<PAGE>

     As filed with the Securities and Exchange Commission on March 25, 2004

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

                                    FORM S-8

                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933
                                ----------------

                   INTERNATIONAL MICROCOMPUTER SOFTWARE, INC.
             (Exact name of Registrant as specified in its charter)

           CALIFORNIA                            94-2862863
     (State of incorporation)         (I.R.S. Employer Identification No.)

                                 100 ROWLAND WAY
                                    Suite 300
                                NOVATO, CA 94945
                    (Address of principal executive offices)
                             -----------------------

                        2004 INCENTIVE STOCK OPTION PLAN
                                2004 WARRANT PLAN
                         COMMON STOCK PURCHASE WARRANTS
                           (Full titles of the Plans)
                             -----------------------

                                   Martin Wade
                             Chief Executive Officer
                   INTERNATIONAL MICROCOMPUTER SOFTWARE, INC.
                                 100 ROWLAND WAY
                                    Suite 300
                                NOVATO, CA 94945
                                 (415) 878-4000
 (Name, address and telephone number, including area code, of agent for service)
                             -----------------------

Page 1 of [] Pages
Exhibit Index on Page []
(Calculation of Registration Fee on following page)


<PAGE>

<TABLE>
<CAPTION>


                           --------------------------------------------------------------------------------
                                                CALCULATION OF REGISTRATION FEE
                           --------------------------------------------------------------------------------


------------------------- ----------------------- ----------------------- ----------------------- -----------------------
 TITLE OF SECURITIES TO        AMOUNT TO BE          PROPOSED MAXIMUM        PROPOSED MAXIMUM           AMOUNT OF
     BE REGISTERED            REGISTERED (1)        OFFERING PRICE PER      AGGREGATE OFFERING       REGISTRATION FEE
                                                          SHARE                   PRICE
------------------------- ----------------------- ----------------------- ----------------------- -----------------------
<S>                       <C>                     <C>                     <C>                     <C>
Common Stock, $0.0001              4,141,667             $1.50(2)               $5,838,700                  $739.88
par value
------------------------- ----------------------- ----------------------- ----------------------- -----------------------
</TABLE>


(1) This Registration Statement shall also cover any additional shares of Common
Stock which become issuable under the Plan and warrants  registered  pursuant to
this  Registration  Statement  by  reason of any stock  dividend,  stock  split,
recapitalization or any other similar  transaction  effected without the receipt
of consideration  which results in an increase in the number of the Registrant's
outstanding shares of Common Stock.

(2) Warrants previously granted and registered as part of this filing,  range in
price from $0.50 to $2.30.  Proposed  maximum price for ungranted  stock options
and warrants was estimated in accordance  with Rule 457(h) under the  Securities
Act of 1933,  as  amended  (the  "Securities  Act")  solely  for the  purpose of
calculating  the  registration  fee,  based upon the  average of the bid and ask
prices reported on the Nasdaq OTC Bulletin Board for  Registrant's  Common Stock
on March 22, 2004.


                                       2
<PAGE>

                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.           INCORPORATION OF DOCUMENTS BY REFERENCE.

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

(a)   The  Registrant's  Annual  Report on Form 10-KSB for the fiscal year ended
      June 30, 2003,  filed pursuant to Section 13(a) or 15(d) of the Securities
      Exchange Act of 1934 (the "Exchange Act") (Commission File No. 000-15949).

(b)   All other  reports filed by IMSI pursuant to Section 13(a) or 15(d) of the
      Exchange Act since June 30, 2003.

(c)   The description of IMSI's common stock,  contained in IMSI's  registration
      statements filed pursuant to Section 12 of the Exchange Act, including any
      amendment   or  report   filed  for  the  purpose  of  updating  any  such
      description.

(d)   All documents  filed by IMSI  pursuant to Sections  13(a),  13(c),  14 and
      15(d) of the Exchange  Act,  after the date hereof and prior to the filing
      of a post-effective  amendment which indicates that all securities offered
      have been sold or which  deregisters all securities then remaining unsold,
      shall be deemed to be  incorporated  by reference  herein and to be a part
      hereof from the date of filing of such documents.

Any statement contained in a document  incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Registration  Statement to the extent that a statement  contained herein or
in any  other  subsequently  filed  document  which  also is or is  deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded  shall not be deemed,  except as so modified
or superseded, to constitute a part of this Registration Statement.

Item 4.           DESCRIPTION OF SECURITIES.  Not applicable.

Item 5.           INTERESTS OF NAMED EXPERTS AND COUNSEL.  Not applicable.

Item 6.           INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Registrant's Bylaws reduce the liability of a director to the corporation or
its  shareholders for monetary damages for breaches of his or her fiduciary duty
of care to the fullest extent  permissible  under  California law. The Bylaws of
the Registrant  further provide for  indemnification  of corporate agents to the
maximum extent permitted by the California General Corporation Law.

                                       3
<PAGE>

Item 7.           EXEMPTION FROM REGISTRATION CLAIMED.  Not applicable.

Item 8.           EXHIBITS.

Exhibit Number
------  ------

4.1      2004 Stock Option Incentive Plan
4.2      2004 Warrant Plan
5.1      Opinion of Niesar & Diamond LLP
23.1     Consent of Independent Auditors
23.2     Consent of Niesar & Diamond LLP (included in Exhibit 5.1)
24.1     Power of Attorney (see page 5)


SIGNATURES

Pursuant  to  the   requirements   of  the  Securities   Act,  the   Registrant,
International Microcomputer Software, Inc., a corporation organized and existing
under  the laws of the State of  California,  certifies  that it has  reasonable
grounds to believe that it meets all of the  requirements for filing on Form S-8
and has duly caused this  Registration  Statement  to be signed on its behalf by
the  undersigned,  thereunto duly  authorized,  in the City of Novato,  State of
California, on March 23, 2004.


                                   International Microcomputer Software, Inc.


                                   By: /s/ Martin Wade III
                                      ------------------------
                                      Martin Wade III
                                      Chief Executive Officer

                                       4

<PAGE>



                                POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE  PRESENTS,  that each person whose  signature  appears
below  constitutes  and appoints Martin Wade III as his  attorney-in-fact,  with
full  power  of  substitution,  for him in any and all  capacities,  to sign any
amendments to this Registration Statement on Form S-8 and to file the same, with
exhibits  thereto  and  other  documents  in  connection  therewith,   with  the
Commission,  hereby ratifying and confirming all that the said attorney-in-fact,
or his substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration  Statement
has been  signed by the  following  persons in the  capacities  and on the dates
indicated.

