Exhibit 10.23

CENTILE, INC.

2001 STOCK OPTION PLAN

 

Purposes of the Plan

. The purposes of this Stock Option Plan are to attract and retain the best
available personnel for positions of substantial responsibility, to provide
additional incentive to Employees, Directors and Consultants and to promote the
success of the Company's business. Options granted under the Plan may be
Incentive Stock Options or Nonstatutory Stock Options, as determined by the
Administrator at the time of grant.

Definitions

. As used herein, the following definitions shall apply:

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

    "Applicable Laws" means the requirements relating to the administration of
    stock option plans under U.S. state corporate laws, U.S. federal and state
    securities laws, the Code, any stock exchange or quotation system on which
    the Common Stock is listed or quoted and the applicable laws of any other
    country or jurisdiction where Options are granted under the Plan.

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

 a. "Change in Control" means the occurrence of any of the following events:
     i.   Any "person" (as such term is used in Sections 13(d) and 14(d) of the
          Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3
          of the Exchange Act), directly or indirectly, of securities of the
          Company representing fifty percent (50%) or more of the total voting
          power represented by the Company's then outstanding voting securities;
          or
     ii.  The consummation of the sale or disposition by the Company of all or
          substantially all of the Company's assets; or
     iii. The consummation of a merger or consolidation of the Company with any
          other corporation, other than a merger or consolidation which would
          result in the voting securities of the Company outstanding immediately
          prior thereto continuing to represent (either by remaining outstanding
          or by being converted into voting securities of the surviving entity
          or its parent) at least fifty percent (50%) of the total voting power
          represented by the voting securities of the Company or such surviving
          entity or its parent outstanding immediately after such merger or
          consolidation.

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

    "Committee" means a committee of Directors appointed by the Board in
    accordance with Section 4 hereof.

    "Common Stock" means the Common Stock of the Company.

    "Company" means Centile, Inc., a Delaware corporation.

    "Consultant" means any natural person who is engaged by the Company or any
    Parent or Subsidiary to render consulting or advisory services to such
    entity and who satisfies the requirements of subsection (c)(1) of Rule 701
    under the Securities Act of 1933, as amended.

    "Director" means a member of the Board.

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

    "Employee" means any person, including officers and Directors, employed by
    the Company or any Parent or Subsidiary of the Company. A Service Provider
    shall not cease to be an Employee in the case of (i) any leave of absence
    approved by the Company or (ii) transfers between locations of the Company
    or between the Company, its Parent, any Subsidiary, or any successor. For
    purposes of Incentive Stock Options, no such leave may exceed ninety (90)
    days, unless reemployment upon expiration of such leave is guaranteed by
    statute or contract. If reemployment upon expiration of a leave of absence
    approved by the Company is not so guaranteed, then three (3) months
    following the 91st day of such leave, any Incentive Stock Option held by the
    Optionee shall cease to be treated as an Incentive Stock Option and shall be
    treated for tax purposes as a Nonstatutory Stock Option. Neither service as
    a Director nor payment of a director's fee by the Company shall be
    sufficient to constitute "employment" by the Company.

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

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

    If the Common Stock is listed on any established stock exchange or a
    national market system, including without limitation the Nasdaq National
    Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair
    Market Value shall be the closing sales price for such stock (or the closing
    bid, if no sales were reported) as quoted on such exchange or system on the
    day of determination, as reported in The Wall Street Journal or such other
    source as the Administrator deems reliable;
    
    If the Common Stock is regularly quoted by a recognized securities dealer
    but selling prices are not reported, its Fair Market Value shall be the mean
    between the high bid and low asked prices for the Common Stock on the day of
    determination; or
    
    In the absence of an established market for the Common Stock, the Fair
    Market Value thereof shall be determined in good faith by the Administrator.

    "Incentive Stock Option" means an Option intended to qualify as an incentive
    stock option within the meaning of Section 422 of the Code.

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

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

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

    "Optioned Stock" means the Common Stock subject to an Option.

    "Optionee" means the holder of an outstanding Option granted under the Plan.

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

    "Plan" means this 2001 Stock Option Plan.

    "Service Provider" means an Employee, Director or Consultant.

    "Share" means a share of the Common Stock, as adjusted in accordance with
    Section 12 below.

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

Stock Subject to the Plan

. Subject to the provisions of Section 12 of the Plan, the maximum aggregate
number of Shares that may be subject to option and sold under the Plan is
4,500,000 Shares. The Shares may be authorized but unissued, or reacquired
Common Stock.

If an Option expires or becomes unexercisable without having been exercised in
full, the unpurchased Shares which were subject thereto shall become available
for future grant or sale under the Plan (unless the Plan has terminated).
However, Shares that have actually been issued under the Plan, upon exercise of
an Option, shall not be returned to the Plan and shall not become available for
future distribution under the Plan, except that if Shares of restricted stock
issued pursuant to an Option are repurchased by the Company at their original
purchase price, such Shares shall become available for future grant under the
Plan.

