Exhibit 10.1

MENTOR CORPORATION
1991 STOCK OPTION PLAN

(as amended through September 17, 2007)

I. Purposes of the Plan

This Mentor Corporation 1991 Stock Option Plan (the “Plan”) is intended to
enable Mentor Corporation (the “Corporation”) and its subsidiaries to attract
and retain key employees and non-employee directors and, by giving such
employees and non-employee directors an opportunity to acquire a proprietary
interest in the corporation, to provide such employees and non-employee
directors with a stronger incentive to exert their maximum effort for the
continued success and growth of the Corporation and its subsidiaries.

II. Administration of the Plan

The Plan shall be administered by a committee or committees appointed by, and
consisting of one or more members of, the Board of Directors of the Corporation
(the “Board”). The Board may delegate the responsibility for administration of
the Plan with respect to designated classes of optionees to different
committees, subject to such limitations as the Board deems appropriate. The
composition of any committee responsible for administration of the Plan with
respect to optionees who are subject to trading restrictions of Section 16(b) of
the Securities Exchange Act of 1934 (the “1934 Act”) with respect to securities
of the Corporation shall comply with the applicable requirements of Rule 16b-3
of the Securities and Exchange Commission. Members of a committee shall serve
for such term as the Board may determine and shall be subject to removal by the
Board at any time. Any committee appointed by the Board shall have full
authority to administer the Plan within the scope of its delegated
responsibilities, including authority to interpret and construe any relevant
provision of the Plan and to adopt such rules and regulations as it may deem
necessary. Decisions of a committee made within the discretion delegated to it
by the Board shall be final and binding on all persons who have an interest in
the Plan. With respect to any matter, the term “Committee” shall hereinafter
refer to such committee as shall have been delegated authority with respect to
such matter.

III. Eligibility for Awards

Options may be granted under the Plan to such key employees of the Corporation
and its subsidiaries (including officers, whether or not they are also members
of the Board) as the Committee shall from time to time select. In addition,
members of the Board who are not employees of the Corporation or one of its
subsidiaries shall be eligible to receive options in accordance with, and only
in accordance with, the automatic grant provisions of Section VI below.

IV. Stock Subject to the Plan

a. Class. The stock which is the subject of options granted under the Plan shall
be the Corporation’s authorized but unissued common stock (“Common Stock”). In
connection with the issuance of shares of Common Stock under the Plan, the
Corporation may repurchase shares in the open market or otherwise.

 

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b. Aggregate Amount

1. The total number of shares of Common Stock issuable under the Plan shall not
exceed 5,000,000* shares plus the number of shares that would have become
available for grant, under the Corporation’s Restated 1987 Stock Option Plan and
Incentive Stock Option Plan (the “Prior Plans”) by reason of the lapse,
expiration or cancellation of options thereunder prior to exercise in full
(provided such shares are not subject to a subsequent grant under one of the
Prior Plans), subject to adjustment under Section IV(c).

2. If any outstanding option under the Plan expires or is terminated or
cancelled for any reason (including pursuant to Section IX of the Plan) before
being exercised for the full number of shares of Common Stock to which it
applies, then the Common Stock allocable to the unexercised portion of such
option shall not be charged against the limitation of Section IV(b)(1) and may
again become the subject of subsequent options granted under the Plan.

3. Adjustments. In the event any change is made to the Common Stock subject to
the Plan or subject to any outstanding option granted under the Plan (whether by
reason of merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, combination of shares, exchange of shares, or other
change in corporate or capital structure of the Corporation), then, unless such
change results in the termination of all outstanding options, the Committee
shall make appropriate adjustments to the kind and maximum number of shares
subject to the Plan, the kind and maximum number of shares for which options are
to be granted to each individual under the Plan, the kind and maximum number of
shares for which options are to be granted to non-employee directors, and the
kind and number of shares and price per share of stock subject to outstanding
options.

4. Individual Limit. No individual will receive grants under this Plan for more
than 600,000* shares (subject to adjustment as provided in Section IV(c)).
Grants that are repriced and/or canceled and regranted will count against the
limit contained in this Section IV(d).

