Exhibit 10.42

 

INSIGNIA SOLUTIONS plc

 

1995 EMPLOYEE SHARE PURCHASE PLAN

 

Adopted by the Board of Directors on February 9, 1995

and Amended on December 15, 1995 and April 21, 1998

Amended and Restated on April 30, 2004

 

1.  ESTABLISHMENT OF PLAN

 

Insignia Solutions plc (the “Company”) proposes to grant options to subscribe
for the Company’s ordinary shares of 20p each, or any instruments evidencing
such ordinary shares (e.g., American Depositary Shares or American Depositary
Receipts), to eligible employees of the Company and its Subsidiaries (as
hereinafter defined) pursuant to this Insignia Solutions plc 1995 Employee Share
Purchase Plan (this “Plan”).  For purposes of this Plan, “Parent Corporation”
and “Subsidiary” (collectively, “Subsidiaries”) shall have the same meanings as
“parent corporation” and “subsidiary corporation” in Sections 424(e) and 424(f),
respectively, of the Internal Revenue Code of 1986, as amended (the “Code”). 
The Company intends the Plan to qualify as an “employee stock purchase plan”
under Section 423 of the Code (including any amendments to or replacements of
such section), and the Plan shall be so construed.  Any term not expressly
defined in the Plan but defined for purposes of Section 423 of the Code shall
have the same definition herein.  A total of one million two hundred thousand
(1,200,00) of the Company’s ordinary shares is reserved for issue under the
Plan.  Such number shall be subject to adjustments effected in accordance with
Section 14 of the Plan.

 

2.  PURPOSES

 

The purpose of the Plan is to provide employees of the Company and Subsidiaries
designated by the Board of Directors of the Company (the “Board”) as eligible to
participate in the Plan with a convenient means of acquiring an equity interest
in the Company through payroll deductions, to enhance such employees’ sense of
participation in the affairs of the Company and Subsidiaries, and to provide an
incentive for continued employment.

 

3.  ADMINISTRATION

 

This Plan may be administered by the Board or a committee appointed by the Board
(the “Committee”).  If a majority of the Board is not comprised of Disinterested
Persons as defined in Rule 16b-3(d) promulgated under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), the Board shall appoint a
committee consisting of at least two (2) members of the Board, each of whom is a
Disinterested Person.  As used in this Plan, references to the “Committee” shall
mean either such committee or the Board if no committee has been established. 
Board members who are not Disinterested Persons may not vote on any matters
affecting

 

--------------------------------------------------------------------------------

 

the administration of this Plan, but any such member may be counted for
determining the existence of a quorum at any meeting of the Board.  Subject to
the provisions of the Plan and the limitations of Section 423 of the Code or any
successor provision in the Code, all questions of interpretation or application
of the Plan shall be determined by the Board and its decisions shall be final
and binding upon all participants.  Members of the Board shall receive no
compensation for their services in connection with the administration of the
Plan, other than standard fees as established from time to time by the Board for
services rendered by Board members serving on Board committees.  All expenses
incurred in connection with the administration of the Plan shall be paid by the
Company.

 

4.  ELIGIBILITY

 

Any employee of the Company or the Subsidiaries is eligible to participate in an
Offering Period (as hereinafter defined) under the Plan except the following:

 

(a)  employees who are not employed by the Company or Subsidiaries on the
fifteenth (15th) day of the month before the beginning of such Offering Period;

 

(b)  employees who are customarily employed for less than 20 hours per week;

 

(c)  employees who are customarily employed for less than 5 months in a calendar
year;

 

(d)  employees who, together with any other person whose stock or shares would
be attributed to such employee pursuant to Section 424(d) of the Code, own stock
or shares or hold options to subscribe for ordinary shares or who, as a result
of being granted an option under the Plan with respect to such Offering Period,
would own shares or hold options to subscribe for shares possessing 5 percent or
more of the total combined voting power or value of all classes of stock or
shares of the Company or any of its Subsidiaries.

