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Exhibit 10.2
 
VIRNETX HOLDING CORPORATION
 
2007 STOCK PLAN
 
(As amended on April 13, 2012)
 
1.             Purposes of the Plan.  The purposes of this 2007 Stock Plan are
to attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees 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 of an option and subject to the
applicable provisions of Section 422 of the Code and the regulations promulgated
thereunder.  Stock Purchase Rights and Restricted Stock Units may also be
granted under the Plan.
 
2.             Definitions.  As used herein, the following definitions shall
apply:
 
(a)            “Administrator” means the Board or its Committee appointed
pursuant to Section 4 of the Plan.
 
(b)            “Affiliate” means an entity other than a Subsidiary (as defined
below) which, together with the Company, is under common control of a third
person or entity.
 
(c)            “Applicable Laws” means the legal requirements relating to the
administration of stock option and restricted stock purchase plans under
applicable U.S. state corporate laws, U.S. federal and applicable state
securities laws, the Code, any Stock Exchange rules or regulations and the
applicable laws of any other country or jurisdiction where Awards are granted
under the Plan, as such laws, rules, regulations and requirements shall be in
place from time to time.
 
(d)            “Award” means, individually or collectively, a grant under the
Plan of Options, Stock Purchase Rights or Restricted Stock Units
 
(e)            “Board” means the Board of Directors of the Company.
 
(f)             “Cause” for termination of a Participant’s Continuous Service
Status will exist (unless another applicable definition is provided in the
Option Agreement, Restricted Stock Purchase Agreement, employment agreement or
other applicable agreement) if the Participant is terminated for any of the
following reasons: (i) Participant’s willful failure substantially to perform
his or her duties and responsibilities to the Company or deliberate violation of
a Company policy; (ii) Participant’s commission of any act of fraud,
embezzlement, dishonesty or any other willful misconduct that has caused or is
reasonably expected to result in material injury to the Company; (iii)
unauthorized use or disclosure by Participant of any proprietary information or
trade secrets of the Company or any other party to whom the Participant owes an
obligation of nondisclosure as a result of his or her relationship with the
Company; or (iv) Participant’s willful breach of any of his or her obligations
under any written agreement or covenant with the Company.  The determination as
to whether a Participant is being terminated for Cause shall be made in good
faith by the Company and shall be final and binding on the Participant.  The
foregoing definition does not in any way limit the Company’s ability to
terminate a Participant’s employment or consulting relationship at any time as
provided in Section 5(d) below, and the term “Company” will be interpreted to
include any Subsidiary, Parent, Affiliate, or any successor thereto, if
appropriate.
 
 
 

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(g)            “Change of Control” means (1) a sale of all or substantially all
of the Company’s assets, or (2) any merger, consolidation or other business
combination transaction of the Company with or into another corporation, entity
or person, other than a transaction in which the holders of at least a majority
of the shares of voting capital stock of the Company outstanding immediately
prior to such transaction continue to hold (either by such shares remaining
outstanding or by their being converted into shares of voting capital stock of
the surviving entity) a majority of the total voting power represented by the
shares of voting capital stock of the Company (or the surviving entity)
outstanding immediately after such transaction, or (3) the direct or indirect
acquisition (including by way of a tender or exchange offer) by any person, or
persons acting as a group, of beneficial ownership or a right to acquire
beneficial ownership of shares representing a majority of the voting power of
the then outstanding shares of capital stock of the Company; provided that an
acquisition of shares from the Company in an equity financing approved by the
Board shall not constitute a “Change of Control” hereunder.
 
(h)            “Code” means the Internal Revenue Code of 1986, as amended.
 
(i)             “Committee” means one or more committees or subcommittees of the
Board appointed by the Board to administer the Plan in accordance with Section 4
below.
 
(j)             “Common Stock” means the Common Stock of the Company.
 
(k)            “Company” means VirnetX Holding Corporation, a Delaware
corporation.
 
(l)             “Consultant” means any person, including an advisor, who is
engaged by the Company or any Parent, Subsidiary or Affiliate to render services
and is compensated for such services, and any director of the Company whether
compensated for such services or not.
 
(m)           “Continuous Service Status” means the absence of any interruption
or termination of service as an Employee or Consultant.  Continuous Service
Status as an Employee or Consultant shall not be considered interrupted in the
case of: (i) sick leave; (ii) military leave; (iii) any other leave of absence
approved by the Administrator, provided that such leave is for a period of not
more than ninety (90) days, unless reemployment upon the expiration of such
leave is guaranteed by contract or statute, or unless provided otherwise
pursuant to Company policy adopted from time to time; or (iv) in the case of
transfers between locations of the Company or between the Company, its Parents,
Subsidiaries, Affiliates or their respective successors.  A change in status
from an Employee to a Consultant or from a Consultant to an Employee will not
constitute an interruption of Continuous Service Status.
 
(n)            “Corporate Transaction” means a sale of all or substantially all
of the Company’s assets, or a merger, consolidation or other capital
reorganization or business combination transaction of the Company with or into
another corporation, entity or person, or the direct or indirect acquisition
(including by way of a tender or exchange offer) by any person, or persons
acting as a group, of beneficial ownership or a right to acquire beneficial
ownership of shares representing a majority of the voting power of the then
outstanding shares of capital stock of the Company.
 
 
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(o)            “Director” means a member of the Board.
 
