Exhibit 10.10

GREATER BAY BANCORP 1996 STOCK OPTION PLAN, AS AMENDED

As of December 19, 2006

1. PURPOSE.

The purpose of the Plan is to offer selected employees, directors and
consultants an opportunity to acquire a proprietary interest in the success of
the Company, or to increase such interest, by purchasing Shares of the Company’s
Common Stock. The Plan provides for the grant of Nonstatutory Options, ISOs
intended to qualify under Section 422 of the Code, and the grant of Restricted
Stock Awards.

2. DEFINITIONS.

(a) “Board of Directors” shall mean the Board of Directors of the Company, as
constituted from time to time.

(b) “Change in Control” shall mean the occurrence of either of the following
events:

(i) A change in the composition of the Board of Directors, as a result of which
fewer than one-half of the incumbent directors are directors who either:

(A) Had been directors of the Company 24 months prior to such change; or

(B) Were elected, or nominated for election, to the Board of Directors 24 months
prior to such change and who were still in office at the time of the election or
nomination;

(ii) Any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) by the acquisition or aggregation of securities is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing 40 percent or more of the combined voting power of the Company’s
then outstanding securities. For purposes of this Paragraph (ii), the term
“person” shall not include an employee benefit plan maintained by the Company;

(iii) The effective date of any merger, consolidation or other reorganization of
the Company, other than a merger, consolidation or other reorganization of the
Company in which the holders of the voting capital stock of the Company
immediately prior to the merger, consolidation or other reorganization hold more
that 40 percent of the voting capital stock of the surviving entity or its
parent immediately after the consolidation, merger or other reorganization;

(iv) The shareholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company; or

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(v) The shareholders of the Company approve the sale or transfer of
substantially all of the Company’s assets to parties that are not within a
“controlled group of corporations” (as that term is defined in section 1563 of
the Code) in which the Company is a member.

(c) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(d) “Committee” shall mean a committee of the Board of Directors, as described
in Section 3(a), or in the absence of such a committee, the Board of Directors.

(e) “Company” shall mean Greater Bay Bancorp, a California corporation, formerly
known as Mid-Peninsula Bancorp, a California corporation.

(f) “Employee” shall mean:

(i) Any individual who is a common-law employee of the Company or of a
Subsidiary;

(ii) A member of the Board of Directors; and

(iii) An independent contractor who performs services for the Company or a
Subsidiary and who is not a member of the Board of Directors.

Service as an independent contractor or member of the Board of Directors shall
be considered employment for all purposes of the Plan, except as provided in
Section 4(a).

(g) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

(h) “Exercise Price” shall mean the amount for which one Share may be purchased
upon exercise of an Option, as specified by the Committee in the applicable
Stock Option Agreement.

(i) “Fair Market Value” shall mean the market price of Stock, determined by the
Committee as follows:

(i) If Stock was traded over-the-counter on the date in question but was not
traded on the Nasdaq system or the Nasdaq National Market System, then the Fair
Market Value shall be equal to the mean between the last reported representative
bid and asked prices quoted for such date by the principal automated
inter-dealer quotation system on which Stock is quoted or, if Stock is not
quoted on any such system, by the “Pink Sheets” published by the National
Quotation Bureau, Inc.;

(ii) If Stock was traded over-the-counter on the date in question and was traded
on the Nasdaq system or the Nasdaq National Market System, then the Fair Market
Value shall be equal to the last-transaction price quoted for such date by the
Nasdaq system or the Nasdaq National Market System;

 

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(iii) If Stock was traded on a stock exchange on the date in question, then the
Fair Market Value shall be equal to the closing price reported by the applicable
composite transactions report for such date; and

(iv) If none of the foregoing provisions is applicable, then the Fair Market
Value shall be determined by the Committee in good faith on such basis as it
deems appropriate.

In all cases, the determination of Fair Market Value by the Committee shall be
conclusive and binding on all persons.

(j) “Grantee” means an individual who holds a Restricted Stock Award.

(k) “ISO” shall mean an employee incentive stock option described in
Section 422(b) of the Code.

(l) “Nonstatutory Option” shall mean a stock option not described in Sections
422(b) or 423(b) of the Code.

(m) “Option” shall mean an ISO or Nonstatutory Option granted under the Plan and
entitling the holder to purchase Shares.