V. Terms and Conditions of Options

Stock options granted under the Plan may be either incentive stock options
(“Incentive Options”) qualifying under Section 422 of the Internal Revenue Code
of 1986, as amended (“Internal Revenue Code”), or nonstatutory options, and
shall be appropriately designated. The options shall be evidenced by instruments
in such form as the Committee may from time to time approve. Such instruments
shall conform to the following terms and conditions:

a. Option Price. The option price per share shall be the fair market value of a
share of Common Stock on the day the option is granted.

b. Number of Shares, Term and Exercise

1. Each option granted under the Plan shall be exercisable on such date or
dates, during such period and for such number of shares as shall be determined
by the Committee and set forth in the instrument evidencing such option. No
option granted under the Plan, however, shall have an expiration date which is
more than 10 years after the date of the option grant. Each option shall contain
such other terms, conditions and restrictions, which may vary from grant to
grant and may be modified by the Committee after the date of grant, as the
Committee shall determine.

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2. After any option granted under the Plan becomes exercisable, it may be
exercised by notice to the Corporation at any time prior to the termination of
such option. Except as authorized by the Committee in accordance with Section
VII, the option price for the number of shares of Common Stock for which the
option is exercised shall become immediately due and payable upon exercise.

3. The option price shall be payable in full in cash; provided, however, that
the Committee may, either at the time the option is granted or at the time it is
exercised and subject to such limitations as it may determine, authorize payment
of all or a portion of the option price in cash and/or one or a combination of
the following alternative forms:

i. a promissory note authorized pursuant to Section VII; or

ii. full payment in shares of Common Stock valued as of the exercise date; or

iii. by delivering a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Corporation the amount of
sale or loan proceeds to pay the option price; or

4. Effective September 17, 2007, in the event an optionee ceases to be an
employee of the Corporation of any of its subsidiaries due to death, his or her
options shall become fully vested and exercisable upon the optionee’s death.

c. Termination of Employment

The Committee shall determine and shall set forth in each option whether the
option shall continue to be exercisable, and the terms and conditions of such
exercise, on and after an optionee ceases to be employed by the Corporation or
any of its subsidiaries.

d. Incentive Options. Options granted under the Plan which are intended to be
Incentive Options shall be subject to the following additional terms and
conditions:

1. Dollar Limitation. To the extent that the aggregate fair market value
(determined as of the respective date or dates of grant) of shares with respect
to which options that would otherwise be Incentive Options are exercisable for
the first time by any individual during any calendar year under the Plan (or any
other plan of the Corporation, a parent or subsidiary corporation or predecessor
thereof) exceeds the sum of $100,000 (or such greater amount as may be permitted
under the Internal Revenue Code), whether by reason of acceleration or
otherwise, such options shall not be treated as Incentive Options. In making
such determination, such options shall be taken into account in the order in
which they were granted.

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2. 10% Shareholder. If any employee to whom an Incentive Option is to be granted
pursuant to the provisions of the Plan is on the date of grant the owner of
stock (determined with application of the ownership attribution rules of Section
425(d) of the Internal Revenue Code) possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of his or her employer
corporation or of its parent or subsidiary corporation (10% Shareholder), then
the following special provisions shall be applicable to the option granted to
such individual:

i. The option price per share of the Common Stock subject to such Incentive
Option shall not be less than one hundred ten percent (110%) of the fair market
value of one share of Common Stock on the date of grant; and

ii. The option shall not have a term in excess of five (5) years from the date
of grant.

3. Parent; Subsidiary. For purposes of this Section VI(d) “parent and subsidiary
corporation” and “parent or subsidiary corporation” shall have the meaning
attributed to those terms under Section 422A(b) of the Internal Revenue Code.

e. Withholding

1. The Corporation’s obligation to deliver stock certificates upon the exercise
of any option shall be subject to the optionee’s satisfaction of all applicable
federal, state and local income and employment tax withholding requirements.