(p)            “Employee” means any person employed by the Company or any
Parent, Subsidiary or Affiliate, with the status of employment determined based
upon such factors as are deemed appropriate by the Administrator in its
discretion, subject to any requirements of the Code or the Applicable Laws.  The
payment by the Company of a director’s fee to a Director shall not be sufficient
to constitute“employment” of such Director by the Company.
 
(q)            “Exchange Act” means the Securities Exchange Act of 1934, as
amended.
 
(r)             “Fair Market Value” means, as of any date, the fair market value
of the Common Stock, as determined by the Administrator in good faith on such
basis as it deems appropriate and applied consistently with respect to
Participants.  Whenever possible, the determination of Fair Market Value shall
be based upon the closing price for the Shares as reported in the Wall Street
Journal for the applicable date.
 
(s)            “Incentive Stock Option” means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code, as
designated in the applicable Option Agreement.
 
(t)             “Listed Security” means any security of the Company that is
listed or approved for listing on a national securities exchange or designated
or approved for designation as a national market system security on an
interdealer quotation system by the National Association of Securities Dealers,
Inc.
 
(u)            “Named Executive” means any individual who, on the last day of
the Company’s fiscal year, is the chief executive officer of the Company (or is
acting in such capacity) or among the four most highly compensated officers of
the Company (other than the chief executive officer).  Such officer status shall
be determined pursuant to the executive compensation disclosure rules under the
Exchange Act.
 
(v)            “Nonstatutory Stock Option” means an Option not intended to
qualify as an Incentive Stock Option, as designated in the applicable Option
Agreement.
 
(w)           “Option” means a stock option granted pursuant to the Plan.
 
(x)            “Option Agreement” means a written document, the form(s) of which
shall be approved from time to time by the Administrator, reflecting the terms
of an Option granted under the Plan and includes any documents attached to or
incorporated into such Option Agreement, including, but not limited to, a notice
of stock option grant and a form of exercise notice.
 
 
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(y)            “Option Exchange Program” means a program approved by the
Administrator whereby outstanding Options are exchanged for Options with a lower
exercise price or are amended to decrease the exercise price as a result of a
decline in the Fair Market Value of the Common Stock.
 
(z)            “Optioned Stock” means the Common Stock subject to an Option.
 
(aa)          “Optionee” means an Employee or Consultant who receives an Option.
 
(bb)         “Parent” means a “parent corporation,” whether now or hereafter
existing, as defined in Section 424(e) of the Code, or any successor provision.
 
(cc)          “Participant” means any holder of one or more Awards, or the
Shares issuable or issued upon exercise of such awards, under the Plan.
 
(dd)         “Plan” means this 2007 Stock Plan.
 
(ee)          “Reporting Person” means an officer, Director, or greater than ten
percent stockholder of the Company within the meaning of Rule 16a-2 under the
Exchange Act, who is required to file reports pursuant to Rule 16a-3 under the
Exchange Act.
 
(ff)           “Restricted Stock” means Shares of Common Stock acquired pursuant
to a grant of a Stock Purchase Right under Section 11 below.
 
(gg)         “Restricted Stock Purchase Agreement” means a written document, the
form(s) of which shall be approved from time to time by the Administrator,
reflecting the terms of a Stock Purchase Right granted under the Plan and
includes any documents attached to such agreement.
 
(hh)         “Restricted Stock Unit” means a bookkeeping entry representing the
right to receive one share of Common Stock, granted pursuant to Section
11.  Each Restricted Stock Unit represents an unfunded and unsecured obligation
of the Company.
 
(ii)            “Restricted Stock Unit Agreement” means a written or electronic
agreement between the Company and any Participant evidencing the terms and
restrictions applying to Shares acquired under a Restricted Stock Unit.  The
Restricted Stock Unit Agreement is subject to the terms and conditions of the
Plan and the notice of grant.
 
(jj)            “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange
Act, as amended from time to time, or any successor provision.
 
(kk)          “Share” means a share of the Common Stock, as adjusted in
accordance with Section 14 of the Plan.
 
(ll)            “Stock Exchange” means any stock exchange or consolidated stock
price reporting system on which prices for the Common Stock are quoted at any
given time.
 
 
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(mm)        “Stock Purchase Right” means the right to purchase Common Stock
pursuant to Section 11 below.
 
(nn)         “Subsidiary” means a “subsidiary corporation,” whether now or
hereafter existing, as defined in Section 424(f) of the Code, or any successor
provision.
 
(oo)         “Ten Percent Holder” means a person who 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.
 
3.             Stock Subject to the Plan.  Subject to the provisions of Section
14 of the Plan, the maximum aggregate number of Shares that may be sold under
the Plan is 11,624,469 Shares of Common Stock.  The Shares may be authorized,
but unissued, or reacquired Common Stock.  If an Award should expire or become
unexercisable for any reason without having been exercised in full, or is
surrendered pursuant to an Option Exchange Program, the unpurchased Shares that
were subject thereto shall, unless the Plan shall have been terminated, become
available for future grant under the Plan.  In addition, any Shares of Common
Stock which are retained by the Company upon exercise or settlement of an Award
in order to satisfy the exercise or purchase price for such Award or any
withholding taxes due with respect to such exercise, purchase or settlement
shall be treated as not issued and shall continue to be available under the
Plan.  Shares issued under the Plan and later repurchased by the Company
pursuant to any repurchase right that the Company may have shall not be
available for future grant under the Plan.
 
