Exhibit 10.76

 

BORLAND SOFTWARE CORPORATION

 

STOCK OPTION AGREEMENT

 

RECITALS

 

A.    The Board has adopted the Plan for the purpose of retaining the services
of selected Employees, non-employee members of the Board (or the board of
directors of any Parent or Subsidiary) and consultants and other independent
advisors who provide services to the Corporation (or any Parent or Subsidiary).

 

B.    Optionee is to render valuable services to the Corporation (or a Parent or
Subsidiary), and this Agreement is executed pursuant to, and is intended to
carry out the purposes of, the Plan in connection with the Corporation’s grant
of an option to Optionee.

 

C.    All capitalized terms in this Agreement shall have the meaning assigned to
them in the attached Appendix.

 

NOW, THEREFORE, it is hereby agreed as follows:

 

1.    Grant of Option.    The Corporation hereby grants to Optionee, as of the
Grant Date, an option to purchase up to the number of Option Shares specified in
the Grant Notice. The Option Shares shall be purchasable from time to time
during the option term specified in Paragraph 2 below at the Exercise Price.

 

2.    Option Term.    This option shall have a maximum term of ten (10) years
measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 7.

 

3.     Limited Transferability.

 

(a)    This option shall be neither transferable nor assignable by Optionee
other than by will or the laws of inheritance following Optionee’s death and may
be exercised, during Optionee’s lifetime, only by Optionee. However, Optionee
may designate one or more persons as the beneficiary or beneficiaries of this
option, and this option shall, in accordance with such designation,
automatically be transferred to such beneficiary or beneficiaries upon the
Optionee’s death while holding this option. Such beneficiary or beneficiaries
shall take the transferred option subject to all the terms and conditions of
this Agreement, including (without limitation) the limited time period during
which this option may, pursuant to Paragraph 5, be exercised following
Optionee’s death.

 

(b)    If this option is designated a Non-Statutory Option in the Grant Notice,
then this option may be assigned in whole or in part during Optionee’s lifetime
to one or more members of Optionee’s family or to a trust established for the
exclusive benefit of one or more such family members or to Optionee’s former
spouse, to the extent such assignment is in

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connection with the Optionee’s estate plan or pursuant to a domestic relations
order. The assigned portion shall be exercisable only by the person or persons
who acquire a proprietary interest in the option pursuant to such assignment.
The terms applicable to the assigned portion shall be the same as those in
effect for this option immediately prior to such assignment.

 

4.    Dates of Exercise.    This option shall become exercisable for the Option
Shares in one or more installments as specified in the Grant Notice. As the
option becomes exercisable for such installments, those installments shall
accumulate, and the option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the option term
under Paragraph 5 or 7.

 

5.    Cessation of Service.    The option term specified in Paragraph 2 shall
terminate (and this option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:

 

(a)    Should Optionee cease to remain in Service for any reason (other than
death, Permanent Disability or Misconduct) while this option is outstanding,
then Optionee (or any person or persons to whom this option is transferred
pursuant to a permitted transfer under Paragraph 3) shall have a period of three
(3) months (commencing with the date of such cessation of Service) during which
to exercise this option. In the event the Optionee is precluded by federal or
state securities laws from selling the shares of Common Stock at the time
subject to this option during such three (3)-month period, such period shall
automatically be extended so that it ends thirty (30) days after such federal or
state securities law prohibitions on the sale of the Shares lapses. Under no
circumstances, however, shall this option be exercisable at any time after the
Expiration Date.

 

(b)    Should Optionee die while this option is outstanding, then the personal
representative of Optionee’s estate or the person or persons to whom the option
is transferred pursuant to Optionee’s will or the laws of inheritance following
Optionee’s death or to whom the option is transferred during Optionee’s lifetime
pursuant to a permitted transfer under Paragraph 3 shall have the right to
exercise this option. However, if Optionee dies while holding this option and
has an effective beneficiary designation in effect for this option at the time
of his or her death, then the designated beneficiary or beneficiaries shall have
the exclusive right to exercise this option following Optionee’s death. Any such
right to exercise this option shall lapse, and this option shall cease to be
outstanding, upon the earlier of (i) the expiration of the twelve (12)-month
period measured from the date of Optionee’s death or (ii) the Expiration Date.