 

5.  OFFERING DATES

 

The Offering Periods of the Plan (the “Offering Period”) shall be of six (6)
months duration commencing February 1 and August 1 of each year and ending on
July 31 and January 31 respectively.  Payroll deductions of each participant are
accumulated under the Plan during the Offering Periods.  The first day of each
Offering Period is referred to as the “Offering Date”.  The last business day of
each Offering Period is referred to as the “Purchase Date”.  The Board shall
have the power to change the duration of Offering Periods with respect to future
offerings without shareholder approval if such change is announced at least
fifteen (15) days prior to the scheduled beginning of the first Offering Period
to be affected.

 

2

--------------------------------------------------------------------------------

 

6.  PARTICIPATION IN THE PLAN

 

Eligible employees may become participants in an Offering Period under the Plan
on the first Offering Date after satisfying the eligibility requirements by
delivering a subscription agreement to the Company’s or Subsidiary’s (whichever
employs such employee) payroll department (the “Payroll Department”) not later
than five (5) days prior to such Offering Date unless a later time for filing
the subscription agreement authorizing payroll deductions is set by the Board
for all eligible employees with respect to a given Offering Period.  An eligible
employee who does not deliver a subscription agreement to the Payroll Department
by such date after becoming eligible to participate in such Offering Period
shall not participate in that Offering Period or any subsequent Offering Period
unless such employee enrolls in the Plan by filing a subscription agreement with
the Payroll Department not later than five (5) days prior to such subsequent
Offering Date.  Once an employee becomes a participant in an Offering Period,
such employee will automatically participate in the Offering Period commencing
immediately following the last day of the prior Offering Period unless the
employee withdraws from the Plan or terminates further participation in the
Offering Period as set forth in Section 11 below.  Such participant is not
required to file any additional subscription agreement in order to continue
participation in the Plan.

 

7.  GRANT OF OPTION ON ENROLLMENT

 

Enrollment by an eligible employee in the Plan with respect to an Offering
Period will constitute the grant (as of the Offering Date) by the Company to
such employee of an option to subscribe on the Purchase Date for up to that
number of ordinary shares of the Company determined by dividing the amount
accumulated in such employee’s payroll deduction account during such Offering
Period, and if applicable, as converted into U.S. Dollars at the Conversion Rate
(as defined in Section 9(g)) on the Purchase Date, by the lower of (i)
eighty-five percent (85%) of the fair market value of an ordinary share of the
Company on the Offering Date (the “Entry Price”) or (ii) eighty-five percent
(85%) of the fair market value of an ordinary share of the Company on the
Purchase Date; provided, however, that the number of ordinary shares of the
Company subject to any option granted pursuant to this Plan shall not exceed the
lesser of (a) the maximum number of shares set by the Board pursuant to
Section 10(c) below with respect to the applicable Offering Period, or (b) 200%
of the number of shares determined by using 85% of the fair market value of an
ordinary share of the Company on the Offering Date as the denominator.  Fair
market value of an ordinary share of the Company shall be determined as provided
in Section 8 hereof.

 

8.  PURCHASE PRICE

 

The purchase price of shares issued pursuant to this Plan shall be payable in
U.S. Dollars.  The purchase price per share at which a share will be issued in
any Offering Period shall be 85 percent of the lesser of:

 

(a)  The fair market value on the Offering Date; or

 

3

--------------------------------------------------------------------------------

 

(b)  The fair market value on the Purchase Date.

 

Notwithstanding the foregoing, the purchase price per ordinary share shall not
in any circumstances be less than the U.S. Dollar equivalent, at the Conversion
Rate (as defined in Section 9(g)) on the Purchase Date, of 20p (being the par
value of an ordinary share).