4.             Administration of the Plan.
 
(a)           General.  The Plan shall be administered by the Board or a
Committee, or a combination thereof, as determined by the Board.  The Plan may
be administered by different administrative bodies with respect to different
classes of Participants and, if permitted by the Applicable Laws, the Board may
authorize one or more officers to make Awards under the Plan.
 
(b)           Committee Composition.  If a Committee has been appointed pursuant
to this Section 4, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board.  From time to time the Board may
increase the size of any Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies (however caused) and remove all members of a Committee
and thereafter directly administer the Plan, all to the extent permitted by the
Applicable Laws and, in the case of a Committee administering the Plan in
accordance with the requirements of Rule 16b-3 or Section 162(m) of the Code, to
the extent permitted or required by such provisions.
 
(c)           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, the Administrator shall have the authority, in its
discretion:
 
(i)      to determine the Fair Market Value of the Common Stock, in accordance
with Section 2(r) of the Plan, provided that such determination shall be applied
consistently with respect to Participants under the Plan;
 
 
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(ii)      to select the Employees and Consultants to whom Awards may from time
to time be granted;
 
(iii)     to determine whether and to what extent Awards are granted;
 
(iv)     to determine the number of Shares of Common Stock to be covered by each
Award granted;
 
(v)      to approve the form(s) of agreement(s) used under the Plan;
 
(vi)     to determine the terms and conditions, not inconsistent with the terms
of the Plan, of any Award granted hereunder, which terms and conditions include
but are not limited to the exercise or purchase price, the time or times when
Awards 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 Award, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;
 
(vii)    to determine whether and under what circumstances an Award may be
settled in cash instead of Common Stock;
 
(viii)   to implement an Option Exchange Program on such terms and conditions as
the Administrator in its discretion deems appropriate, provided that no
amendment or adjustment to an Option that would materially and adversely affect
the rights of any Optionee shall be made without the prior written consent of
the Optionee;
 
(ix)      to adjust the vesting of an Award held by an Employee or Consultant as
a result of a change in the terms or conditions under which such person is
providing services to the Company;
 
(x)       to construe and interpret the terms of the Plan and Awards granted
under the Plan, which constructions, interpretations and decisions shall be
final and binding on all Participants; and
 
(xi)      in order to fulfill the purposes of the Plan, to modify grants of
Awards to Participants who are foreign nationals or employed outside of the
United States in order to recognize differences in local law, tax policies or
customs.
 
5.             Eligibility.
 
(a)           Recipients of Grants.  Nonstatutory Stock Options, Stock Purchase
Rights and Restricted Stock Units may be granted to Employees and
Consultants.  Incentive Stock Options may be granted only to Employees, provided
that Employees of Affiliates shall not be eligible to receive Incentive Stock
Options.
 
(b)           Type of Option.  Each Option shall be designated in the Option
Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
 
 
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(c)           ISO $100,000 Limitation.  Notwithstanding any designation under
Section 5(b), to the extent that the aggregate Fair Market Value of Shares with
respect to which Options designated as Incentive Stock Options are exercisable
for the first time by any Optionee during any calendar year (under all plans of
the Company or any Parent or Subsidiary) exceeds $100,000, such excess Options
shall be treated as Nonstatutory Stock Options.  For purposes of this Section
5(c), Incentive Stock Options shall be taken into account in the order in which
they were granted, and the Fair Market Value of the Shares subject to an
Incentive Stock Option shall be determined as of the date of the grant of such
Option.
 
(d)           No Employment Rights.  The Plan shall not confer upon any
Participant any right with respect to continuation of an employment or
consulting relationship with the Company, nor shall it interfere in any way with
such Participant’s right or the Company’s right to terminate his or her
employment or consulting relationship at any time, with or without cause.
 
6.             Term of Plan.  The Plan shall become effective upon its adoption
by the Board of Directors.  It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 16 of the Plan.
 
7.             Term of Option.  The term of each Option shall be the term stated
in the Option Agreement; provided that the term shall be no more than ten years
from the date of grant thereof or such shorter term as may be provided in the
Option Agreement and provided further that, in the case of an Incentive Stock
Option granted to a person who at the time of such grant is a Ten Percent
Holder, the term of the Option shall be five years from the date of grant
thereof or such shorter term as may be provided in the Option Agreement.
 
8.             [Reserved.]
 
9.             Option Exercise Price and Consideration.
 
(a)           Exercise Price.  The per Share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be such price as is determined by
the Administrator and set forth in the Option Agreement, but shall be subject to
the following:
 
(i)       In the case of an Incentive Stock Option
 
   (A)           granted to an Employee who at the time of grant is a Ten
Percent Holder, the per Share exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of grant; or
 
   (B)            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.
 