<TABLE>
<CAPTION>
          Signature                                      Title                                     Date
          ---------                                      -----                                     ----
<S>                             <C>                                                      <C>
/s/ Martin Wade III             Chief Executive Officer (Principal Executive Officer),   March 23, 2004
----------------------          Director
Martin Wade III

/s/ William Bush                Chief Financial Officer (Principal Financial Officer,    March 23, 2004
----------------------          Principal Accounting Officer)
William Bush

/s/ Bruce Galloway              Director, Chairman of the Board                          March 23, 2004
----------------------
Bruce Galloway

/s/ Evan Binn                   Director                                                 March 23, 2004
----------------------
Evan Binn

/s/ Robert Falcone              Director                                                 March 23, 2004
----------------------
Robert Falcone

/s/ Richard Berman              Director                                                 March 23, 2004
----------------------
Richard Berman

/s/ Robert Mayer                Director                                                 March 23, 2004
----------------------
Robert Mayer

/s/ Donald Perlyn               Director                                                 March 23, 2004
----------------------
Donald Perlyn
</TABLE>

                                       5

<PAGE>



                                INDEX TO EXHIBITS


Exhibit  Number
-------  ------

4.1      2004 Stock Option Incentive Plan

4.2      2004 Warrant Plan

5.1      Opinion of Niesar & Diamond LLP

23.1     Consent of Independent Auditors

23.2     Consent of Niesar & Diamond LLP
         (included in Exhibit 5.1)

24.1     Power of Attorney (see page [])

                                       6
<PAGE>



                                   EXHIBIT 4.1


                        2004 INCENTIVE STOCK OPTION PLAN
ARTICLE ONE

                               GENERAL PROVISIONS

      I.    PURPOSE OF THE PLAN

      This 2004 INCENTIVE STOCK OPTION PLAN is intended to promote the interests
of INTERNATIONAL  MICROCOMPUTER  SOFTWARE,  INC., a California  corporation (the
"Corporation"),  by providing eligible persons with the opportunity to acquire a
proprietary  interest,  or otherwise increase their proprietary interest, in the
Corporation  as  an  incentive  for  them  to  remain  in  the  service  of  the
Corporation.

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

      II.   STRUCTURE OF THE PLAN

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

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

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

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

      III.  ADMINISTRATION OF THE PLAN

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

            B. The Plan  Administrator  shall  have  full  power  and  authority
(subject to the provisions of the Plan) to establish such rules and  regulations

                                       7
<PAGE>

as it may deem  appropriate  for proper  administration  of the Plan and to make
such determinations  under, and issue such  interpretations of, the Plan and any
outstanding  options or stock  issuances  thereunder as it may deem necessary or
advisable. Decisions of the Plan Administrator shall be final and binding on all
parties  who have an  interest  in the  Plan or any  option  or  stock  issuance
thereunder.

      IV.   ELIGIBILITY

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

                  (i)   Employees,

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

                  (iii) consultants and other  independent  advisors who provide
services to the Corporation (or any Parent or Subsidiary).

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

      V.    STOCK SUBJECT TO THE PLAN

            A. The stock  issuable  under the Plan shall be shares of authorized
but unissued or reacquired  Common Stock. The maximum number of shares of Common
Stock  which may be issued  over the term of the Plan  shall  not  exceed  three
million  (3,000,000)]  shares;  provided,  however,  that the  number  of shares
issuable on exercise of  outstanding  options under the Plan and all other stock
option,  stock bonus and similar plans or agreements of the Corporation  (except
as  otherwise  provided  by the  California  Corporations  Code and  regulations
promulgated  thereunder)  shall at no time exceed  thirty  percent  (30%) of the
number of outstanding  shares of the  Corporation's  capital stock. In the event
that the Corporation's Board of Directors  authorizes the grant of options under
the Plan such that the 30% limit set  forth  above is  exceeded,  those  options
authorized in excess of the 30% limit will not be considered  granted until such
time as (i)  additional  shares  are  issued  by the  Corporation  to bring  the
authorized  options within the 30% limit,  or (ii) the consent of the holders of
at least  two-thirds  of the  Company's  outstanding  shares is  obtained to the
issuance of options in excess of the 30% limit.

            B. Shares of Common Stock  subject to  outstanding  options shall be
available for  subsequent  issuance under the Plan to the extent (i) the options
expire or terminate for any reason prior to exercise in full or (ii) the options

                                       8
<PAGE>

are cancelled in accordance with the cancellation-regrant provisions of yArticle
Two.  Unvested shares issued under the Plan and subsequently  repurchased by the
Corporation,  at the  option  exercise  price paid per  share,  pursuant  to the
Corporation's repurchase rights under the Plan shall be added back to the number
of  shares  of  Common  Stock  reserved  for  issuance  under the Plan and shall
accordingly be available for reissuance  through one or more  subsequent  option
grants or direct stock issuances under the Plan.

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

                                  ARTICLE TWO

                              OPTION GRANT PROGRAM

      I.    OPTION TERMS

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

            A.    EXERCISE PRICE.

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

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

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

                  2.  The  exercise  price  shall  become  immediately  due upon
exercise  of the option  and shall,  subject  to the  documents  evidencing  the
option,  be  payable in cash or check made  payable to the  Corporation  or by a
promissory  note as described in Section yI of yArticle Four.  Should the Common
Stock be  registered  under Section 12(g) of the 1934 Act at the time the option

                                       9
<PAGE>

is exercised, then the exercise price may also be paid as follows:

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

                        (ii) to the extent the  option is  exercised  for vested
shares,  through a special sale and remittance  procedure  pursuant to which the
Optionee shall  concurrently  provide  irrevocable  written  instructions to the
Corporation to deliver the  certificates  for the purchased  shares  directly to
such brokerage firm in order to complete the sale.

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

            B. EXERCISE AND TERM OF OPTIONS. Each option shall be exercisable at
such time or times, during such period and for such number of shares as shall be
determined by the Plan  Administrator and set forth in the documents  evidencing
the option  grant.  However,  no option  shall have a term in excess of ten (10)
years measured from the option grant date.

            C. EFFECT OF TERMINATION OF SERVICE.

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

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

                        (ii) Should  Optionee's  Service  terminate by reason of
Disability,  then  the  Optionee  shall  have a period  of  twelve  (12)  months
following  the date of such  cessation of Service  during which to exercise each
outstanding option held by such Optionee.

                        (iii) If the Optionee dies while holding an  outstanding
option,  then the personal  representative of his or her estate or the person or
persons to whom the option is transferred pursuant to the Optionee's will or the
laws of inheritance  shall have a twelve (12)-month period following the date of
the Optionee's death to exercise such option.

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

                        (v) During the applicable  post-Service exercise period,
the option may not be  exercised  in the  aggregate  for more than the number of
vested shares for which the option is  exercisable on the date of the Optionee's


                                       10
<PAGE>

cessation of Service.  Upon the expiration of the applicable  exercise period or
(if earlier) upon the expiration of the option term, the option shall  terminate
and cease to be  outstanding  for any vested shares for which the option has not
been  exercised.  However,  the option shall,  immediately  upon the  Optionee's
cessation of Service,  terminate and cease to be outstanding with respect to any
and all  option  shares  for  which  the  option  is not  otherwise  at the time
exercisable or in which the Optionee is not otherwise at that time vested.