Administration of the Plan

.

Administrator

. The Plan shall be administered by the Board or a Committee appointed by the
Board, which Committee shall be constituted to comply with Applicable Laws.

Powers of the Administrator

. Subject to the provisions of the Plan and, in the case of a Committee, the
specific duties delegated by the Board to such Committee, and subject to the
approval of any relevant authorities, the Administrator shall have the authority
in its discretion:

to determine the Fair Market Value;

to select the Service Providers to whom Options may from time to time be granted
hereunder;

to determine the number of Shares to be covered by each such Option granted
hereunder;

to approve forms of agreement for use under the Plan;

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

to prescribe, amend and rescind rules and regulations relating to the Plan,
including rules and regulations relating to sub-plans established for the
purpose of satisfying applicable foreign laws;

to allow Optionees to satisfy withholding tax obligations by electing to have
the Company withhold from the Shares to be issued upon exercise of an Option
that number of Shares having a Fair Market Value equal to the minimum amount
required to be withheld. The Fair Market Value of the Shares to be withheld
shall be determined on the date that the amount of tax to be withheld is to be
determined. All elections by Optionees to have Shares withheld for this purpose
shall be made in such form and under such conditions as the Administrator may
deem necessary or advisable; and

to construe and interpret the terms of the Plan and Options granted pursuant to
the Plan.

Effect of Administrator's Decision
. All decisions, determinations and interpretations of the Administrator shall
be final and binding on all Optionees.

Eligibility. Nonstatutory Stock Options may be granted to Service Providers.
Incentive Stock Options may be granted only to Employees. Limitations.
Incentive Stock Option Limit
. Each Option shall be designated in the Option Agreement as either an Incentive
Stock Option or a Nonstatutory Stock Option. However, notwithstanding such
designation, to the extent that the aggregate Fair Market Value of the Shares
with respect to which Incentive Stock Options are exercisable for the first time
by the Optionee during any calendar year (under all plans of the Company and any
Parent or Subsidiary) exceeds $100,000, such Options shall be treated as
Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock
Options shall be taken into account in the order in which they were granted. The
Fair Market Value of the Shares shall be determined as of the time the Option
with respect to such Shares is granted.

At-Will Employment

. Neither the Plan nor any Option shall confer upon any Optionee any right with
respect to continuing the Optionee's relationship as a Service Provider with the
Company, nor shall it interfere in any way with his or her right or the
Company's right to terminate such relationship at any time, with or without
cause, and with or without notice.

Term of Plan

. Subject to shareholder approval in accordance with Section 18, the Plan shall
become effective upon its adoption by the Board. Unless sooner terminated under
Section 14, it shall continue in effect for a term of ten (10) years from the
later of (i) the effective date of the Plan, or (ii) the date of the most recent
Board approval of an increase in the number of shares reserved for issuance
under the Plan.

Term of Option

. The term of each Option shall be stated in the Option Agreement; provided,
however, that the term shall be no more than ten (10) years from the date of
grant thereof. In the case of an Incentive Stock Option granted to an Optionee
who, at the time the Option is granted, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the term of the Option shall be five (5) years from the
date of grant or such shorter term as may be provided in the Option Agreement.

Option Exercise Price and Consideration

.

Exercise Price

. The per share exercise price for the Shares to be issued upon exercise of an
Option shall be such price as is determined by the Administrator, but shall be
subject to the following:

In the case of an Incentive Stock Option

granted to an Employee who, at the time of grant of such Option, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the exercise price shall be no
less than 110% of the Fair Market Value per Share on the date of grant.

granted to any other Employee, the per Share exercise price shall be no less
than 100% of the Fair Market Value per Share on the date of grant.

In the case of a Nonstatutory Stock Option

granted to a Service Provider who, at the time of grant of such Option, owns
stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the exercise price
shall be no less than 110% of the Fair Market Value per Share on the date of
grant.

granted to any other Service Provider, the per Share exercise price shall be no
less than 85% of the Fair Market Value per Share on the date of grant.

Notwithstanding the foregoing, Options may be granted with a per Share exercise
price other than as required above pursuant to a merger or other corporate
transaction.

Forms of Consideration

. The consideration to be paid for the Shares to be issued upon exercise of an
Option, including the method of payment, shall be determined by the
Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant). Such consideration may consist of, without
limitation, (1) cash, (2) check, (3) promissory note, (4) other Shares, provided
Shares acquired directly from the Company (x) have been owned by the Optionee
for more than six (6) months on the date of surrender, and (y) have a Fair
Market Value on the date of surrender equal to the aggregate exercise price of
the Shares as to which such Option shall be exercised, (5) consideration
received by the Company under a cashless exercise program implemented by the
Company in connection with the Plan, or (6) any combination of the foregoing
methods of payment. In making its determination as to the type of consideration
to accept, the Administrator shall consider if acceptance of such consideration
may be reasonably expected to benefit the Company. Notwithstanding the
foregoing, the Administrator may permit an Optionee to exercise his or her
Option by delivery of a full-recourse promissory note secured by the purchased
Shares. The terms of such promissory note shall be determined by the
Administrator in its sole discretion.