(ii)      In the case of a Nonstatutory Stock Option
 
   (A)           granted prior to the date, if ever, on which the Common Stock
becomes a Listed Security to a person who is at the time of grant is a Ten
Percent Holder, the per Share exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of grant if required by the Applicable
Laws and, if not so required, shall be such price as is determined by the
Administrator;
 
 
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   (B)            granted prior to the date, if ever, on which the Common Stock
becomes a Listed Security to any other eligible person, the per Share exercise
price shall be no less than 85% of the Fair Market Value per Share on the date
of grant if required by the Applicable Laws and, if not so required, shall be
such price as is determined by the Administrator; or
 
   (C)            granted on or after the date, if ever, on which the Common
Stock becomes a Listed Security to any eligible person, the per share Exercise
Price shall be such price as determined by the Administrator provided that if
such eligible person is, at the time of the grant of such Option, a Named
Executive of the Company, the per share Exercise Price shall be no less than
100% of the Fair Market Value on the date of grant if such Option is intended to
qualify as performance-based compensation under Section 162(m) of the Code.
 
(iii)     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.
 
(b)           Permissible 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) and may consist entirely of
(1) cash; (2) check; (3) to the extent permitted under Applicable Laws, delivery
of Optionee’s promissory note with such recourse, interest, security and
redemption provisions as the Administrator determines to be appropriate (subject
to the provisions of Section 153 of the Delaware General Corporation Law); (4)
cancellation of indebtedness; (5) other Shares that have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which the Option is exercised, provided that in the case of Shares acquired,
directly or indirectly, from the Company, such Shares must have been owned by
the Optionee for more than six months on the date of surrender (or such other
period as may be required to avoid the Company’s incurring an adverse accounting
charge); (6) to the extent permitted under Applicable Laws, delivery of a
properly executed exercise notice together with such other documentation as the
Administrator and a securities broker approved by the Company shall require to
effect exercise of the Option and prompt delivery to the Company of the sale or
loan proceeds required to pay the exercise price and any applicable withholding
taxes (subject to the applicable provisions of the Sarbanes-Oxley Act
prohibiting loans to directors and officers); (7) any combination of the
foregoing methods of payment; or (8) such other consideration and method of
payment permitted under Applicable Laws.  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 and the
Administrator may, in its sole discretion, refuse to accept a particular form of
consideration at the time of any Option exercise.
 
10.           Exercise of Option.
 
(a)           General.
 
 
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(i)       Exercisability.  Any Option granted hereunder shall be exercisable at
such times and under such conditions as determined by the Administrator,
consistent with the term of the Plan and reflected in the Option Agreement,
including vesting requirements and/or performance criteria with respect to the
Company and/or the Optionee; provided however that, if required by Applicable
Laws, any Option granted prior to the date, if ever, upon which the Common Stock
becomes a Listed Security shall become exercisable at the rate of at least 20%
per year over five years from the date the Option is granted.  In the event that
any of the Shares issued upon exercise of an Option (which exercise occurs prior
to the date, if ever, upon which the Common Stock becomes a Listed Security)
should be subject to a right of repurchase in the Company’s favor, such
repurchase right shall, if required by Applicable Laws, lapse at the rate of at
least 20% per year over five years from the date the Option is
granted.  Notwithstanding the above, in the case of an Option granted to an
officer, Director or Consultant of the Company or any Parent, Subsidiary or
Affiliate of the Company, the Option may become fully exercisable, or a
repurchase right, if any, in favor of the Company Shall lapse, at any time or
during any period established by the Administrator.
 
(ii)      Leave of Absence.  The Administrator shall have the discretion to
determine whether and to what extent the vesting of Options shall be tolled
during any unpaid leave of absence; provided, however, that in the absence of
such determination, vesting of Options shall be tolled during any such unpaid
leave (unless otherwise required by the Applicable Laws).  In the event of
military leave, vesting shall toll during any unpaid portion of such leave,
provided that, upon a Participant’s returning from military leave (under
conditions that would entitle him or her to protection upon such return under
the Uniform Services Employment and Reemployment Rights Act), he or she shall be
given vesting credit with respect to Options to the same extent as would have
applied had the Participant continued to provide services to the Company
throughout the leave on the same terms as he or she was providing services
immediately prior to such leave.
 
(iii)      Minimum Exercise Requirements.  An Option may not be exercised for a
fraction of a Share.  The Administrator may require that an Option be exercised
as to a minimum number of Shares, provided that such requirement shall not
prevent an Optionee from exercising the full number of Shares as to which the
Option is then exercisable.
 
(iv)     Procedures for and Results of Exercise.  An Option shall be deemed
exercised when written notice of such exercise has been given to the Company in
accordance with the terms of the Option by the person entitled to exercise the
Option and the Company has received full payment for the Shares with respect to
which the Option is exercised.  Full payment may, as authorized by the
Administrator, consist of any consideration and method of payment allowable
under Section 9(b) of the Plan, provided that the Administrator may, in its sole
discretion, refuse to accept any form of consideration at the time of any Option
exercise.
 
Exercise of an Option in any manner shall result in a decrease in the number of
Shares that thereafter may be 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.
 
(v)      Rights as Stockholder.  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 stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option.  No adjustment will be made for a
dividend or other right for which the record date is prior to the date the stock
certificate is issued, except as provided in Section 14 of the Plan.
 
 
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(b)           Termination of Employment or Consulting Relationship.  Except as
otherwise set forth in this Section 10(b), the Administrator shall establish and
set forth in the applicable Option Agreement the terms and conditions upon which
an Option shall remain exercisable, if at all, following termination of an
Optionee’s Continuous Service Status, which provisions may be waived or modified
by the Administrator at any time.  To the extent that the Optionee is entitled
to exercise an Option at the date of his or her termination of Continuous
Service Status, or if the Optionee (or other person entitled to exercise the
Option) does not exercise the Option to the extent so entitled within the time
specified in the Option Agreement or below (as applicable), the Option shall
terminate and the Optioned Stock underlying the unexercised portion of the
Option shall revert to the Plan.  In no event may any Option be exercised after
the expiration of the Option term as set forth in the Option Agreement (and
subject to Section 7).
 