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

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

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

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

            E. UNVESTED SHARES. The Plan Administrator shall have the discretion
to grant  options  which are  exercisable  for unvested  shares of Common Stock.
Should the Optionee  cease  Service  while  holding such  unvested  shares,  the
Corporation  shall have the right to repurchase,  at the exercise price paid per
share,  all or (at the discretion of the Corporation and with the consent of the
Optionee) any of those  unvested  shares.  The terms upon which such  repurchase
right shall be exercisable  (including the period and procedure for exercise and
the appropriate  vesting schedule for the purchased shares) shall be established
by the  Plan  Administrator  and  set  forth  in the  document  evidencing  such
repurchase right.

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

            G. LIMITED  TRANSFERABILITY  OF OPTIONS.  During the lifetime of the
Optionee,  the option shall be exercisable only by the Optionee and shall not be
assignable  or  transferable  other than by will or by the laws of  descent  and
distribution following the Optionee's death.


                                       11
<PAGE>

            H. WITHHOLDING.  The  Corporation's  obligation to deliver shares of
Common  Stock upon the exercise of any options  granted  under the Plan shall be
subject to the  satisfaction of all applicable  federal,  state and local income
and employment tax withholding requirements.

      II.   INCENTIVE OPTIONS

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

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

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

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

            D. 10%  SHAREHOLDER.  If any Employee to whom an Incentive Option is
granted is a 10%  Shareholder,  then the option  term shall not exceed  five (5)
years measured from the option grant date.

      III.  CORPORATE TRANSACTION

            A. The shares subject to each option  outstanding  under the Plan at
the time of a Corporate  Transaction  shall  automatically  vest in full so that
each such option shall, immediately prior to the effective date of the Corporate
Transaction,  become fully  exercisable for all of the shares of Common Stock at
the time  subject to that  option and may be  exercised  for any or all of those
shares as fully vested shares of Common Stock. However, the shares subject to an
outstanding  option  shall not vest on such an  accelerated  basis if and to the
extent:  (i) such  option is assumed  by the  successor  corporation  (or parent
thereof) in the Corporate  Transaction and the  Corporation's  repurchase rights
with respect to the unvested  option  shares are  concurrently  assigned to such
successor  corporation (or parent thereof) or (ii) such option is to be replaced
with a cash incentive  program of the successor  corporation which preserves the
spread  existing  on the  unvested  option  shares at the time of the  Corporate


                                       12
<PAGE>

Transaction  and  provides for  subsequent  payout in  accordance  with the same
vesting  schedule  applicable  to those  unvested  option  shares  or (iii)  the
acceleration of such option is subject to other limitations  imposed by the Plan
Administrator at the time of the option grant.

            B.  All   outstanding   repurchase   rights  shall  also   terminate
automatically, and the shares of Common Stock subject to those terminated rights
shall  immediately  vest in full,  in the  event of any  Corporate  Transaction,
except to the extent:  (i) those repurchase rights are assigned to the successor
corporation (or parent thereof) in connection with such Corporate Transaction or
(ii) such accelerated  vesting is precluded by other limitations  imposed by the
Plan Administrator at the time the repurchase right is issued.

            C.   Immediately   following  the   consummation  of  the  Corporate
Transaction,   all   outstanding   options  shall  terminate  and  cease  to  be
outstanding,  except to the extent  assumed  by the  successor  corporation  (or
parent thereof).

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

            E. The Plan  Administrator  shall have the  discretion,  exercisable
either at the time the option is granted or at any time while the option remains
outstanding,  to provide for the automatic acceleration (in whole or in part) of
one or more  outstanding  options (and the automatic  termination of one or more
outstanding  repurchase  rights,  with the  immediate  vesting  of the shares of
Common  Stock  subject to those  terminated  rights)  upon the  occurrence  of a
Corporate  Transaction,  whether  or not  those  options  are to be  assumed  or
replaced  (or those  repurchase  rights  are to be  assigned)  in the  Corporate
Transaction.

            F. The Plan Administrator  shall also have full power and authority,
exercisable  either at the time the  option is  granted or at any time while the
option remains outstanding,  to structure such option so that the shares subject
to that  option  will  automatically  vest on an  accelerated  basis  should the
Optionee's  Service terminate by reason of an Involuntary  Termination  within a
designated  period (not to exceed eighteen (18) months)  following the effective
date of any  Corporate  Transaction  in which  the  option  is  assumed  and the
repurchase  rights  applicable to those shares do not otherwise  terminate.  Any
such option shall remain  exercisable  for the fully vested  option shares until
the earlier of (i) the  expiration of the option term or (ii) the  expiration of
the one (1)-year  period  measured  from the effective  date of the  Involuntary
Termination. In addition, the Plan Administrator may provide that one or more of
the outstanding repurchase rights with respect to shares held by the Optionee at
the time of such  Involuntary  Termination  shall  immediately  terminate  on an
accelerated  basis,  and the shares  subject to those  terminated  rights  shall
accordingly vest.


                                       13
<PAGE>

            G. The portion of any  Incentive  Option  accelerated  in connection
with a Corporate  Transaction  shall remain  exercisable as an Incentive  Option
only to the extent the applicable One Hundred Thousand Dollar  limitation is not
exceeded.  To the extent such dollar  limitation  is exceeded,  the  accelerated
portion of such option shall be exercisable as a Non-Statutory  Option under the
Federal tax laws.

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

      IV.   CANCELLATION AND REGRANT OF OPTIONS

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

                                 ARTICLE THREE

                             STOCK ISSUANCE PROGRAM

      I.    STOCK ISSUANCE TERMS

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

            A. PURCHASE PRICE.

                  1. The  purchase  price per  share  shall be fixed by the Plan
Administrator  but shall not be less than eighty-five  percent (85%) of the Fair
Market Value per share of Common Stock on the issue date. However,  the purchase
price per share of Common  Stock issued to a 10%  Shareholder  shall not be less
than one hundred and ten percent (110%) of such Fair Market Value.

                  2.  Shares  of  Common  Stock  may be  issued  under the Stock
Issuance Program for any of the following items of consideration  which the Plan
Administrator may deem appropriate in each individual instance:

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

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


                                       14
<PAGE>

                        (iii) a  promissory  note as  described in Section yI of
yArticle Four.