 

(c)    Should Optionee cease Service by reason of Permanent Disability while
this option is outstanding, then Optionee (or any person or persons to whom this
option is transferred pursuant to a permitted transfer under Paragraph 3) shall
have a period of twelve (12) months (commencing with the date of such cessation
of Service) during which to exercise this option. In no event shall this option
be exercisable at any time after the Expiration Date.

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(d)    Should Optionee’s Service be terminated for Misconduct or should Optionee
otherwise engage in any Misconduct while this option is outstanding, then this
option shall terminate immediately and cease to remain outstanding.

 

(e)    During the limited period of post-Service exercisability, this option may
not be exercised in the aggregate for more than the number of Option Shares for
which the option is exercisable at the time of Optionee’s cessation of Service.
Upon the expiration of such limited exercise period or (if earlier) upon the
Expiration Date, this option shall terminate and cease to be outstanding for any
exercisable Option Shares for which the option has not been exercised. However,
this option shall, immediately upon Optionee’s cessation of Service for any
reason, terminate and cease to be outstanding with respect to any Option Shares
for which this option is not otherwise at that time exercisable.

 

6.    Authorized Leave of Absence.    The following provisions shall apply upon
the Optionee’s commencement of an authorized leave of absence:

 

(a)    The Optionee shall, for purposes of the exercise schedule set forth in
the Grant Notice, receive Service credit for the first six (6) months of such
authorized leave or for the entire period of the leave if such leave is less
than six (6) months.

 

(b)    If the authorized leave of absence exceeds six (6) months, then no
further Service credit shall be given after the first six (6) months of such
leave, and the exercise schedule in effect under the Grant Notice shall be
frozen at the end of that six (6) month period. Accordingly, this option shall
not become exercisable for any additional installments of the Option Shares
during the remainder of the Optionee’s authorized leave.

 

(c)    Upon the Optionee’s return to active Employee status following an
authorized leave in excess of six (6) months, Service credit shall resume for
each period of Service subsequently completed by Optionee, and such Service
credit shall, for purposes of the exercise schedule in effect under the Grant
Notice, be added to (i) the Service credited to the Optionee prior to the start
of the authorized leave and (ii) any Service credit the Optionee received for
such leave pursuant to paragraph 6(a) above. In no event, however, shall any
Service credit be given for the period of such leave beyond the initial six
(6) months of that leave or beyond the date of the Optionee’s actual cessation
of Service.

 

(d)    If this option is designated as an Incentive Option in the Grant Notice,
then the following additional provision shall apply:

 

-    If the leave of absence continues for more than ninety (90) days, then this
option shall automatically convert to a Non-Statutory Option at the end of the
three (3)-month period (determined using business days), measured from the later
of (x) the ninety-first (91st) day of such leave or, if applicable, (ii) the
first date the Optionee’s reemployment rights are no longer guaranteed by
statute or by written agreement. Following any such conversion of this option,
all subsequent exercises of this option, whether effected before or after
Optionee’s return to active Employee status, shall result

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in an immediate taxable event, and the Corporation shall be required to collect
from Optionee the income and employment withholding taxes applicable to such
exercise.

 

(e)    In no event shall this option become exercisable for any additional
Option Shares or otherwise remain outstanding if Optionee does not resume
Employee status prior to the Expiration Date of the option term.

 

7.    Change in Control.

 

(a)    This option, to the extent outstanding at the time of a Change in
Control, shall be assumed or substituted for by the successor corporation (or
the parent thereof) or may otherwise be continued in full force and effect
pursuant to the express terms of the Change in Control transaction. Upon the
consummation of such Change in Control, this option shall terminate and cease to
be outstanding, except to the extent so assumed, substituted for or otherwise
continued in effect. No portion of this option shall vest or become exercisable
on an accelerated basis in connection with such Change in Control, except to the
extent otherwise provided in any Special Acceleration Addendum attached to this
Agreement.