 

For purposes of the Plan, the term “fair market value” on a given date shall
mean the fair market value of an ordinary share of the Company, or instrument
evidencing such ordinary shares (e.g., American Depositary Shares or American
Depositary Receipts) in U.S. Dollars, as determined by the Committee from time
to time in good faith.  If a public market exists for the shares, or instrument
evidencing such ordinary shares (e.g., American Depositary Shares or American
Depositary Receipts), the fair market value shall be the average of the last
reported bid and asked prices for an ordinary share of the Company on the last
trading day prior to the date of determination, or, in the event ordinary shares
of the Company, or instruments evidencing such ordinary shares (e.g., American
Depositary Shares or American Depositary Receipts), are listed on the Nasdaq
National Market, the fair market value shall be the closing price of a share, or
instrument evidencing such ordinary shares (e.g., American Depositary Shares or
American Depositary Receipts), on the determination date as quoted on the Nasdaq
National Market or if no such reported sale takes place on such date, the
closing price on the next preceding trading date on which a reported sale
occurred.

 

9.  PAYMENT OF PURCHASE PRICE;  CHANGES IN PAYROLL DEDUCTIONS; ISSUE OF SHARES

 

(a)  The purchase price of the shares is accumulated by regular payroll
deductions made during each Offering Period.  The deductions are made as a
percentage of the participant’s compensation in one percent increments not less
than 2 percent nor greater than 10 percent, not to exceed $25,000 per year, or
the U.S. Dollar equivalent determined at the Conversion Rate (as defined in
Section 9(g)) on the Offering Date, or such lower limit set by the Committee. 
Compensation for U.S. employees shall mean all W-2 compensation, including, but
not limited to base salary, wages, commissions, overtime, shift premiums and
bonuses, plus draws against commissions and excluding car allowances and any
other in kind employment related benefits; provided, however, that for purposes
of determining a participant’s compensation, any election by such participant to
reduce his or her regular cash remuneration under Sections 125 or 401(k) of the
Code shall be treated as if the participant did not make such election. 
Compensation for U.K. employees shall mean all compensation, including, but not
limited to base salary, wages, commissions, overtime, the substantial equivalent
of U.S. “shift premiums” and bonuses, plus draws against commissions and
excluding car allowances and any other in kind employment related benefits. 
Payroll deductions shall commence on the first payday following the Offering
Date and shall continue to the end of the Offering Period unless sooner altered
or terminated as provided in the Plan.

 

(b)  A participant may lower (but not increase) the rate of payroll deductions
during an Offering Period by filing with the Payroll Department a new
authorization for payroll deductions, in which case the new rate shall become
effective for the next payroll period

 

4

--------------------------------------------------------------------------------

 

commencing more than 15 days after the Payroll Department’s receipt of the
authorization and shall continue for the remainder of the Offering Period unless
changed as described below.  Such change in the rate of payroll deductions may
be made at any time during an Offering Period, but not more than one change may
be made effective during any Offering Period.  A participant may increase or
decrease the rate of payroll deductions for any subsequent Offering Period by
filing with the Payroll Department a new authorization for payroll deductions
not later than five (5) days prior to the beginning of such subsequent Offering
Period.

 

(c)  All payroll deductions made for a participant are credited to his or her
account under the Plan and are deposited with the general funds of the Company. 
No interest accrues on the payroll deductions.  All payroll deductions received
or held by the Company may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions.

 