            B. VESTING PROVISIONS.

                  1.  Shares of Common  Stock  issued  under the Stock  Issuance
Program  may,  in the  discretion  of  the  Plan  Administrator,  be  fully  and
immediately  vested upon issuance or may vest in one or more  installments  over
the Participant's period of Service or upon attainment of specified  performance
objectives.  However,  the Plan  Administrator may not impose a vesting schedule
upon any stock issuance  effected under the Stock Issuance Program which is more
restrictive than twenty percent (20%) per year vesting,  with initial vesting to
occur not later than one (1) year after the issuance date.

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

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

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

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


                                       15
<PAGE>

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

      II.   CORPORATE TRANSACTION

            A. Upon the occurrence of a Corporate  Transaction,  all outstanding
repurchase   rights   under  the  Stock   Issuance   Program   shall   terminate
automatically, and the shares of Common Stock subject to those terminated rights
shall  immediately  vest in full,  except to the  extent:  (i) those  repurchase
rights  are  assigned  to the  successor  corporation  (or  parent  thereof)  in
connection with such Corporate  Transaction or (ii) such accelerated  vesting is
precluded by other limitations imposed by the Plan Administrator at the time the
repurchase right is issued.

            B. The Plan  Administrator  shall have the discretionary  authority,
exercisable  either at the time the unvested shares are issued or any time while
the  Corporation's  repurchase  rights  with  respect  to  those  shares  remain
outstanding,  to provide that those rights shall  automatically  terminate on an
accelerated  basis,  and the shares of Common Stock subject to those  terminated
rights shall  immediately  vest, in the event the  Participant's  Service should
subsequently  terminate  by  reason  of  an  Involuntary  Termination  within  a
designated  period (not to exceed eighteen (18) months)  following the effective
date of any Corporate  Transaction in which those repurchase rights are assigned
to the successor corporation (or parent thereof).

      III.  SHARE ESCROW/LEGENDS

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

                                  ARTICLE FOUR

                                  MISCELLANEOUS

I.       FINANCING

      The Plan  Administrator  may permit any Optionee or Participant to pay the
option  exercise  price or the purchase  price for shares  issued to such person
under the Plan by delivering a full-recourse,  interest-bearing  promissory note
payable  in one or  more  installments  and  secured  by the  purchased  shares.
However,  any  promissory  note  delivered  by a  consultant  must be secured by
property in addition to the purchased  shares of Common Stock. In no event shall
the maximum credit  available to the Optionee or  Participant  exceed the sum of
(i) the  aggregate  option  exercise  price or  purchase  price  payable for the
purchased  shares plus (ii) any federal,  state and local income and  employment
tax liability incurred by the Optionee or the Participant in connection with the
option exercise or share purchase.


                                       16
<PAGE>

      II.   EFFECTIVE DATE AND TERM OF PLAN

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

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

      III.  AMENDMENT OF THE PLAN

            A. The Board shall have complete and  exclusive  power and authority
to amend or modify the Plan in any or all respects.  However,  no such amendment
or modification  shall adversely  affect the rights and obligations with respect
to options or unvested stock  issuances at the time  outstanding  under the Plan
unless  the  Optionee  or  the   Participant   consents  to  such  amendment  or
modification.  In addition,  certain amendments may require shareholder approval
pursuant to applicable laws and regulations.

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

      IV.   USE OF PROCEEDS

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


                                       17
<PAGE>

      V.    WITHHOLDING

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

      VI.   REGULATORY APPROVALS

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

      VII.  NO EMPLOYMENT OR SERVICE RIGHTS

      Nothing in the Plan shall confer upon the Optionee or the  Participant any
right to continue in Service  for any period of specific  duration or  interfere
with or  otherwise  restrict  in any way the rights of the  Corporation  (or any
Parent or Subsidiary  employing or retaining  such person) or of the Optionee or
the  Participant,  which  rights  are  hereby  expressly  reserved  by each,  to
terminate  such  person's  Service at any time for any  reason,  with or without
cause.

      VIII. FINANCIAL REPORTS

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

                                       18
<PAGE>

                                    APPENDIX

            The following definitions shall be in effect under the Plan:

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

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

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

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

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

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

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

      F. DISABILITY  shall mean the inability of the Optionee or the Participant
to engage  in any  substantial  gainful  activity  by  reason  of any  medically
determinable  physical or mental  impairment and shall be determined by the Plan
Administrator  on the basis of such medical  evidence as the Plan  Administrator
deems warranted under the circumstances.

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

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

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

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


                                       19
<PAGE>

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

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

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

      K.  INVOLUNTARY  TERMINATION  shall mean the termination of the Service of
any individual which occurs by reason of:

            (i) such  individual's  involuntary  dismissal  or  discharge by the
      Corporation for reasons other than Misconduct, or

            (ii) such individual's  voluntary resignation following (A) a change
      in his or her position with the Corporation  which materially  reduces his
      or her level of  responsibility,  (B) a  reduction  in his or her level of
      compensation  (including  base salary,  fringe benefits and target bonuses
      under any corporate-performance based bonus or incentive programs) by more
      than fifteen percent (15%) or (C) a relocation of such individual's  place
      of  employment  by more than fifty (50) miles,  provided  and only if such
      change,  reduction  or  relocation  is effected  without the  individual's
      consent.

      L. MISCONDUCT shall mean the commission of any act of fraud,  embezzlement
or dishonesty by the Optionee or Participant, any unauthorized use or disclosure
by such person of  confidential  information or trade secrets of the Corporation
(or any  Parent or  Subsidiary),  or any other  intentional  misconduct  by such
person  adversely  affecting the business or affairs of the  Corporation (or any
Parent or Subsidiary) in a material manner.  The foregoing  definition shall not
be deemed to be inclusive of all the acts or omissions which the Corporation (or
any Parent or Subsidiary) may consider as grounds for the dismissal or discharge
of any Optionee,  Participant or other person in the Service of the  Corporation
(or any Parent or Subsidiary).

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

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

      O. OPTION  GRANT  PROGRAM  shall mean the option  grant  program in effect
under the Plan.


                                       20
<PAGE>

      P.  OPTIONEE  shall mean any person to whom an option is granted under the
Plan.

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

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

      S. PLAN shall mean the Corporation's 2004 Incentive Stock Option Plan.

      T. PLAN ADMINISTRATOR  shall mean either the Board or the Committee acting
in its capacity as administrator of the Plan.

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

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

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

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

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

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


                                       21
[{"type": "S-8", "sequence": "1", "filename": "forms8.txt", "secsgml_size_bytes": 55588}]
{"company-data": {"conformed-name": "INTERNATIONAL MICROCOMPUTER SOFTWARE INC /CA/", "cik": "0000814929", "assigned-sic": "7372", "irs-number": "942862863", "state-of-incorporation": "CA", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-113918", "film-number": "04688164"}, "business-address": {"street1": "75 ROWLAND WAY", "city": "NOVATO", "state": "CA", "zip": "94945", "phone": "4158784000"}, "mail-address": {"street1": "75 ROWLAND WAY", "city": "NOAVTAO", "state": "CA", "zip": "94945"}}
As filed with the Securities and Exchange Commission on March 25, 2004

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

                                    FORM S-8

                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933
                                ----------------

                   INTERNATIONAL MICROCOMPUTER SOFTWARE, INC.
             (Exact name of Registrant as specified in its charter)

           CALIFORNIA                            94-2862863
     (State of incorporation)         (I.R.S. Employer Identification No.)