 

(b)    If this option is assumed in connection with a Change in Control or
otherwise continued in effect, then this option shall be appropriately adjusted,
immediately after such Change in Control, to apply to the number and class of
securities which would have been issuable to Optionee in consummation of such
Change in Control had the option been exercised immediately prior to such Change
in Control, and appropriate adjustments shall also be made to the Exercise
Price, provided the aggregate Exercise Price shall remain the same. To the
extent the actual holders of the Corporation’s outstanding Common Stock receive
cash consideration for their Common Stock in consummation of the Change in
Control, the successor corporation may, in connection with the assumption of
this option, substitute one or more shares of its own common stock with a fair
market value equivalent to the cash consideration paid per share of Common Stock
in such Change in Control.

 

(c)    This Agreement shall not in any way affect the right of the Corporation
to adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.

 

8.    Adjustment in Option Shares.    Should any change be made to the Common
Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation’s receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.

 

9.    Stockholder Rights.    The holder of this option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.

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10.    Manner of Exercising Option.

 

(a)    In order to exercise this option with respect to all or any part of the
Option Shares for which this option is at the time exercisable, Optionee (or any
other person or persons exercising the option) must take the following actions:

 

(i)    Execute and deliver to the Corporation a Notice of Exercise for the
Option Shares for which the option is exercised.

 

(ii)    Pay the aggregate Exercise Price for the purchased shares in one or more
of the following forms:

 

(A)    cash or check made payable to the Corporation;

 

(B)    shares of Common Stock held by Optionee (or any other person or persons
exercising the option) for the requisite period necessary to avoid a charge to
the Corporation’s earnings for financial reporting purposes and valued at Fair
Market Value on the Exercise Date; or

 

(C)    through a special sale and remittance procedure pursuant to which
Optionee (or any other person or persons exercising the option) shall
concurrently provide irrevocable instructions (i) to a brokerage firm
(reasonably satisfactory to the Corporation for purposes of administering such
procedure) to effect the immediate sale of the purchased shares and remit to the
Corporation, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate Exercise Price payable for the purchased
shares plus all applicable income and employment taxes required to be withheld
by the Corporation by reason of such exercise and (ii) to the Corporation to
deliver the certificates for the purchased shares directly to such brokerage
firm on the settlement date in order to complete the sale.

 

Except to the extent the sale and remittance procedure is utilized in connection
with the option exercise, payment of the Exercise Price must accompany the
Notice of Exercise delivered to the Corporation in connection with the option
exercise.

 

(iii)    Furnish to the Corporation appropriate documentation that the person or
persons exercising the option (if other than Optionee) have the right to
exercise this option.

 

(iv)    Make appropriate arrangements with the Corporation (or Parent or
Subsidiary employing or retaining Optionee) for the

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satisfaction of all applicable income and employment tax withholding
requirements applicable to the option exercise.

 

(b)    As soon as practical after the Exercise Date, the Corporation shall
directs its transfer agent to issue to or on behalf of Optionee (or any other
person or persons exercising this option) a certificate for the purchased Option
Shares, with the appropriate legends affixed thereto.

 

(c)    In no event may this option be exercised for any fractional shares.

 

11.    Compliance with Laws and Regulations.

 

(a)    The exercise of this option and the issuance of the Option Shares upon
such exercise shall be subject to compliance by the Corporation and Optionee
with all applicable requirements of law relating thereto and with all applicable
regulations of any stock exchange (or the Nasdaq National Market, if applicable)
on which the Common Stock may be listed for trading at the time of such exercise
and issuance.

 

(b)    The inability of the Corporation to obtain approval from any regulatory
body having authority deemed by the Corporation to be necessary to the lawful
issuance and sale of any Common Stock pursuant to this option shall relieve the
Corporation of any liability with respect to the non-issuance or sale of the
Common Stock as to which such approval shall not have been obtained. The
Corporation, however, shall use reasonable efforts to obtain all such approvals.

 

12.    Successors and Assigns.    Except to the extent otherwise provided in
Paragraphs 3 and 7, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the Corporation and its successors and assigns and
Optionee, Optionee’s assigns, the legal representatives, heirs and legatees of
Optionee’s estate and any beneficiaries of this option designated by Optionee.