(n) “Optionee” shall mean an individual who holds an Option.

(o) “Plan” shall mean this Greater Bay Bancorp 1996 Stock Option Plan, as it may
be amended from time to time.

(p) “Restricted Stock” means shares of Common Stock issued or issuable pursuant
to a grant of Restricted Stock Award.

(q) “Restricted Stock Award” means the right to earn Restricted Stock under the
Plan.

(r) “Restricted Stock Award Agreement” means a written agreement between the
Company and the Grantee which contains the terms, conditions and restrictions
pertaining to his or her Restricted Stock Award.

(s) “Restrictions” shall mean (a) the restrictions on sale or other transfer
(b) the exposure to forfeiture set forth in Section 4 of the Restricted Award
Agreement and/or (c) the restrictions relating to performance, if any, set forth
on Appendix A of the Restricted Stock Award Agreement.

(t) “Retirement” shall have the same meaning as “Retirement,” as defined in the
Greater Bay Bancorp 401(k) Profit Sharing Plan.

(u) “Service” shall mean service as an Employee.

(v) “Share” shall mean one share of Stock, as adjusted in accordance with
Section 9 (if applicable).

 

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(w) “Stock” shall mean the Common Stock of the Company.

(x) “Stock Option Agreement” shall mean the agreement between the Company and an
Optionee which contains the terms, conditions and restrictions pertaining to his
or her Option.

(y) “Subsidiary” shall mean any corporation, if the Company and/or one or more
other Subsidiaries own not less than 50 percent of the total combined voting
power of all classes of outstanding stock of such corporation. A corporation
that attains the status of a Subsidiary on a date after the adoption of the Plan
shall be considered a Subsidiary commencing as of such date.

(z) “Substitute Option” shall mean an option described in Section 6(j).

(aa) “Substitute Restricted Stock Award” shall mean a restricted stock award
described in Section 7(m).

(bb) “Total and Permanent Disability” shall mean that the Optionee or Grantee is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted, or can be expected to last, for a continuous period
of not less than one year.

3. ADMINISTRATION.

(a) Committee Membership. The Board of Directors shall have the authority to
administer the Plan but may delegate its administrative powers under the Plan,
in whole or in part, to one or more committees of the Board of Directors. With
respect to the participation of Employees who are subject to Section 16 of the
Exchange Act, the Plan may be administered by a committee composed solely of two
or more members of the Board of Directors who qualify as “nonemployee directors”
as defined in Securities and Exchange Commission Rule 16b-3 under the Exchange
Act. The Plan may be administered by a committee composed solely of two or more
members of the Board of Directors who qualify as “outside directors” as defined
by the Internal Revenue Service for awards intended to qualify for an exemption
under Section 162(m)(4)(C) of the Code.

(b) Committee Procedures. The Board of Directors shall designate one of the
members of any Committee appointed under paragraph (a) as chairman. Any such
Committee may hold meetings at such times and places as it shall determine. The
acts of a majority of the Committee members present at meetings at which a
quorum exists, or acts reduced to or approved in writing by all Committee
members, shall be valid acts of the Committee.

(c) Committee Responsibilities. Subject to the provisions of the Plan, any such
Committee shall have full authority and discretion to take the following
actions:

(i) To interpret the Plan and to apply its provisions;

(ii) To adopt, amend or rescind rules, procedures and forms relating to the
Plan;

 

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(iii) To authorize any person to execute, on behalf of the Company, any
instrument (including, but not limited to, Stock Option Agreements and
Restricted Stock Award Agreements) required to carry out the purposes of the
Plan;

(iv) To determine when Options and Restricted Stock Awards are to be granted
under the Plan;

(v) To select the Optionees and Grantees;

(vi) To determine the number of Shares to be made subject to each Option and
Restricted Stock Award;

(vii) To prescribe the terms and conditions of each Option, including (without
limitation) the Exercise Price, to determine whether such Option is to be
classified as an ISO or as a Nonstatutory Option, and to specify the provisions
of the Stock Option Agreement relating to such Option;

(viii) To prescribe the terms and conditions of each Restricted Stock Award,
including (without limitation) Restrictions (if any), and to specify the
provisions of the Restricted Stock Award Agreement relating to such Restricted
Stock Award;

(ix) To amend any outstanding Stock Option Agreement and Restricted Stock Award
Agreement, subject to applicable legal restrictions and to the consent of the
Optionee or Grantee who entered into such agreement;

(x) To prescribe the consideration for the grant of each Option and Restricted
Stock Award under the Plan and to determine the sufficiency of such
consideration; and

(xi) To take any other actions deemed necessary or advisable for the
administration of the Plan.