2. In the event that an optionee is required to pay to the Corporation an amount
with respect to income and employment tax withholding obligations in connection
with exercise of an option, the Committee may, in its discretion and subject to
such limitations and rules as it may adopt, permit the optionee to satisfy the
obligation, in whole or in part, by delivering shares of Common Stock already
held by the optionee or by making an irrevocable election that a portion of the
total value of the shares of Common Stock subject to the option be paid in the
form of cash in lieu of the issuance of Common Stock and that such cash payment
be applied to the satisfaction of the withholding obligations.

f. Repurchase Rights. The Committee may in its discretion determine that it
shall be a term and condition of one or more options exercised under the Plan
that the Corporation (or its assigns) shall have the right, exercisable upon the
optionee’s termination of employment with the Corporation and its subsidiaries,
to repurchase any or all of the shares of Common Stock previously acquired by
the optionee upon the exercise of such option. Any such repurchase right shall
be exercisable by the Corporation (or its assigns) upon such terms and
conditions (including the establishment of the appropriate vesting schedule and
other provisions for the expiration of such right in one or more installments)
as the Committee may specify in the instrument evidencing such right. The
Committee shall also have full power and authority to provide for the automatic
termination of the Corporation’s repurchase rights, in whole or in part, and
thereby accelerate the vesting of any or all of the purchased shares, upon the
occurrence of any Change in Control specified in Article X.

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g. Modification of Options. The Committee shall have full power and authority to
modify or waive any or all of the terms, conditions or restrictions applicable
to any outstanding option, to the extent not inconsistent with the Plan;
provided, however, that no such modification or waiver shall (1) without the
consent of the option holder, adversely affect the holder’s rights thereunder or
(2) affect any outstanding option granted pursuant to Section VI, except to the
extent necessary to conform to any amendment to Section VI.

VI. Automatic Option Grants to Directors

a. Automatic Option Grants. Non-employee members of the Board shall
automatically be granted nonstatutory stock options (“Automatic Option Grants”)
to purchase the number of shares of Common Stock set forth below (subject to
adjustment under Section IV(c) hereof) on the dates and terms set forth below:

1. Each person who is newly elected or appointed as a non-employee member of the
Board of Directors after the date of adoption of this Plan shall receive on the
date of such election or appointment an Automatic Option Grant to purchase
20,000 shares* .

2. On the date of each of the Corporation’s Annual Meetings occurring after the
date of adoption of this Plan each person who is then an incumbent, continuing
non-employee director, or who is then newly elected or appointed as a
nonemployee director, shall receive an Automatic Option Grant for 6,000* shares,
provided that the maximum number of shares for which such a director may receive
such options pursuant to Section VI(a)(1) and VI(a)(2) shall be 60,000* less the
number of shares for which such director received options under any prior option
plan of the Corporation.

3. In addition to any grants under Section VI(a)(1) and Section VI(a)(2)
immediately above, each individual who is a non-employee member of the Board on
May 17, 1994 shall receive an Automatic Option Grant to purchase 30,000* shares.
The automatic grant date of these options will be May 17, 1994.

4. In addition to any grants under Section VI(a)(1), Section VI(a)(2) and
Section VI(a)(3) immediately above, each individual who is a non-employee member
of the Board of Directors of Mentor Corporation on May 15, 1997 shall receive a
one-time grant of options to purchase 30,000 shares of Common Stock.

b. Terms and Conditions. The terms and conditions applicable to each Automatic
Option Grant shall be as follows:

1. The option price per share will be equal to one hundred percent (100%) of the
fair market value of one share of the Common Stock on the automatic grant date.

2. The options will have terms of ten years measured from the automatic grant
date.

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3. The options will be exercisable in the following increments: twenty-five
percent (25%) after one year and the remainder in equal annual installments over
the next three years, provided that options with an automatic grant date of
May 17, 1994 will be exercisable in the following increments: thirty-three and
one-third percent (33-1/3%) after one year and the remainder in equal annual
installments over the next two years. Notwithstanding the foregoing, (i) the
exercisability of all such options shall accelerate upon the occurrence of a
Change in Control in accordance with Section X(a) and shall terminate, to the
extent unexercised, if the Corporation’s Common Stock ceases to exist or be
publicly traded as a result of the Change in Control, unless the options are
expressly assumed or replaced by substitute options by the entity that survives
the Change in Control, and (ii) no option granted under this Section VI may be
exercised prior to approval of the Plan by the Corporation’s shareholders, which
approval was obtained in September of 1991 for all such grants except the
May 17, 1994 grants.

4. Upon exercise of the option, the option price for the purchased shares will
become payable immediately in cash or in shares of Common Stock that the
optionee has held for at least six months.