 

13.    Notices.    Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in either written or
electronic format and delivered to the Stock Administrator of the Corporation at
its principal corporate offices. Any notice required to be given or delivered to
Optionee shall be in writing and addressed to Optionee at the address indicated
below Optionee’s signature line on the Grant Notice. All notices shall be deemed
effective upon personal or electronic delivery or upon deposit in the U.S. mail,
postage prepaid and properly addressed to the party to be notified.

 

14.    Mandatory Arbitration.    Any dispute or controversy arising out of,
relating to or otherwise connected with this Agreement or the option evidenced
hereby or the validity, construction, performance or termination of this
Agreement shall be settled by binding arbitration to be held in the county in
which the Optionee is (or has most recently been) employed by the Corporation
(or any Parent or Subsidiary) at the time of such arbitration. The arbitration
proceedings shall be conducted by JAMS, Inc. (“JAMS”) and governed by (i) the
applicable JAMS employment rules and (ii) U.S. federal arbitration law, without
reference to any

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state arbitration law. The arbitrator shall apply the laws of the State of
California to the merits of any dispute or claim, without resort to that state’s
conflicts-of-laws rules. The decision of the arbitrator shall be final,
conclusive and binding on the parties to the arbitration and shall be in lieu of
the rights those parties may otherwise have to a jury trial; provided, however,
that such decision shall be subject to correction, confirmation or vacation in
accordance with the provisions and standards of applicable law governing the
judicial review of arbitration awards. Judgment shall be entered on the
arbitrator’s decision in any court having jurisdiction over the subject matter
of such dispute or controversy. The arbitrator shall be authorized to award any
or all remedies that the parties would be entitled to seek in court of law. The
Corporation shall pay all jams arbitration fees in excess of the amount of court
fees that would be required if the dispute were decided in a court of law or
equity.

 

15.    Construction.    This Agreement and the option evidenced hereby are made
and granted pursuant to the Plan and are in all respects limited by and subject
to the terms of the Plan. All decisions of the Plan Administrator with respect
to any question or issue arising under the Plan or this Agreement shall be
conclusive and binding on all persons having an interest in this option.

 

16.    Governing Law.    The interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of California without
regard to the conflict-of-laws rules thereof or of any other jurisdiction.

 

17.    Excess Shares.    If the Option Shares covered by this Agreement exceed,
as of the Grant Date, the number of shares of Common Stock which may without
stockholder approval be issued under the Plan, then this option shall be void
with respect to those excess shares, unless stockholder approval of an amendment
sufficiently increasing the number of shares of Common Stock issuable under the
Plan is obtained in accordance with the provisions of the Plan.

 

18.    Additional Terms Applicable to an Incentive Option.    In the event this
option is designated an Incentive Option in the Grant Notice, the following
terms and conditions shall also apply to the grant:

 

(a)    This option shall cease to qualify for favorable tax treatment as an
Incentive Option if (and to the extent) this option is exercised for one or more
Option Shares: (A) more than three (3) months after the date Optionee ceases to
be an Employee for any reason other than death or Permanent Disability or
(B) more than twelve (12) months after the date Optionee ceases to be an
Employee by reason of Permanent Disability.

 

(b)    No installment under this option shall qualify for favorable tax
treatment as an Incentive Option if (and to the extent) the aggregate Fair
Market Value (determined at the Grant Date) of the Common Stock for which such
installment first becomes exercisable hereunder would, when added to the
aggregate value (determined as of the respective date or dates of grant) of the
Common Stock or other securities for which this option or any other Incentive
Options granted to Optionee prior to the Grant Date (whether under the Plan or
any other option plan of the Corporation or any Parent or Subsidiary) first
become exercisable during

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the same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the
aggregate. Should such One Hundred Thousand Dollar ($100,000) limitation be
exceeded in any calendar year, this option shall nevertheless become exercisable
for the excess shares in such calendar year as a Non-Statutory Option.