All decisions, interpretations and other actions of the Committee shall be final
and binding on all Optionees and Grantees, and all persons deriving their rights
from an Optionee or Grantee. No member of the Committee shall be liable for any
action that he or she has taken or has failed to take in good faith with respect
to the Plan or any Option or Restricted Stock Award.

4. ELIGIBILITY.

(a) General Rules. Only Employees shall be eligible for designation as Optionees
or Grantees by the Committee. In addition, only Employees who are common-law
employees of the Company or a Subsidiary shall be eligible for the grant of
ISOs.

(b) Ten-Percent Stockholders. An Employee who owns more than 10 percent of the
total combined voting power of all classes of outstanding stock of the Company
or any of its Subsidiaries shall not be eligible for the grant of an ISO unless:

(i) The Exercise Price is at least 110 percent of the Fair Market Value of a
Share on the date of grant; and

 

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(ii) Such ISO by its terms is not exercisable after the expiration of five years
from the date of grant.

(c) Attribution Rules. For purposes of Subsection (b) above, in determining
stock ownership, the rules of Section 424(d) of the Code shall apply.

(d) Outstanding Stock. For purposes of Subsection (b) above, “outstanding stock”
shall include all stock actually issued and outstanding immediately after the
grant. “Outstanding stock” shall not include shares authorized for issuance
under outstanding options held by the Employee or by any other person.

5. STOCK SUBJECT TO PLAN.

(a) Basic Limitation. Shares reserved for issuance pursuant to the exercise of
Options and Restricted Stock Awards granted under the Plan shall be authorized
but unissued Shares. The aggregate number of Shares which may be issued pursuant
to the exercise of Options and Restricted Stock Awards granted under the Plan
shall be 20,204,312 all of which may be issued pursuant to the exercise of ISOs,
Nonstatutory Options or Restricted Stock Awards granted under the Plan. The
number of Shares which are subject to Options or Restricted Stock Awards
outstanding at any time under the Plan shall not exceed the number of Shares
which then remain available for issuance under the Plan. The Company, during the
term of the Plan, shall at all times reserve and keep available sufficient
Shares to satisfy the requirements of the Plan.

(b) Additional Shares. In the event that any outstanding option granted under
this Plan, including Substitute Options, or the Prior Plan, for any reason
expires or is canceled or otherwise terminated, the Shares allocable to the
unexercised portion of such option shall become available for the purposes of
this Plan. In the event that any outstanding Restricted Stock Award granted
under this Plan, including Substitute Restricted Stock Awards, for any reason
expires or is canceled, forfeited or otherwise terminated, the Shares allocable
to the unearned portion of such Restricted Stock Award shall become available
for the purposes of this Plan.

6. TERMS AND CONDITIONS OF OPTIONS.

(a) Stock Option Agreement. Each grant of an Option under the Plan shall be
evidenced by a Stock Option Agreement executed by the Optionee and the Company.
Such Option shall be subject to all applicable terms and conditions of the Plan
and may be subject to any other terms and conditions which are not inconsistent
with the Plan and which the Committee deems appropriate for inclusion in a Stock
Option Agreement. The provisions of the various Stock Option Agreements entered
into under the Plan need not be identical.

(b) Number of Shares. Each Stock Option Agreement shall specify the number of
Shares that are subject to the Option and shall provide for the adjustment of
such number in accordance with Section 9. Options granted to any Optionee in a
single calendar year shall in no event cover more than 120,000 Shares, subject
to adjustment in accordance with Section 9. The Stock Option Agreement shall
also specify whether the Option is an ISO or a Nonstatutory Option.

 

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(c) Exercise Price. Each Stock Option Agreement shall specify the Exercise
Price. The Exercise Price of an Option shall not be less than 100 percent of the
Fair Market Value of a Share on the date of grant, except as otherwise provided
in Section 4(b) with respect to ISO’s and Section 6(i) with respect to
Substitute Options. The Exercise Price shall be payable in a form described in
Section 8.