5. In the event the optionee ceases to serve as a director, the option may be
exercised, to the extent then exercisable and within the term thereof, for a
period of ninety (90) days after the date of cessation (twelve (12) months in
the case of cessation by reason of disability or death). In the case of death,
the option may be exercised within such period by the estate or heirs of the
optionee.

6. Effective September 17, 2007, in the event the optionee ceases to serve as a
director due to the optionee’s death, the option shall become fully vested and
exercisable upon the optionee’s death.

VII. Loans, Loan Guarantees and Installment Payments

In order to assist an employee (including an employee who is an officer or
member of the Board) in the acquisition of shares of Common Stock pursuant to an
option granted under the Plan (other than pursuant to Section VI), the Committee
may authorize, at either the time of the grant of an option or the time of the
acquisition of Common Stock thereunder, (i) the extension of a loan to the
employee by the Corporation, (ii) the payment by the employee of the purchase
price, if any, of the Common Stock in installments, or (iii) the guarantee by
the Corporation of a loan obtained by the employee from a third party. The terms
of any loans, guarantees or installment payments, including the interest: rate
and terms of repayment, will be subject to the discretion of the Committee.
Loans, installment payments and guarantees may be granted without security, the
maximum credit available being the purchase price, if any, of the Common Stock
acquired plus the maximum federal and state income and employment tax liability
which may be incurred in connection with the acquisition.

VIII. Assignability

No option granted under the Plan shall be assignable or transferable by the
optionee other than by will or by the laws of descent and distribution, and
during the lifetime of the optionee options granted under the Plan may be
exercised only by the optionee.

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IX. Cancellation and New Grant of Options

The Committee shall have the authority to effect, at any time and from time to
time, with the consent of the affected option holders, the cancellation of any
or all outstanding options under the Plan or the Prior Plans (other than options
granted under Section VI) and to grant in substitution therefor new options
under the Plan covering the same or different numbers of shares of Common Stock
but having an option price per share not less than the fair market value on the
new grant date (or, in the case of an Incentive Option to be granted to a 10%
Shareholder, one hundred ten percent (110%) of such fair market value). If one
or more of the cancelled options is an Incentive Option granted before 1987
under one of the Prior Plans, then such option shall, solely for purposes of the
“sequential exercise” rule applicable to other outstanding Incentive options
granted before 1987 under the Prior Plans or any other plan of the Corporation
or parent or subsidiary, be considered to be outstanding until the expiration
date initially specified for the option term of such option.

X. Recapitalization, Merger, Consolidation, Sale of Assets or Liquidation

a. Acceleration of Exercisability. Anything else to the contrary in this Plan
notwithstanding, in the event of a “Change in Control” of the Corporation, as
defined herein, all options held by a person under this Plan that shall not have
expired, shall become immediately exercisable in full. The acceleration of the
exercisability of options shall be effective immediately prior to (but subject
to the actual occurrence of) the applicable Change in Control, and each optionee
shall be entitled to exercise his or her accelerated options in advance prior to
the Change in Control, provided that such Change in Control actually occurs and
that such optionee has not voluntarily terminated his or her position with the
Corporation prior to the occurrence of such Change in Control.

b. Optional Actions. In the event the Committee determines in good faith that a
Change in Control may be imminent, the Committee may, but shall not be obligated
to:

1. If the Change in Control is a merger or consolidation or a statutory share
exchange, make provision for the protection of the outstanding options granted
under this Plan by the substitution, in lieu of such options, of options to
purchase such numbers of shares of appropriate voting common stock of the
corporation surviving any merger or consolidation or, if appropriate, of the
parent corporation of the Corporation or such surviving corporation (the
“Survivor’s Stock”) as the Committee deems equitable, or, alternatively, by the
delivery of such numbers of shares of the Survivor’s Stock as have a fair market
value as of the date of the Change in Control equal to the product of (i) the
amount by which the Change in Control Proceeds per Share (as defined in
Section X(c)(3)) exceeds the option exercise price per share times (ii) the
numbers of Common shares covered by the respective options; or

2. At least ten (10) days prior to any Change in Control described in
Section X(c)(1)(iii), declare, and provide written notice to each optionee of
the declaration, that each outstanding option, whether or not then exercisable,
shall be cancelled at the time of the Change in Control (unless it shall have
been exercised prior to the occurrence of the Change in Control) in exchange for
payment to each optionee, within ten days after the Change in Control, of cash
equal to the amount (if any), for each Share covered by the cancelled option, by
which the Change in Control Proceeds per Share (as defined in Section X(c)(3))
exceeds the exercise price per Share covered by such option.