                                 100 ROWLAND WAY
                                    Suite 300
                                NOVATO, CA 94945
                    (Address of principal executive offices)
                             -----------------------

                        2004 INCENTIVE STOCK OPTION PLAN
                                2004 WARRANT PLAN
                         COMMON STOCK PURCHASE WARRANTS
                           (Full titles of the Plans)
                             -----------------------

                                   Martin Wade
                             Chief Executive Officer
                   INTERNATIONAL MICROCOMPUTER SOFTWARE, INC.
                                 100 ROWLAND WAY
                                    Suite 300
                                NOVATO, CA 94945
                                 (415) 878-4000
 (Name, address and telephone number, including area code, of agent for service)
                             -----------------------

Page 1 of [] Pages
Exhibit Index on Page []
(Calculation of Registration Fee on following page)
--------------------------------------------------------------------------------
                                                CALCULATION OF REGISTRATION FEE
                           --------------------------------------------------------------------------------

------------------------- ----------------------- ----------------------- ----------------------- -----------------------
 TITLE OF SECURITIES TO        AMOUNT TO BE          PROPOSED MAXIMUM        PROPOSED MAXIMUM           AMOUNT OF
     BE REGISTERED            REGISTERED (1)        OFFERING PRICE PER      AGGREGATE OFFERING       REGISTRATION FEE
                                                          SHARE                   PRICE
------------------------- ----------------------- ----------------------- ----------------------- -----------------------
Common Stock, $0.0001              4,141,667             $1.50(2)               $5,838,700                  $739.88
par value
------------------------- ----------------------- ----------------------- ----------------------- -----------------------
(1) This Registration Statement shall also cover any additional shares of Common
Stock which become issuable under the Plan and warrants  registered  pursuant to
this  Registration  Statement  by  reason of any stock  dividend,  stock  split,
recapitalization or any other similar  transaction  effected without the receipt
of consideration  which results in an increase in the number of the Registrant's
outstanding shares of Common Stock.

(2) Warrants previously granted and registered as part of this filing,  range in
price from $0.50 to $2.30.  Proposed  maximum price for ungranted  stock options
and warrants was estimated in accordance  with Rule 457(h) under the  Securities
Act of 1933,  as  amended  (the  "Securities  Act")  solely  for the  purpose of
calculating  the  registration  fee,  based upon the  average of the bid and ask
prices reported on the Nasdaq OTC Bulletin Board for  Registrant's  Common Stock
on March 22, 2004.

                                       2
PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.           INCORPORATION OF DOCUMENTS BY REFERENCE.

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

(a)   The  Registrant's  Annual  Report on Form 10-KSB for the fiscal year ended
      June 30, 2003,  filed pursuant to Section 13(a) or 15(d) of the Securities
      Exchange Act of 1934 (the "Exchange Act") (Commission File No. 000-15949).

(b)   All other  reports filed by IMSI pursuant to Section 13(a) or 15(d) of the
      Exchange Act since June 30, 2003.

(c)   The description of IMSI's common stock,  contained in IMSI's  registration
      statements filed pursuant to Section 12 of the Exchange Act, including any
      amendment   or  report   filed  for  the  purpose  of  updating  any  such
      description.

(d)   All documents  filed by IMSI  pursuant to Sections  13(a),  13(c),  14 and
      15(d) of the Exchange  Act,  after the date hereof and prior to the filing
      of a post-effective  amendment which indicates that all securities offered
      have been sold or which  deregisters all securities then remaining unsold,
      shall be deemed to be  incorporated  by reference  herein and to be a part
      hereof from the date of filing of such documents.

Any statement contained in a document  incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Registration  Statement to the extent that a statement  contained herein or
in any  other  subsequently  filed  document  which  also is or is  deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded  shall not be deemed,  except as so modified
or superseded, to constitute a part of this Registration Statement.

Item 4.           DESCRIPTION OF SECURITIES.  Not applicable.

Item 5.           INTERESTS OF NAMED EXPERTS AND COUNSEL.  Not applicable.

Item 6.           INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Registrant's Bylaws reduce the liability of a director to the corporation or
its  shareholders for monetary damages for breaches of his or her fiduciary duty
of care to the fullest extent  permissible  under  California law. The Bylaws of
the Registrant  further provide for  indemnification  of corporate agents to the
maximum extent permitted by the California General Corporation Law.

                                       3
Item 7.           EXEMPTION FROM REGISTRATION CLAIMED.  Not applicable.

Item 8.           EXHIBITS.

Exhibit Number
------  ------

4.1      2004 Stock Option Incentive Plan
4.2      2004 Warrant Plan
5.1      Opinion of Niesar & Diamond LLP
23.1     Consent of Independent Auditors
23.2     Consent of Niesar & Diamond LLP (included in Exhibit 5.1)
24.1     Power of Attorney (see page 5)

SIGNATURES

Pursuant  to  the   requirements   of  the  Securities   Act,  the   Registrant,
International Microcomputer Software, Inc., a corporation organized and existing
under  the laws of the State of  California,  certifies  that it has  reasonable
grounds to believe that it meets all of the  requirements for filing on Form S-8
and has duly caused this  Registration  Statement  to be signed on its behalf by
the  undersigned,  thereunto duly  authorized,  in the City of Novato,  State of
California, on March 23, 2004.

                                   International Microcomputer Software, Inc.

