 27










                                    Page ii

- --------------------------------     [LOGO]     --------------------------------

     1.   PARTIES: THIS LEASE, is entered into on this 16th day of July, 1992,
between Sobrato Interests, a California limited partnership, whose address is
10600 North De Anza Boulevard, Cupertino, California, 95014 and VISX,
Incorporated, a California corporation, whose address is 3400 Central
Expressway, Santa Clara, California, hereinafter called respectively Landlord
and Tenant.

     2.   PREMISES: Landlord hereby leases to Tenant, and Tenant hires from
Landlord those certain Premises with the appurtenances, situated in the City of
Santa Clara, County of Santa Clara, State of California, and more particularly
described as follows, to-wit:

That certain real property commonly known and designated as 3400 Central
Expressway consisting of 52,344 rentable square feet on the ground floor of a
larger, two-story building of 108,844 square feet ("Building") and 185 parking
stalls in a project consisting of a total of five (5) buildings, including the
Premises, totaling 412,171 square feet ("Project") as outlined in red on
Exhibit "A". The parking stalls shall be available for Tenant's exclusive use
but shall not be designated or segregated from the balance of the parking area.

As an appurtenant right to Tenant's right to the use of the Premises, Tenant
shall have the non-exclusive right to use the Common Areas in conjunction with
other tenants of the Project and their invitees, subject to the limitations on
such use as set forth in Paragraphs 9 and 11, and solely for the purposes for
which they were designed and intended. Tenant's right to use the Common Areas
shall terminate concurrently with any termination of this Lease.

     3.   USE: Tenant shall use the Premises only for the following purposes
and shall not change the use of the Premises without the prior written consent
of Landlord: Office, research, development, testing, light manufacturing,
ancillary warehouse, and other legal uses not prohibited by private
restrictions. Landlord makes no representation or warranty that any specific
use of the Premises desired by Tenant is permitted pursuant to any Laws.

     4.   TERM AND RENTAL: The term ("Lease Term") shall be for sixty (60)
months, commencing on the 1st day of October, 1992 ("Intended Commencement
Date"), and ending on the 30th day of September, 1997 ("Expiration Date"),
unless either (i) Landlord is unable to deliver possession of the Premises
to Tenant on the Intended Commencement Date, in which case the Lease
Commencement Date shall be as determined pursuant to Paragraph 7 below, or (ii)
Tenant enters into possession of the Premises prior to the Intended
Commencement Date, in which case the Lease Commencement Date shall be deemed to
have occurred on such earlier date (the "Lease Commencement Date"). If the Lease
Commencement Date is later than the Intended Commencement Date, then the
Expiration Date shall be sixty months after the Lease Commencement Date, unless
extended pursuant to Paragraph 37 below. The "Lease Term" shall be that period
of time commencing on the Lease Commencement Date and ending on the Expiration
Date. In addition to all other sums payable by Tenant under this Lease, Tenant
shall pay as base monthly rent ("Base Monthly Rent") for the Premises the sum
of Forty Three Thousand One Hundred Eighty Three and 80/100 Dollars
($43,183.80) per month. Base Monthly Rent shall be due on or before the first
day of each calendar month during Lease Term. All sums payable by Tenant under
this Lease shall be paid in lawful money of the United States of America,
without offset or

                                     Page 1

deduction, and shall be paid to Landlord at such place or places as may be
designated from time to time by Landlord. Base Monthly Rent for any period less
than a calendar month shall be a pro rata portion of the monthly installment.

Concurrently with Tenant's execution of this Lease, Tenant shall pay to
Landlord the sum of Forty Three Thousand One Hundred Eighty Three and 80/100
Dollars ($43,183.80) as prepaid rent for the first month of the Lease.

     A. Rental Adjustment: Beginning thirty-one (31) months after the
Commencement Date, the Base Monthly Rent shall be subject to one adjustment that
will remain in effect for the balance of the Lease Term, based on the increase,
if any, in the Consumer Price Index ("Adjustment Date"). The basis for computing
the adjustment shall be the U.S. Department of Labor, Bureau of Labor
Statistic's Consumer Price Index for All Urban Consumers, All Items,
1982-84=100, for the San Francisco-Oakland-San Jose area, ("Index"). The Index
most recently published preceding the commencement of the Lease (or previous
Adjustment Date, as applicable), shall be considered the "Base Index". If the
Index most recently published preceding the Adjustment Date ("Comparison Index")
is greater than the Base Index, the then payable Base Monthly Rent shall be
increased by multiplying the Base Monthly Rent by a fraction, the numerator of
which is the Comparison Index and the denominator of which is the Base Index.
Notwithstanding any subsequent decrease in the Index, the increase in the Index
for any calendar year shall be deemed not less than three percent (3%) per year
compounded annually nor more than seven percent (7%) per year compounded
annually. Landlord's calculation of the Base Monthly Rent escalation shall be
conclusive and binding unless Tenant objects to said calculation within a thirty
(30) day period. On adjustment of the Base Monthly Rent. Landlord shall notify
Tenant by letter stating the new Base Monthly Rent. If the Index base year is
changed so that it differs from 1982-84=100, the Index shall be converted in
accordance with the conversion factor published by the United States Department
of Labor, Bureau of Labor Statistics. If the Index is discontinued or revised
during the Lease Term, such other government index or computation with which it
is replaced shall be used in order to obtain substantially the same result as
would be obtained if the index had not been discontinued or revised.

     5. SECURITY DEPOSIT: Concurrently with Tenant's execution of this Lease,
Tenant has deposited with Landlord the sum of Forty Five Thousand and No/100
Dollars ($45,000.00) as a security deposit. If Tenant defaults with respect to
any provisions of this Lease, including but not limited to the provisions
relating to payment of Base Monthly Rent or other charges, Landlord may, to the
extent reasonably necessary to remedy Tenant's default, use all or any part of
said deposit for the payment of Base Monthly Rent or other charges in default or
the payment of any other payment of any other amount which Landlord may spend or
become obligated to spend by reason of Tenant's default or to compensate
Landlord for any other loss or damage which Landlord may suffer by reason of
Tenant's default. Landlord shall promptly notify Tenant that it has incurred an
expense pursuant to the preceding sentence. If any portion of said deposit is so
used or applied, Tenant shall, within ten (10) days after written demand
therefor, deposit cash with Landlord in an amount sufficient to restore said
deposit to the full amount hereinabove stated and shall pay to Landlord such
other sums as shall be necessary to reimburse Landlord for any sums paid by
Landlord. Said deposit shall be returned to Tenant within thirty (30) days after
the Expiration Date and surrender of the Premises to Landlord, less any amount
deducted in accordance with this paragraph and not previously restored to
Landlord, together with Landlord's written notice itemizing the amounts and
purposes for such retention. In the event of termination of Landlord's interest
in this Lease, Landlord shall transfer said deposit to Landlord's successor in
interest.

     6. LATE CHARGES: Tenant hereby acknowledges that late payment by Tenant to
Landlord of Base Monthly Rent and other sums due hereunder will cause Landlord
to incur costs not contemplated by this Lease, the exact amount of which will
be extremely difficult to ascertain. Such costs include, but are not limited
to, administrative, processing, accounting charges, and late charges, which may
be

                                     Page 2

imposed on Landlord by the terms of any contract, revolving credit, mortgage or
trust deed covering the Premises. Accordingly, if any installment of Base
Monthly Rent or any other sum due from Tenant shall not be received by Landlord
or Landlord's designee when due, Tenant shall pay to Landlord a late charge
equal to five (5%) percent of such overdue amount which shall be due and
payable with the payment then delinquent. Landlord agrees to waive said late
charge in the event the Base Monthly Rent or other sum due is received within
ten (10) days after receipt by Tenant of Landlord's notice to quit or pay rent.
The parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs Landlord will incur by reason of late payment by Tenant.
Acceptance of such late charge by Landlord shall in no event constitute a
waiver of Tenant's default with respect to such overdue amount, nor prevent
Landlord from exercising any of the other rights and remedies granted
hereunder. In the event that a late charge is payable hereunder, whether or not
collected, for three (3) consecutive installments of Base Monthly Rent, then
Landlord shall notify Tenant in writing that for the balance of the Lease Term,
rent shall automatically become due and payable quarterly in advance, rather
than monthly, notwithstanding any provision of this Lease to the contrary.

     7.  CONSTRUCTION AND POSSESSION: The Tenant Improvements shall be
constructed, at Landlord's sole expense, in accordance with the Final Working
Drawings and under the supervision of Landlord and shall comply with all
existing applicable municipal, local, state and federal laws, statutes, rules,
regulations and ordinances. Landlord shall at its sole expense repair all latent
defects respecting the Premises and all violations of laws, statutes, rules,
regulations and ordinances in effect as of the Commencement Date. Landlord's
obligations with respect to the correction of such defects shall be limited to
the cost to correct the defective work and Landlord shall not be liable for any
consequential damages or other loss or damage incurred by Tenant.

Landlord and Tenant have approved the architectural, mechanical and electrical
working drawings ("Working Drawings") attached as Exhibit "B", and the scope of
work and budget ("Budget") attached as Exhibit "C". Prior to August 3, 1992,
Tenant agrees to reduce the scope of work of the Working Drawings so as to
reduce the Budget to a maximum cost of Nine Hundred Fifty Thousand and No/100
Dollars ($950,000.00) ("Maximum Tenant Improvement Cost"). Landlord and Tenant
shall be responsible for and shall pay the cost of the Tenant Improvements as
defined in Exhibit "B" and Exhibit "C" as follows: Landlord shall pay (i) the
first 785,160 and (i) Fifty Percent (50%) of the remaining cost up to the
Maximum Tenant Improvement Cost. Tenant shall pay the balance of the cost of the
Tenant Improvements.

In the event Tenant makes any changes to the Final Working Drawings which
increase the Tenant Improvement cost ("Cost Increase"), the Cost Increase shall
be paid for by Tenant in cash within seven (7) days after payment by Landlord to
the General Contractor. In the event Tenant makes any changes to the Final
Working Drawings after August 3, 1992 which cause the General Contractor's
construction schedule to be delayed, the Commencement Date shall occur one (1)
day in advance of Substantial Completion as defined below for each day of delay.

Landlord shall deliver possession of the Building in good condition and repair,
broom clean, reasonable wear and tear excepted, on or before the Intended
Commencement Date. Landlord by delivery of possession to Tenant represents that
the Building is structurally sound and meets all code requirements as of the
Commencement Date. Landlord shall provide a warranty, excluding routine
maintenance or damage caused by the negligence or misuse by Tenant, on the
Building for one (1) year from the Commencement Date.

If Landlord is unable to deliver possession of the Premises to Tenant on or
before the Intended Commencement Date, for whatever reason, Landlord shall not
be in default under this Lease, nor shall this Lease be void, voidable or
cancelable by Tenant until the lapse of forty five (45) days after the Intended
Commencement Date (the "Delivery Grace Period"); however, the Lease
Commencement Date shall not be deemed to have

                                     Page 3

occurred until such date as Landlord notifies Tenant that the Premises are
ready for occupancy and substantial completion of the Premises has occurred.
Notwithstanding the foregoing, the Delivery Grace Period shall be extended one
day for every day of delay in completion caused by labor strikes, material
shortages, inclement weather, or other causes beyond the reasonable control of
Landlord. If Landlord is unable to deliver possession of the Premises to Tenant
within the Delivery Grace Period, Tenant shall be entitled to rental abatement
hereunder of one day's rent for each day beyond said 45-day period in which the
Premises are not substantially complete. The delay in the commencement of rent
shall be the sole and exclusive remedy of Tenant with respect by the failure by
Landlord to achieve substantial completion within the delivery grace period.

"Substantial Completion" shall mean that: (i) all necessary governmental
approvals, permits, consents, and certificates have been obtained by us for
Landlord for the lawful construction by Landlord, and occupancy by Tenant, or
said Premises, excluding work attributable to any special fit-up requested or
required by Tenant, (ii) all of the Premises interior fully meet all of the
Final Working Drawings, excluding Tenant's special fit-up, (iii) all of the
Premises exterior substantially meets the applicable Final Working Drawings,
including paved parking areas, and (iv) said interior is in a "broom clean"
finished condition.