(d) Withholding Taxes. As a condition to the exercise of an Option, the Optionee
shall make such arrangements as the Committee may require for the satisfaction
of any federal, state, local or foreign withholding tax obligations that arise
in connection with such exercise. The Optionee shall also make such arrangements
as the Committee may require for the satisfaction of any federal, state, local
or foreign withholding tax obligations that may arise in connection with the
disposition of Shares acquired by exercising an Option. The Committee may permit
the Optionee to satisfy all or part of his or her tax obligations related to the
Option by having the Company withhold a portion of any Shares that otherwise
would be issued to him or her or by surrendering any Shares that previously were
acquired by him or her. Such Shares shall be valued at their Fair Market Value
on the date when taxes otherwise would be withheld in cash. The payment of taxes
by assigning Shares to the Company, if permitted by the Committee, shall be
subject to such restrictions as the Committee may impose.

(e) Exercisability. Each Stock Option Agreement shall specify the date when all
or any installment of the Option is to become exercisable. The vesting of any
Option shall be determined by the Committee at its sole discretion; provided
however, that:

(i) Each Stock Option Agreement shall provide for immediate exercisability of
the entire Option in the event of a Change in Control. In addition, each Stock
Option Agreement shall provide that during the 15 day period prior to the
effective date of a merger, consolidation or other reorganization which would
constitute a Change in Control, each holder of an Option shall have the right,
subject to earlier expiration or termination of the Option in accordance with
its terms, to exercise the entire Option which exercise shall be deemed
effective immediately prior to the effective date of such merger, consolidation
or other reorganization and be subject to the occurrence of such effective date.

(ii) In the event that an Optionee’s Service terminates, the Option shall be
exercisable only to the extent the Option was vested as of the date of such
termination, unless otherwise specified in the Optionee’s Stock Option
Agreement.

(f) Term. Each Stock Option Agreement shall specify the term of the Option. The
term of an ISO shall not exceed 10 years from the date of grant, except as
otherwise provided in Section 4(b). Subject to the preceding sentence, the
Committee at its sole discretion shall determine when an Option is to expire. In
the event that the Optionee’s Service terminates:

(i) As a result of such Optionee’s death or Total and Permanent Disability, the
term of the Option shall expire twelve months (or such other period specified in
the Optionee’s Stock Option Agreement) after such death or Total and Permanent
Disability but not later than the original expiration date specified in the
Stock Option Agreement.

 

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(ii) As a result of termination by the Company for cause, the term of the Option
shall expire thirty days after the Company’s notice or advice of such
termination is dispatched to Employee, but not later than the original
expiration date specified in the Stock Option Agreement. For purposes of this
Paragraph (ii), “cause” shall mean an act of embezzlement, disclosure of any of
the secrets or confidential information of the Company, the inducement of any
client or customer of the Company to break any contract with the Company, or the
inducement of any principal for whom the Company acts as agent to terminate such
agency relationship, the engagement of any conduct which constitutes unfair
competition with the Company, the removal of Optionee from office by any court
or bank regulatory agency, or such other similar acts which the Committee in its
discretion determine to constitute good cause for termination of Optionee’s
Service. As used in this Paragraph (ii), Company includes Subsidiaries of the
Company.

(iii) As a result of termination for any reason other than Total and Permanent
Disability, death or cause, the term of the Option shall expire three months (or
such other period specified in the Optionee’s Stock Option Agreement) after such
termination, but not later than the original expiration date specified in the
Stock Option Agreement.

(g) Transferability. During an Optionee’s lifetime, such Optionee’s ISO(s) shall
be exercisable only by him or her and shall not be transferable. An Optionee’s
Nonstatutory Options shall also not be transferable during the Optionee’s
lifetime, except to the extent otherwise permitted in the Optionee’s Stock
Option Agreement. Subject to prior permitted transfers, in the event of an
Optionee’s death, such Optionee’s Option(s) shall not be transferable other than
by will, by written beneficiary designation or by the laws of descent and
distribution.

(h) No Rights as a Stockholder. An Optionee, or a transferee of an Optionee,
shall have no rights as a stockholder with respect to any Shares covered by his
or her Option until the date of the issuance of a stock certificate for such
Shares. No adjustments shall be made, except as provided in Section 9.