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No such action by the Committee shall in any way affect the acceleration of the
exercisability of options pursuant to Section X(a), and each optionee shall have
the right, during the period preceding the Change in Control, to exercise his or
her option as; to all or any part of the shares covered thereby in accordance
with said Section X(a). In the event of a declaration pursuant to this
Section X(b), each outstanding option granted pursuant to this Plan that shall
not have been exercised prior to the Change in Control shall be cancelled at the
time of the Change in Control, and this Plan shall terminate at the time of such
cancellation, subject to the obligations of the Corporation provided in this
Section X(b).

Any action taken by the Committee under this Section X(b) in contemplation of an
expected Change in Control shall be null and void in the event such Change in
Control does not actually occur.

c. Definitions

1. Change in Control. A “Change in Control,” for purposes of this Plan, shall
have occurred if:

i. a majority of the directors of the Corporation shall be persons other than
persons: (A) for whose election proxies shall have been solicited by the Board
of Directors of the Corporation, or (B) who are then serving as directors
appointed by the Board of Directors to fill vacancies on the Board of Directors
caused by death or resignation (but not by removal) or to fill newly-created
directorships;

ii. twenty percent (20%) or more of the outstanding voting power of the
Corporation shall have been acquired or beneficially owned (as defined in
Rule 13d-3 under the 1934 Act or any successor rule thereto) by any person
(other than the Corporation, a subsidiary of the Corporation or, as to any
optionee, that optionee) or Group (as defined in Section X(c)(2), which Group
does not, as to any optionee, include such optionee; or

iii. there shall have occurred:

(A) a merger or consolidation of the Corporation with or into another
corporation (other than (1) a merger or consolidation with a subsidiary of the
Corporation or (2) a merger or consolidation in which (aa) the holders of voting
stock of the Corporation immediately prior to the merger as a class continue to
hold immediately after the merger at least sixty percent (60%) of all
outstanding voting power of the surviving or resulting corporation or its parent
and (bb) all holders of each outstanding class or series of voting stock of the
Corporation immediately prior to the merger or consolidation have the right to
receive substantially the same cash, securities or other property in exchange
for their voting stock of the Corporation as all other holders of such class or
series);

(B) a statutory exchange of shares of one or more classes or series of
outstanding voting stock of the Corporation for cash, securities or other
property;

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(C) the sale or other disposition of all or substantially all of the assets of
the Corporation (in one transaction or a series of transactions); or

(D) the liquidation or dissolution of the Corporation;

unless, as to any optionee, more than twenty-five percent (25%) of the voting
stock (or the voting equity interest) of the surviving corporation or the
corporation or other entity acquiring all or substantially all of the assets of
the Corporation (in the case of a merger, consolidation or disposition of
assets) or of the Corporation or its resulting parent corporation (in the case
of a statutory share exchange) is beneficially owned by such optionee or a Group
that includes such optionee.

2. Group. A “Group,” for purposes of this Plan, shall mean any two or more
persons acting as a partnership, limited partnership, syndicate, or other group
acting in concert for the purpose of acquiring, holding or disposing of voting
stock of the Corporation.

3. Change in Control Proceeds. “Change in Control Proceeds” per Share shall mean
the cash plus the fair market value ‘ as determined in good faith by the
Committee, of the noncash consideration to be received per Share by the
shareholders of the Corporation upon the occurrence of a Change in Control.