     8.   ACCEPTANCE OF POSSESSION AND COVENANTS TO SURRENDER: By entry
hereunder, Tenant accepts the Premises as being in good and sanitary order,
condition and repair and accepts the Building and the other improvements in
their present condition, except for Tenant's "punch list" of incomplete and/or
improper work, which Tenant shall submit to Landlord within thirty (30) days
after Landlord notifies Tenant that the Premises are ready for occupancy. The
Tenant agrees on Expiration Date, or on the sooner termination of this Lease, to
surrender the Premises to Landlord in good condition and repair, reasonable wear
and tear excepted. "Good condition" shall mean that the interior walls, floors,
suspended ceilings, and carpeting within the Premises will be cleaned to the
same condition as existed at the commencement of the Lease, reasonable wear and
tear excepted. Tenant agrees, at its sole cost, to remove all phone and data
cabling from the suspended ceiling and repair or replace broken ceiling tiles,
and re-level the ceiling, if required, so as to be as level as when Tenant took
possession of the Premises. Tenant shall ascertain from Landlord within thirty
(30) days before the Expiration Date whether Landlord desires to have the
Premises or any part or parts thereof restored to their condition as of the
Commencement Date or to cause Tenant to surrender all Alterations (as defined in
Paragraph 10) in place to Landlord. If Landlord shall so desire and has
previously notified Tenant at the time the Alterations were made, then Tenant
shall remove such Alterations as Landlord may require and shall repair and
restore said Premises or such part or parts thereof before the Expiration Date
at Tenant's sole cost and expense. Tenant on or before the Expiration Date or
sooner termination of this Lease, shall remove all its personal property and
trade fixtures from the Premises, and all property and fixtures not so removed
shall be deemed to be abandoned by Tenant. If the Premises are not surrendered
at the Expiration Date or sooner termination of this Lease in the condition
required by this paragraph, Tenant shall indemnify, defend, and hold harmless
Landlord against loss or liability resulting from delay by Tenant in so
surrendering the Premises including, without limitation, any claims made by any
succeeding tenant founded on such delay.

     9.   USES PROHIBITED: Tenant shall not commit, or suffer to be committed,
any waste upon the said Premises, or any nuisance, or other act or thing which
may disturb the quiet enjoyment of any other tenant in or around the Building or
allow any sale by auction upon the Premises, or allow the Premises to be used
for any unlawful or objectionable purpose, or place any loads upon the floor,
walls, or ceiling which endanger the structure, or use any machinery or
apparatus which will in any manner vibrate or shake the Building, or place any
harmful liquids, waste materials, or hazardous materials in the drainage system
of, or upon or in the soils surrounding the Building. No materials, supplies,
equipment, finished products or semi-finished products, raw materials or
articles of any nature or any waste materials, refuse, scrap or debris shall be
stored upon or permitted to remain on any portion of the Premises

                                     Page 4

outside of the Building proper without Landlord's prior approval, which approval
may be withheld in its sole discretion. Landlord shall use commercially
reasonable efforts to ensure that the other tenants in the Project comply with
the terms of this paragraph 9.

     10. ALTERATIONS AND ADDITIONS: Tenant shall not make, or suffer to be made,
any alteration or addition to the said Premises ("Alterations"), or any part
thereof, without (i) the written consent of Landlord first had and obtained, and
(ii) delivering to Landlord the proposed architectural and structural plans for
all such Alterations. Any Alterations, except movable furniture and trade
fixtures, shall become at once a part of the realty and belong to Landlord.
Alterations which are not to be deemed as trade fixtures shall include heating,
lighting, electrical systems, air conditioning, partitioning, carpeting, or any
other installation which has become an integral part of the Premises. The term
"Alterations" is not intended to include any of the items listed above which are
included in the Premises or the Tenant Improvements. After having obtained
Landlord's consent, Tenant agrees that it will not proceed to make such
Alterations until (i) Tenant has obtained all required governmental approvals
and permits, and (ii) Tenant has provided Landlord reasonable security, in form
reasonably approved by Landlord, to protect Landlord against mechanics' lien
claims. Tenant further agrees to provide Landlord (i) written notice of the
actual start date of the work, (iii) a complete set of as-built drawings. All
Alterations shall be maintained, replaced or repaired at Tenant's sole cost and
expense. Tenant acknowledges Landlord's right to and hereby consents to
construction of additional building(s) on the land where the Premises are
located or on adjacent land owned by Landlord, indicated on Exhibit "A".

Notwithstanding the provisions of this Paragraph 10, Tenant shall be entitled
without obtaining Landlord's consent to make any alteration or addition to the
Premises which does not affect the structure of the Building, provided that each
such alteration costs no more than $10,000, and all such alterations in any
twelve (12) month period do not exceed an aggregate of $25,000.

     11. MAINTENANCE OF PREMISES:

          A. Landlord and Tenant's Obligations Regarding Common Area Costs:
Tenant agrees to reimburse Landlord for the expenses resulting from Landlord's
payment of Common Area Costs as defined in paragraph 11(B) incurred by Landlord
because the cost is not directly allocable to or payable by a single tenant in
the Building or the Project. Tenant agrees to pay Tenant's Allocable Share as
defined in paragraph 11(C) of the Common Area Costs, as additional rental,
within ten (10) days of written invoice from Landlord.

          B. Common Area Costs: Except as provided otherwise in this Lease, for
purposes of calculating Tenant's Allocable Share of Building and of Project
Costs, the term "Common Area Costs" shall mean all costs and expenses of the
nature hereinafter described which are incurred in connection with ownership and
operation of the Building or the Project in which the Premises are located, as
the case may be not directly allocable to or payable by a single tenant in the
Building or the Project, provided however, that any special assessments for
additional facilities shall not be included in Common Area Costs. All costs and
expenses shall be determined in accordance with generally accepted accounting
principles which shall be consistently applied (with accruals appropriate to
Landlord's business), including but not limited to, the following: (i) common
area utilities, including water and power, heating, lighting, air-conditioning,
ventilating and Building utilities to the extent not separately metered; (ii)
common area maintenance and service agreements for the Building or the Project
and the equipment therein including, without limitation, common area janitorial
services, alarm and security services, exterior window cleaning, and maintenance
of the sidewalks, landscaping, waterscape, roof membrane, parking areas,
driveways, service areas, mechanical rooms, elevators, and the building
exterior; (iii) insurance premiums and costs, including without limitation, the
premiums and cost of fire, casualty and liability coverage and rental abatement
and earthquake (if commercially available) insurance applicable to the Building
or Project; (iv) repairs, replacements and general



                                     Page 5

maintenance (excluding repairs and general maintenance paid by proceeds of
insurance or by Tenant or other third parties, and repairs or alterations
attributable solely to tenants of the Building or Project other than Tenant);
and (v) All real estate taxes, special assessments, service payments in lieu of
taxes, excises, transit charges, housing fund assessment, levies, fees or
charges and including any substitutes or additions thereto which may occur
during the Lease Term (and Renewal Terms, if any) or this lease which are
assessed, or imposed by any public authority upon the Building or Project, the
act of entering this Lease, the occupancy by Tenant, the rent provided for in
this Lease and including real estate tax increases due to a sale or transfer of
the Building or the Project, in which the Premises are located, as such taxes
are levied or appear on the City and County tax bills and assessment rolls. This
shall be a Net Lease and the Base Monthly Rent shall be paid to Landlord
absolutely net of all costs and expenses. The provision for payment of Common
Area Costs by means of periodic payment of Tenant's Allocable Share of Building
and/or Project Costs are intended to pass on to Tenant and reimburse Landlord
for all costs of operating and managing the Building and/or Project. Tenant
shall have the right, one time per year, to audit Landlord's books related to
costs and expenses for the Premises to determine compliance with the
determination of costs and expenses pursuant to this paragraph.

      C. Tenant's Allocable Share: For purposes of prorating Common Area Costs
which Tenant shall pay, Tenant's Allocable Share of Building Costs is computed
by multiplying the total Common Area Costs for services shared by the Building
by a fraction, the numerator of which is the rentable square footage of the
Premises and the denominator of which is the total rentable square footage of
the Building (excluding common areas). Tenant's Allocable Share of Project
Costs shall be computed on a shared service by service basis, by either (i)
multiplying the total Common Area Costs for services shared by the Building and
one or more buildings in the Project by a fraction, the numerator of which is
the rentable square footage of the Premises and the denominator of which is the
total rentable square footage of the Buildings in the Project which share the
services; or (ii) some other equitable method agreed by the parties if method
(i) above does not fairly allocate a particular expense. It is understood and
agreed by Landlord and Tenant that Tenant's Allocable Share of Building Costs
is 48.09% and of Project Costs is 12.69%. It is understood and agreed that
Tenant's obligation to share in Common Area Costs shall be adjusted to reflect
the commencement and termination dates of the Lease Term and are subject to
recalculation in the event of expansion of the Building or Project.

      D. Waiver of Liability: Failure by Landlord to perform any defined
services, or any cessation thereof, when such failure is caused by accident,
breakage, repairs, strikes, lockout or other labor disturbances or labor
disputes of any character, or by any other cause, similar or dissimilar, beyond
the reasonable control of Landlord, shall not render Landlord liable in any
respect for damages to either person or property, nor be construed as an
eviction of Tenant, nor cause an abatement of rent nor relieve Tenant from
fulfillment of any covenant or agreement hereof. Should any of the equipment or
machinery utilized in supplying the services listed herein break down, or for
any cause cease to function properly, upon receipt of written notice from Tenant
of any deficiency or failure of any defined Services, Landlord shall use
reasonable diligence to repair the same promptly, but Tenant shall have no right
to terminate this Lease, and shall have no claim for rebate of rent or damages,
on account of any interruptions in service occasioned thereby or resulting
therefrom. Tenant shall have the right to make repairs should Landlord fail to
do so, and to bill Landlord for the cost so incurred, but shall have no right to
deduct such cost from the rent. Landlord shall not be liable for a loss of or
injury to property, however occurring, through or in connection with or
incidental to furnishing or its failure to furnish any of the foregoing.

      E. Tenant's Obligations: Except as provided in 11(A) above, Tenant shall,
at its sole cost, keep and maintain, repair and replace, said Premises and
appurtenances and every part hereof, including but not limited to, plumbing,
glazing, electrical and HVAC systems, and all the Tenant Interior Improvements
in good and sanitary order, condition, and repair. Notwithstanding the
foregoing, Landlord at its sole cost and expense, shall maintain in good
condition, order, and repair, and replace

                                     Page 6

as and when necessary, all structural and exterior portions of the Building,
including, without limitation, the foundation, exterior load bearing walls and
roof structure of the Building Shell. Tenant shall provide Landlord with a copy
of a service contract between Tenant and a licensed air-conditioning and
heating contractor which contract shall provide for bi-monthly maintenance of
all air conditioning and heating equipment at the Premises. Tenant shall pay
the cost of all air-conditioning and heating repairs or replacements which are
either excluded from such service contract or any existing equipment
warranties. All wall surfaces and floor tile are to be maintained in an as good
a condition as when Tenant took possession free of holes, gouges, or
defacements. Tenant agrees to limit attachments to vinyl demountable wall
surfaces exclusively to V-joints.

          F.   LANDLORD'S OBLIGATIONS:  Landlord shall, at all times during the
Lease Term, maintain in good condition and repair, (i) the exterior and
structural parts of the Building (including the foundation, subflooring,
load-bearing and exterior walls, and roof structure), (ii) the Common Area, and
(iii) the electrical and plumbing systems located outside the Premises which
service the Building. Additionally, to the extent that the Building contains
central heating, ventilation and/or air conditioning systems located outside
the Premises which are designed to service and are then servicing more than a
single tenant within the Building ("Common HVAC"), Landlord shall maintain in
good operating condition and repair such Common HVAC equipment and systems. The
provisions of this subparagraph 11.F shall in no way limit Landlord's right to
charge to Tenant as Common Area Costs the costs incurred by Landlord in making
such repairs and/or performing such maintenance.