(i) Modification, Extension and Renewal of Options. Within the limitations of
the Plan, the Committee may modify, extend or renew outstanding Options;
provided, however, that in no event shall the Committee reduce the exercise
price of any outstanding options or replace any outstanding options with new
options having a lower exercise price for any reason (“repricing”), without the
approval of the Company’s shareholders. The foregoing notwithstanding, no
modification of an Option shall, without the consent of the Optionee, impair
such Optionee’s rights or increase his or her obligations under such Option.

(j) Substitute Options. If the Company at any time should succeed to the
business of another corporation through merger or consolidation, or through the
acquisition of stock or assets of such corporation, Options may be granted under
the Plan in substitution of options previously granted by such corporation to
purchase shares of its stock which options are outstanding at the date of the
succession (“Surrendered Options”). It is specifically intended that this
section of the Plan shall authorize the granting and issuance of Substitute
Options pursuant to the terms of: (i) the Amended and Restated Agreement and
Plan of Reorganization by and between Mid-Peninsula Bancorp and Cupertino
National Bancorp dated June 26, 1996 and (ii) the Agreement and Plan of
Reorganization by and among the Company, GBB Acquisition Corp., and Peninsula

 

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Bank of Commerce dated November 3, 1997. The Committee shall have discretion to
determine the extent to which such Substitute Options shall be granted, the
persons to receive such Substitute Options, the number of Shares to be subject
to such Substitute Options, and the terms and conditions of such Substitute
Options which shall, to the extent permissible within the terms and conditions
of the Plan, be equivalent to the terms and conditions of the Surrendered
Options. The Exercise Price may be determined without regard to Section 6(c);
provided however, that the Exercise Price of each Substitute Option shall be an
amount such that, in the sole and absolute judgment of the Committee (and if the
Substitute Options are to be ISO’s, in compliance with Section 424(a) of the
Code), the economic benefit provided by such Substitute Option is not greater
than the economic benefit represented by the Surrendered Option as of the date
of the succession.

7. TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS.

(a) Restricted Stock Award Agreement. Each grant of a Restricted Stock Award
under the Plan shall be evidenced by a Restricted Stock Award Agreement executed
by the Grantee and the Company. Such Restricted Stock Award shall be subject to
all applicable terms and conditions of the Plan and may be subject to any other
terms and conditions, including any Restrictions, which are not inconsistent
with the Plan and which the Committee deems appropriate for inclusion in a
Restricted Stock Award Agreement. The Restricted Stock Award Agreement shall
specify the purchase price (if any) for the Restricted Stock. The provisions of
the various Restricted Stock Award Agreements entered into under the Plan need
not be identical.

(b) Number of Shares. Each Restricted Stock Award Agreement shall specify the
number of Shares that are subject to the Restricted Stock Award and shall
provide for the adjustment of such number in accordance with Section 9.

(c) Withholding Taxes. As a condition to the lapse of any Restrictions to the
Restricted Stock Award, the Grantee shall make such arrangements as the
Committee may require for the satisfaction of any federal, state, local or
foreign withholding tax obligations that arise in connection with such lapse.
The Committee may permit the Grantee to satisfy all or part of his or her tax
obligations related to the Restricted Stock Award by having the Company withhold
a portion of any Shares that otherwise would be issued to him or her or by
surrendering any Shares that previously were acquired by him or her. Such Shares
shall be valued at their Fair Market Value on the date when taxes otherwise
would be withheld in cash. The payment of taxes by assigning Shares to the
Company, if permitted by the Committee, shall be subject to such restrictions as
the Committee may impose.

(d) Restrictions. Each Restricted Stock Award Agreement shall specify any
Restrictions on the Restricted Stock Award. Each Restricted Stock Award
Agreement shall specify the date(s) when all or any Restrictions to the
Restricted Stock Award shall lapse or the Restrictions (if any) relating to
performance satisfaction of which shall cause such Restrictions to lapse. The
lapse of any Restrictions shall be determined by the Committee in its sole
discretion, provided, however, that each Restricted Stock Award Agreement shall
provide that all Restrictions shall lapse upon a Change in Control.