                                   By: /s/ Martin Wade III
                                      ------------------------
                                      Martin Wade III
                                      Chief Executive Officer

                                       4
POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE  PRESENTS,  that each person whose  signature  appears
below  constitutes  and appoints Martin Wade III as his  attorney-in-fact,  with
full  power  of  substitution,  for him in any and all  capacities,  to sign any
amendments to this Registration Statement on Form S-8 and to file the same, with
exhibits  thereto  and  other  documents  in  connection  therewith,   with  the
Commission,  hereby ratifying and confirming all that the said attorney-in-fact,
or his substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration  Statement
has been  signed by the  following  persons in the  capacities  and on the dates
indicated.
Signature                                      Title                                     Date
          ---------                                      -----                                     ----
/s/ Martin Wade III             Chief Executive Officer (Principal Executive Officer),   March 23, 2004
----------------------          Director
Martin Wade III

/s/ William Bush                Chief Financial Officer (Principal Financial Officer,    March 23, 2004
----------------------          Principal Accounting Officer)
William Bush

/s/ Bruce Galloway              Director, Chairman of the Board                          March 23, 2004
----------------------
Bruce Galloway

/s/ Evan Binn                   Director                                                 March 23, 2004
----------------------
Evan Binn

/s/ Robert Falcone              Director                                                 March 23, 2004
----------------------
Robert Falcone

/s/ Richard Berman              Director                                                 March 23, 2004
----------------------
Richard Berman

/s/ Robert Mayer                Director                                                 March 23, 2004
----------------------
Robert Mayer

/s/ Donald Perlyn               Director                                                 March 23, 2004
----------------------
Donald Perlyn
5
INDEX TO EXHIBITS

Exhibit  Number
-------  ------

4.1      2004 Stock Option Incentive Plan

4.2      2004 Warrant Plan

5.1      Opinion of Niesar & Diamond LLP

23.1     Consent of Independent Auditors

23.2     Consent of Niesar & Diamond LLP
         (included in Exhibit 5.1)

24.1     Power of Attorney (see page [])

                                       6
EXHIBIT 4.1

                        2004 INCENTIVE STOCK OPTION PLAN
ARTICLE ONE

                               GENERAL PROVISIONS

      I.    PURPOSE OF THE PLAN

      This 2004 INCENTIVE STOCK OPTION PLAN is intended to promote the interests
of INTERNATIONAL  MICROCOMPUTER  SOFTWARE,  INC., a California  corporation (the
"Corporation"),  by providing eligible persons with the opportunity to acquire a
proprietary  interest,  or otherwise increase their proprietary interest, in the
Corporation  as  an  incentive  for  them  to  remain  in  the  service  of  the
Corporation.

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

      II.   STRUCTURE OF THE PLAN

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

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

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

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

      III.  ADMINISTRATION OF THE PLAN

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

            B. The Plan  Administrator  shall  have  full  power  and  authority
(subject to the provisions of the Plan) to establish such rules and  regulations

                                       7
as it may deem  appropriate  for proper  administration  of the Plan and to make
such determinations  under, and issue such  interpretations of, the Plan and any
outstanding  options or stock  issuances  thereunder as it may deem necessary or
advisable. Decisions of the Plan Administrator shall be final and binding on all
parties  who have an  interest  in the  Plan or any  option  or  stock  issuance
thereunder.

      IV.   ELIGIBILITY

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

                  (i)   Employees,

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

                  (iii) consultants and other  independent  advisors who provide
services to the Corporation (or any Parent or Subsidiary).

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

      V.    STOCK SUBJECT TO THE PLAN

            A. The stock  issuable  under the Plan shall be shares of authorized
but unissued or reacquired  Common Stock. The maximum number of shares of Common
Stock  which may be issued  over the term of the Plan  shall  not  exceed  three
million  (3,000,000)]  shares;  provided,  however,  that the  number  of shares
issuable on exercise of  outstanding  options under the Plan and all other stock
option,  stock bonus and similar plans or agreements of the Corporation  (except
as  otherwise  provided  by the  California  Corporations  Code and  regulations
promulgated  thereunder)  shall at no time exceed  thirty  percent  (30%) of the
number of outstanding  shares of the  Corporation's  capital stock. In the event
that the Corporation's Board of Directors  authorizes the grant of options under
the Plan such that the 30% limit set  forth  above is  exceeded,  those  options
authorized in excess of the 30% limit will not be considered  granted until such
time as (i)  additional  shares  are  issued  by the  Corporation  to bring  the
authorized  options within the 30% limit,  or (ii) the consent of the holders of
at least  two-thirds  of the  Company's  outstanding  shares is  obtained to the
issuance of options in excess of the 30% limit.

            B. Shares of Common Stock  subject to  outstanding  options shall be
available for  subsequent  issuance under the Plan to the extent (i) the options
expire or terminate for any reason prior to exercise in full or (ii) the options

                                       8
are cancelled in accordance with the cancellation-regrant provisions of yArticle
Two.  Unvested shares issued under the Plan and subsequently  repurchased by the
Corporation,  at the  option  exercise  price paid per  share,  pursuant  to the
Corporation's repurchase rights under the Plan shall be added back to the number
of  shares  of  Common  Stock  reserved  for  issuance  under the Plan and shall
accordingly be available for reissuance  through one or more  subsequent  option
grants or direct stock issuances under the Plan.

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

                                  ARTICLE TWO

                              OPTION GRANT PROGRAM

      I.    OPTION TERMS

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

            A.    EXERCISE PRICE.

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

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

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

                  2.  The  exercise  price  shall  become  immediately  due upon
exercise  of the option  and shall,  subject  to the  documents  evidencing  the
option,  be  payable in cash or check made  payable to the  Corporation  or by a
promissory  note as described in Section yI of yArticle Four.  Should the Common
Stock be  registered  under Section 12(g) of the 1934 Act at the time the option

                                       9
is exercised, then the exercise price may also be paid as follows:

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

                        (ii) to the extent the  option is  exercised  for vested
shares,  through a special sale and remittance  procedure  pursuant to which the
Optionee shall  concurrently  provide  irrevocable  written  instructions to the
Corporation to deliver the  certificates  for the purchased  shares  directly to
such brokerage firm in order to complete the sale.

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

            B. EXERCISE AND TERM OF OPTIONS. Each option shall be exercisable at
such time or times, during such period and for such number of shares as shall be
determined by the Plan  Administrator and set forth in the documents  evidencing
the option  grant.  However,  no option  shall have a term in excess of ten (10)
years measured from the option grant date.

            C. EFFECT OF TERMINATION OF SERVICE.

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

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

                        (ii) Should  Optionee's  Service  terminate by reason of
Disability,  then  the  Optionee  shall  have a period  of  twelve  (12)  months
following  the date of such  cessation of Service  during which to exercise each
outstanding option held by such Optionee.

                        (iii) If the Optionee dies while holding an  outstanding
option,  then the personal  representative of his or her estate or the person or
persons to whom the option is transferred pursuant to the Optionee's will or the
laws of inheritance  shall have a twelve (12)-month period following the date of
the Optionee's death to exercise such option.

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

                        (v) During the applicable  post-Service exercise period,
the option may not be  exercised  in the  aggregate  for more than the number of
vested shares for which the option is  exercisable on the date of the Optionee's

                                       10
cessation of Service.  Upon the expiration of the applicable  exercise period or
(if earlier) upon the expiration of the option term, the option shall  terminate
and cease to be  outstanding  for any vested shares for which the option has not
been  exercised.  However,  the option shall,  immediately  upon the  Optionee's
cessation of Service,  terminate and cease to be outstanding with respect to any
and all  option  shares  for  which  the  option  is not  otherwise  at the time
exercisable or in which the Optionee is not otherwise at that time vested.