     12.  HAZARD INSURANCE

          A.   TENANT'S USE:  Tenant shall not use, or permit said Premises, or
any part thereof, to be used, for any purpose other than that for which the
said Premises are hereby leased and Landlord acknowledges that Tenant intends
to use the Premises primarily for the purpose described in Exhibit "D"; and no
use shall be made or permitted to be made of the said Premises, nor acts done,
which will cause an increase in premiums or a cancellation of any insurance
policy covering said Building, or any part thereof, nor shall Tenant sell or
permit to be kept, used or sold, in or about said Premises, any article which
may be prohibited by fire insurance policies. Tenant shall, at its sole cost
and expense, comply with any and all requirements, pertaining to said Premises,
of any insurance organization or company, necessary for the maintenance of
reasonable fire and public liability insurance, covering said Building and
appurtenances.

          B.   LANDLORD'S INSURANCE:  Landlord agrees to purchase, on a
competitive bid basis, and keep in force fire and extended coverage, earthquake
(at Landlord's election), and 12 month rental loss insurance covering the
Premises in amounts not to exceed the actual insurable value of the Building as
determined by Landlord's insurance company's appraisers. Landlord shall have
no responsibility to either purchase or keep in force insurance covering
Tenant's personal property. The Tenant agrees to pay to the Landlord as
additional rent, on demand, the full cost of said insurance as evidenced by
insurance billings to the Landlord, and in the event of damage covered by said
insurance, the amount of any deductible under such policy. Payment shall be due
to Landlord within ten (10) days after written invoice to Tenant.
Notwithstanding the foregoing, Tenant's obligation to pay for the cost of any
earthquake insurance premiums shall be limited to an amount equal or less than
four (4) times the cost of the fire and extended coverage premiums. It is
understood and agreed that Tenant's obligation under this paragraph will be
prorated to reflect the commencement and termination dates of this Lease.

          C.   TENANT'S INSURANCE:  Tenant, at its sole cost, agrees to insure
its Alterations for their full replacement value (without depreciation) and to
obtain worker's compensation and public liability and property damage
insurance for occurrences within the Premises with a $4,000,000.00 combined
single limit for bodily injury and property damage. Tenant shall name Landlord
and Landlord's lender as an additional insured, shall deliver a copy of the
policies and renewal certificates to


                                     Page 7

Landlord. All such policies shall provide for thirty (30) days' prior written
notice to Landlord of any cancellation, termination, or reduction in coverage.

          D.  Waiver.  Landlord and Tenant hereby waive any and all rights each
may have against the other on account of any loss or damage occasioned to the
Landlord or the Tenant as the case may be, or to the Premises or its contents,
and which may arise from any risk covered by their respective insurance
policies, as set forth above. The parties shall use their reasonable efforts to
obtain from their respective insurance companies a waiver of any right of
subrogation which said insurance company may have against the Landlord or the
Tenant, as the case may be.

     13.  TAXES:  Tenant shall be liable and shall pay prior to delinquency, for
all taxes and assessments levied against personal property and trade or business
fixtures, and agrees to pay, as additional rental, all real estate taxes and
assessment installments (special or general) or other impositions or charges
which may be levied on the Premises, upon the occupancy of the Premises and
including any substitute or additional charges which may be imposed during, or
applicable to the Lease Term including real estate tax increases due to a sale
or other transfer of the Premises (but not city or county deed conveyance
taxes), as they appear on the City and County tax bills during the Lease Term,
and as they become due. It is understood and agreed that Tenant's obligation
under this paragraph will be prorated to reflect the Commencement and Expiration
Dates of this Lease. In any time during the Lease Term a tax, excise on rents,
business license tax, or any other tax, however described, is levied or assessed
against Landlord, as a substitute or addition in whole or in part for taxes
assessed or imposed on land or Buildings in the Project, Tenant shall pay and
discharge his pro rata share of such tax or excise on rents or other tax before
it becomes delinquent, except that this provision is not intended to cover net
income taxes, inheritance, gift or estate tax imposed upon the Landlord. In the
event that a tax is placed, levied, or assessed against Landlord and the taxing
authority takes the position that the Tenant cannot pay and discharge his pro
rata share of such tax on behalf of the Landlord, then at the sole election of
the Landlord, the Landlord may increase the rental charged hereunder by the
exact amount of such tax and Tenant shall pay such increase as additional rent
hereunder.

Notwithstanding the provisions of this Paragraph 13, if property taxes increase
during the lease term as a result of a reassessment due to a voluntary change of
ownership, Tenant's shall be responsible for payment of the resulting property
tax increase as follows: during the first twelve months, Tenant shall be
responsible for payment of one third (1/3) of the tax increase; during the
second twelve months, Tenant shall be responsible for payment of two thirds
(2/3) of the tax increase, thereafter Tenant shall be responsible for payment of
the entire tax increase.

     14.  UTILITIES:  Tenant shall pay directly to the providing utility all
water, gas, heat, light, power, telephone and other utilities supplied to the
Premises which are separately metered. Landlord shall not be liable for a loss
of or injury to property, however occurring, through or in connection with or
incidental to furnishing or failure to furnish any utilities to the Premises and
Tenant shall not be entitled to abatement or reduction of any portion of the
Base Monthly Rent so long as any failure to provide and furnish the utilities to
the Premises is due to any cause beyond the Landlord's reasonable control
provided, however, that Landlord shall use its best efforts to assist Tenant to
arrange for the prompt restoration of services that are interrupted for any
reason.

     15.  ABANDONMENT:  Tenant shall not abandon the Premises at any time during
the Lease Term; and if Tenant shall abandon said Premises, or be dispossessed by
process of law, or otherwise, any personal property belonging to Tenant and left
on the Premises shall be deemed to be abandoned, at the option of Landlord,
except such property as may be mortgaged to Landlord. Notwithstanding the
foregoing, Tenant shall be entitled to suspend its operations on the Premises
and vacate the Premises provided that Tenant continues to timely pay rent and
perform all other obligations of Tenant under this Lease, and further provided
that Tenant provides a security guard or



                                     Page 8

other reasonable security protection for the Premises.

          16.  FREE FROM LIENS:  Tenant shall keep the Premises and the Building
free from any liens arising out of any work performed, materials furnished, or
obligations incurred by Tenant or claimed to have been performed for Tenant. In
the event Tenant fails to discharge, or fails to take action acceptable to
Landlord to discharge, any such lien within ten (10) days after receiving notice
of the filing, Landlord shall be entitled to discharge such lien at Tenant's
expense and all resulting costs incurred by Landlord, including attorney's fees
shall be due from Tenant as additional rent.

          17.  COMPLIANCE WITH GOVERNMENTAL REGULATIONS:  Tenant shall, at its
sole cost and expense, comply with all of the requirements of all Municipal,
State and Federal authorities now in force, or which may hereafter be in force,
pertaining to the said Premises, and shall faithfully observe in the use of the
Premises all Municipal ordinances and State and Federal statutes now in force or
which may hereafter be in force. The judgment of any court or competent
jurisdiction, or the admission of Tenant in any action or proceeding against
Tenant, whether Landlord be a party thereto or not, that Tenant has violated any
such ordinance or statute in the use of the Premises, shall be conclusive of
that fact as between Landlord and Tenant.

          18.  TOXIC WASTE AND ENVIRONMENTAL DAMAGE

               A.   TENANT'S RESPONSIBILITY:  Except for the materials listed on
Exhibit "E", Tenant shall not, without the prior written consent of Landlord,
bring, use, or permit upon the Premises, or generate, emit, or dispose from the
Premises any chemicals, toxic or hazardous gaseous, liquid or solid materials,
or waste, including without limitation, material or substance having
characteristics of ignitability, corrosivity, reactivity, or toxicity or
substances or materials which are listed on any of the Environmental Protection
Agency's lists of hazardous wastes or which are identified in Sections 66680
through 66685 of Title 22 of the California Administrative Code as the same may
be amended from time to time ("Hazardous Materials"). Tenant may use small
quantities of household chemicals such as adhesive, lubricants, and cleaning
fluids in order to conduct its business at the Premises. In order to obtain
consent, Tenant shall deliver to Landlord its written proposal describing the
toxic material to be brought onto the Premises, measures to be taken for storage
and disposal thereof, safety measures to be employed to prevent pollution of the
air, ground, surface, and ground water. Landlord hereby acknowledges and
consents to Tenant's initial proposal, attached in the form of the list on
Exhibit "E". Landlord's approval as to future proposals may be withheld in its
reasonable judgment. In the event Landlord consents to Tenant's use of Hazardous
Materials on the Premises, Tenant represents and warrants that Tenant will (i)
adhere to all reporting and inspection requirements imposed by Federal, State,
County or Municipal laws, ordinances or regulations and upon request, will
provide Landlord a copy of any such reports or agency inspections, (ii) obtain
and upon request, provide Landlord copies of all necessary permits required for
the use and handling Hazardous Materials on the Premises, (iii) enforce
Hazardous Materials handling and disposal practices consistent with industry
standards, and (iv) properly close the facility with regard to Hazardous
Materials including the removal or decontamination of any process piping,
mechanical ducting, storage tanks, containers, or trenches which have come into
contact with Hazardous Materials and obtain a closure certificate from the local
administering agency prior to the Expiration Date. Landlord may employ, at
Tenant's  expense, an independent engineer or consultant to periodically inspect
Tenant's operations to verify that Tenant is complying with its obligations
under this paragraph. Such inspections shall only be conducted (i) after twenty
four (24) hours' written notice to Tenant, and (ii) during Tenant's normal
business hours.

               B.   TENANT'S INDEMNITY REGARDING HAZARDOUS MATERIALS:  Tenant
shall comply, at its sole cost, with all laws pertaining to, and shall indemnify
and hold Landlord harmless from any claims, liabilities, costs or expenses
incurred or suffered by Landlord arising from such bringing, using, permitting,
generating, emitting or disposing of Hazardous Materials by Tenant. Tenant's
indemnification and hold


                                     Page 9

harmless obligations include, without limitation, (i) claims, liability, costs
or expenses resulting from or based upon administrative, judicial (civil or
criminal) or other action, legal or equitable, brought by any private or public
person under common law or under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), the Resource Conservation and
Recovery Act of 1980 ("RCRA") or any other Federal, State, County or Municipal
law, ordinance or regulation, (ii) claims, liabilities, costs or expenses
pertaining to the identification, monitoring, cleanup, containment, or removal
of Hazardous Materials from soils, riverbeds or aquifers including the provision
of an alternative public drinking water source, and (iii) all costs of defending
such claims.

          C. ENVIRONMENTAL MONITORING:  Landlord and its agents shall have the
right, at Tenant's sole cost and expense to inspect, investigate, sample and/or
monitor the Premises, including any air, soil, water, groundwater or other
sampling or any other testing, digging, drilling or analysis to determine
whether Tenant is complying with the terms of this paragraph 18. If Landlord
discovers that Tenant is not in compliance with the terms of this paragraph, any
such costs incurred by Landlord, including attorneys' and consultants' fees
shall be due and payable by Tenant to Landlord within five days following
Landlord's written demand therefore.