Exercise of Option

.

Procedure for Exercise; Rights as a Shareholder

. Any Option granted hereunder shall be exercisable according to the terms
hereof at such times and under such conditions as determined by the
Administrator and set forth in the Option Agreement. Except in the case of
Options granted to officers, Directors and Consultants, Options shall become
exercisable at a rate of no less than 20% per year over five (5) years from the
date the Options are granted. Unless the Administrator provides otherwise,
vesting of Options granted hereunder to officers and Directors shall be
suspended during any unpaid leave of absence. An Option may not be exercised for
a fraction of a Share.

An Option shall be deemed exercised when the Company receives (i) written or
electronic notice of exercise (in accordance with the Option Agreement) from the
person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the Shares
are issued (as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
Shares, notwithstanding the exercise of the Option. The Company shall issue (or
cause to be issued) such Shares promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the Shares are issued, except as provided in Section 12 of
the Plan.

Exercise of an Option in any manner shall result in a decrease in the number of
Shares thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised.

Termination of Relationship as a Service Provider

. If an Optionee ceases to be a Service Provider, such Optionee may exercise his
or her Option within thirty (30) days of termination, or such longer period of
time as specified in the Option Agreement, to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of the Option as set forth in the Option Agreement). If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified by the Administrator, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

Disability of Optionee

. If an Optionee ceases to be a Service Provider as a result of the Optionee's
Disability, the Optionee may exercise his or her Option within six (6) months of
termination, or such longer period of time as specified in the Option Agreement,
to the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement). If, on the date of termination, the Optionee is not vested as to his
or her entire Option, the Shares covered by the unvested portion of the Option
shall revert to the Plan. If, after termination, the Optionee does not exercise
his or her Option within the time specified herein, the Option shall terminate,
and the Shares covered by such Option shall revert to the Plan.

Death of Optionee

. If an Optionee dies while a Service Provider, the Option may be exercised
within six (6) months following Optionee's death, or such longer period of time
as specified in the Option Agreement, to the extent that the Option is vested on
the date of death (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement) by the Optionee's designated
beneficiary, provided such beneficiary has been designated prior to Optionee's
death in a form acceptable to the Administrator. If no such beneficiary has been
designated by the Optionee, then such Option may be exercised by the personal
representative of the Optionee's estate or by the person(s) to whom the Option
is transferred pursuant to the Optionee's will or in accordance with the laws of
descent and distribution. If, at the time of death, the Optionee is not vested
as to his or her entire Option, the Shares covered by the unvested portion of
the Option shall immediately revert to the Plan. If the Option is not so
exercised within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

Limited Transferability of Options. Unless determined otherwise by the
Administrator, Options may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or the laws of
descent and distribution, and may be exercised during the lifetime of the
Optionee, only by the Optionee. If the Administrator in its sole discretion
makes an Option transferable, such Option may only be transferred by (i) will,
(ii) the laws of descent and distribution, (iii) instrument to an inter vivos or
testamentary trust in which the Option is to be passed to beneficiaries upon the
death of the Optionee, or (iv) gift to a member of Optionee's immediate family
(as such term is defined in Rule 16a-1(e) of the Exchange Act). In addition, any
transferable Option shall contain additional terms and conditions as the
Administrator deems appropriate.

Adjustments Upon Changes in Capitalizati on, Merger or Change in Control

.

Changes in Capitalization

. Subject to any required action by the shareholders of the Company, the number
and type of Shares which have been authorized for issuance under the Plan but as
to which no Options have yet been granted or which have been returned to the
Plan upon cancellation or expiration of an Option, and the number and type of
Shares covered by each outstanding Option, as well as the price per Share
covered by each such outstanding Option, shall be proportionately adjusted for
any increase or decrease in the number or type of issued Shares resulting from a
stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company. The conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number, type or
price of Shares subject to an Option.

Dissolution or Liquidation

. In the event of the proposed dissolution or liquidation of the Company, the
Administrator shall notify each Optionee as soon as practicable prior to the
effective date of such proposed transaction. The Administrator in its discretion
may provide for an Optionee to have the right to exercise his or her Option
until fifteen (15) days prior to such transaction as to all of the Optioned
Stock covered thereby, including Shares as to which the Option would not
otherwise be exercisable. In addition, the Administrator may provide that any
Company repurchase option applicable to any Shares purchased upon exercise of an
Option shall lapse as to all such Shares, provided the proposed dissolution or
liquidation takes place at the time and in the manner contemplated. To the
extent it has not been previously exercised, an Option will terminate
immediately prior to the consummation of such proposed action.