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

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

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

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

            E. UNVESTED SHARES. The Plan Administrator shall have the discretion
to grant  options  which are  exercisable  for unvested  shares of Common Stock.
Should the Optionee  cease  Service  while  holding such  unvested  shares,  the
Corporation  shall have the right to repurchase,  at the exercise price paid per
share,  all or (at the discretion of the Corporation and with the consent of the
Optionee) any of those  unvested  shares.  The terms upon which such  repurchase
right shall be exercisable  (including the period and procedure for exercise and
the appropriate  vesting schedule for the purchased shares) shall be established
by the  Plan  Administrator  and  set  forth  in the  document  evidencing  such
repurchase right.

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

            G. LIMITED  TRANSFERABILITY  OF OPTIONS.  During the lifetime of the
Optionee,  the option shall be exercisable only by the Optionee and shall not be
assignable  or  transferable  other than by will or by the laws of  descent  and
distribution following the Optionee's death.

                                       11
H. WITHHOLDING.  The  Corporation's  obligation to deliver shares of
Common  Stock upon the exercise of any options  granted  under the Plan shall be
subject to the  satisfaction of all applicable  federal,  state and local income
and employment tax withholding requirements.

      II.   INCENTIVE OPTIONS

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

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

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

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

            D. 10%  SHAREHOLDER.  If any Employee to whom an Incentive Option is
granted is a 10%  Shareholder,  then the option  term shall not exceed  five (5)
years measured from the option grant date.

      III.  CORPORATE TRANSACTION

            A. The shares subject to each option  outstanding  under the Plan at
the time of a Corporate  Transaction  shall  automatically  vest in full so that
each such option shall, immediately prior to the effective date of the Corporate
Transaction,  become fully  exercisable for all of the shares of Common Stock at
the time  subject to that  option and may be  exercised  for any or all of those
shares as fully vested shares of Common Stock. However, the shares subject to an
outstanding  option  shall not vest on such an  accelerated  basis if and to the
extent:  (i) such  option is assumed  by the  successor  corporation  (or parent
thereof) in the Corporate  Transaction and the  Corporation's  repurchase rights
with respect to the unvested  option  shares are  concurrently  assigned to such
successor  corporation (or parent thereof) or (ii) such option is to be replaced
with a cash incentive  program of the successor  corporation which preserves the
spread  existing  on the  unvested  option  shares at the time of the  Corporate

                                       12
Transaction  and  provides for  subsequent  payout in  accordance  with the same
vesting  schedule  applicable  to those  unvested  option  shares  or (iii)  the
acceleration of such option is subject to other limitations  imposed by the Plan
Administrator at the time of the option grant.

            B.  All   outstanding   repurchase   rights  shall  also   terminate
automatically, and the shares of Common Stock subject to those terminated rights
shall  immediately  vest in full,  in the  event of any  Corporate  Transaction,
except to the extent:  (i) those repurchase rights are assigned to the successor
corporation (or parent thereof) in connection with such Corporate Transaction or
(ii) such accelerated  vesting is precluded by other limitations  imposed by the
Plan Administrator at the time the repurchase right is issued.

            C.   Immediately   following  the   consummation  of  the  Corporate
Transaction,   all   outstanding   options  shall  terminate  and  cease  to  be
outstanding,  except to the extent  assumed  by the  successor  corporation  (or
parent thereof).

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

            E. The Plan  Administrator  shall have the  discretion,  exercisable
either at the time the option is granted or at any time while the option remains
outstanding,  to provide for the automatic acceleration (in whole or in part) of
one or more  outstanding  options (and the automatic  termination of one or more
outstanding  repurchase  rights,  with the  immediate  vesting  of the shares of
Common  Stock  subject to those  terminated  rights)  upon the  occurrence  of a
Corporate  Transaction,  whether  or not  those  options  are to be  assumed  or
replaced  (or those  repurchase  rights  are to be  assigned)  in the  Corporate
Transaction.

            F. The Plan Administrator  shall also have full power and authority,
exercisable  either at the time the  option is  granted or at any time while the
option remains outstanding,  to structure such option so that the shares subject
to that  option  will  automatically  vest on an  accelerated  basis  should the
Optionee's  Service terminate by reason of an Involuntary  Termination  within a
designated  period (not to exceed eighteen (18) months)  following the effective
date of any  Corporate  Transaction  in which  the  option  is  assumed  and the
repurchase  rights  applicable to those shares do not otherwise  terminate.  Any
such option shall remain  exercisable  for the fully vested  option shares until
the earlier of (i) the  expiration of the option term or (ii) the  expiration of
the one (1)-year  period  measured  from the effective  date of the  Involuntary
Termination. In addition, the Plan Administrator may provide that one or more of
the outstanding repurchase rights with respect to shares held by the Optionee at
the time of such  Involuntary  Termination  shall  immediately  terminate  on an
accelerated  basis,  and the shares  subject to those  terminated  rights  shall
accordingly vest.

                                       13
G. The portion of any  Incentive  Option  accelerated  in connection
with a Corporate  Transaction  shall remain  exercisable as an Incentive  Option
only to the extent the applicable One Hundred Thousand Dollar  limitation is not
exceeded.  To the extent such dollar  limitation  is exceeded,  the  accelerated
portion of such option shall be exercisable as a Non-Statutory  Option under the
Federal tax laws.

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

      IV.   CANCELLATION AND REGRANT OF OPTIONS

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

                                 ARTICLE THREE

                             STOCK ISSUANCE PROGRAM

      I.    STOCK ISSUANCE TERMS

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

            A. PURCHASE PRICE.

                  1. The  purchase  price per  share  shall be fixed by the Plan
Administrator  but shall not be less than eighty-five  percent (85%) of the Fair
Market Value per share of Common Stock on the issue date. However,  the purchase
price per share of Common  Stock issued to a 10%  Shareholder  shall not be less
than one hundred and ten percent (110%) of such Fair Market Value.

                  2.  Shares  of  Common  Stock  may be  issued  under the Stock
Issuance Program for any of the following items of consideration  which the Plan
Administrator may deem appropriate in each individual instance:

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

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

                                       14
(iii) a  promissory  note as  described in Section yI of
yArticle Four.

            B. VESTING PROVISIONS.

                  1.  Shares of Common  Stock  issued  under the Stock  Issuance
Program  may,  in the  discretion  of  the  Plan  Administrator,  be  fully  and
immediately  vested upon issuance or may vest in one or more  installments  over
the Participant's period of Service or upon attainment of specified  performance
objectives.  However,  the Plan  Administrator may not impose a vesting schedule
upon any stock issuance  effected under the Stock Issuance Program which is more
restrictive than twenty percent (20%) per year vesting,  with initial vesting to
occur not later than one (1) year after the issuance date.