     19. INDEMNITY:  As a material part of the consideration to be rendered to
Landlord, Tenant hereby waives all claims against Landlord for damages to goods,
wares and merchandise, and all other personal property in, upon or about said
Premises and for injuries to persons in or about said Premises, from any cause
arising from Tenant's or Tenant's agents, employees, or Invitees use of the
Premises, and Tenant will hold Landlord harmless from any damage or injury to
any person, or to the goods, wares and merchandise and all other personal
property of any person, arising from the use of the Premises by Tenant, or from
the failure of Tenant to keep the Premises in good condition and repair, as
herein provided. Further, in the event Landlord is made party to any litigation
due to the acts or omission of Tenant, Tenant will indemnify and hold Landlord
harmless from any such claim or liability including Landlord's costs and
expenses and reasonable attorney's fees incurred in defending such claims, to
the extent that Landlord is not contributorily negligent. Landlord will hold
Tenant harmless from any damage or injury to any person, or to the goods, wares
and merchandise and all other personal property of any person, arising from the
use of the Premises by Landlord or from Landlord's failure to keep the Premises
in good condition and repair, as herein provided. Further, in the event Tenant
is made party to any litigation due to the acts or omission of Landlord,
Landlord will indemnify and hold Tenant harmless from any such claim or
liability including Tenant's costs and expenses and reasonable attorney's fees
incurred in defending such claims, to the extent that Tenant is not
contributorily negligent.

     20. ADVERTISEMENTS AND SIGNS:  Tenant will not place or permit to be
places, in, upon or about the said Premises any unusual or extraordinary signs,
or any signs not approved by the city or other governing authority. The Tenant
will not place, or permit to be placed, upon the Premises, any signs,
advertisements or notices without the written consent of the Landlord as to
type, size, design, lettering, coloring and location, and such consent will not
be unreasonably withheld. Landlord hereby consents to the placement of a sign
with the dimensions and at the location described on Exhibit "F". Any sign so
placed on the Premises shall be removed by Tenant, at its expense, prior to the
Expiration Date or promptly following the earlier termination of the lease and
Tenant shall repair any damage or injury to the Premises caused thereby, and if
not so removed by Tenant then Landlord may have same so removed at Tenant's
expense.

     21. ATTORNEY'S FEES:  In case any proceeding or suit should be brought for
the possession of the Premises, for the recovery of any sum due hereunder, or
because of the breach of any other covenant herein, the losing party shall pay
to the prevailing party a reasonable attorney's fee as part of its costs which
shall be deemed to have accrued on the commencement of such action.


                                    Page 10

     22. TENANT'S DEFAULT:  The occurrence of any of the following shall
constitute a material default and breach of this Lease by Tenant: a) Any failure
by Tenant to pay the rental or to make any other payment required to be made by
Tenant hereunder provided however, that Tenant may cure such default by payment
to Landlord of the Base Monthly Rent or other sum due within ten (10) days after
receipt by Tenant of written notice specifying Landlord has failed to receive
the amount in question; b) The abandonment of the Premises by Tenant; c) A
failure by Tenant to observe and materially perform any other provision of this
Lease to be observed or performed by Tenant, where such failure continues for
thirty (30) days after written notice thereof by Landlord to Tenant; provided,
however, that if the nature of such default is such that the same cannot
reasonably be cured within such thirty (30) day period Tenant shall not be
deemed to be in default if Tenant shall within such period commence such cure
and thereafter diligently prosecute the same to completion; d) The making by
Tenant of any general assignment for the benefit of creditors; the filing by or
against Tenant of a petition to have Tenant adjudged a bankrupt or of a petition
for reorganization or arrangement under any law relating to bankruptcy (unless,
in the case of a petition filed against Tenant, the same is dismissed after the
filing); the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within thirty
(30) days; or the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within thirty (30)
days. The notice requirements set forth herein are in lieu of and not in
addition to the notices required by California Code of Civil Procedure Section
1161.

          A. REMEDIES:  In the event of any such default by Tenant, then in
addition to any other remedies available to Landlord at law or in equity,
Landlord shall have the immediate option to terminate this Lease and all rights
of Tenant hereunder by giving written notice of such intention to terminate. In
the event that Landlord shall elect to so terminate this Lease then Landlord may
recover from Tenant: a) the worth at the time of award of any unpaid rent which
had been earned at the time of such termination; plus b) the worth at the time
of award of the amount by which the unpaid rent would have been earned after
termination until the time of award exceeds the amount of such rental loss
Tenant proves could have been reasonably avoided; plus c) the worth at the time
of award of the amount by which the unpaid rent for the balance of the Lease
Term after the time of award exceeds the amount of such rental loss that Tenant
proves could be reasonably avoided; plus d) any other amount
necessary to compensate Landlord for all the detriment proximately caused by
Tenant's failure to perform his obligations under this Lease or which in the
ordinary course of things would be likely to result therefrom, and e) at
Landlord's election, such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by applicable California law.
The term "rent", as used herein, shall be deemed to be and to mean the minimum
monthly installments of Base Monthly Rent and all other sums required to be paid
by Tenant pursuant to the terms of this Lease, all other such sums being
deemed to be additional rent due hereunder. As used in (a) and (b) above, the
"worth at the time of award" to be computed by allowing interest at the rate of
the discount rate of the Federal Reserve Bank of San Francisco plus five (5%)
percent per annum. As used in (c) above, the "worth at the time of award" to be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one (1%) percent.

          B. RIGHT TO RE-ENTER:  In the event of such default by Tenant,
Landlord shall also have the right, with or without terminating this Lease, to
re-enter the Premises and remove all persons and property from the Premises;
such property may be removed and stored in a public warehouse or elsewhere at
the cost of and for the account of Tenant and disposed of by Landlord in any
manner permitted by law.

          C. ABANDONMENT:  In the event of the abandonment of the Premises by
Tenant or in the event that Landlord shall elect to re-enter as provided in
paragraph 22(B) above or shall take possession of the Premises pursuant to legal
proceeding or pursuant to any notice provided by law, then if Landlord does not
elect to terminate

                                    Page 11

this Lease as provided in paragraph 22(A) above, then the provisions of
California Civil Code Section 1951.4, as amended from time to time, shall apply
and Landlord may from time to time, without terminating this Lease, either
recover all rental as it becomes due or relet the Premises or any part thereof
for such term or terms and at such rental or rentals and upon such other terms
and conditions as Landlord in its sole discretion may deem advisable with the
right to make alterations and repairs to the Premises. In the event that
Landlord shall elect to so relet, then rentals received by Landlord from such
reletting shall be applied; first, to the payment of any indebtedness other than
Base Monthly Rent due hereunder from Tenant to Landlord; second, to the payment
of any cost of such reletting; third, to the payment of the cost of any
alterations and repairs to the Premises necessary to relet the Premises; fourth,
to the payment of Base Monthly Rent due and unpaid hereunder; and the residue,
if any, shall be held by Landlord and applied in payment of future Base Monthly
Rent as the same may become due and payable hereunder. Should that portion of
such rentals received from such reletting during any month, which is applied by
the payment of rent hereunder, be less than the rent payable during that month
by Tenant hereunder, then Tenant shall pay such deficiency to Landlord
immediately upon demand therefor by Landlord. Such deficiency shall be
calculated and paid monthly. Tenant shall also pay to Landlord, as soon as
ascertained, any costs and expenses incurred by Landlord in such reletting or in
making such alterations and repairs not covered by the rentals received from
such reletting.

         D. NO TERMINATION: No re-entry or taking possession of the Premises by
Landlord pursuant to 22(B) or 22(C) of this Article 22 shall be construed as an
election to terminate this Lease unless a written notice of such intention be
given to Tenant or unless the termination thereof be decreed by a court of
competent jurisdiction. Notwithstanding any reletting without termination by
Landlord because of any default by Tenant, Landlord may at any time after such
reletting elect to terminate this Lease for any such default.

     23. SURRENDER OF LEASE: The voluntary or other surrender of this Lease by
Tenant, or a mutual cancellation thereof, shall not automatically effect a
merger of the Lease with Landlord's ownership of the Building or Premises.
Instead, at the option of Landlord, Tenant's surrender may terminate all or any
existing sublease or subtenancies, or may operate as an assignment to Landlord
of any or all such subleases or subtenancies, thereby creating a direct
Landlord-Tenant relationship between Landlord and any subtenants.

     24.  HABITUAL DEFAULT: Notwithstanding anything to the contrary contained
in paragraph 22, 22(A)(B)(C) and (D), the parties hereto agree that if the
Tenant shall have defaulted in the performance of any (but not necessarily the
same) term or condition of this Lease for three or more times during any twelve
month period during the Lease Term hereof, then such conduct shall, at the
election of the Landlord, represent a separate event of default which cannot be
cured by the Tenant. Tenant acknowledges that the purpose of this provision is
to prevent repetitive defaults by the Tenant under the Lease, which work a
hardship upon the Landlord, and deprive the Landlord of the timely performance
by the Tenant hereunder.

     25. LANDLORD'S DEFAULT: In the event of Landlord's failure to perform any
of its covenants or agreements under this Lease, Tenant shall give Landlord
written notice of such failure and shall give Landlord thirty (30) days or such
other reasonable opportunity to cure or to commence to cure such failure prior
to any claim for breach or for damages resulting from such failure. In addition,
upon any such failure by Landlord, Tenant shall give notice by registered or
certified mail to any person or entity with a security interest in the Premises
("Mortgagee") that has provided Tenant with notice of its interest in the
Premises, and shall provide such Mortgagee a reasonable opportunity to cure such
failure, including such time to obtain possession of the Premises by power of
sale or judicial foreclosure, if such should prove necessary to effectuate a
cure. Tenant agrees that each of the Mortgagees to whom this Lease has been
assigned is an expressed third party beneficiary hereof. Tenant shall not make
any prepayment of rent more than one (1) month in advance without the prior
written


                                    Page 12



consent of such Mortgagee. Tenant waives any right under California Civil Code
Section 1950.7 or any other present or future law to the collection of any
payment or deposit from such Mortgagee or any purchaser at a foreclosure sale
of such Mortgagee's interest unless such Mortgagee or such purchaser shall have
actually received and not refunded the applicable payment or deposit.

     26.  NOTICES: All notices, demands, requests, or consents required to be
given under this Lease shall be sent in writing by U.S. certified mail, return
receipt requested, by acknowledged facsimile, or by personal delivery addressed
to the party to be notified at the address for such party specified in paragraph
1 of this Lease, or to such other place as the party to be notified may from
time to time designate by at least fifteen (15) days prior notice to the
notifying party.

     27. ENTRY BY LANDLORD: Tenant shall permit Landlord and his agents to enter
into and upon said Premises at all reasonable times subject to any security and
safety regulations of Tenant for the purpose of inspecting the same or for the
purpose of maintaining the Premises or for the purpose of making repairs,
alterations or additions to any other portion of said Premises or for the
purpose of erecting additional building(s) and improvements on the land where
the Premises are situated, or on adjacent land owned by Landlord, including the
erection and maintenance of such scaffolding, canopies, fences and props as may
be required without any abatement or reduction of Base Monthly Rent or without
any liability to Tenant for any loss of occupation or quiet enjoyment of the
Premises thereby occasioned; and Tenant shall permit Landlord and his agents, at
any time within one hundred eighty (180) days prior to the Expiration Date (or
at any time during the Lease if Tenant is in default hereunder), to place upon
the Premises any "For Sale" or "For Lease" signs and exhibit the Premises to
real estate brokers and prospective tenants at reasonable hours.

Notwithstanding the provisions of this Paragraph 27, Landlord (i) shall not
enter the Premises without first giving twenty-four (24) hours notice to Tenant
of such entry except in the case of emergency, (ii) shall be accompanied by an
employee of Tenant at all times while in the Premises, (iii) shall comply with
Tenant's safety and security procedures applicable to the Premises, and (iv)
shall not unreasonably interfere with Tenant's use of the Premises.