Change in Control

. In the event of a Change in Control, each outstanding option shall
automatically accelerate so that each such option shall, immediately prior to
the effective date of the Change in Control, become fully exercisable with
respect to the total number of shares of Common Stock at the time subject to
such option and may be exercised for any or all of those shares as fully-vested
shares of Common Stock. However, an outstanding option shall not so accelerate
if and to the extent the acceleration of such option is subject to other
limitations imposed by the Administrator at the time of the option grant.

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

The portion of any Incentive Stock Option accelerated in connection with a
Change in Control shall remain exercisable as an Incentive Stock Option only to
the extent the applicable One Hundred Thousand Dollar ($100,000) limitation is
not exceeded. To the extent such dollar limitation is exceeded, the accelerated
portion of such option shall be exercisable as a Nonstatutory Stock Option under
Federal tax laws.

The outstanding options shall in no way affect the right of the Company 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.

Time of Granting Options

. The date of grant of an Option shall, for all purposes, be the date on which
the Administrator makes the determination granting such Option, or such later
date as is determined by the Administrator. Notice of the determination shall be
given to each Service Provider to whom an Option is so granted within a
reasonable time after the date of such grant.

Amendment and Termination of the Pl an

.

Amendment and Termination

. The Board may at any time amend, alter, suspend or terminate the Plan.

Shareholder Approval

. The Board shall obtain shareholder approval of any Plan amendment to the
extent necessary and desirable to comply with Applicable Laws.

Effect of Amendment or Termination

. No amendment, alteration, suspension or termination of the Plan shall impair
the rights of any Optionee, unless mutually agreed otherwise between the
Optionee and the Administrator, which agreement must be in writing and signed by
the Optionee and the Company. Termination of the Plan shall not affect the
Administrator's ability to exercise the powers granted to it hereunder with
respect to Options granted under the Plan prior to the date of such termination.

Conditions Upon Issuance of Shares

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Legal Compliance

. Shares shall not be issued pursuant to the exercise of an Option unless the
exercise of such Option and the issuance and delivery of such Shares shall
comply with Applicable Laws and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

Investment Representations

. As a condition to the exercise of an Option, the Administrator may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required.

Inability to Obtain Authority

. The inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.

Reservation of Shares

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

Shareholder Approval

. The Plan shall be subject to approval by the shareholders of the Company
within twelve (12) months after the date the Plan is adopted. Such shareholder
approval shall be obtained in the degree and manner required under Applicable
Laws.

Information to Optionees

. The Company shall provide to each Optionee and to each individual who acquires
Shares pursuant to the Plan, not less frequently than annually during the period
such Optionee has one or more Options outstanding, and, in the case of an
individual who acquires Shares pursuant to the Plan, during the period such
individual owns such Shares, copies of annual financial statements. The Company
shall not be required to provide such statements to key employees whose duties
in connection with the Company assure their access to equivalent information.

CENTILE, INC

2001 STOCK OPTION PLAN

STOCK OPTION AGREEMENT

Unless otherwise defined herein, the terms defined in the 2001 Stock Option Plan
(the "Plan") shall have the same defined meanings in this Stock Option
Agreement.

I.

NOTICE OF STOCK OPTION GRANT

The undersigned Optionee has been granted an Option to purchase Common Stock of
Centile, Inc. (the "Company"), subject to the terms and conditions of the Plan
and this Option Agreement, as follows:

Name

Date of Grant

Vesting Commencement Date

Exercise Price per Share

Total Number of Shares Granted

Total Exercise Price

Type of Option

Incentive Stock Option

Nonstatutory Stock Option

Term/Expiration Date

 

Vesting Schedule and Limitations

:

The Option shall become exercisable with respect to, (i) twenty-five percent
(25%) of the Option Shares upon Optionee's completion of one (1) year of Service
measured from the Vesting Commencement Date and (ii) the balance of the Option
Shares in a series of thirty-six (36) successive equal monthly installments,
subject to Optionee continuing to be an Employee, over the thirty-six (36) month
period measured from the first anniversary of the Vesting Commencement Date.

Following an assumption or substitution of the Option Shares in connection with
a merger or Change in Control, if Optionee's status as an Employee of the
Corporation or the successor corporation is terminated by the Corporation or
successor corporation as a result of an "Involuntary Termination" (as defined
below) within two (2) years following their merger or Change in Control,
Optionee shall fully vest in and have the right to exercise the option as to all
of the Option Shares, including shares which would not otherwise be vested or
exercisable.