The following provisions (1) shall apply to the extent an Option Agreement does
not specify the terms and conditions upon which an Option shall terminate upon
termination of an Optionee’s Continuous Service Status, and (2) establish the
minimum post-termination exercise periods that may be set forth in an Option
Agreement:
 
(i)      Termination other than Upon Disability or Death or for Cause.  In the
event of termination of an Optionee’s Continuous Service Status, such Optionee
may exercise an Option for 30 days following such termination to the extent the
Optionee was entitled to exercise it at the date of such termination.  No
termination shall be deemed to occur and this Section 10(b)(i) shall not apply
if (i) the Optionee is a Consultant who becomes an Employee, or (ii) the
Optionee is an Employee who becomes a Consultant.
 
(ii)      Disability of Optionee.  In the event of termination of an Optionee’s
Continuous Service Status as a result of his or her disability (including a
disability within the meaning of Section 22(e)(3) of the Code), such Optionee
may exercise an Option at any time within six months following such termination
to the extent the Optionee was entitled to exercise it at the date of such
termination.
 
(iii)     Death of Optionee.  In the event of the death of an Optionee during
the period of Continuous Service Status since the date of grant of the Option,
or within thirty days following termination of Optionee’s Continuous Service
Status, the Option may be exercised by Optionee’s estate or by a person who
acquired the right to exercise the Option by bequest or inheritance at any time
within twelve months following the date of death, but only to the extent the
Optionee was entitled to exercise it at the date of death or, if earlier, the
date the Optionee’s Continuous Service Status terminated.
 
 
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(iv)     Termination for Cause.  In the event of termination of an Optionee’s
Continuous Service Status for Cause, any Option (including any exercisable
portion thereof) held by such Optionee shall immediately terminate in its
entirety upon first notification to the Optionee of termination of the
Optionee’s Continuous Service Status.  If an Optionee’s employment or consulting
relationship with the Company is suspended pending an investigation of whether
the Optionee shall be terminated for Cause, all the Optionee’s rights under any
Option likewise shall be suspended during the investigation period and the
Optionee shall have no right to exercise any Option.  This Section 10(b)(iv)
shall apply with equal effect to vested Shares acquired upon exercise of an
Option granted on any date on which the Common Stock is not a Listed Security to
a person other than an officer, Director or Consultant, in that the Company
shall have the right to repurchase such Shares from the Participant upon the
following terms: (A) the repurchase is made within 90 days of termination of the
Participant’s Continuous Service Status for Cause at the Fair Market Value of
the Shares as of the date of termination, (B) consideration for the repurchase
consists of cash or cancellation of purchase money indebtedness, and (C) the
repurchase right terminates upon the effective date of the Company’s initial
public offering of its Common Stock.  With respect to vested Shares issued upon
exercise of an Option granted to any officer, Director or Consultant, the
Company’s right to repurchase such Shares upon termination of the Participant’s
Continuous Service Status for Cause shall be made at the Participant’s original
cost for the Shares and shall be effected pursuant to such terms and conditions,
and at such time, as the Administrator shall determine.  Nothing in this Section
10(b)(iv) shall in any way limit the Company’s right to purchase unvested Shares
issued upon exercise of an Option as set forth in the applicable Option
Agreement.
 
(c)           Buyout Provisions.  The Administrator may at any time offer to buy
out for a payment in cash or Shares an Option previously granted under the Plan
based on such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made.
 
11.           Stock Purchase Rights and Restricted Stock Units.
 
(a)           Rights to Purchase.  When the Administrator determines that it
will offer Stock Purchase Rights or Restricted Stock Units under the Plan, it
shall advise the offeree in writing of the terms, conditions and restrictions
related to such Award, including the number of Shares subject to such Award, the
purchase price to be paid (if any), and the time within which such person must
accept such offer.  In the case of a Stock Purchase Right granted prior to the
date, if any, on which the Common Stock becomes a Listed Security and if
required by the Applicable Laws at that time, the purchase price of Shares
subject to such Stock Purchase Rights shall not be less than 85% of the Fair
Market Value of the Shares as of the date of the offer, or, in the case of a Ten
Percent Holder, the price shall not be less than 100% of the Fair Market Value
of the Shares as of the date of the offer.  If the Applicable Laws do not impose
the requirements set forth in the preceding sentence and with respect to any
Stock Purchase Rights granted after the date, if any, on which the Common Stock
becomes a Listed Security, the purchase price of Shares subject to Stock
Purchase Rights shall be as determined by the Administrator.  The grant of Stock
Purchase Rights or Restricted Stock Units shall be accepted by execution of the
applicable Award agreement in the form determined by the Administrator.  The
permissible consideration for Stock Purchase Rights shall be determined by the
Administrator and shall be the same as is set forth in Section 9(b) with respect
to exercise of Options.
 
(b)           Repurchase Option.
 