     28. DESTRUCTION OF PREMISES:

         A. Destruction by an Insured Casualty: In the event of a partial
destruction of the Premises by a casualty for which Landlord has received
insurance proceeds sufficient to repair the damage or destruction during the
Lease Term from any cause, Landlord shall inspect the Premises within five (5)
business days and shall notify Tenant within ten (10) business days thereafter
of Landlord's intent to repair such damage or destruction, together with an
estimate of when the restoration work required may be complete. If restoration
of the Premises cannot be substantially completed within (i) 180 days, or (ii)
50% of the remaining Lease Term, Landlord or Tenant shall have the option to
terminate this Lease by delivery to the other of a written notice of election to
terminate within seven (7) days after Tenant receives the estimate from
Landlord. Tenant shall be entitled to a proportionate reduction of Base Monthly
Rent while such repairs are being made, such proportionate reduction to be based
upon the extent to which the making of such repairs shall interfere with the
business carried on by Tenant in the Premises, in the reasonable judgment of
Landlord. For purposes of this paragraph "partial destruction" shall mean (i)
destruction of no greater than one-third (1/3) of the replacement cost of the
Premises, including the replacement cost of the Tenant improvements paid for by
Landlord, or (ii) destruction of a single portion of the Building which prevents
Tenant from conducting its normal course of business. In the event the Premises
are more than partially destroyed, Landlord or Tenant may elect to terminate
this Lease. Landlord shall not be required to restore Alterations or replace
Tenant's fixtures or personal property. In respect to any partial destruction
which Landlord is obligated to repair or may elect to repair under the terms of
this paragraph, the provision of Section 1932, Subdivision 2, and of Section
1933, Subdivision 4, of the Civil Code of the State of California and any other
similarly enacted statute are waived


                                    Page 13

by Tenant and the provisions of this paragraph 28 shall govern in the case of
such destruction.

      B. Destruction by an Uninsured Casualty: In the event of a total or
partial destruction of Premises by an uninsured casualty the Lease shall
automatically terminate, unless (i) Landlord elects to rebuild, and (ii) the
damage can be repaired within one hundred eighty (180) days. If Landlord elects
to contribute to payment for an uninsured loss, such contributed amount shall be
amortized over the useful life of the improvements and such amortization shall
be reimbursed by Tenant to Landlord as additional rent together with interest at
the prime rate of Union Bank plus two percent (2%).

   29. ASSIGNMENT OR SUBLEASE:

      A. Consent by Landlord: In the event Tenant desires to assign this Lease
or any interest therein including, without limitation, a pledge, mortgage or
other hypothecation, or sublet the Premises or any part thereof, Tenant shall
deliver to Landlord executed counterparts of any such agreement and of all
ancillary agreements with the proposed assignee or subtenant, financial
statements, and any additional information as reasonably required to determine
whether it will consent to the proposed assignment or sublease. The notice shall
give the name and current address of the proposed assignee/subtenant, proposed
use of the Premises, rental rate and current financial statement; and upon
request to Tenant, Landlord shall be given additional information as reasonably
required to determine whether it will consent to the proposed assignment or
sublease. Landlord shall then have a period of thirty (30) days following
receipt of such notice within which to notify Tenant in writing that Landlord
elects (i) to terminate this Lease as to the space so affected as of the date so
specified by Tenant in which event Tenant will be relieved of all further
obligations hereunder as to such space, (ii) to permit Tenant to assign or
sublet such space to the named assignee/subtenant on the terms and conditions
set forth in the notice, or (iii) to refuse consent. If Landlord should fail to
notify Tenant in writing of such election within said thirty (30) day period,
Landlord shall be deemed to have elected option (ii) above. If Landlord
exercises its option to terminate this Lease in part in the event Tenant desires
to sublet or assign part of the Premises, then (i) this Lease shall end and
expire, with respect to such part of the Premises, on the date upon which the
proposed sublease was to commence, and (ii) from and after such date, the Base
Monthly Rent and Tenant's allocable share of all other costs and charges shall
be adjusted, based upon the proportion that the rentable area of the Premises
remaining bears to the total rentable area of the Premises. If Landlord does not
exercise its option to terminate this Lease, Landlord's consent (which must be
in writing and in form reasonably satisfactory to Landlord) to the proposed
assignment or sublease shall not be unreasonably withheld or delayed, provided
and upon condition that: (i) The proposed assignee or subtenant is engaged in a
business that is limited to the use expressly permitted under this Lease; (ii)
The proposed sublease shall be in form reasonably satisfactory to Landlord;
(iii) Tenant shall reimburse Landlord on demand for any costs that may be
incurred by Landlord in connection with said assignment or sublease, including
the costs of making investigations as to the acceptability of the proposed
assignee or subtenant and legal costs incurred in connection with the granting
of any requested consent; and (iv) Tenant shall not have advertised or
publicized in any way the availability of the Premises without prior notice to
Landlord.

      B. Assignment or Subletting Consideration: Any rent or other economic
consideration realized by Tenant under any such sublease and assignment in
excess of the rent payable hereunder (including an allocation of the purchase
price attributable to Tenant's leasehold interest in the event of a sale of the
Tenant's business), after the net unamortized cost of the Tenant Improvements
for which Tenant has itself paid, and reasonable subletting and assignment
costs, shall be divided and paid sixty-seven percent (67%) to Landlord and
thirty-three percent (33%) to Tenant. Tenant's obligation to pay over Landlord's
portion of the consideration shall constitute an obligation for additional rent
hereunder. The above provisions relating to Landlord's right to terminate the
Lease and relating to the allocation of bonus rent are independently negotiated
terms of the Lease, constitute a material inducement for the Landlord to


                                    Page 14

enter into the Lease, and are agreed as between the parties to be commercially
reasonable. No assignment or subletting by Tenant shall relieve Tenant of any
obligation under this Lease. Any assignment or subletting which conflicts with
the provisions hereof shall be void.

     C. No Release: Any assignment or sublease shall be made only if and shall
not be effective until the assignee or subtenant shall execute, acknowledge and
deliver to Landlord an agreement, in form and substance satisfactory to
Landlord, whereby the assignee or subtenant shall assume all of the obligations
of this Lease on the part of Tenant to be performed or observed and shall be
subject to all of the covenants, agreements, terms, provisions and conditions
contained in this Lease. Notwithstanding any such sublease or assignment and the
acceptance of rent or additional rent by Landlord from any subtenant or
assignee, Tenant or any guarantor shall and will remain fully liable for the
payment of the rent and additional rent due, and to become due hereunder, for
the performance of all of the covenants, agreements, terms, provisions and
conditions contained in this Lease on the part of Tenant to be performed and for
all acts and omissions of any licensee, subtenant, assignee or any other person
claiming under or through any subtenant that shall be in violation of any of the
terms and conditions of this Lease, and any such violation shall be deemed to be
a violation by Tenant. Tenant shall further indemnify, defend and hold Landlord
harmless from and against any and all losses, liabilities, damages, costs and
expenses (including reasonable attorney fees) resulting from any claims that may
be made against Landlord by the proposed assignee or subtenant or by any real
estate brokers or other persons claiming a commission or similar compensation in
connection with the proposed assignment or sublease.

     D. Effect of Default: In the event of Tenant's default, Tenant hereby
assigns all rents due from any assignment or subletting to Landlord as security
for performance of its obligations under this Lease and Landlord may collect
such rents as Tenant's Attorney-in-Fact, except that Tenant may collect such
rents unless a default occurs as described in paragraph 22 above. The
termination of this Lease due to Tenant's default shall not automatically
terminate any assignment or sublease then in existence. At the election of
Landlord, the assignee or subtenant shall attorn to Landlord and Landlord shall
undertake the obligations of the Tenant under the sublease or assignment;
provided the Landlord shall not be liable for prepaid rent, security deposits or
other defaults of the Tenant to the subtenant or assignee, or any acts or
omissions of Tenant, its agents, employees or invitees.

     30. CONDEMNATION: If any part of the Premises shall be taken for any public
or quasi-public use, under any statute or by right of eminent domain or private
purchase in lieu thereof, and a part thereof remains which is suitable for
Tenant's intended use hereunder, Landlord shall inspect the Premises within five
(5) days after receiving notice of such taking, and shall notify Tenant within
ten (10) days thereafter of Landlord's intent to continue or terminate this
Lease, together with an estimate of the impact of such taking on the Premises
and Tenant's ability to continue operating its business. If the taking is for no
more than one-third (1/3) of the Premises nor any single portion of the Building
such that the taking would prevent Tenant from conducting its normal course of
business, this Lease shall as to the part so taken, terminate as of the date
title shall vest in the condemnor or purchaser, and the Base Monthly Rent
payable hereunder shall be adjusted so that the Tenant shall be required to pay
for the remainder of the Lease Term only such portion of such rent as the value
of the part remaining after such taking bears to the value of the entire
Premises prior to such taking; but in such event Landlord shall have the option
to terminate this Lease as of the date when title to the part so taken vests in
the condemnor or purchaser. If all of the Premises, or such part thereof be
taken so that there does not remain a substantial portion suitable for Tenant's
intended use hereunder or there does not remain sufficient portion to permit
Tenant to continue operating its business, this Lease shall thereupon terminate.
If a part or all of the Premises be taken, all compensation awarded upon such
taking shall go to the Landlord and the Tenant shall have no claim thereto but
Landlord shall cooperate with Tenant to recover compensation for damage to or
taking of any Alterations or for Tenant's moving costs. Tenant hereby waives the
provisions of


                                    Page 15


California Code of Civil Procedures Section 1265.130 and any other similarly
enacted statue are waived by Tenant and the provisions of this paragraph 30
shall govern in the case of such destruction.

     31.  EFFECTS OF CONVEYANCE:  The term Landlord as used in this Lease, means
only the owner for the time being of the land and Building containing the
Premises, so that, in the event of any sale or other conveyance of said land or
Building, or in the event of a master Lease of the Building, the Landlord shall
be and hereby is entirely freed and relieved of all covenants and obligations of
the Landlord hereunder, provided that the purchaser or master tenant of the
Building has assumed and agreed to carry out any and all covenants and
obligations of the Landlord hereunder. Landlord shall transfer and deliver
Tenant's security deposit to the purchaser at any such sale or the master tenant
of the Building, and thereupon the Landlord shall be discharged from any further
liability in reference thereto.

     32.  SUBORDINATION:  In the event Landlord notifies Tenant in writing,
this Lease shall be subordinate to any ground Lease, deed of trust, or other
hypothecation for security now or hereafter placed upon the real property of
which the Premises are a part and to any and all advances made on the security
thereof and to renewals, modifications, replacements and extensions thereof.
Tenant agrees to promptly execute and deliver any documents which may be
required to effectuate such subordination. Notwithstanding such subordination,
Tenant's right to quiet possession of the Premises shall not be disturbed if
Tenant is not in default and so long as Tenant shall pay the rent and observe
and perform all of the provisions of this Lease. At the request of any lender,
Tenant agrees to execute and deliver any reasonable modifications of this Lease
which do not materially adversely affect Tenant's rights hereunder.

     33.  WAIVER:  The waiver by Landlord of any breach of any term, covenant
or condition, herein contained shall not be deemed to be a waiver of such term,
covenant or condition or any subsequent breach of the same or any other term,
covenant or condition herein contained. The subsequent acceptance of rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding
breach by Tenant of any team, covenant or condition of this Lease, other than
the failure of Tenant to pay the particular rental so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of
such rent. No delay or omission in the exercise of any right or remedy by
Landlord shall impair such right or remedy or be construed as a waiver thereof
by Landlord. No act or conduct of Landlord, including, without limitation, the
acceptance of keys to the Premises shall constitute acceptance of the surrender
of the Premises by Tenant before the Expiration Date. Landlord's consent to or
approval of any act by Tenant which require Landlord's consent or approvals
shall not be deemed to waive or render unnecessary Landlord's consent to or
approval of any subsequent act by Tenant.

     34.  HOLDING OVER:  Any holding over after the termination or Expiration
Date, shall be construed to be a tenancy from month to month terminable on
thirty (30) days written notice from either party and Tenant shall pay Base
Monthly Rent to Landlord at a rate equal to the greater of (i) one hundred
fifty percent (150%) of the Base Monthly Rent due in the month preceding the
termination of Expiration Date or (ii) one hundred fifty percent (150%) of the
Fair Market Rental (as defined in paragraph 37). Any holding over shall
otherwise be on the terms and conditions herein specified, except those
provisions relating to the Lease Term and any options to extend or renew, which
provisions shall be of no further force and effect following the expiration of
the applicable exercise period. Tenant shall indemnify, defend, and hold
Landlord harmless from all loss or liability (including, without limitation,
any loss or liability resulted from any claim against Landlord made by any
succeeding tenant) founded on or resulting from Tenant's failure to surrender
the Premises and losses to Landlord due to lost opportunities to lease the
Premises to succeeding tenants.