 

(c)    Should the vesting or exercisability of this option be accelerated for
any reason, then this option shall qualify for favorable tax treatment as an
Incentive Option only to the extent the aggregate Fair Market Value (determined
at the Grant Date) of the Common Stock for which this option first becomes
exercisable in the calendar year in which the vesting or exercisability
acceleration occurs does not, when added to the aggregate value (determined as
of the respective date or dates of grant) of the Common Stock or other
securities for which this option or one or more other Incentive Options granted
to Optionee prior to the Grant Date (whether under the Plan or any other option
plan of the Corporation or any Parent or Subsidiary) first become exercisable
during the same calendar year, exceed One Hundred Thousand Dollars ($100,000) in
the aggregate. Should the applicable One Hundred Thousand Dollar ($100,000)
limitation be exceeded in the calendar year of such acceleration, the option may
nevertheless be exercised for the excess shares in such calendar year as a
Non-Statutory Option.

 

(d)    Should Optionee hold, in addition to this option, one or more other
options to purchase Common Stock which become exercisable for the first time in
the same calendar year as this option, then the foregoing limitations on the
exercisability of such options as Incentive Options shall be applied on the
basis of the order in which such options are granted.

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EXHIBIT I – FORM OF NOTICE OF EXERCISE

 

BORLAND SOFTWARE CORPORATION

 

NOTICE OF EXERCISE

CASH PURCHASE

 

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Name:                                         
                                        
                                        
                                                                         

 

Address:                                         
                                        
                                        
                                                                    

 

                                                                               
                                        
                                        
                                                 

 

Telephone:     Home:                                                  Business:
                                        
                                                        

 

E-Mail Address:                                                           
            Social Security Number:                                         
                  

 

Plan    Option No.    Grant Date    NQ or ISO?   

(1)

Option Price
Per Share

  

(2)

Number of
Shares to be
Exercised

  

(3)

Total Option
Price

(1)x(2) = (3)

                   

$

        $                                    

$

        $                    

$

        $                    

$

        $                    

$

        $                    

Total

        $

 

Note: Applicable taxes will be due on exercises of NQ stock options (in addition
to exercise price).

 

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Deliver Shares as follows (check one):

 

¨ E*Trade Securities, Inc.

 

Account #                        

**Please note shares will not be delivered without an account number listed

 

¨ Deliver stock certificate to address listed above

 

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Pursuant to the terms of the stock option(s) granted to me as identified above,
I hereby elect to purchase the number of vested shares of common stock of
Borland Software Corporation (“Borland”), at the option price specified above.
Concurrently with the delivery of this Exercise Notice, I shall hereby pay the
full purchase price of the shares exercised, plus any necessary taxes, to
Borland in accordance with the provisions of my agreement with the Corporation
(or other documents) evidencing the Option and shall deliver whatever additional
documents may be required by such agreement as a condition for exercise. I
UNDERSTAND THAT THE AFOREMENTIONED AUTHORIZATIONS MAY NOT BE REVOKED.

 

OPTIONEE’S SIGNATURE:                                         DATE:
                                                                                
             

 

Complete and fax this form to Stock Admin at [Phone Number]. Stock Admin will
contact you with the total amount due (including any necessary taxes). This
document should be completed after reviewing the Stock Option Exercise
Instructions available on the InSite Home Page at: [web address]

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APPENDIX

 

The following definitions shall be in effect under the Agreement:

 

A.    Agreement shall mean this Stock Option Agreement.

 

B.    Board shall mean the Corporation’s Board of Directors.

 

C.    Change in Control shall mean a change in ownership or control of the
Corporation effected through any of the following transactions:

 

(i)    there is consummated a merger, consolidation or other reorganization,
unless securities representing more than fifty percent (50%) of the total
combined voting power of the voting securities of the successor corporation are
immediately thereafter beneficially owned, directly or indirectly and in
substantially the same proportion, by the persons who beneficially owned the
Corporation’s outstanding voting securities immediately prior to such
transaction, or

 

(ii)    the sale, transfer or other disposition of all or substantially all of
the Corporation’s assets in complete liquidation or dissolution of the
Corporation other than a sale or disposition by the Corporation of all or
substantially all of the Corporation’s assets to an entity, at least fifty
percent (50%) of the combined voting power of the voting securities of which are
owned by stockholders of the Corporation in substantially the same proportions
as their ownership of the Corporation immediately prior to such sale, or

 

(iii)    the acquisition, directly or indirectly, by any person or related group
of persons (other than the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Corporation) of
beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of
securities possessing more than thirty percent (30%) of the total combined
voting power of the Corporation’s outstanding securities pursuant to a tender or
exchange offer made directly to the Corporation’s stockholders.