 
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(i)      General.  Unless the Administrator determines otherwise, the Award
agreement shall grant the Company a repurchase option exercisable upon the
voluntary or involuntary termination of the purchaser’s employment with the
Company for any reason (including death or disability).  The purchase price for
Shares repurchased pursuant to the Award agreement shall be the original
purchase price paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company.  The repurchase option shall lapse
at such rate as the Administrator may determine, provided that with respect to a
Stock Purchase Right granted prior to the date, if ever, on which the Common
Stock becomes a Listed Security to a purchaser who is not an officer, Director
or Consultant of the Company or of any Parent, Subsidiary of Affiliate, it shall
lapse at a minimum rate of 20% per year if required by Applicable Laws.
 
(ii)      Leave of Absence.  The Administrator shall have the discretion to
determine whether and to what extent the lapsing of Company repurchase rights
shall be tolled during any unpaid leave of absence; provided, however, that in
the absence of such determination, such lapsing shall be tolled during any such
unpaid leave (unless otherwise required by the Applicable Laws).  In the event
of military leave, the lapsing of Company repurchase rights shall toll during
any unpaid portion of such leave, provided that, upon a Participant’s returning
from military leave (under conditions that would entitle him or her to
protection upon such return under the Uniform Services Employment and
Reemployment Rights Act), he or she shall be given “vesting” credit with respect
to Shares purchased pursuant to the Award agreement to the same extent as would
have applied had the Participant continued to provide services to the Company
throughout the leave on the same terms as he or she was providing services
immediately prior to such leave.
 
(iii)     Termination for Cause.  In the event of termination of a Participant’s
Continuous Service Status for Cause, the Company shall have the right to
repurchase from the Participant vested Shares issued upon exercise of a Stock
Purchase Right or settlement of a Restricted Stock Unit granted to any person
other than an officer, Director or Consultant prior to the date, if any, upon
which the Common Stock becomes a Listed Security upon the following terms: (A)
the repurchase must be made within 90 days of termination of the Participant’s
Continuous Service Status for Cause at the Fair Market Value of the Shares as of
the date of termination, (B) consideration for the repurchase consists of cash
or cancellation of purchase money indebtedness, and (C) the repurchase right
terminates upon the effective date of the Company’s initial public offering of
its Common Stock.  With respect to vested Shares issued upon exercise of a Stock
Purchase Right or settlement of a Restricted Stock Unit granted to any officer,
Director or Consultant, the Company’s right to repurchase such Shares upon
termination of such Participant’s Continuous Service Status for Cause shall be
made at the Participant’s original cost for the Shares and shall be effected
pursuant to such terms and conditions, and at such time, as the Administrator
shall determine.  Nothing in this Section 11(b)(iii) shall in any way limit the
Company’s right to purchase unvested Shares as set forth in the applicable Award
agreement.
 
(c)           Other Provisions.  The Award agreement shall contain such other
terms, provisions and conditions not inconsistent with the Plan as may be
determined by the Administrator in its sole discretion.  In addition, the
provisions of Award agreements need not be the same with respect to each
purchaser.
 
 
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(d)           Form and Timing of Payment.  Payment of earned Restricted Stock
Units will be made as soon as practicable after the date(s) determined by the
Administrator and set forth in the Restricted Stock Unit Agreement.  The
Administrator, in its sole discretion, provide in any Restricted Stock Unit
Agreement for the settlement of any earned Restricted Stock Units in cash,
Shares, or a combination of both.
 
(e)           Rights as a Stockholder.  Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company.  No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 14
of the Plan.
 
12.           Taxes.
 
(a)           As a condition of the grant, vesting or exercise of an Option or
Stock Purchase Right or settlement of Restricted Stock Unit granted under the
Plan, the Participant (or in the case of the Participant’s death, the person
exercising the Option or Stock Purchase Right or receiving the Shares upon
settlement of a Restricted Stock Unit) shall make such arrangements as the
Administrator may require for the satisfaction of any applicable federal, state,
local or foreign withholding tax obligations that may arise in connection with
such grant, vesting or exercise of the Option, Stock Purchase Right, the
issuance of Shares or the settlement of a Restricted Stock Unit.  The Company
shall not be required to issue any Shares under the Plan until such obligations
are satisfied.  If the Administrator allows the withholding or surrender of
Shares to satisfy a Participant’s tax withholding obligations under this Section
12 (whether pursuant to Section 12(c), (d) or (e), or otherwise), the
Administrator shall not allow Shares to be withheld in an amount that exceeds
the minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes.
 
(b)           In the case of an Employee and in the absence of any other
arrangement, the Employee shall be deemed to have directed the Company to
withhold or collect from his or her compensation an amount sufficient to satisfy
such tax obligations from the next payroll payment otherwise payable after the
date of an exercise of the Option or Stock Purchase Right or the settlement of a
Restricted Stock Unit.
 
(c)           This Section 12(c) shall apply only after the date, if any, upon
which the Common Stock becomes a Listed Security.  In the case of Participant
other than an Employee (or in the case of an Employee where the next payroll
payment is not sufficient to satisfy such tax obligations, with respect to any
remaining tax obligations), in the absence of any other arrangement and to the
extent permitted under the Applicable Laws, the Participant shall be deemed to
have elected to have the Company withhold from the Shares to be issued upon
exercise of the Option or Stock Purchase Right or the settlement of a Restricted
Stock Unit that number of Shares having a Fair Market Value determined as of the
applicable Tax Date (as defined below) equal to the amount required to be
withheld.  For purposes of this Section 12, 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 under the Applicable Laws (the “Tax Date”).
 