(d)  On each Purchase Date, so long as the Plan remains in effect and provided
that the participant has not submitted a signed and completed withdrawal form
before that date, as set forth in Section 11 below, which notifies the Company
that the participant wishes to withdraw from that Offering Period under the Plan
and have all payroll deductions accumulated in the account maintained on behalf
of the participant as of that date returned to the participant, the Company
shall apply the funds, and if applicable, as converted into U.S. Dollars at the
Conversion Rate (as defined in Section 9(g)) on the Purchase Date, then in the
participant’s account to the subscription for a whole number of ordinary shares
reserved under the option granted to such participant with respect to the
Offering Period to the extent that such option is exercisable on the Purchase
Date.  The purchase price per share shall be as specified in Section 8 of the
Plan.  Any cash remaining in a participant’s account after such subscription for
ordinary shares shall be refunded to such participant in cash, without interest;
provided, however, that any amount remaining in such participant’s account on a
Purchase Date which is less than the amount necessary to subscribe for a single
ordinary share shall be carried forward, without interest, into the next
Offering Period.  In the event that the Plan has been oversubscribed, all funds
not used to subscribe for ordinary shares on the Purchase Date shall be returned
to the participant, without interest.  No ordinary shares shall be subscribed
for on a Purchase Date on behalf of any employee whose participation in the Plan
has terminated prior to such Purchase Date.

 

(e)  As promptly as practicable after the Purchase Date, the Company shall
arrange the delivery to each participant of a certificate representing the
shares issued upon exercise of his option.

 

(f)  During a participant’s lifetime, such participant’s option to subscribe for
shares hereunder is exercisable only by him or her.  The participant will have
no interest or voting right in shares covered by his or her option until such
option has been exercised.  Shares to be delivered to a participant under the
Plan will be registered in the name of the participant or in the name of the
participant and his or her spouse.

 

(g)  “Conversion Rate” means the average currency conversion rate quoted by the
Bank of America in London for converting Pounds Sterling into U.S. Dollars.

 

5

--------------------------------------------------------------------------------

 

10.  LIMITATIONS ON SHARES TO BE PURCHASED

 

(a)  No employee shall be entitled to subscribe for shares under the Plan at a
rate which, when aggregated with his or her rights to subscribe for shares under
all other employee stock purchase plans of the Company or any Subsidiary,
exceeds $25,000 (or if applicable, the U.S. Dollars equivalent determined at the
Conversion Rate (as defined in Section 9(g)) as of the Offering Date) in fair
market value, determined as of the Offering Date (or such other limit as may be
imposed by the Code) for each calendar year in which the employee participates
in the Plan.

 

(b)  No more than 200% of the number of shares determined by using 85% of the
fair market value of an ordinary share of the Company on the Offering Date as
the denominator may be subscribed for by a participant on any single Purchase
Date.

 

(c)  No employee shall be entitled to subscribe for more than the Maximum Share
Amount (as defined below) on any single Purchase Date.  Not less than thirty
days prior to the commencement of any Offering Period, the Board may, in its
sole discretion, set a maximum number of shares which may be subscribed for by
any employee at any single Purchase Date (hereinafter the “Maximum Share
Amount”).  In no event shall the Maximum Share Amount exceed the amounts
permitted under Section 10(b) above.  If a new Maximum Share Amount is set, then
all participants must be notified of such Maximum Share Amount not less than
fifteen days prior to the commencement of the next Offering Period.  Once the
Maximum Share Amount is set, it shall continue to apply with respect to all
succeeding Purchase Dates and Offering Periods unless revised by the Board as
set forth above.

 

(d)  If the number of shares to be subscribed for on a Purchase Date by all
employees participating in the Plan exceeds the number of shares then available
for issue under the Plan, the Company will make a pro rata allocation of the
remaining shares in as uniform a manner as shall be practicable and as the Board
shall determine to be equitable.  In such event, the Company shall give written
notice of such reduction of the number of shares to be subscribed for under a
participant’s option to each participant affected thereby.

 

(e)  Any payroll deductions accumulated in a participant’s account which are not
used to subscribe for ordinary shares due to the limitations in this Section 10
shall be returned to the participant as soon as practicable after the end of the
Offering Period, without interest.

 

6

--------------------------------------------------------------------------------

 

11.  WITHDRAWAL

 

(a)  Each participant may withdraw from an Offering Period under the Plan by
signing and delivering to the Payroll Department notice on a form provided for
such purpose.  Such withdrawal may be elected at any time at least 15 days prior
to the end of an Offering Period.