 

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(e) Escrow of Restricted Stock. Until all Restrictions have expired or been
removed, the Secretary or such other escrow holder as the Board of Directors may
appoint shall retain custody of the stock certificates representing the
Restricted Stock subject to the Award; provided, however, that in no event shall
the Grantee retain physical custody of any certificates representing shares of
Restricted Stock awarded to him or her.

(f) Termination of Service and Forfeiture of Restricted Stock. Each Restricted
Stock Award Agreement shall specify the term of the Restricted Stock Award.
Subject to the preceding sentence, the Committee at its sole discretion shall
determine when a Restricted Stock Award is to expire. In the event that the
Grantee’s Service terminates:

(i) As a result of such Grantee’s death or Total and Permanent Disability, or in
the event of Grantee’s Retirement, the term of the Restricted Stock Award shall
expire and any Restrictions on the Restricted Stock Awards immediately shall
lapse upon such death, Total and Permanent Disability or Retirement but not
later than the original expiration date specified in the Restricted Stock Award
Agreement.

(ii) As a result of termination by the Company for cause, or any other event
resulting in the termination of Grantee’s Service not specified in
Section 7(f)(i) above, the term of the Restricted Stock Award shall expire
thirty days after the Company’s notice or advice of such termination is
dispatched to Employee, but not later than the original expiration date
specified in the Restricted Stock Award Agreement. In the event that a Grantee’s
Service terminates for cause, or any other event resulting in the termination of
Grantee’s service not specified in Section 7(f)(i) above, the Shares subject to
the Restricted Stock Award shall be earned only to the extent the such Shares
were earned as of the date of such termination, unless otherwise specified in
the Grantee’s Restricted Stock Award Agreement. In such event, the Grantee shall
forfeit the right to earn any Restricted Stock subject to the Restricted Stock
Award as to which vesting has not yet occurred, and the Restricted Stock so
forfeited shall be returned to the Company.

For purposes of this Paragraph (ii), “cause” shall mean an act of embezzlement,
disclosure of any of the secrets or confidential information of the Company, the
inducement of any client or customer of the Company to break any contract with
the Company, or the inducement of any principal for whom the Company acts as
agent to terminate such agency relationship, the engagement of any conduct which
constitutes unfair competition with the Company, the removal of Grantee from
office by any court or bank regulatory agency, or such other similar acts which
the Committee in its discretion determine to constitute good cause for
termination of Grantee’s Service. As used in this Paragraph (ii), Company
includes Subsidiaries of the Company.

(g) No Fractional Shares. In determining the number of shares of Restricted
Stock which are earned, fractional shares shall be rounded down to the nearest
whole number, provided that such fractional shares shall be aggregated and
earned at such time as all Restrictions lapse or expire.

 

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(h) Timing of Distributions: General Rule. Except as provided in Subsection
(i) below, certificates representing Restricted Stock shall be distributed to
the Grantee as soon as practicable after all Restrictions have lapsed or
expired.

(i) Conditions to Issuance of Certificates. The Company shall not be required to
issue or deliver any certificate or certificates for shares of stock pursuant to
this Agreement prior to fulfillment of all of the following conditions:

(i) The listing of such shares on all stock exchanges on which such class of
stock is then listed;

(ii) The registration or qualification of such shares under any federal or state
securities laws or under rulings or regulations of the Securities and Exchange
Commission or of any other governmental regulatory body, which the Board of
Directors shall, in its sole and absolute discretion, deem necessary or
advisable;

(iii) The obtaining of any approval or other clearance from any state or federal
governmental agency which the Board of Directors shall, in its sole and absolute
discretion, determine to be necessary or advisable;

(iv) The lapse of such reasonable period of time as the Board of Directors may
from time to time establish for reasons of administrative convenience;

(v) The receipt by the Company of full payment for any applicable withholding
tax.

(j) Transferability. A Grantee’s Restricted Stock Award shall not be
transferable during the Grantee’s lifetime, except to the extent otherwise
permitted in the Grantee’s Restricted Stock Award Agreement. Subject to prior
permitted transfers, in the event of a Grantee’s death, such Grantee’s
Restricted Stock Award(s) shall not be transferable other than by will, by
written beneficiary designation or by the laws of descent and distribution.