For this purpose, "Involuntary Termination" means (i) without Optionee's express
written consent, a significant reduction of Optionee's duties, position or
responsibilities, or the removal of such Optionee from such position and
responsibilities, unless the Optionee is provided with a comparable position
(i.e., a position of equal or greater organizational level, duties, authority,
compensation and status) relative to Optionee's duties, position or
responsibilities in effect immediately prior to such reduction; (ii) without
Optionee's express written consent, a material reduction by the Corporation or
successor corporation of Optionee's base salary as in effect immediately prior
to such reduction; (iii) without Optionee's express written consent, a material
reduction by the Corporation or successor corporation in the kind or level of
employee benefits to which Optionee is entitled immediately prior to such
reduction with the result that Optionee's overall benefits package is
significantly reduced; (iv) without Optionee's express written consent, the
relocation of Optionee to a facility or a location more than fifty (50) miles
from his/her current location, or (v) any purported termination of Optionee
other than for "Cause" (as defined below).

For this purpose, "Cause" means (i) any act of personal dishonesty taken by
Optionee in connection with his or her responsibilities as an Employee of the
Corporation or successor corporation which is intended to result in personal
enrichment of Optionee, (ii) Optionee's conviction of a felony, (iii) any act by
Optionee that constitutes material misconduct and is injurious to the
Corporation or successor corporation, or (iv) continued violations by Optionee
of Optionee's obligations to the Corporation or successor corporation.

Termination Period

:

This Option shall be exercisable for thirty (30) days after Optionee ceases to
be an Employee. Upon Optionee's death or Disability, this Option may be
exercised for one (1) year after Optionee ceases to be an Employee. In no event
may Optionee exercise this Option after the Term/Expiration Date as provided
above.

II. AGREEMENT

1. Grant of Option. The Plan Administrator of the Company hereby grants to the
Optionee named in the Notice of Grant (the "Optionee"), an option (the "Option")
to purchase the number of Shares set forth in the Notice of Grant, at the
exercise price per Share set forth in the Notice of Grant (the "Exercise
Price"), and subject to the terms and conditions of the Plan, which is
incorporated herein by reference. Subject to Section 14(c) of the Plan, in the
event of a conflict between the terms and conditions of the Plan and this Option
Agreement, the terms and conditions of the Plan shall prevail.

If designated in the Notice of Grant as an Incentive Stock Option ("ISO"), this
Option is intended to qualify as an Incentive Stock Option as defined in
Section 422 of the Code. Nevertheless, to the extent that it exceeds the
$100,000 rule of Code Section 422(d), this Option shall be treated as a
Nonstatutory Stock Option ("NSO").

Exercise of Option
.

Right to Exercise
. This Option shall be exercisable during its term in accordance with the
Vesting Schedule set out in the Notice of Grant and with the applicable
provisions of the Plan and this Option Agreement.
Method of Exercise
. This Option shall be exercisable by delivery of an exercise notice in the form
attached as
Exhibit A
(the "Exercise Notice") which shall state the election to exercise the Option,
the number of Shares with respect to which the Option is being exercised, and
such other representations and agreements as may be required by the Company
pursuant to the provisions of the Plan. The Exercise Notice shall be accompanied
by payment of the aggregate Exercise Price as to all Exercised Shares. This
Option shall be deemed to be exercised upon receipt by the Company of such fully
executed Exercise Notice accompanied by the aggregate Exercise Price.

No Shares shall be issued pursuant to the exercise of an Option unless such
issuance and such exercise comply with Applicable Laws. Assuming such
compliance, for income tax purposes the Shares shall be considered transferred
to the Optionee on the date on which the Option is exercised with respect to
such Shares.

Optionee's Representations

. In the event the Shares have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), at the time this Option is exercised,
the Optionee shall, if required by the Company, concurrently with the exercise
of all or any portion of this Option, deliver to the Company his or her
Investment Representation Statement in the form attached hereto as
Exhibit B
.

Lock-Up Period

. Optionee hereby agrees that Optionee shall not offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any Common Stock (or
other securities) of the Company or enter into any swap, hedging or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of any Common Stock (or other securities) of the
Company held by Optionee (other than those included in the registration) for a
period specified by the representative of the underwriters of Common Stock (or
other securities) of the Company not to exceed one hundred eighty (180) days
following the effective date of a registration statement of the Company filed
under the Securities Act.

Optionee agrees to execute and deliver such other agreements as may be
reasonably requested by the Company or the underwriter which are consistent with
the foregoing or which are necessary to give further effect thereto. In
addition, if requested by the Company or the representative of the underwriters
of Common Stock (or other securities) of the Company, Optionee shall provide,
within ten (10) days of such request, such information as may be required by the
Company or such representative in connection with the completion of any public
offering of the Company's securities pursuant to a registration statement filed
under the Securities Act. The obligations described in this Section shall not
apply to a registration relating solely to employee benefit plans on Form S-1 or
Form S-8 or similar forms that may be promulgated in the future, or a
registration relating solely to a Commission Rule 145 transaction on Form S-4 or
similar forms that may be promulgated in the future. The Company may impose
stop-transfer instructions with respect to the shares of Common Stock (or other
securities) subject to the foregoing restriction until the end of said one
hundred eighty (180) day period. Optionee agrees that any transferee of any
Option shall be bound by this Section.