 

(b)  Upon withdrawal from the Plan, the accumulated payroll deductions shall be
returned to the withdrawn participant, without interest, and his or her interest
in the Plan shall terminate.  In the event a participant voluntarily elects to
withdraw from the Plan, he or she may not resume his or her participation in the
Plan during the same Offering Period, but he or she may participate in any
Offering Period under the Plan which commences on a date subsequent to such
withdrawal by filing a new authorization for payroll deductions in the same
manner as set forth in Section 6 above for initial participation in the Plan.

 

12.  TERMINATION OF EMPLOYMENT

 

Termination of a participant’s employment for any reason, including retirement,
death or the failure of a participant to remain an eligible employee,
immediately terminates his or her participation in the Plan.  In such event, the
payroll deductions credited to the participant’s account will be returned to him
or her or, in the case of his or her death, to his or her legal representative,
without interest.  For purposes of this Section 12, an employee will not be
deemed to have terminated employment or failed to remain in the continuous
employ of the Company in the case of sick leave, military leave, or any other
leave of absence approved by the Board; provided that such leave is for a period
of not more than ninety (90) days or reemployment upon the expiration of such
leave is guaranteed by contract or statute.

 

13.  RETURN OF PAYROLL DEDUCTIONS

 

In the event a participant’s interest in the Plan is terminated by withdrawal,
termination of employment or otherwise, or in the event the Plan is terminated
by the Board, the Company shall promptly deliver to the participant all payroll
deductions credited to his account.  No interest shall accrue on the payroll
deductions of a participant in the Plan.

 

14.  CAPITAL CHANGES

 

Subject to any required action by the shareholders of the Company, the number of
ordinary shares covered by each option under the Plan which has not yet been
exercised and the number of ordinary shares which have been authorized for issue
under the Plan but have not yet been placed under option (collectively, the
“Reserves”), as well as the price per ordinary share covered by each option
under the Plan which has not yet been exercised, shall be proportionately
adjusted for any increase or decrease in the number of issued ordinary shares
resulting from any consolidation or subdivision of ordinary shares of the
Company, or any bonus or other capitalization issue of ordinary shares or any
other increase or decrease in the number of issued ordinary shares effected
without receipt of consideration by the Company; provided, however, that
conversion of any

 

7

--------------------------------------------------------------------------------

 

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 shall be final, binding and conclusive.  Except as expressly
provided herein, no issue by the Company of shares of any class, or securities
convertible into shares of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of ordinary shares
subject to an option.

 

In the event of the proposed dissolution or liquidation of the Company, the
Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board.  The Board may, in the
exercise of its sole discretion in such instances, declare that the options
under the Plan shall terminate as of a date fixed by the Board and give each
participant the right to exercise his or her option as to all of the ordinary
shares comprised in the option, including shares in respect of which the option
would not otherwise be exercisable.  In the event of a proposed sale of all or
substantially all of the assets of the Company, or the sale of the entire share
capital of the Company to another corporation, (whether for consideration in
cash or in the form of securities of any kind) (a “Merger”), each option under
the Plan shall be assumed or an equivalent option shall be substituted by the
purchasing corporation or a parent or subsidiary of such purchasing corporation,
unless the Board determines, in the exercise of its sole discretion and in lieu
of such assumption or substitution, to shorten the Offering Period then in
progress and set a new purchase date (the “New Purchase Date”) and provide that
the participant shall have the right to exercise the option as to all of the
ordinary shares comprised in the option as of the New Purchase Date.  If the
Board sets a New Purchase Date and makes an option exercisable in lieu of
assumption or substitution in the event of a Merger the Board shall notify the
participant in writing, at least ten (10) days prior to the New Purchase Date,
that the Purchase Date for his or her option has changed to the New Purchase
Date and that his or her option will be automatically exercised on the New
Purchase Date, unless prior to such date ho or she has withdrawn from the
Offering Period as provided in Section 11.