(k) Rights as Stockholder. Upon the delivery of Restricted Stock to the escrow
holder pursuant to the Restricted Stock Award Agreement, the Grantee shall have
all the rights of a stockholder of the Company with respect to the Restricted
Stock, subject to the Restrictions and the Restricted Stock Agreement, including
the right to vote the Restricted Stock and the right to receive all dividends or
other distributions paid or made with respect to the Restricted Stock; provided,
however, that any additional Shares of Restricted Stock to which Grantee shall
be entitled as a result of stock dividends, stock splits or any other form of
recapitalization in respect of Shares of Restricted Stock subject to
Restrictions shall also be subject to the Restrictions until the Restrictions on
the underlying shares of Restricted Stock lapse or expire.

(l) Modification, Extension and Renewal of Options. Within the limitations of
the Plan, the Committee may modify, extend or renew outstanding Restricted Stock
Awards or may accept the cancellation of outstanding Restricted Stock Awards (to
the extent not previously earned) in return for the grant of new Restricted
Stock Awards at the same or a different price. The foregoing notwithstanding, no
modification of a Restricted Stock Award shall, without the consent of the
Grantee, impair such Grantee’s rights or increase his or her obligations under
such Restricted Stock Award.

 

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(m) Substitute Restricted Stock Award. If the Company at any time should succeed
to the business of another corporation through merger or consolidation, or
through the acquisition of stock or assets of such corporation, Restricted Stock
Awards may be granted under the Plan in substitution of restricted stock awards
previously granted by such corporation with respect to shares of its stock which
restricted stock awards are outstanding at the date of the succession
(“Surrendered Restricted Stock Awards”). The Committee shall have discretion to
determine the extent to which such Substitute Restricted Stock Awards shall be
granted, the persons to receive such Substitute Restricted Stock Awards, the
number of Shares to be subject to such Restricted Stock Awards, and the terms,
conditions and restrictions of such Substitute Restricted Stock Awards which
shall, to the extent permissible within the terms and conditions of the Plan, be
equivalent to the terms, conditions and restrictions of the Surrendered
Restricted Stock Awards. The Restrictions may be determined in the sole
discretion of the Committee; provided however, that the Restrictions of each
Substitute Restricted Stock Award shall be equivalent to the Restrictions
represented by the Surrendered Restricted Stock Award as of the date of the
succession.

8. PAYMENT FOR SHARES.

(a) General Rule. The entire consideration for Shares issued under the Plan
shall be payable in lawful money of the United States of America at the time
when such Shares are purchased, except as follows:

(i) ISOs. In the case of an ISO granted under the Plan, payment shall be made
only pursuant to the express provisions of the applicable Stock Option
Agreement. However, the Committee (at its sole discretion) may specify in the
Stock Option Agreement that payment may be made pursuant to Subsections (b),
(c) or (d) below.

(ii) Nonstatutory Options. In the case of a Nonstatutory Option granted under
the Plan, the Committee (at its sole discretion) may accept payment pursuant to
Subsections (b), (c), or (d) below.

(iii) Restricted Stock Awards. In the case of a Restricted Stock Award granted
under the Plan, payment (if any) shall be made only pursuant to the express
provisions of the applicable Restricted Stock Award Agreement.

(b) Surrender of Stock. To the extent that this Subsection (b) is applicable,
payment may be made all or in part with Shares which have already been owned by
the Optionee or Grantee or his or her representative for more than 6 months and
which are surrendered to the Company in good form for transfer. Such Shares
shall be valued at their Fair Market Value on the date when the new Shares are
purchased under the Plan.

(c) Exercise/Sale. To the extent that this Subsection (c) is applicable, payment
may be made by the delivery (on a form prescribed by the Company) of an
irrevocable direction to a securities broker approved by the Company to sell
Shares and to deliver all or part of the sales

 

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proceeds to the Company in payment of all or part of the Exercise Price of the
Option, or the consideration for the Restricted Stock Award, whichever the case
may be, and any withholding taxes.

(d) Exercise/Pledge. To the extent that this Subsection (d) is applicable,
payment may be made by the delivery (on a form prescribed by the Company) of an
irrevocable direction to pledge Shares to a securities broker or lender approved
by the Company, as security for a loan, and to deliver all or part of the loan
proceeds to the Company in payment of all or part of the Exercise Price of the
Option, or the consideration for the Restricted Stock Award, whichever the case
may be, and any withholding taxes.