 
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(d)           If permitted by the Administrator, in its discretion, a
Participant may satisfy his or her tax withholding obligations upon exercise of
an Option or Stock Purchase Right or the vesting or settlement of a Restricted
Stock Unit by surrendering to the Company Shares that have a Fair Market Value
determined as of the applicable Tax Date equal to the amount required to be
withheld.  In the case of shares previously acquired from the Company that are
surrendered under this Section 12(d), such Shares must have been owned by the
Participant for more than six (6) months on the date of surrender (or such other
period of time as is required for the Company to avoid adverse accounting
charges).
 
(e)           Any election or deemed election by a Participant to have Shares
withheld to satisfy tax withholding obligations under Section 12(c) or (d) above
shall be irrevocable as to the particular Shares as to which the election is
made and shall be subject to the consent or disapproval of the
Administrator.  Any election by a Participant under Section 12(d) above must be
made on or prior to the applicable Tax Date.
 
(f)           In the event an election to have Shares withheld is made by a
Participant and the Tax Date is deferred under Section 83 of the Code because no
election is filed under Section 83(b) of the Code, the Participant shall receive
the full number of Shares with respect to which the Option or Stock Purchase
Right is exercised but such Participant shall be unconditionally obligated to
tender back to the Company the proper number of Shares on the Tax Date.
 
13.           Non-Transferability of Awards.
 
(a)           General.  Except as set forth in this Section 13, Awards may not
be sold, pledged, assigned, hypothecated, transferred or disposed of in any
manner other than by will or by the laws of descent or distribution.  The
designation of a beneficiary by a Participant will not constitute a
transfer.  An Award may be exercised, during the lifetime of the holder of an
Award, only by such holder or a transferee permitted by this Section 13.
 
(b)           Limited Transferability Rights.  Notwithstanding anything else in
this Section 13, prior to the date, if ever, on which the Common Stock becomes a
Listed Security, the Administrator may in its discretion grant Nonstatutory
Stock Options that may be transferred by instrument to an inter vivos or
testamentary trust in which the Options are to be passed to beneficiaries upon
the death of the trustor (settlor) or by gift to “Immediate Family Members” (as
defined below) of the Optionee.  “Immediate Family” means any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law and
shall include adoptive relationships.  Following the date, if ever, on which the
Common Stock becomes a Listed Security, the Administrator may in its discretion
grant transferable Awards pursuant to Award agreements specifying the manner in
which such Awards are transferable.
 
14.           Adjustments Upon Changes in Capitalization, Merger or Certain
Other Transactions.
 
(a)           Changes in Capitalization.  Subject to any required action by the
stockholders of the Company, the number of Shares of Common Stock covered by
each outstanding Award, the numbers of Shares set forth in Sections 3(a) and 8
above, and the number of Shares of Common Stock that have been authorized for
issuance under the Plan but as to which no Awards have yet been granted or that
have been returned to the Plan upon cancellation or expiration of an Award, as
well as the price per Share of Common Stock covered by each such outstanding
Award, shall be proportionately adjusted for any increase or decrease in the
number of issued Shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination, recapitalization 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;
provided, however, that 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 Administrator, 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 or price
of Shares of Common Stock subject to an Award.
 
 
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(b)           Dissolution or Liquidation.  In the event of the dissolution or
liquidation of the Company, each Award will terminate immediately prior to the
consummation of such action, unless otherwise determined by the Administrator.
 
(c)           Corporate Transaction.  In the event of a Corporate Transaction
(including without limitation a Change of Control), each outstanding Award shall
be assumed or an equivalent award shall be substituted by such successor
corporation or a parent or subsidiary of such successor corporation (the
“Successor Corporation”), unless the Successor Corporation does not agree to
assume the Award or to substitute an equivalent award, in which case such Award
shall terminate upon the consummation of the transaction.
 
Notwithstanding the above, in the event of a Change of Control and irrespective
of whether outstanding Awards are being assumed, substituted or terminated in
connection with the transaction, the vesting and exercisability of each
outstanding Award shall accelerate as and to the extent (if at all) provided in
such Participant’s Award agreement.
 
For purposes of this Section 14(c), an Award shall be considered assumed,
without limitation, if, at the time of issuance of the stock or other
consideration upon a Corporate Transaction or a Change of Control, as the case
may be, each holder of an Award would be entitled to receive upon exercise or
settlement of the Award 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 such transaction, the holder of the number of Shares of
Common Stock covered by the Award at such time (after giving effect to any
adjustments in the number of Shares covered by the Award as provided for in this
Section 14); provided that if such consideration received in the transaction is
not solely common stock of the Successor Corporation, the Administrator may,
with the consent of the Successor Corporation, provide for the consideration to
be received upon exercise or settlement of the Award to be solely common stock
of the Successor Corporation equal to the Fair Market Value of the per Share
consideration received by holders of Common Stock in the transaction.
 
