2002 STOCK OPTION PLAN





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                                TABLE OF CONTENTS



                                                                     Page

                                                                     ----

Section 1.  Purpose................................................    1

Section 2.  Definition.............................................    1

Section 3.  Administration.........................................    3

Section 4.  Shares Subject to the Plan.............................    4

Section 5.  Eligibility............................................    5

Section 6.  Stock Options..........................................    5

Section 7.  Stock Appreciation Rights..............................    8

Section 8.  Restricted Stock.......................................   10

Section 9.  Performance Awards.....................................   10

Section 10. Other Stock Unit Awards................................   11

Section 11. Termination of Awards..................................   11

Section 12. Transferability of Awards..............................   13

Section 13. Change in Control......................................   13

Section 14. Amendments and Termination.............................   15

Section 15. General Provisions.....................................   15

Section 16. Term of Plan...........................................   17





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                                  SALTON, INC.

                             2002 STOCK OPTION PLAN



     THE PLAN. Salton, Inc., a Delaware corporation (the "Company"), hereby

establishes the Salton, Inc. 2002 Stock Option Plan (the "Plan"), effective as

of the Effective Date.



     SECTION 1. PURPOSE. The purposes of the Plan are to encourage employees of

the Company and its Affiliates to acquire an ownership interest in the growth

and performance of the Company and to increase their incentive to contribute to

the Company's future success, thus enhancing the value of the Company for the

benefit of stockholders, and enhancing the ability of the Company and its

Affiliates to attract and retain individuals upon whom, in large measure, the

progress, growth and profitability of the Company depends.



     SECTION 2. DEFINITIONS. The following terms have the meanings set forth

below:



     "Affiliate" means any Person that directly, or through one or more

intermediaries, controls, or is controlled by, or is under common control with,

the Company.



     "Award" means any Option, SAR, Restricted Stock Award, Performance Share,

Performance Unit or Other Stock Unit Award.



     "Award Agreement" means the written agreement or instrument by which every

Award is evidenced.



     "Board" means the Board of Directors of the Company.



     "Code" means the Internal Revenue Code of 1986, as amended from time to

time. References to a specific section of the Code shall also refer to any

successor provision, and any regulations promulgated under such section or

successor provision.



     "Committee" means the Stock Option Committee of the Board.



     "Company" means Salton, Inc.



     "Effective Date" means October 29, 2001, the date this Plan is adopted by

the Board; provided, however, that if the Plan is not approved by a majority of

the stockholders present and voting at an annual meeting of the stockholders of

the Company on or before January 15, 2002, this Plan shall not be effective and

this Plan and any Award theretofore made under this Plan shall be void.



     "Employee" means any employee of the Company or of any Affiliate.



     "Exchange Act" means the Securities Exchange Act of 1934.



     "Fair Market Value" means, with respect to a Share, (i) the closing price

of the Shares on the NYSE or any other national stock exchange on which the

Shares are then traded, or if no such reported sale of Shares shall have

occurred on such date, on the next preceding date on which there was such a

reported sale; or (ii) if the Shares are not listed for trading on a national

securities exchange or authorized for quotation on the NYSE, the average of the

closing bid and



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asked prices as reported by the NYSE or, if no such prices shall have been

reported for such date, on the next preceding date for which such prices were so

reported.



     "Incentive Stock Option" means an Option granted pursuant to Section 6(h)

that is intended to meet the requirements of Section 422 of the Code.



     "including" means including without limitation.



     "Limited Right" means an SAR which is exercisable only for a limited period

after a Change in Control as provided in Section 7(f).



     "Mature Shares" means Shares to which the holder thereof has good title,

free and clear of all liens and encumbrances, and which such holder either (i)

has held for at least six months or (ii) has purchased on the open market.



     "Nonstatutory Stock Option" means an Option granted to a Participant

pursuant to Section 6 that is not intended to be an Incentive Stock Option.



     "NYSE" means the New York Stock Exchange.



     "Option" means any right granted to a Participant under the Plan allowing

such Participant to purchase Shares at such price or prices and during such

period or periods as the Committee shall determine.



     "Optionee" means any Participant to whom an Option has been granted under

the Plan.



     "Option Price" means the per share purchase price of Shares subject to an

Option.



     "Other Stock Unit Award" means any right granted to a Participant by the

Committee pursuant to Section 10.



     "Participant" means an Employee who is selected by the Committee to receive

an Award under the Plan.



     "Performance Award" means any Award of Performance Shares or Performance

Units pursuant to Section 9.



     "Performance Period" means that period established by the Committee at the

time any Performance Award is granted or at any time thereafter during which any

performance goals specified by the Committee with respect to such Award are to

be measured.



     "Performance Share" means any grant pursuant to Section 9 of a unit valued

by reference to a designated number of Shares, which value may be paid to the

Participant by delivery of such property as the Committee shall determine,

including cash, Shares, or any combination thereof, upon achievement of such

performance goals during the Performance Period as the Committee shall establish

at the time of such grant or thereafter.



     "Performance Unit" means any grant pursuant to Section 9 of a unit valued

by reference to a designated amount of property other than Shares, which value

may be paid to the Participant by delivery of such property as the Committee

shall determine, including cash, Shares, or any



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combination thereof, upon achievement of such performance goals during the

Performance Period as the Committee shall establish at the time of such grant or

thereafter.



     "Permitted Transferee" means, in respect of any Participant, any member of

the Immediate Family of such Participant, any trust of which all of the primary

beneficiaries are such Participant or members of his or her Immediate Family, or

any partnership of which all of the partners are such Participant or members of

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