 

For purposes of this Section 14, an option granted under the Plan shall be
deemed to be assumed, without limitation, if , at the time of issuance of the
stock or other consideration upon a Merger, each holder of an option under the
Plan would be entitled to receive upon exercise of the option the same number
and kind of shares of stock or the same amount of property, cash or securities
as such holder would have been entitled to receive upon the occurrence of the
transaction if the holder had been, immediately prior to the transaction, the
holder of the number of ordinary shares covered by the option at such time
(after giving effect to any adjustments in the number of ordinary shares covered
by the option as provided for in this Section 14); provided however that if the
consideration received in the transaction is not solely ordinary shares of the
successor corporation or its parent (as defined in Section 424(e) of the Code),
the Board may, with the consent of the successor corporation, provide for the
consideration to be received upon exercise of the option to be solely ordinary
shares of the successor corporation or its parent equal in Fair Market Value to
the per share consideration received by holders of ordinary shares in the
transaction.

 

The Board may, if it so determines in the exercise of its sole discretion, also
make provision for adjusting the Reserves, as well as the price per ordinary
share comprised in each

 

8

--------------------------------------------------------------------------------

 

outstanding option, in the event that the Company effects one or more
reorganizations, recapitalizations, rights offerings or other increases or
reductions of share capital, or in the event of a merger.

 

15.  NONASSIGNABILITY

 

Neither payroll deductions credited to a participant’s account nor any rights
with regard to the exercise of an option or to receive shares under the Plan may
be assigned, transferred, pledged or otherwise disposed of in any way (other
than by will, the laws of descent and distribution or as provided in Section 22
hereof) by the participant.  Any such attempt at assignment, transfer, pledge or
other disposition shall be without effect.

 

16.  REPORTS

 

Individual accounts will be maintained for each participant in the Plan.  Each
participant shall receive promptly after the end of each Offering Period a
report of his or her account setting forth the total payroll deductions
accumulated (and if applicable, the Conversion Rate (as defined in Section 9(g))
at which such participant’s payroll deductions were converted into U.S.
Dollars), the number of shares subscribed for, the per share price thereof and
the remaining cash balance, if any, carried forward to the next Offering Period.

 

17.  NOTICE OF DISPOSITION

 

Each participant shall notify the Company if the participant disposes of any of
the shares subscribed for in any Offering Period pursuant to this Plan if such
disposition occurs within two years from the Offering Date or within one year
from the Purchase Date on which such shares were subscribed for (the
“Notice Period”).  Unless such participant is disposing of any of such shares
during the Notice Period, such participant shall keep the certificates
representing such shares in his or her name (and not in the name of a nominee)
during the Notice Period.  The Company may, at any time during the Notice
Period, place a legend or legends on any certificate representing shares
acquired pursuant to the Plan requesting the Company’s transfer agent to notify
the Company of any transfer of the shares.  The obligation of the participant to
provide such notice shall continue notwithstanding the placement of any such
legend on the certificates.

 

18.  NO RIGHTS TO CONTINUED EMPLOYMENT

 

(a)                                  Neither this Plan nor the grant of any
option hereunder shall confer any right on any employee to remain in the employ
of the Company or any Subsidiary, or restrict the right of the Company or any
Subsidiary to terminate such employee’s employment.

 

(b)                                 In the event that any person holding an
option under the Plan ceases to be employed by the Company or a Subsidiary for
whatever reason, he shall have no right to any compensation in respect of the
loss of his right to receive shares under this Plan.

 

9

--------------------------------------------------------------------------------

 

19.  EQUAL RIGHTS AND PRIVILEGES

 

All eligible employees shall have equal rights and privileges with respect to
the Plan so that the Plan qualifies as an “employee stock purchase plan” within
the meaning of Section 423 or any successor provision of the Code and the
related regulations.  Any provision of the Plan which is inconsistent with
Section 423 or any successor provision of the Code shall, without further act or
amendment by the Company or the Board, be reformed to comply with the
requirements of Section 423.  This Section 19 shall take precedence over all
other provisions in the Plan.