 
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(d)           Limitation on Payments.  In the event that the vesting
acceleration of any Award or lapse of a repurchase right provided for in this
Plan or in any Award agreement constitutes “parachute payments” within the
meaning of Section 280G of the Code, and (y) but for this Section 14(d) would be
subject to the excise tax imposed by Section 4999 of the Code (or any
corresponding provisions of state income tax law), then such vesting
acceleration or lapse of a repurchase right shall be either:
 
  (A)            delivered in full, or
 
  (B)            delivered to such lesser extent as would result in no portion
of such severance benefits being subject to excise tax under Code Section 4999,
 
whichever amount, taking into account the applicable federal, state and local
income taxes and the excise tax imposed by Code Section 4999, results in the
receipt by the Participant on an after-tax basis of the greater amount of
acceleration or lapse of repurchase rights benefits, notwithstanding that all or
some portion of such benefits may be taxable under Code Section 4999.  Any
determination required under this Section 14(d) shall be made in writing by the
Company’s independent accountants, whose determination shall be conclusive and
binding for all purposes on the Company and any affected Participant.  In the
event that (A) above applies, then the Participant shall be responsible for any
excise taxes imposed with respect to such benefits.  In the event that (B) above
applies, then each benefit provided hereunder shall be proportionately reduced
to the extent necessary to avoid imposition of such excise taxes.
 
(e)           Certain Distributions.  In the event of any distribution to the
Company’s stockholders of securities of any other entity or other assets (other
than dividends payable in cash or stock of the Company) without receipt of
consideration by the Company, the Administrator may, in its discretion,
appropriately adjust the price per Share of Common Stock covered by each
outstanding Award to reflect the effect of such distribution.
 
15.           Time of Granting Awards.  The date of grant of an Award shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Award, or such other date as is determined by the Administrator,
provided that in the case of any Incentive Stock Option, the grant date shall be
the later of the date on which the Administrator makes the determination
granting such Incentive Stock Option or the date of commencement of the
Optionee’s employment relationship with the Company.  Notice of the
determination shall be given to each Employee or Consultant to whom an Award is
so granted within a reasonable time after the date of such grant.
 
16.           Amendment and Termination of the Plan.
 
(a)           Authority to Amend or Terminate.  The Board may at any time amend,
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation (other than an adjustment pursuant to Section 14 above) shall
be made that would materially and adversely affect the rights of any Participant
under any outstanding grant, without his or her consent.  In addition, to the
extent necessary and desirable to comply with the Applicable Laws, the Company
shall obtain stockholder approval of any Plan amendment in such a manner and to
such a degree as required.
 
 
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(b)           Effect of Amendment or Termination.  Except as to amendments which
the Administrator has the authority under the Plan to make unilaterally, no
amendment or termination of the Plan shall materially and adversely affect
Awards already granted, unless mutually agreed otherwise between the Participant
and the Administrator, which agreement must be in writing and signed by the
Participant and the Company.
 
17.           Conditions Upon Issuance of Shares.  Notwithstanding any other
provision of the Plan or any agreement entered into by the Company pursuant to
the Plan, the Company shall not be obligated, and shall have no liability for
failure, to issue or deliver any Shares under the Plan unless such issuance or
delivery would comply with the Applicable Laws, with such compliance determined
by the Company in consultation with its legal counsel.  As a condition to the
exercise of an Option or Stock Purchase Right, or the settlement of a Restricted
Stock Unit, the Company may require the person exercising the Award or receiving
the Shares upon settlement of a Restricted Stock Unit 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
by law.  Shares issued upon exercise of Awards granted prior to the date, if
ever, on which the Common Stock becomes a Listed Security shall be subject to a
right of first refusal in favor of the Company pursuant to which the Participant
will be required to offer Shares to the Company before selling or transferring
them to any third party on such terms and subject to such conditions as is
reflected in the applicable Award agreement.
 
18.           Reservation of Shares.  The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
 
19.           Agreements.  Awards shall be evidenced by Option Agreements,
Restricted Stock Purchase Agreements, and Restricted Stock Unit Agreements,
respectively, in such form(s) as the Administrator shall from time to time
approve.
 
20.           Stockholder Approval.  If required by the Applicable Laws,
continuance of the Plan shall be subject to approval by the stockholders of the
Company within twelve (12) months before or after the date the Plan is
adopted.  Such stockholder approval shall be obtained in the manner and to the
degree required under the Applicable Laws.
 
21.           Information and Documents to Optionees and Purchasers.  Prior to
the date, if any, upon which the Common Stock becomes a Listed Security and if
required by the Applicable Laws, the Company shall provide financial statements
at least annually to each Participant and to each individual who acquired Shares
pursuant to the Plan, during the period such Participant or purchaser has one or
more Awards outstanding, and in the case of an individual who acquired Shares
pursuant to the Plan, during the period such individual owns such Shares.  The
Company shall not be required to provide such information if the issuance of
Awards under the Plan is limited to key employees whose duties in connection
with the Company assure their access to equivalent information.
 
 
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22.           Compliance With Code Section 409A.  Awards will be designed and
operated in such a manner that they are either exempt from the application of,
or comply with, the requirements of Code Section 409A, except as otherwise
determined in the sole discretion of the Administrator.  The Plan and each Award
agreement under the Plan is intended to meet the requirements of Code Section
409A and will be construed and interpreted in accordance with such intent,
except as otherwise determined in the sole discretion of the Administrator.  To
the extent that an Award or payment, or the settlement or deferral thereof, is
subject to Code Section 409A the Award will be granted, paid, settled or
deferred in a manner that will meet the requirements of Code Section 409A, such
that the grant, payment, settlement or deferral will not be subject to the
additional tax or interest applicable under Code Section 409A.
 
 
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