     35.  SUCCESSORS AND ASSIGNS:  The covenants and conditions herein
contained shall, subject to the provisions of paragraph 28, apply to and bind
the heirs, successors, executors, administrators and assigns of all the parties
hereto; and all of the


                                    Page 16

parties hereto shall be jointly and severally liable hereunder.

     36. ESTOPPEL CERTIFICATES: Tenant shall at any time during the Lease Term,
within ten (10) days following written notice from Landlord, execute and
deliver to Landlord a statement in writing certifying that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature of
such modification) and the date to which the rent and other charges are paid in
advance, if any, and acknowledging that there are not, to Tenant's knowledge,
any uncured defaults on the part of Landlord hereunder or specifying such
defaults if they are claimed. Any such statement may be conclusively relied
upon by any prospective purchaser or encumbrancer of the Premises. Tenant's
failure to deliver such statement within such time shall be conclusive upon
the Tenant that: (i) this Lease is in full force and effect, without
modification except as may be represented by Landlord; (ii) there are not
uncured defaults in Landlord's performance. Tenant also agrees to provide the
most current three (3) years of audited financial statements within five (5)
days of a request by Landlord for Landlord's use in financing the Premises with
commercial lenders.

     37. OPTION TO EXTEND THE LEASE TERM:

          A. Grant and Exercise of Option: Landlord hereby grants to Tenant,
upon and subject to the terms and conditions set forth in this paragraph, the
option (the "Option") to extend the Lease Term for an additional term (the
"Option Term"), which Option Term shall be a period of sixty (60) months. The
Option Term shall be exercised, if at all, by written notice to Landlord on or
before the date that is six (6) months prior to the Expiration Date. If Tenant
exercises the Option, each of the terms, covenants and conditions of this
Lease except this paragraph shall apply during the Option Term as though the
expiration date of the Option Term was the date originally set forth herein as
the Expiration Date, provided that the Base Monthly Rent to be paid shall be
the greater of (i) the Base Monthly Rent applicable to the period immediately
prior to the commencement of the Option Term, or (ii) the Fair Market Rental,
as hereinafter defined, for the Premises for the Option Term. Anything
contained herein to the contrary notwithstanding, if Tenant is in monetary or
material non-monetary default under any of the terms, covenants or conditions
of this Lease either at the time Tenant exercises the Option or at any time
thereafter prior to the commencement date of the Option Term, Landlord shall
have, in addition to all of Landlord's other rights and remedies provided in
this Lease, the right to terminate the Option upon notice to Tenant, in which
event the expiration date of this Lease shall be and remain the Expiration
Date. As used herein, the term "Fair Market Rental" for the Premises shall mean
the rental and all other monetary payments including any escalations and
adjustments thereto (including without limitation Consumer Price Indexing) then
being obtained for new leases of space comparable in age and quality to the
Premises in the locality of the Building that Landlord could obtain during the
Option Term from a third party desiring to lease the Premises for the Option
Term. Fair Market Rental shall further take into account that (i) that Tenant
is in occupancy of the Premises and making functional use of the space in its
then existing condition, and (ii) that no brokerage commission is payable.

          B. Determination of Fair Market Rental: If Tenant exercises the
Option, Landlord shall send to Tenant a notice setting forth the Fair Market
Rental for the Premises for the Option Term, on or before the date that is one
hundred fifty (150) days prior to the Expiration Date. If Tenant disputes
Landlord's determination of the Fair Market Rental for the Option Term, Tenant
shall, within thirty (30) days after the date of Landlord's notice setting
forth the Fair Market Rental for the Option Term, send to Landlord a notice
stating that Tenant either (i) elects to terminate its exercise of the Option,
in which event the Option shall lapse and this Lease shall terminate on the
Expiration Date, or (ii) disagrees with Landlord's determination of Fair Market
Rental for the Option Term and elects to resolve the disagreement as provided
in paragraph 37(C) below. If Tenant does not send to Landlord a notice as
provided in the previous sentence, Landlord's determination of the Fair Market
Rental shall be the basis for determining the Base Monthly Rent to be paid by
Tenant hereunder during the Option Term. If Tenant elects to resolve the
disagreement as provided in paragraph 37(C) below and such procedures shall not
have been concluded prior to the commencement



                                    Page 17

date of the Option Term, Tenant shall pay Base Monthly Rent to Landlord
hereunder adjusted to reflect the Fair Market Rental as determined by Landlord
in the manner provided above. If the amount of Fair Market Rental is finally
determined pursuant to paragraph 37(C) below is greater than Landlord's
determination, Tenant shall pay to Landlord the difference between the amount
paid by Tenant and the Fair Market Rental as so determined in paragraph 37(C)
below within thirty (30) days after the determination. If the Fair Market Rental
as finally determined in paragraph 37(C) below is less than Landlord's
determination, the difference between the amount paid by Tenant and the Fair
Market Rental as so determined in paragraph 37(C) below shall be credited
against the next installments of rent due from Tenant to Landlord hereunder.

      C. Resolution of a Disagreement over the Fair Market Rental: Any
disagreement regarding the Fair Market Rental shall be resolved as follows:

            1. Within thirty (30) days after Tenant's response to Landlord's
notice to Tenant of the Fair Market Rental, Landlord and Tenant shall meet no
less than two (2) times, at a mutually agreeable time and place, to attempt to
resolve any such disagreement.

            2. If within the thirty (30) day period referred to in (i) above,
Landlord and Tenant can not reach agreement as to the Fair Market Rental, they
shall each select one appraiser to determine the Fair Market Rental. Each such
appraiser shall arrive at a determination of the Fair Market Rental and submit
their conclusions to Landlord and Tenant within thirty (30) days after the
expiration of the thirty (30) day consultation period described in (i) above.

            3. If only one appraisal is submitted within the requisite time
period, it shall be deemed to be the Fair Market Rental. If both appraisals are
submitted within such time period, and if the two appraisals so submitted differ
by less than ten percent (10%) of the higher of the two, the average of the two
shall be the Fair Market Rental. If the two appraisals differ by more than ten
percent (10%) of the higher of the two, then the two appraisers shall
immediately select a third appraiser who shall within thirty (30) days after his
or her selection make a determination of the Fair Market Rental and submit such
determination to Landlord and Tenant. This third appraisal will then be averaged
with the closer of the two previous appraisals and the result shall be the Fair
Market Rental.

            4. All appraisers specified pursuant to this paragraph shall be
members of the American Institute of Real Estate Appraisers with not less than
ten (10) years experience appraising office and industrial properties in the
Santa Clara Valley. Each party shall pay the cost of the appraiser selected by
such party and one-half of the cost of the third appraiser plus one-half of any
other costs incurred in resolving the dispute pursuant to this paragraph.

      D. Tenant's Right to Rescind Exercise of Option: If the determination of
fair market value pursuant to the foregoing provision results in a fair market
value which is in excess of an amount Tenant believes is appropriate, Tenant
shall be entitled to rescind its exercise of the option to extend within ten
(10) days after the date on which Tenant is notified of the determination of
fair market value, in which event the term of this lease shall be extended from
the date on which the Lease would have expired if the option were never
exercised plus an additional period of four months.

   38. OPTIONS: All Options provided Tenant in this Lease are personal and
granted to original Tenant and are not exercisable by any third party should
Tenant assign or sublet all or a portion of its rights under this Lease, unless
Landlord consents to permit exercise of any option by any assignee or subtenant,
in Landlord's sole discretion. In the event that Tenant hereunder has any
multiple options to extend this Lease, a later option to extend the Lease cannot
be exercised unless the prior option has been so exercised.

   39. QUIET ENJOYMENT: Upon Tenant's faithful and timely performance of


                                    Page 18

all the terms and covenants of the Lease, Tenant shall quietly have and hold the
Premises for the Lease Term and any extensions thereof.

     40. BROKERS: Tenant represents it has not utilized or contacted a real
estate broker or finder with respect to this Lease other than Grubb & Ellis
Commercial Real Estate and Tenant agrees to indemnify and hold Landlord harmless
against any claim, cost, liability or cause of action asserted by any other
broker or finder claiming through Tenant.

     41. LANDLORD'S LIABILITY: If Tenant should recover a money judgment against
Landlord arising in connection with this Lease, the judgment shall be satisfied
only out of Landlord's interest in the Premises including the improvements and
real property and neither Landlord or any of its partners, officers, directors
or employees shall be liable personally for any deficiency.

     42. AUTHORITY OF PARTIES:

          A. Corporate Authority: If Tenant is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants that
he is duly authorized to execute and deliver this Lease on behalf of said
corporation, in accordance with a duly adopted resolution of the Board of
Directors of said corporation or in accordance with the by-laws of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms.

          B. Limited Partnerships: If the Landlord herein is a limited
partnership, it is understood and agreed that any claims by Tenant on Landlord
shall be limited to the assets of the limited partnership. And furthermore,
Tenant expressly waives any and all rights to proceed against the individual
partners or the officers, directors or shareholders of any corporate partner,
except to the extent of their interest in said limited partnership.

     43. TRANSPORTATION DEMAND MANAGEMENT PROGRAMS: Should a government agency
or municipality require Landlord to institute TDM (Transportation Demand
Management) facilities and/or program after the Lease Commencement Date, Tenant
hereby agrees that the cost of TDM imposed facilities required on the Premises,
including but not limited to employee showers, lockers, cafeteria, or lunchroom
facilities, shall be included as Tenant Improvement Costs and any ongoing costs
or expenses associated with a TDM program, such as an on-site TDM coordinator,
which are required for the Premises and not provided by Tenant shall be provided
by Landlord with such costs being included as additional rent and reimbursed to
Landlord by Tenant. Landlord shall capitalize all such costs as are permitted to
be capitalized.

     44. RIGHT OF FIRST OFFER: Landlord grants Tenant a right of first offer to
lease the remaining portion of the building in which the Premises are a part,
which is currently leased by Wells Fargo Bank ("Upstairs Space"), together with
the right in accordance with this Lease to use the parking spaces and other
common areas on the real property on which the parking and other common areas
are located ("Additional Premises"). The location and dimension of the
Additional Premises are depicted on Exhibit "A."

Prior to each lease or voluntary sale by Landlord of all or any portion of the
Additional Premises, Landlord will notify Tenant in writing of its intention,
setting forth the terms and conditions under which it proposes to lease
("Notice"). Tenant will have the 15 day period immediately after the Notice has
been given to notify Landlord in writing that Tenant elects to lease the space
so offered. Tenant will be entitled to lease the Upstairs Space on the same
terms and conditions as Landlord proposes to offer to third parties. If Tenant
elects to lease the Upstairs Space, Landlord and Tenant will promptly negotiate
in good faith and execute an appropriate amendment to this Lease consistent with
this Paragraph 44, and thereafter any reference in this Lease to the Premises
will include the Additional Premises.


                                    Page 19

If Tenant decides not to lease the Upstairs Space or fails to respond within
the 15 day period after the Notice, then without further notice to Tenant,
Landlord may offer the Upstairs Space to others for lease during the following
90-day period on the same terms and conditions originally offered Tenant. Any
Landlord offer to lease or voluntarily sell after that 90-day period will
require an additional notice to Tenant in accordance with this provision.

     45.  MISCELLANEOUS PROVISIONS:

          A.  Rent:  All monetary sums due from Tenant to Landlord under this
Lease shall be deemed to be rent.

          B.  Management Fee:  All maintenance and utility services administered
by Landlord and subject to reimbursement by Tenant shall include a property
management fee to Landlord of fifteen percent (15%) of such services.