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

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

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

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

                                       15
C. FIRST  REFUSAL  RIGHTS.  Until  such time as the Common  Stock is
first registered under Section 12(g) of the 1934 Act, the Corporation shall have
the right of first  refusal  with  respect to any  proposed  disposition  by the
Participant  (or any successor in interest) of any shares of Common Stock issued
under  the  Stock  Issuance  Program.  Such  right  of  first  refusal  shall be
exercisable in accordance with the terms  established by the Plan  Administrator
and set forth in the document evidencing such right.

      II.   CORPORATE TRANSACTION

            A. Upon the occurrence of a Corporate  Transaction,  all outstanding
repurchase   rights   under  the  Stock   Issuance   Program   shall   terminate
automatically, and the shares of Common Stock subject to those terminated rights
shall  immediately  vest in full,  except to the  extent:  (i) those  repurchase
rights  are  assigned  to the  successor  corporation  (or  parent  thereof)  in
connection with such Corporate  Transaction or (ii) such accelerated  vesting is
precluded by other limitations imposed by the Plan Administrator at the time the
repurchase right is issued.

            B. The Plan  Administrator  shall have the discretionary  authority,
exercisable  either at the time the unvested shares are issued or any time while
the  Corporation's  repurchase  rights  with  respect  to  those  shares  remain
outstanding,  to provide that those rights shall  automatically  terminate on an
accelerated  basis,  and the shares of Common Stock subject to those  terminated
rights shall  immediately  vest, in the event the  Participant's  Service should
subsequently  terminate  by  reason  of  an  Involuntary  Termination  within  a
designated  period (not to exceed eighteen (18) months)  following the effective
date of any Corporate  Transaction in which those repurchase rights are assigned
to the successor corporation (or parent thereof).

      III.  SHARE ESCROW/LEGENDS

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

                                  ARTICLE FOUR

                                  MISCELLANEOUS

I.       FINANCING

      The Plan  Administrator  may permit any Optionee or Participant to pay the
option  exercise  price or the purchase  price for shares  issued to such person
under the Plan by delivering a full-recourse,  interest-bearing  promissory note
payable  in one or  more  installments  and  secured  by the  purchased  shares.
However,  any  promissory  note  delivered  by a  consultant  must be secured by
property in addition to the purchased  shares of Common Stock. In no event shall
the maximum credit  available to the Optionee or  Participant  exceed the sum of
(i) the  aggregate  option  exercise  price or  purchase  price  payable for the
purchased  shares plus (ii) any federal,  state and local income and  employment
tax liability incurred by the Optionee or the Participant in connection with the
option exercise or share purchase.

                                       16
II.   EFFECTIVE DATE AND TERM OF PLAN

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

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

      III.  AMENDMENT OF THE PLAN

            A. The Board shall have complete and  exclusive  power and authority
to amend or modify the Plan in any or all respects.  However,  no such amendment
or modification  shall adversely  affect the rights and obligations with respect
to options or unvested stock  issuances at the time  outstanding  under the Plan
unless  the  Optionee  or  the   Participant   consents  to  such  amendment  or
modification.  In addition,  certain amendments may require shareholder approval
pursuant to applicable laws and regulations.

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

      IV.   USE OF PROCEEDS

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

                                       17
V.    WITHHOLDING

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

      VI.   REGULATORY APPROVALS

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

      VII.  NO EMPLOYMENT OR SERVICE RIGHTS

      Nothing in the Plan shall confer upon the Optionee or the  Participant any
right to continue in Service  for any period of specific  duration or  interfere
with or  otherwise  restrict  in any way the rights of the  Corporation  (or any
Parent or Subsidiary  employing or retaining  such person) or of the Optionee or
the  Participant,  which  rights  are  hereby  expressly  reserved  by each,  to
terminate  such  person's  Service at any time for any  reason,  with or without
cause.

      VIII. FINANCIAL REPORTS

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

                                       18
APPENDIX

            The following definitions shall be in effect under the Plan:

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

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

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

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

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

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

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

      F. DISABILITY  shall mean the inability of the Optionee or the Participant
to engage  in any  substantial  gainful  activity  by  reason  of any  medically
determinable  physical or mental  impairment and shall be determined by the Plan
Administrator  on the basis of such medical  evidence as the Plan  Administrator
deems warranted under the circumstances.

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

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

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

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

                                       19
(ii)  If  the  Common  Stock  is at the  time  listed  on any  Stock
      Exchange,  then the Fair Market Value shall be the closing  selling  price
      per share of Common  Stock on the date in question  on the Stock  Exchange
      determined  by the Plan  Administrator  to be the  primary  market for the
      Common Stock, as such price is officially  quoted in the composite tape of
      transactions  on such exchange.  If there is no closing  selling price for
      the Common Stock on the date in question, then the Fair Market Value shall
      be the closing  selling  price on the last  preceding  date for which such
      quotation exists.

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

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

      K.  INVOLUNTARY  TERMINATION  shall mean the termination of the Service of
any individual which occurs by reason of:

            (i) such  individual's  involuntary  dismissal  or  discharge by the
      Corporation for reasons other than Misconduct, or

            (ii) such individual's  voluntary resignation following (A) a change
      in his or her position with the Corporation  which materially  reduces his
      or her level of  responsibility,  (B) a  reduction  in his or her level of
      compensation  (including  base salary,  fringe benefits and target bonuses
      under any corporate-performance based bonus or incentive programs) by more
      than fifteen percent (15%) or (C) a relocation of such individual's  place
      of  employment  by more than fifty (50) miles,  provided  and only if such
      change,  reduction  or  relocation  is effected  without the  individual's
      consent.

      L. MISCONDUCT shall mean the commission of any act of fraud,  embezzlement
or dishonesty by the Optionee or Participant, any unauthorized use or disclosure
by such person of  confidential  information or trade secrets of the Corporation
(or any  Parent or  Subsidiary),  or any other  intentional  misconduct  by such
person  adversely  affecting the business or affairs of the  Corporation (or any
Parent or Subsidiary) in a material manner.  The foregoing  definition shall not
be deemed to be inclusive of all the acts or omissions which the Corporation (or
any Parent or Subsidiary) may consider as grounds for the dismissal or discharge
of any Optionee,  Participant or other person in the Service of the  Corporation
(or any Parent or Subsidiary).

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

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

      O. OPTION  GRANT  PROGRAM  shall mean the option  grant  program in effect
under the Plan.

                                       20
P.  OPTIONEE  shall mean any person to whom an option is granted under the
Plan.

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

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

      S. PLAN shall mean the Corporation's 2004 Incentive Stock Option Plan.

      T. PLAN ADMINISTRATOR  shall mean either the Board or the Committee acting
in its capacity as administrator of the Plan.

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

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

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

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

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

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

                                       21