9. ADJUSTMENT OF SHARES.

(a) General. In the event of a subdivision of the outstanding Stock, a
declaration of a dividend payable in Shares, a declaration of a dividend payable
in a form other than Shares in an amount that has a material effect on the value
of Shares, a combination or consolidation of the outstanding Stock (by
reclassification or otherwise) into a lesser number of Shares, a
recapitalization, a spinoff or a similar occurrence, proportionate adjustments
shall be made to each of the following, in all cases without the consent of any
Optionee or Grantee:

(i) The number of Shares available under Section 5 for future grants;

(ii) The limit set forth in Section 6(b) and Section 7(b);

(iii) The number of Shares covered by each outstanding Option and consideration
for each outstanding Restricted Stock Award; or

(iv) The Exercise Price under each outstanding Option and Restricted Stock
Award.

(b) Reorganizations. In the event that the Company is a party to a merger,
consolidation or other reorganization which would constitute a Change in
Control, such agreement may provide, subject to the provisions of
Section 6(e)(i) and the proviso of Section 7(d) (which provide for the immediate
acceleration of the vesting and exercisability of all shares subject to
outstanding Options and the immediate lapse of all restrictions on Restricted
Stock Awards), (i) for the assumption of outstanding Options and Restricted
Stock Awards by the surviving corporation or its parent, for their continuation
by the Company (if the Company is a surviving corporation), or (ii) for
cancellation of the Options or Restricted Stock Awards upon payment of a cash
settlement per Option or Restricted Stock Award equal to the difference between
the amount to be paid for one Share under such agreement and the then-current
Fair Market Value of such Share on an unrestricted basis, or (iii) in the event
the agreement does not provide for either of the events specified in
subparagraphs (i) and (ii) above, the cancellation of Options not exercised
prior to the effective date of such merger, consolidation or other
reorganization, in all cases without the Optionees’ or Grantees’ consent.

(c) Reservation of Rights. Except as provided in this Section 9, an Optionee or
Grantee shall have no rights by reason of any subdivision or consolidation of
shares of stock of any class, the payment of any dividend or any other increase
or decrease in the number of shares of stock of

 

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any class. Any issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number or
Exercise Price of Shares subject to an Option and the number of or consideration
for Shares subject to a Restricted Stock Award. The grant of an Option or
Restricted Stock Award pursuant to the Plan shall not affect in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to merge or
consolidate or to dissolve, liquidate, sell or transfer all or any part of its
business or assets.

10. SECURITIES LAWS.

Shares shall not be issued under the Plan unless the issuance and delivery of
such Shares complies with (or is exempt from) all applicable requirements of
law, including (without limitation) the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder, state securities laws and
regulations, and the regulations of any stock exchange on which the Company’s
securities may then be listed.

11. NO RETENTION RIGHTS.

Neither the Plan nor any Option or Restricted Stock Award shall be deemed to
give any individual a right to remain an employee or consultant of the Company
or a Subsidiary. The Company and its Subsidiaries reserve the right to terminate
the service of any employee or consultant at any time, with or without cause,
subject to applicable laws and a written employment agreement (if any).

12. DURATION AND AMENDMENTS.

(a) Term of the Plan. The Plan, as set forth herein, shall become effective as
of the Effective Date, provided that the Plan has been approved by the
shareholders of the Company in the manner required by applicable law or
regulation. The Plan, if not extended, shall terminate automatically ten years
after the Effective Date, except that any ISO’s granted under the Plan must be
granted by September 18, 2006, ten years after the Plan was adopted by the Board
of Directors. It may be terminated on any earlier date pursuant to
Subsection (b) below.

(b) Right to Amend or Terminate the Plan. The Board of Directors may amend,
suspend or terminate the Plan at any time and for any reason; provided, however,
that in no event shall the Plan be amended to permit the repricing of any
outstanding Options, without the approval of the Company’s shareholders. An
amendment of the Plan shall be subject to the approval of the Company’s
shareholders only to the extent provided herein or required by applicable laws
or regulations.

(c) Effect of Amendment or Termination. No Shares shall be issued or sold under
the Plan after the termination thereof, except upon exercise of an Option
granted prior to such termination. The termination of the Plan, or any amendment
thereof, shall not adversely affect any Share previously issued or any Option or
Restricted Stock Award previously granted under the Plan.

 

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