          C.  Performance by Landlord:  If Tenant fails to perform any
obligation required under this Lease or by law or government regulation,
Landlord in its sole discretion may without notice perform such obligation, in
which event Tenant shall pay Landlord as additional rent all sums paid by
Landlord in connection with such substitute performance within ten (10) days
following Landlord's written notice for such payment.

          D.  Interest:  All sums hereunder, including rent and additional rent,
if not paid when due, shall bear interest at the maximum rate permitted under
California law accruing from the date due until the date paid to Landlord.

          E.  Rights and Remedies:  All rights and remedies hereunder are
cumulative and not alternative to the extent permitted by law and are in
addition to all other rights and remedies in law and in equity.

          F.  Survival of Indemnities:  All indemnification, defense, and hold
harmless obligations of Landlord and Tenant under the Lease shall survive the
expiration or sooner termination of the Lease.

          G.  Severability:  If any term or provision of this Lease is held
unenforceable or invalid by a court of competent jurisdiction, the remainder of
the Lease shall not be invalidated thereby but shall be enforceable in
accordance with its terms, omitting the invalid or unenforceable term.

          H.  Choice of Law:  This Lease shall be governed by and construed in
accordance with California law.

          I.  Time:  Time is of the essence hereunder.

          J.  Entire Agreement:  This instrument contains all of the agreements
and conditions made between the parties hereto and may not be modified orally or
in any other manner other than by an agreement in writing signed by all of the
parties hereto or their respective successors in interest.

          K.  Representations:  Tenant acknowledges that neither Landlord or its
affiliates or agents have made any agreements, representations, warranties or
promises with respect to the demised Premises or the Building of which they are
a part, or with respect to present or future rents, expenses, operations,
tenancies or any other matter. Except as herein expressly set forth herein,
Tenant relied on no statement of Landlord or its agents for that purpose.

          L.  Headings:  The headings or titles to the paragraphs of this Lease
are not a part of this Lease and shall have no effect upon the construction or
interpretation of any part thereof.



                                    Page 20

IN WITNESS WHEREOF, Landlord and Tenant have executed these presents, the day
and year first above written.

LANDLORD: Sobrato Interests,            TENANT, VISX: Incorporated,
a California limited partnership        a California corporation

BY: [Illegible]                         BY: [Illegible]
   -----------------------------           -------------------------------
ITS: General Manager                    ITS: Vice President Chairman
                                             [Illegible]
                                             CEO



                                    Page 21

                                  EXHIBIT "A"
                                    PREMISES

                                     [MAP]


                                  [FLOOR PLAN]

                                    Page 22


                                  EXHIBIT "B"
                                Working Drawings


























                                    Page 23

                                  EXHIBIT "C"
                                     BUDGET

VISX, Incorporated
3400 Central Expressway       VISX Budget-7/14/02
Santa Clara, CA.                        52,344 Sq. Ft.



Description                   Subcontractor       SDC Costs      VISX Upgrades        Total          PSF
- -----------                   -------------       ---------      -------------       --------       -----
                                                                                     
HVAC                          Therma               $88,200        $34,889            $123,109       $2.35
HVAC Equipment Rehab          Therma               $20,000             $0             $20,000       $0.38
Plumbing                      Therma               $14,234        $10,791             $26,025       $0.48
Electrical                    SASCO               $153,200        $60,800            $224,000       $4.28
Fire Sprinklers               Superior             $18,860         $7,327             $25,157       $0.50
Drywall/Acoust Insul          K&C                  $90,562        $34,602            $125,264       $2.39
Acoustical Ceilings           K&C                  $29,077             $0             $29,077       $0.58
Doors, Frames, Hdwr           Trim Tech            $52,318        $10,043             $52,359       $1.19
Ceramic Tile                  California Tile       $5,500             $0              $5,500       $0.11
Flooring                      Benessi              $89,638        $11,362            $101,000       $1.93
VCT Remove if ACM             Allow                 $9,000             $0              $9,000       $0.17
Rough Carp./Struct Modil      Permian               $2,819        $25,767             $28,586       $0.55
Concrete Sealer               B&W                   $3,000             $0              $3,000       $0.06
Toilet Access/Ptn's           Western Shower        $2,270             $0              $2,270       $0.04
Glass and Glazing             Buds                 $17,517         $2,483             $20,000       $0.38
Chain Link Fence              AAA                     $300         $4,850              $5,150       $0.10
Painting & VWC                A&B                  $17,500         $1,500             $19,000       $0.36
Blinds                        Buranzon                $200         $5,100              $5,300       $0.10
Fire Ext and Sign             K-Fire                $2,000             $0              $2,000       $0.04
Millwork                      Triad                     $0        $42,077             $42,077       $0.80
Landscape Rehab               Allow                 $2,500             $0              $2,500       $0.05
Projection Screens            Brookman                  $0         $2,210              $2,210       $0.04
Adjust Roll Up Doors          Allow                 $1,500             $0              $1,500       $0.03
Plan Check Fee                Allow                 $2,000             $0              $2,000       $0.04
Building Permit Fee           Allow                 $3,500             $0              $3,500       $0.07
Fire Dept Permit              Allow                     $0             $0                  $0       $0.00
Construction Cleanup          Allow                 $6,000             $0              $6,000       $0.11
Blueprinting                  Allow                 $3,000             $0              $3,000       $0.06
Mold Test                     Allow                   $500             $0                $500       $0.01
Architect                     Kobza                $20,000             $0             $20,000       $0.38
Traffic Impact Fees           Allow                     $0             $0                  $0       $0.00
Dumpsters/Toilets             Allow                 $7,500             $0              $7,500       $0.14
Construction Tax              Allow                     $0             $0                  $0       $0.00
Utility Company Fees          Excluded                  $0             $0                  $0       $0.00
School Tax                    Allow                     $0             $0                  $0       $0.00
                                                  --------       --------            --------      ------
Subtotal                                          $672,813       $253,801            $926,614      $17.70
Contingency @5%                                    $33,641        $12,690             $46,331       $0.89
SCC Fee @8%                                        $55,516        $21,319             $77,836       $1.49
                                                  --------       --------            --------      ------
Total                                             $762,970       $287,810          $1,050,780      $20.07
                                        PSF         $14.58          $5.50              $20.07
                                                  --------       --------            --------      ------



Submitted by:                           Approved by:

- ----------------------------            ----------------------------
Donald A. Jones - V.P.                  E. Paul Eder - V.P/C.F.O.
Sobrato Construction Corporation        VISX, Incorporated,
                                        a California Corporation

Approved by:

- ----------------------------
John M. Sobrato - Trustee
Sobrato Interests.
a California limited partnership

                                     Page 1

                                   Page 24(A)



VISX Budget Qualifications and Upgrades
Date: 7/14/92

Qualifications:
 1. Permits and fees are allowance items only.
 2. Office glass is to be 3/8" not 1/2" as specified.
 3. No wall coverings included. An allowance of $1500 for accent paint is
    included.
 4. Wood base in lobby only.
 5. No security hardware modifications to exterior doors have been provided for.
 6. Chain link fence to be 10' high, galvanized, non-painted.
 7. Excludes: Utility company fees
              Power poles for landscape partitions
              Exterior lighting upgrade
              Overtime
              Sound system
              Security
              Telephone cabling
              Data cabling
              Darco pricing issues. Note: a response from Sasco/Valley and
              budget pricing is attached. Therma's response and budget pricing
              is forthcoming. No costs associated with this report are included
              in the budget.
 8. An allowance of $9,000 is carried for removal of VCT in rooms #166, 167,
    168 and 169 should the VCT prove to be asbestos-containing material.

Upgrades:
 1. HVAC: $34,889 (see back-up)
 2. Plumbing: $10,791 (see back-up)
 3. Electrical: $60,800 (see back-up)
 4. Fire sprinklers: $7,327. This is to change existing heads to semi-recessed.
 5. Drywall/Acoustical Ceiling:
    a. Meeting room/Lunch room design                                $10,350
    b. Slot channel reveals                                            1,900
    c. Board room ceiling (premium)                                    8,600
    d. Lobby soffit                                                    2,600
    e. Box undergrid columns                                           2,880
    f. Radius walls:  9'-$1512 (premium)
                     17'-$2980 (premium)                               4,492
    g. Sound conditioning at lab #166                                  3,780
                                                                     -------
                                                                     $34,602
 6. Doors, frames and hardware: $10,043 Vinyl doors.
 7. Flooring: $11,362. Enhancer back if on carpet C-2.
 8. Rough carpentry/structural modification: $25,767 (see back-up).
 9. Glass and glazing: $2,483. New door #45 to exterior.
10. Chain link fence: $4,850 (tenant cost).
11. Painting: An allowance of $1500 is included for accent
    walls not currently defined.
12. Blinds: $5,100. Exterior application only, if desired.
13. Millwork: $42,077. All millwork is a tenant cost.
    Two low bids had spread of $200. (see back-up).
14. Projection screen: $2,210. Includes relocating
    existing screen and one (1) new 70" x 70" screen.

                                   Page 24(B)


                                  EXHIBIT "D"
                                  Intended Use


























                                    Page 25

                                  EXHIBIT "E"
                                Toxic Chemicals


























                                    Page 26

                                  EXHIBIT "F"
                                    Signage

Landlord consents to construction by Tenant, at its expense, of either, (i) a
ground mounted monument sign in the landscape area adjacent to the Building or
(ii) a Building mounted sign on the panel located between the floors, of a size
and type consistent with those allowed the other tenants in the Park. In
addition Tenant shall be entitled to identification on the existing shared
monument signs at the project entries.




                                    Page 27

                      [SOBRATO DEVELOPMENT COMPANIES LOGO]

SOBRATO DEVELOPMENT COMPANIES

                                           10600 N. De Anza Boulevard, Suite 200
                                                        Cupertino, CA 95014-2075
                                                                  (408) 446-0700
                                                              FAX (408) 446-0583

                            FIRST AMENDMENT TO LEASE

This Amendment is made this 2nd day of October, 1992 by and between Sobrato
Interests, a California limited partnership having an address at 10600 N. De
Anza Blvd., Suite 200, Cupertino, California 95014 ("Landlord") and Visx,
Incorporated, a California corporation having its principal place of business
at 3400 Central Expressway, Santa Clara, California ("Tenant").

                                   WITNESSETH

WHEREAS Landlord and Tenant entered into a lease ("Lease") dated July 16, 1992
for the premises ("Premises") located at 3400 Central Expressway, Santa Clara,
California; and

WHEREAS effective October 2, 1992, Landlord and Tenant wish to modify the Lease
to document the Commencement Date based on Substantial Completion of the Tenant
Improvements which occurred on October 1, 1992;

NOW, THEREFORE, in order to effect the intent of the parties as set forth above
and for good and valuable consideration exchanged between the parties, the
Lease is amended effective October 2, 1992 as follows:

  1. The Commencement Date of the Lease shall be October 1, 1992 and the Lease
     shall expire on September 30, 1997.

  2. Except as hereby amended, the Lease and all of the terms, covenants and
     conditions thereof are ratified and confirmed.

IN WITNESS WHEREOF, the parties hereto have set their hands to this Amendment
as of the day and date first above written.

LANDLORD: Sobrato Interests             TENANT: VISX, Incorporated,
a California limited partnership        a California corporation,


BY: /s/ [illegible]                     BY: /s/ [illegible]
   -------------------------------      -----------------------------------
Its: General Partner






- -------------------------(SOBRATO DEVELOPMENT COMPANIES LOGO)-------------------
SOBRATO                                    10600 N. De Anza Boulevard, Suite 200
DEVELOPMENT                                             Cupertino, CA 95014-2075
COMPANIES                                                         (408) 446-0700
                                                              FAX (408) 446-0583



                           SECOND AMENDMENT TO LEASE

This second amendment to lease ("Amendment") is made this 8th day of March,
1996 by and between Sobrato Interests, a California limited partnership having
an address at 10600 N. De Anna Blvd., Suite 200, Cupertino, California 95014
("Landlord") and VISX, Incorporated, a Delaware corporation having its
principal place of business at 3400 Central Expressway, Santa Clara, California
("Tenant").