 

Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have
occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
Common Stock immediately prior to such transaction or series of transactions
continue to have substantially the same proportionate ownership in an entity
which owns all or substantially all of the assets of the Corporation immediately
following such transaction or series of transactions.

 

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

 

E.    Common Stock shall mean shares of the Corporation’s common stock.

 

A-1

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F.    Corporation shall mean Borland Software Corporation, a Delaware
corporation, and any successor corporation to all or substantially all of the
assets or voting stock of Borland Software Corporation which shall by
appropriate action adopt the Plan.

 

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

 

H.    Exercise Date shall mean the date on which the option shall have been
exercised in accordance with Paragraph 10 of the Agreement.

 

I.    Exercise Price shall mean the exercise price per Option Share as specified
in the Grant Notice.

 

J.    Expiration Date shall mean the date on which the option expires as
specified in the Grant Notice.

 

K.    Fair Market Value per share of Common Stock on any relevant date shall be
determined in accordance with the following provisions:

 

(i)    If the Common Stock is at the time traded on the Nasdaq National Market,
then the Fair Market Value shall be deemed equal to the last sale price per
share of Common Stock on the date in question, as the price is reported by the
National Association of Securities Dealers on the Nasdaq National Market and
published in The Wall Street Journal. If there is no reported sale of the Common
Stock on the date in question, then the Fair Market Value shall be the last sale
price on the last preceding date for which such quotation exists.

 

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

 

L.    Grant Date shall mean the date of grant of the option as specified in the
Grant Notice.

 

M.    Grant Notice shall mean the Notice of Grant of Stock Option accompanying
the Agreement, pursuant to which Optionee has been informed of the basic terms
of the option evidenced hereby.

 

A-2

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N.    Incentive Option shall mean an option which satisfies the requirements of
Code Section 422.

 

O.    Misconduct means (i) Optionee’s willful and continued failure to perform
the duties and responsibilities of his position that is not corrected within a
thirty (30) day correction period that begins upon delivery to the Optionee of a
written demand for performance from the Corporation that describes the basis for
the Corporation’s belief that Optionee has not substantially performed his
duties; (ii) any act of personal dishonesty taken by the Optionee in connection
with his responsibilities as an employee of the Corporation with the intention
that such may result in substantial personal enrichment of the Optionee;
(iii) the Optionee’s conviction of, or plea of nolo contendre to, a felony that
the Corporation reasonably believes has had or will have a material detrimental
effect on the Corporation’s reputation or business, or (iv) the Optionee
materially breaching the Optionee’s Employee Confidentiality and Assignment of
Inventions Agreement, which breach is (if capable of cure) not cured within
thirty (30) days after the Corporation delivers written notice to the Optionee
of the breach

 

P.    Non-Statutory Option shall mean an option not intended to satisfy the
requirements of Code Section 422.

 

Q.    Notice of Exercise shall mean the notice of exercise in the form attached
hereto as Exhibit I.

 

R.    Option Shares shall mean the number of shares of Common Stock subject to
the option as specified in the Grant Notice.

 

S.    Optionee shall mean the person to whom the option is granted as specified
in the Grant Notice.

 

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

 

U.    Permanent Disability shall mean the inability of Optionee to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which is expected to result in death or has lasted or can be
expected to last for a continuous period of twelve (12) months or more.

 

V.    Plan shall mean the Corporation’s 2002 Stock Incentive Plan.

 

W.    Plan Administrator shall mean the Board, a committee of the Board or a
committee of the Corporation’s executive officers acting in its capacity as
administrator of the Plan.

 

A-3

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X.    Service shall mean the Optionee’s performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor. Service shall not be deemed to cease during a period of military leave,
sick leave or other leave approved by the Corporation.

 

Y.    Special Acceleration Addendum shall mean any amendment or addendum entered
into simultaneously with this Agreement which provides for special acceleration
provisions in the event of a Change in Control or Hostile Take-Over.

 

Z.    Stock Exchange shall mean the American Stock Exchange or the New York
Stock Exchange.

 

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

 

A-4