XI. Valuation of Common Stock

For all valuation purposes under the Plan, the fair market value of a share of
Common Stock on any relevant date shall be determined in accordance with the
following provisions:

a. Over-the-Counter. If the Common Stock is not at the time listed or admitted
to trading on any stock exchange but is traded in the over-the-counter market,
the fair market value shall be the mean between the highest bid price and lowest
asked price (or, if such information is available, the closing selling price) of
one share of Common Stock on the date in question in the over-the-counter
market, as such prices are reported by the National Association of securities
Dealers through its NASDAQ system or any successor system. If there are no
reported bid and asked prices (or closing selling price) on the date in
question, then the mean between the highest bid price and lowest asked price
(or, if available, the closing selling price) on the last preceding date for
which such quotations exist shall be determinative of fair market value.

b. Stock Exchange. If the Common Stock is at the time listed or admitted to
trading on any stock exchange, then the fair market value shall be the closing
selling price of one share of Common Stock on the date in question on the stock
exchange determined by the Committee to be the primary market for the Common
Stock, as such price is officially quoted on such exchange. If there is no
reported sale of Common Stock on such exchange on the date in question, then the
fair market value shall be the closing selling price on the exchange on the last
preceding date for which such quotation exists.

c. Neither Over-the-Counter nor Stock Exchange. If the Common Stock is at the
time neither listed nor admitted to trading on any stock exchange nor traded in
the over-the-counter market, then the fair market value shall be determined by
the Committee after taking into account such factors as the Committee shall deem
appropriate.

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If, however, the Committee determines that, as a result of circumstances
existing on any date, the use of the above rules is not a reasonable method of
determining fair market value on that date, the Committee may use such other
method as, in its judgment, is reasonable.

XII. Effective Date and Term of Plan

a. Effective Date. The Plan shall become effective on the date it is adopted by
the Board, but no shares of Common Stock shall be issued under the Plan and no
options granted under the Plan shall be exercisable before the Plan is approved
by the holders of at least a majority of the Corporation’s voting stock
represented and voting at a duly-held meeting at which a quorum is present. If
such shareholder approval is not obtained, then any options previously granted
under the Plan shall terminate and no further options shall be granted. Subject
to such limitation, the Committee may grant options under the Plan at any time
after the adoption of the Plan by the Board and before the date fixed herein for
termination of the Plan.

b. Term. No option may be granted under the Plan after the earlier of (i) the
tenth anniversary of the date of its adoption by the Board or (ii) the date on
which all shares available for issuance under the Plan have been issued or
cancelled pursuant to the exercise or surrender of options granted hereunder.

XIII. Amendment or Discontinuance by Board Action

The Board may amend, suspend or discontinue the Plan in whole or in part at any
time; provided, however, that (1) except to the extent necessary to qualify as
Incentive options any or all options granted under the Plan which are intended
to so qualify, such action shall not adversely affect rights and obligations
with respect to options at the time outstanding under the Plan; (2) the
provisions of the Plan concerning the eligibility of outside directors for
awards and the amount, price and timing of their awards may not be amended more
than once every six months, other than to comport with changes in the Internal
Revenue Code or rules thereunder; and (3) the Board shall not, without the
approval of the Corporation’s shareholders (i) increase the number of shares of
Common Stock which may be issued under the Plan (unless necessary to effect the
adjustments required under Section IV(c)), (ii) modify the eligibility
requirements for awards under the Plan or (iii) make any other change with
respect to which the Board determines that shareholder approval is required by
applicable law or regulatory standards.

XIV. No Employment Obligation

Nothing contained in the Plan (or in any option granted under the Plan) shall
confer upon any employee any right to continue in the employ of the Corporation
or any affiliate or constitute any contract or agreement of employment or
interfere in any way with the right of the Corporation or an affiliate to reduce
such employee’s compensation from the rate in existence at. the time of the
granting of an option or to terminate such employee’s employment at any time,
with or without cause; but nothing contained herein or in any option shall
affect any contractual rights of an employee pursuant to a written employment
agreement.

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XV. Use of Proceeds

The cash proceeds received by the Corporation from the issuance of shares
pursuant to options under the Plan shall be used for general corporate purposes.

XVI. Regulatory Approvals

The implementation of the Plan, the granting of any option under the Plan, and
the issuance of Common Stock upon the exercise of any such option or lapse of
restrictions on any Common Stock issued under the Plan shall be subject to the
Corporation’s procurement of all approvals and permits required by regulatory
authorities having jurisdiction over the Plan, the options granted under the
Plan or the Common Stock issued pursuant to such an option.

XVII. Governing Law

To the extent not otherwise governed by federal law, the Plan and its
implementation shall be governed by and construed in accordance with the laws of
the State of California.

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