                                   WITNESSETH

WHEREAS Landlord and Tenant entered into a lease dated July 16, 1992 and a
First Amendment to Lease dated October 2, 1992 (collectively the "Lease") for
the premises ("Premises") located at 3400 Central Expressway, Santa Clara; and

WHEREAS effective January 19, 1996, Landlord and Tenant wish to modify the
Lease to reflect the Tenant's exercise of its right of First Offering to Lease;

NOW, THEREFORE, in order to effect the intent of the parties as set forth above
and for good and valuable consideration exchanged between the parties, the
Lease is amended as follows:

     1.  PREMISES: The first sentence of the second paragraph of Section 2 of
the Lease (Premises) shall be replaced with the following: The entirety of that
certain real property commonly known as 3400 Central Expressway, Santa Clara,
California consisting of a two-story building of 108,844 square foot building
and 385 parking stalls in a project consisting of a total of five (5) buildings
including the Premises, totaling 412,171 square feet ("Project") as outlined in
red on Exhibit "A".

     2.  TERM & RENTAL: Section 4 of the Lease (Term & Rental) shall be replaced
with the following: The Commencement Date of the Lease occurred on October 1,
1992 and shall end eighty four (84) months following Substantial Completion of
the Tenant Improvements desired by Tenant to the second floor of the Premises
("Second Floor Commencement Date"). In addition to all other sums payable by
Tenant under this Lease, prior to the Second Floor Commencement Date Tenant
shall pay as base monthly rent ("Base Monthly Rent") for the Premises the sum of
Forty Six Thousand Five Hundred and 90/100 Dollars ($46,500.90) per month. From
the Second Floor Commencement


                                     Page 1

Date through September 30, 1997, Tenant shall pay as Base Monthly Rent the sum
of One Hundred Two Thousand Four Hundred Thirty Five and 90/100 Dollars
($102,435.90) per month. Beginning on October 1, 1997 through the balance of
the Lease Term, subject to adjustment pursuant to Section 3 of this Amendment,
Tenant shall pay as Base Monthly Rent the sum of One Hundred Seven Thousand
Seven Hundred Fifty Five and 56/100 Dollars ($107,755.56) per month. Base
Monthly Rent shall be due on or before the first day of each calendar month
during Lease Term. All sums payable by Tenant under this Lease shall be paid in
lawful money of the United States of America, without offset or deduction, and
shall be paid to Landlord at such place or places as may be designated from
time to time by Landlord. Base Monthly Rent for any period less than a calendar
month shall be a pro rata portion of the monthly installment.

     3.  Rental Adjustment:  Section 4.A of the Lease (Rental Adjustment) shall
be replaced with the following: On the twenty fourth (24th) month following the
Second Floor Commencement Date and every twenty four (24) months thereafter,
(an "Adjustment Date"), the then payable Base Monthly Rent shall be subject to
adjustment based on the increase, if any, in the Consumer Price Index that has
occurred during the twenty four (24) months preceding the then applicable
Adjustment Date. The basis for computing the adjustment shall be the U.S.
Department of Labor, Bureau of Labor Statistic's Consumer Price Index for All
Urban Consumers, All Items, 1982-84=100, for the San Francisco-Oakland-San Jose
area ("Index"). The Index most recently published preceding the Second Floor
Commencement Date for the first Adjustment (or previous Adjustment Date, as
applicable), shall be considered the "Base Index". If the Index most recently
published preceding the Adjustment Date ("Comparison Index") is greater than
the Base Index, the then payable Base Monthly Rent shall be increased by
multiplying the then payable Base Monthly Rent by a fraction, the numerator of
which is the Comparison Index and the denominator of which is the Base Index.
Notwithstanding any subsequent decrease in the Index, the increase in the CPI
for any calendar year shall never be less than four percent (4%) per year
compounded annually nor more than eight percent (8%) per year compounded
annually. On adjustment of the Base Monthly Rent Landlord shall notify Tenant
by letter stating the new Base Monthly Rent. Landlord's calculation of the Base
Monthly Rent escalation shall be conclusive and binding unless Tenant objects to
said calculation within a thirty (30) day period following receipt from
Landlord of such calculation. Landlord's failure to adjust Base Monthly Rent on
an Adjustment Date shall not prevent Landlord from retroactively adjusting Base
Monthly Rent at any subsequent time during the Lease Term. If the Index base
year is changed so that it differs from 1982-84=100, the Index shall be
converted in accordance with the conversion factor published by the United
States Department of Labor, Bureau of Labor Statistics. If the Index is
discontinued or revised during the Lease Term, such other government index or
computation with which it is replaced shall be used in order to obtain
substantially the same result as would be obtained if the index had not been
discontinued or revised.

     4.  Construction and Possession:  The entirety of Section 7 of the Lease
(Construction and Possession) shall be replaced with the following:




                                     Page 2

The Tenant Improvements shall be constructed by McLarney Construction, as
general contractor, ("General Contractor") in accordance with the working
drawings ("Working Drawings") attached as Exhibit "1" and budget for the cost
of the Tenant Improvements ("Budget") attached as Exhibit "2". The Tenant
Improvements constructed hereunder shall comply with all existing applicable
municipal, local, state and federal laws, statutes, rules, regulations and
ordinances. Landlord shall provide a warranty, excluding routine maintenance or
damage caused by the negligence or misuse by Tenant, on the Tenant Improvements
for one (1) year from the Second Floor Commencement Date. Landlord and Tenant
shall be responsible for and shall pay the cost of the Tenant Improvements as
allocated in the Budget attached as Exhibit "2". Tenant shall contract directly
with General Contractor for the portion of the Tenant Improvements to be
constructed at Tenant's expense and Tenant reserves the right to eliminate or
delay the construction of this work.

In the event Tenant makes any changes to the Working Drawings which increase
the cost of Tenant Improvements paid for by Landlord ("Cost Increase"), the
Cost Increase shall be paid for by Tenant in cash within seven (7) days after
payment by Landlord to the General Contractor. In the event Tenant makes any
changes to the Final Working Drawings after March 1, 1996 which cause the
General Contractor's construction schedule to be delayed, the Second Floor
Commencement Date shall occur one (1) day in advance of Substantial Completion
as defined below for each day of delay.

The Second Floor Commencement Date shall not be deemed to have occurred until
such date Landlord notifies Tenant that Substantial Completion of the Tenant
Improvements paid for by Landlord has occurred and the second floor of the
Premises is ready for occupancy. "Substantial Completion" shall mean that (i)
all necessary governmental approvals, permits, consents, and certificates have
been obtained by or for Landlord for the lawful construction by Landlord, and
occupancy by Tenant of the Premises, excluding any Tenant Improvement work paid
for by Tenant, (ii) the Tenant Improvements paid for by Landlord have been
completed consistent with the Working Drawings, and (iii) said interior is in a
"broom clean" finished condition.

      5. MAINTENANCE OF PREMISES: In the second to last sentence of Section
11.C of the Lease (Tenant's Allocable Share) change Tenant's Allocable Share of
Building Costs to 100% and Tenant's Allocable Share of Project Costs to 26.41%.
In addition add "Landlord agrees to replace to membrane of the roof of the
Premises within six (6) months following the date of this Amendment."

      6. OPTION TO EXTEND THE TERM OF THE LEASE: In the third sentence of
Section 37.A of the Lease (Grant & Exercise of Option) add "ninety five percent
(95%) of" before the phrase "Fair Market Rental".

      7. MISCELLANEOUS: All defined terms shall have the same meanings as in
the Lease, except as otherwise stated in this Amendment. Except as hereby
amended, the Lease and all of the terms,

                                     Page 3

covenants and conditions thereof shall remain unmodified and in full force and
effect. In the event of any conflict or inconsistency between the terms
and provisions of this Amendment and the terms and provisions of the Lease, the
terms and provisions of this Amendment shall prevail.

IN WITNESS WHEREOF, the parties hereto have set their hands to this Amendment
as of the day and date first above written.


Landlord                                Tenant
Sobrato Interests,                      VISX, Incorporated
a California limited partnership        a Delaware corporation

By: [Illegible]                         By: [Illegible]
   -----------------------------           -------------------------------
Its: General Partner                    Its: CFO




                                     Page 4

                        EXHIBIT "1" -- Working Drawings

Prepared by Arctec, dated 2/21/96, last revision date 3/5/96.

Sheets: A0.1, A1.0, A2.0, A2.1, A2.2, A6.0, A6.1, A6.2, A7.0, A8.0, A8.1, A9.0,

A9.1, A9.2, A10.0, A10.1, A10.2, A10.3, A10.5.





                                     Page 5


10600 North De Anza Blvd.     408.445.0700
Suite 200                     Facsimile:  408.448.0583
Cupertino, CA 85014-2075      www.sobrato.com



                                            [SOBRATO DEVELOPMENT COMPANIES LOGO]



                            THIRD AMENDMENT TO LEASE

This third amendment to lease ("Third Amendment") is made this 29th day of
March, 2002 ("Effective Date") by and between Sobrato Interests, a California
Limited Partnership, having an address at 10600 N. De Anza Blvd., Suite 200,
Cupertino, California 95014 ("Landlord"), and VISX, Incorporated, having its
principal place of business at 3400 Central Expressway in Santa Clara,
California ("Tenant").

                                   WITNESSETH

WHEREAS Landlord and Tenant entered into a lease dated July 16, 1992 and
subsequent lease amendments dated October 2, 1992 and March 8, 1996
(collectively the "Lease") for the premises ("Premises") located at 3400
Central Expressway in Santa Clara, California; and

WHEREAS effective the date of this Third Amendment, Landlord and Tenant wish to
modify the Lease to: (i) extend the Lease Term; (ii) specify the Base Monthly
Rent due during the extended Lease Term; (iii) conditionally provide for
Landlord's participation in HVAC maintenance costs; and (iv) modify the timing
of Tenant's notice of intent to exercise its Lease Option pursuant to Lease
section 37.A.;

NOW, THEREFORE, in order to effect the intent of the parties as set forth above
and for good and valuable consideration exchanged between the parties, the
Lease is amended as of the Effective Date as follows:

1.  The current Expiration Date of the Lease is May 23, 2003. By virtue of this
    Third Amendment, the Lease Expiration Date is changed to May 31, 2008.

2.  Base Monthly Rent payable by Tenant during the extended Lease Term is
    payable according to the following schedule:

    May 24, 2003 through May 31, 2005:           $146,939.00 per month
    June 1, 2005 through May 31, 2006:           $152,382.00 per month
    June 1, 2006 through May 31, 2007:           $157,824.00 per month
    June 1, 2007 through May 31, 2008:           $163,266.00 per month

3.  Landlord agrees to reimburse Tenant for HVAC maintenance costs (excluding
    capital replacement costs) incurred by Tenant in excess of $25,000.00 during
    any year of the extended Lease Term provided Tenant does not defer, delay,
    or otherwise manipulate the timing of HVAC maintenance to its advantage
    under this paragraph.

4. Tenant retains its Option to extend the Lease Term under the conditions
   specified in Lease section 37A. except that Tenant's notice shall be
   required no earlier than 18 months and no later than 9 months prior to the
   Lease Expiration Date.

5. All defined terms shall have the same meanings as in the Lease, except as
   otherwise stated in this Third Amendment.

Except as hereby amended, the Lease and all of the terms, covenants and
conditions thereof shall remain unmodified and in full force and effect. In the
event of any conflict or inconsistency between the terms and provisions of this
Third Amendment and the terms and provisions of the Lease, the terms and
provisions of this Third Amendment shall prevail.

IN WITNESS WHEREOF, the parties hereto have set their hands to this Third
Amendment as of the day and date first above written.


Landlord                                Tenant
Sobrato Interests,                      VISX, Incorporated
a California limited partnership

By:  [illegible]                        By:  [illegible]
   _____________________________           _____________________________

Its: General Partner                    Its: Executive V.P. Operations