Method of Payment

. Payment of the aggregate Exercise Price shall be by any of the following, or a
combination thereof, at the election of the Optionee:

 a. cash or check;
 b. consideration received by the Company under a formal cashless exercise
    program adopted by the Company in connection with the Plan; or
 c. surrender of other Shares which, (i) in the case of Shares acquired from the
    Company, either directly or indirectly, have been owned by the Optionee for
    more than six (6) months on the date of surrender, and (ii) have a Fair
    Market Value on the date of surrender equal to the aggregate Exercise Price
    of the Exercised Shares.

Restrictions on Exercise
. This Option may not be exercised until such time as the Plan has been approved
by the shareholders of the Company, or if the issuance of such Shares upon such
exercise or the method of payment of consideration for such shares would
constitute a violation of any Applicable Law.
Non-Transferability of Option
. This Option may not be transferred in any manner otherwise than by will or by
the laws of descent or distribution and may be exercised during the lifetime of
Optionee only by Optionee. The terms of the Plan and this Option Agreement shall
be binding upon the executors, administrators, heirs, successors and assigns of
the Optionee.
Term of Option
. This Option may be exercised only within the term set out in the Notice of
Grant, and may be exercised during such term only in accordance with the Plan
and the terms of this Option.
Tax Obligations
.

Withholding Taxes.
Optionee agrees to make appropriate arrangements with the Company (or the Parent
or Subsidiary employing or retaining Optionee) for the satisfaction of all
Federal, state, local and foreign income and employment tax withholding
requirements applicable to the Option exercise. Optionee acknowledges and agrees
that the Company may refuse to honor the exercise and refuse to deliver Shares
if such withholding amounts are not delivered at the time of exercise.
Notice of Disqualifying Disposition of ISO Shares
. If the Option granted to Optionee herein is an ISO, and if Optionee sells or
otherwise disposes of any of the Shares acquired pursuant to the ISO on or
before the later of (1) the date two years after the Date of Grant, or (2) the
date one year after the date of exercise, the Optionee shall immediately notify
the Company in writing of such disposition. Optionee agrees that Optionee may be
subject to income tax withholding by the Company on the compensation income
recognized by the Optionee.

Entire Agreement; Governing Law
. The Plan is incorporated herein by reference. The Plan and this Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee's interest except by
means of a writing signed by the Company and Optionee. This agreement is
governed by the internal substantive laws but not the choice of law rules of
California.

No Guarantee of Continued Service

. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE
VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS AN EMPLOYEE AT THE WILL
OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR
ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS
AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET
FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
ENGAGEMENT AS AN EMPLOYEE FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND
SHALL NOT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO
TERMINATE OPTIONEE'S RELATIONSHIP AS AN EMPLOYEE AT ANY TIME, WITH OR WITHOUT
CAUSE.

Optionee acknowledges receipt of a copy of the Plan and represents that he or
she is familiar with the terms and provisions thereof, and hereby accepts this
Option subject to all of the terms and provisions thereof. Optionee has reviewed
the Plan and this Option in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Option and fully understands all
provisions of the Option. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator upon
any questions arising under the Plan or this Option. Optionee further agrees to
notify the Company upon any change in the residence address indicated below.

 

OPTIONEE

CENTILE, INC.

Signature

By

Print Name

Title

Residence Address

 

 

 

 

EXHIBIT A

2001 STOCK OPTION PLAN

EXERCISE NOTICE

Centile, Inc.

2445 Mission College Blvd.

Santa Clara, CA 95054

Attention: [__________]

Exercise of Option

. Effective as of today, _____________, _____, the undersigned ("Optionee")
hereby elects to exercise Optionee's option to purchase _________ shares of the
Common Stock (the "Shares") of ________. (the "Company") under and pursuant to
the 2001 Stock Option Plan (the "Plan") and the Stock Option Agreement dated
____________, ____ (the "Option Agreement").

Delivery of Payment

. Purchaser herewith delivers to the Company the full purchase price of the
Shares, as set forth in the Option Agreement, and any and all withholding taxes
due in connection with the exercise of the Option.

Representations of Optionee

. Optionee acknowledges that Optionee has received, read and understood the Plan
and the Option Agreement and agrees to abide by and be bound by their terms and
conditions.

Rights as Shareholder

. Until the issuance of the Shares (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company), no
right to vote or receive dividends or any other rights as a shareholder shall
exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. The Shares shall be issued to the Optionee as soon as practicable after
the Option is exercised in accordance with the Option Agreement. No adjustment
shall be made for a dividend or other right for which the record date is prior
to the date of issuance except as provided in Section 12 of the Plan.