 

20.  NOTICES

 

All notices or other communications by a participant to the Company under or in
connection with the Plan shall be deemed to have been duly given when received
in the form specified by the Company at the location, or by the person,
designated by the Company for the receipt thereof.

 

21.  TERM; SHAREHOLDER APPROVAL

 

This Plan shall become effective at such date and time as the Registration
Statement filed with the Securities and Exchange Commission relating to the
Company’s securities is declared effective (and then only provided that the
initial public offering later closes).  This Plan shall be approved by the
shareholders of the Company, in any manner permitted by applicable tax and
corporate law, within twelve months before or after the date this Plan is
adopted by the Board.  No subscription for shares pursuant to the Plan shall
occur prior to such shareholder approval.  The Plan shall continue until the
earlier to occur of termination by the Board (as set forth in Section 24), issue
of all of the ordinary shares reserved for issue under the Plan, or twenty (20)
years from the adoption of the Plan by the Board.

 

22.  DESIGNATION OF BENEFICIARY

 

(a)  A participant may file a written designation of a beneficiary who is to
receive any shares and cash, if any, from the participant’s account under the
Plan in the event of such participant’s death subsequent to the end of an
Offering Period but prior to delivery to him of such shares and cash.  In
addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant’s account under the Plan in the event
of such participant’s death prior to a Purchase Date.

 

(b)  Such designation of beneficiary may be changed by the participant at any
time by written notice.  In the event of the death of a participant and in the
absence of a beneficiary validly designated under the Plan who is living at the
time of such participant’s death, the Company shall deliver such shares or cash
to the executor or administrator of the estate of the participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such shares or cash to the spouse or
to any one or more dependents or relatives of the participant, or if no spouse,
dependent or relative is known to the Company, then to such other person as the
Company may designate.

 

10

--------------------------------------------------------------------------------

 

23.  CONDITIONS UPON ISSUE OF SHARES; LIMITATION ON SALE OF SHARES

 

Shares shall not be issued with respect to an option unless the exercise of such
option and the issue and delivery of such shares pursuant thereto shall comply
with all applicable provisions of law, domestic or foreign, including, without
limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules
and regulations promulgated thereunder, and the requirements of any stock
exchange upon which the shares may then be listed, and shall be further subject
to the approval of counsel for the Company with respect to such compliance.

 

24.  AMENDMENT OR TERMINATION OF THE PLAN

 

The Board may at any time amend, terminate or extend the term of the Plan,
except that any such termination cannot affect options previously granted under
the Plan, nor may any amendment make any change in an option previously granted
which would adversely affect the right of any participant, provided that the
Plan or an Offering Period may be terminated by the Board on a Purchase Date or
by the Board’s setting a new Purchase Date with respect to an Offering Period
then in progress if the Board determines that termination of the Plan and/or the
Offering Period is in the best interests of the Company and its Shareholders, or
if continuation of the Plan and/or the Offering Period would cause the Company
to incur adverse accounting charges as a result of a change after the effective
date of the Plan in the generally accepted accounting rules applicable to the
Plan.  Except as provided in Section 14 and in this Section 24, no amendment to
the Plan shall make any change in any option previously granted which adversely
affects the rights of any participant.  In addition, to the extent necessary to
comply with Rule 16b-3 under the Exchange Act, or under Section 423 of the Code
(or any successor rule or provision or any other applicable law, regulation or
stock exchange rule), the Company shall obtain Shareholder approval in such a
manner and to such a degree as so required.

 

25.  GOVERNING LAW

 

The Plan and all agreements, documents and instruments entered into pursuant to
the Plan shall be governed by and construed in accordance with the internal laws
of the State of California, excluding that body of law pertaining to conflict of
laws.

 

11

--------------------------------------------------------------------------------