Company's Right of First Refusal

. Before any Shares held by Optionee or any transferee (either being sometimes
referred to herein as the "Holder") may be sold or otherwise transferred
(including transfer by gift or operation of law), the Company or its assignee(s)
shall have a right of first refusal to purchase the Shares on the terms and
conditions set forth in this Section (the "Right of First Refusal").

Notice of Proposed Transfer

. The Holder of the Shares shall deliver to the Company a written notice (the
"Notice") stating: (i) the Holder's bona fide intention to sell or otherwise
transfer such Shares; (ii) the name of each proposed purchaser or other
transferee ("Proposed Transferee"); (iii) the number of Shares to be transferred
to each Proposed Transferee; and (iv) the bona fide cash price or other
consideration for which the Holder proposes to transfer the Shares (the "Offered
Price"), and the Holder shall offer the Shares at the Offered Price to the
Company or its assignee(s).

Exercise of Right of First Refusal

. At any time within thirty (30) days after receipt of the Notice, the Company
and/or its assignee(s) may, by giving written notice to the Holder, elect to
purchase all, but not less than all, of the Shares proposed to be transferred to
any one or more of the Proposed Transferees, at the purchase price determined in
accordance with subsection (c) below.

Purchase Price

. The purchase price ("Purchase Price") for the Shares purchased by the Company
or its assignee(s) under this Section shall be the Offered Price. If the Offered
Price includes consideration other than cash, the cash equivalent value of the
non- cash consideration shall be determined by the Board of Directors of the
Company in good faith.

Payment

. Payment of the Purchase Price shall be made, at the option of the Company or
its assignee(s), in cash (by check), by cancellation of all or a portion of any
outstanding indebtedness of the Holder to the Company (or, in the case of
repurchase by an assignee, to the assignee), or by any combination thereof
within thirty (30) days after receipt of the Notice or in the manner and at the
times set forth in the Notice.

Holder's Right to Transfer

. If all of the Shares proposed in the Notice to be transferred to a given
Proposed Transferee are not purchased by the Company and/or its assignee(s) as
provided in this Section, then the Holder may sell or otherwise transfer such
Shares to that Proposed Transferee at the Offered Price or at a higher price,
provided that such sale or other transfer is consummated within 120 days after
the date of the Notice, that any such sale or other transfer is effected in
accordance with any applicable securities laws and that the Proposed Transferee
agrees in writing that the provisions of this Section shall continue to apply to
the Shares in the hands of such Proposed Transferee. If the Shares described in
the Notice are not transferred to the Proposed Transferee within such period, a
new Notice shall be given to the Company, and the Company and/or its assignees
shall again be offered the Right of First Refusal before any Shares held by the
Holder may be sold or otherwise transferred.

Exception for Certain Family Transfers

. Anything to the contrary contained in this Section notwithstanding, the
transfer of any or all of the Shares during the Optionee's lifetime or on the
Optionee's death by will or intestacy to the Optionee's immediate family or a
trust for the benefit of the Optionee's immediate family shall be exempt from
the provisions of this Section. "Immediate Family" as used herein shall mean
spouse, lineal descendant or antecedent, father, mother, brother or sister. In
such case, the transferee or other recipient shall receive and hold the Shares
so transferred subject to the provisions of this Section, and there shall be no
further transfer of such Shares except in accordance with the terms of this
Section.

Termination of Right of First Refusal

. The Right of First Refusal shall terminate as to any Shares upon the earlier
of (i) the first sale of Common Stock of the Company to the general public, or
(ii) a Change in Control in which the successor corporation has equity
securities that are publicly traded.

Tax Consultation

. Optionee understands that Optionee may suffer adverse tax consequences as a
result of Optionee's purchase or disposition of the Shares. Optionee represents
that Optionee has consulted with any tax consultants Optionee deems advisable in
connection with the purchase or disposition of the Shares and that Optionee is
not relying on the Company for any tax advice.

Restrictive Legends and Stop-Transfer Orders

.

Legends

. Optionee understands and agrees that the Company shall cause the legends set
forth below or legends substantially equivalent thereto, to be placed upon any
certificate(s) evidencing ownership of the Shares together with any other
legends that may be required by the Company or by state or federal securities
laws:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE
OPINION OF COMPANY COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
ON TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S)
AS SET FORTH IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER
OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE
ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON
TRANSFEREES OF THESE SHARES.

Stop-Transfer Notices

. Optionee agrees that, in order to ensure compliance with the restrictions
referred to herein, the Company may issue appropriate "stop transfer"
instructions to its transfer agent, if any, and that, if the Company transfers
its own securities, it may make appropriate notations to the same effect in its
own records.

Refusal to Transfer

. The Company shall not be required (i) to transfer on its books any Shares that
have been sold or otherwise transferred in violation of any of the provisions of
this Exercise Notice or (ii) to treat as owner of such Shares or to accord the
right to vote or pay dividends to any purchaser or other transferee to whom such
Shares shall have been so transferred.

Successors and Assigns

. The Company may assign any of its rights under this Exercise Notice to single
or multiple assignees, and this Exercise Notice shall inure to the benefit of
the successors and assigns of the Company. Subject to the restrictions on
transfer herein set forth, this Exercise Notice shall be binding upon Optionee
and his or her heirs, executors, administrators, successors and assigns.

Interpretation

. Any dispute regarding the interpretation of this Exercise Notice shall be
submitted by Optionee or by the Company forthwith to the Administrator which
shall review such dispute at its next regular meeting. The resolution of such a
dispute by the Administrator shall be final and binding on all parties.

Governing Law; Severability

. This Exercise Notice is governed by the internal substantive laws but not the
choice of law rules, of California.

Entire Agreement

. The Plan and Option Agreement are incorporated herein by reference. This
Exercise Notice, the Plan, the Option Agreement and the Investment
Representation Statement constitute the entire agreement of the parties with
respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Optionee with respect to the
subject matter hereof, and may not be modified adversely to the Optionee's
interest except by means of a writing signed by the Company and Optionee.

Submitted by:

Accepted by:

OPTIONEE

CENTILE, INC.

Signature

By

Print Name

Title

Address: 2445 Mission College Blvd

Address

Santa Clara, CA 95054

Date Received

 

 

EXHIBIT B

INVESTMENT REPRESENTATION STATEMENT

OPTIONEE:

 

COMPANY:

CENTILE, INC.

SECURITY:

COMMON STOCK

AMOUNT:

 

DATE:

 

In connection with the purchase of the above-listed Securities, the undersigned
Optionee represents to the Company the following:

Optionee is aware of the Company's business affairs and financial condition and
has acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Securities. Optionee is acquiring these
Securities for investment for Optionee's own account only and not with a view
to, or for resale in connection with, any "distribution" thereof within the
meaning of the Securities Act of 1933, as amended (the "Securities Act").

Optionee acknowledges and understands that the Securities constitute "restricted
securities" under the Securities Act and have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of Optionee's investment
intent as expressed herein. In this connection, Optionee understands that, in
the view of the Securities and Exchange Commission, the statutory basis for such
exemption may be unavailable if Optionee's representation was predicated solely
upon a present intention to hold these Securities for the minimum capital gains
period specified under tax statutes, for a deferred sale, for or until an
increase or decrease in the market price of the Securities, or for a period of
one year or any other fixed period in the future. Optionee further understands
that the Securities must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available. Optionee further acknowledges and understands that the Company is
under no obligation to register the Securities. Optionee understands that the
certificate evidencing the Securities will be imprinted with any legend required
under applicable state securities laws.

Optionee is familiar with the provisions of Rule 701 and Rule 144, each
promulgated under the Securities Act, which, in substance, permit limited public
resale of "restricted securities" acquired, directly or indirectly from the
issuer thereof, in a non-public offering subject to the satisfaction of certain
conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the
time of the grant of the Option to the Optionee, the exercise will be exempt
from registration under the Securities Act. In the event the Company becomes
subject to the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, ninety (90) days thereafter (or such longer period as any
market stand-off agreement may require) the Securities exempt under Rule 701 may
be resold, subject to the satisfaction of certain of the conditions specified by
Rule 144, including: (1) the resale being made through a broker in an
unsolicited "broker's transaction" or in transactions directly with a market
maker (as said term is defined under the Securities Exchange Act of 1934); and,
in the case of an affiliate, (2) the availability of certain public information
about the Company, (3) the amount of Securities being sold during any three
month period not exceeding the limitations specified in Rule 144(e), and (4) the
timely filing of a Form 144, if applicable.

In the event that the Company does not qualify under Rule 701 at the time of
grant of the Option, then the Securities may be resold in certain limited
circumstances subject to the provisions of Rule 144, which requires the resale
to occur not less than one year after the later of the date the Securities were
sold by the Company or the date the Securities were sold by an affiliate of the
Company, within the meaning of Rule 144; and, in the case of acquisition of the
Securities by an affiliate, or by a non-affiliate who subsequently holds the
Securities less than two years, the satisfaction of the conditions set forth in
sections (1), (2), (3) and (4) of the paragraph immediately above.

Optionee further understands that in the event all of the applicable
requirements of Rule 701 or 144 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rules 144
and 701 are not exclusive, the Staff of the Securities and Exchange Commission
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rules 144 or 701 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk. Optionee understands that no assurances can be given that any
such other registration exemption will be available in such event.

Signature of Optionee:

 

Date: