Exhibit 10.48

 

LECG CORPORATION

 

2003 STOCK OPTION PLAN

 

(As Amended and Restated as of February 6, 2008)

 

1.             PURPOSES OF THE PLAN.  THE PURPOSES OF THIS 2003 STOCK OPTION
PLAN ARE:

 

·              to attract and retain the best available personnel for positions
of substantial responsibility,

 

·              to provide additional incentive to Employees, Directors and
Consultants, and

 

·              to promote the success of the Company’s business.

 

Awards granted under the Plan may be Incentive Stock Options, Nonstatutory Stock
Options, Restricted Stock and Restricted Stock Units as determined by the
Administrator at the time of grant.

 

2.             DEFINITIONS.  AS USED HEREIN, THE FOLLOWING DEFINITIONS SHALL
APPLY:

 

(A)           “ADMINISTRATOR” MEANS THE BOARD OR ANY OF ITS COMMITTEES AS SHALL
BE ADMINISTERING THE PLAN, IN ACCORDANCE WITH SECTION 4 OF THE PLAN.

 

(B)           “APPLICABLE LAWS” MEANS THE REQUIREMENTS RELATING TO THE
ADMINISTRATION OF EQUITY-BASED AWARDS UNDER U.S. STATE CORPORATE LAWS, U.S.
FEDERAL AND STATE SECURITIES LAWS, THE CODE, ANY STOCK EXCHANGE OR QUOTATION
SYSTEM ON WHICH THE COMMON STOCK IS LISTED OR QUOTED AND THE APPLICABLE LAWS OF
ANY FOREIGN COUNTRY OR JURISDICTION WHERE AWARDS ARE, OR WILL BE, GRANTED UNDER
THE PLAN.

 

(C)           “AWARD” MEANS, INDIVIDUALLY OR COLLECTIVELY, A GRANT UNDER THE
PLAN OF OPTIONS, RESTRICTED STOCK AND RESTRICTED STOCK UNITS.

 

(D)           “AWARD AGREEMENT” MEANS THE WRITTEN OR ELECTRONIC AGREEMENT
SETTING FORTH THE TERMS AND PROVISIONS APPLICABLE TO EACH AWARD GRANTED UNDER
THE PLAN, INCLUDING ANY OPTION AGREEMENT AND RESTRICTED STOCK PURCHASE
AGREEMENT.  THE AWARD AGREEMENT IS SUBJECT TO THE TERMS AND CONDITIONS OF THE
PLAN.

 

(E)           “BOARD” MEANS THE BOARD OF DIRECTORS OF THE COMPANY.

 

(F)            “CHANGE IN CONTROL” MEANS THE OCCURRENCE OF ANY OF THE FOLLOWING
EVENTS:

 

(I)            ANY “PERSON” (AS SUCH TERM IS USED IN SECTIONS 13(D) AND 14(D) OF
THE EXCHANGE ACT) BECOMES THE “BENEFICIAL OWNER” (AS DEFINED IN RULE 13D-3 OF
THE EXCHANGE ACT), DIRECTLY OR INDIRECTLY, OF SECURITIES OF THE COMPANY
REPRESENTING FIFTY PERCENT (50%) OR MORE OF THE TOTAL VOTING POWER REPRESENTED
BY THE COMPANY’S THEN OUTSTANDING VOTING SECURITIES;

 

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(II)           THE CONSUMMATION OF THE SALE OR DISPOSITION BY THE COMPANY OF ALL
OR SUBSTANTIALLY ALL OF THE COMPANY’S ASSETS;

 

(III)          A CHANGE IN THE COMPOSITION OF THE BOARD OCCURRING WITHIN A
TWO-YEAR PERIOD, AS A RESULT OF WHICH FEWER THAN A MAJORITY OF THE DIRECTORS ARE
INCUMBENT DIRECTORS.  “INCUMBENT DIRECTORS” MEANS DIRECTORS WHO EITHER (A) ARE
DIRECTORS AS OF THE DATE HEREOF, OR (B) ARE ELECTED, OR NOMINATED FOR ELECTION,
TO THE BOARD WITH THE AFFIRMATIVE VOTES OF AT LEAST A MAJORITY OF THE INCUMBENT
DIRECTORS AT THE TIME OF SUCH ELECTION OR NOMINATION (BUT WILL NOT INCLUDE AN
INDIVIDUAL WHOSE ELECTION OR NOMINATION IS IN CONNECTION WITH AN ACTUAL OR
THREATENED PROXY CONTEST RELATING TO THE ELECTION OF DIRECTORS TO THE COMPANY);
OR

 

(IV)          THE CONSUMMATION OF A MERGER OR CONSOLIDATION OF THE COMPANY WITH
ANY OTHER CORPORATION, OTHER THAN A MERGER OR CONSOLIDATION WHICH WOULD RESULT
IN THE VOTING SECURITIES OF THE COMPANY OUTSTANDING IMMEDIATELY PRIOR THERETO
CONTINUING TO REPRESENT (EITHER BY REMAINING OUTSTANDING OR BY BEING CONVERTED
INTO VOTING SECURITIES OF THE SURVIVING ENTITY OR ITS PARENT) AT LEAST FIFTY
PERCENT (50%) OF THE TOTAL VOTING POWER REPRESENTED BY THE VOTING SECURITIES OF
THE COMPANY OR SUCH SURVIVING ENTITY OR ITS PARENT OUTSTANDING IMMEDIATELY AFTER
SUCH MERGER OR CONSOLIDATION.

 

(G)           “CODE” MEANS THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.

 

(H)           “COMMITTEE” MEANS A COMMITTEE OF DIRECTORS APPOINTED BY THE BOARD
IN ACCORDANCE WITH SECTION 4 OF THE PLAN.

 

(I)            “COMMON STOCK” MEANS THE COMMON STOCK OF THE COMPANY.

 

(J)            “COMPANY” MEANS LECG CORPORATION, A DELAWARE CORPORATION.

 

(K)           “CONSULTANT” MEANS ANY NATURAL PERSON, INCLUDING AN ADVISOR,
ENGAGED BY THE COMPANY OR A PARENT OR SUBSIDIARY TO RENDER SERVICES TO SUCH
ENTITY.

 

(L)            “DIRECTOR” MEANS A MEMBER OF THE BOARD.

 

(M)          “DISABILITY” MEANS TOTAL AND PERMANENT DISABILITY AS DEFINED IN
SECTION 22(E)(3) OF THE CODE.

 

(N)           “EMPLOYEE” MEANS ANY PERSON, INCLUDING OFFICERS AND DIRECTORS,
EMPLOYED BY THE COMPANY OR ANY PARENT OR SUBSIDIARY OF THE COMPANY.  A SERVICE
PROVIDER SHALL NOT CEASE TO BE AN EMPLOYEE IN THE CASE OF (I) ANY LEAVE OF
ABSENCE APPROVED BY THE COMPANY OR (II) TRANSFERS BETWEEN LOCATIONS OF THE
COMPANY OR BETWEEN THE COMPANY, ITS PARENT, ANY SUBSIDIARY, OR ANY SUCCESSOR. 
FOR PURPOSES OF INCENTIVE STOCK OPTIONS, NO SUCH LEAVE MAY EXCEED THREE
(3) MONTHS, UNLESS REEMPLOYMENT UPON EXPIRATION OF SUCH LEAVE IS GUARANTEED BY
STATUTE OR CONTRACT.  IF REEMPLOYMENT UPON EXPIRATION OF A LEAVE OF ABSENCE
APPROVED BY THE COMPANY IS NOT SO GUARANTEED, THEN SIX (6) MONTHS FOLLOWING THE
FIRST (1ST) DAY OF SUCH LEAVE, ANY INCENTIVE STOCK OPTION HELD BY THE OPTIONEE
SHALL CEASE TO BE TREATED AS AN INCENTIVE STOCK OPTION AND SHALL BE TREATED FOR
TAX PURPOSES AS A NONSTATUTORY STOCK OPTION.  NEITHER SERVICE AS A DIRECTOR NOR
PAYMENT OF A DIRECTOR’S FEE BY THE COMPANY SHALL BE SUFFICIENT TO CONSTITUTE
“EMPLOYMENT” BY THE COMPANY.

 

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(O)           “EXCHANGE ACT” MEANS THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

(P)           “FAIR MARKET VALUE” MEANS, AS OF ANY DATE, THE VALUE OF COMMON
STOCK DETERMINED AS FOLLOWS:

 

(I)            IF THE COMMON STOCK IS LISTED ON ANY ESTABLISHED STOCK EXCHANGE
OR A NATIONAL MARKET SYSTEM, INCLUDING WITHOUT LIMITATION THE NASDAQ NATIONAL
MARKET OR THE NASDAQ SMALLCAP MARKET OF THE NASDAQ STOCK MARKET, ITS FAIR MARKET
VALUE SHALL BE THE CLOSING SALES PRICE FOR SUCH STOCK (OR THE CLOSING BID, IF NO
SALES WERE REPORTED) AS QUOTED ON SUCH EXCHANGE OR SYSTEM ON THE DAY OF
DETERMINATION, AS REPORTED IN THE WALL STREET JOURNAL OR SUCH OTHER SOURCE AS
THE ADMINISTRATOR DEEMS RELIABLE;

 

(II)           IF THE COMMON STOCK IS REGULARLY QUOTED BY A RECOGNIZED
SECURITIES DEALER BUT SELLING PRICES ARE NOT REPORTED, THE FAIR MARKET VALUE OF
A SHARE OF COMMON STOCK SHALL BE THE MEAN BETWEEN THE HIGH BID AND LOW ASK
PRICES FOR THE COMMON STOCK ON THE DAY OF DETERMINATION, AS REPORTED IN THE WALL
STREET JOURNAL OR SUCH OTHER SOURCE AS THE ADMINISTRATOR DEEMS RELIABLE; OR

 

(III)          IN THE ABSENCE OF AN ESTABLISHED MARKET FOR THE COMMON STOCK, THE
FAIR MARKET VALUE SHALL BE DETERMINED IN GOOD FAITH BY THE ADMINISTRATOR.

 

(Q)           “INCENTIVE STOCK OPTION” MEANS AN OPTION INTENDED TO QUALIFY AS AN
INCENTIVE STOCK OPTION WITHIN THE MEANING OF SECTION 422 OF THE CODE AND THE
REGULATIONS PROMULGATED THEREUNDER.

 

(R)            “NONSTATUTORY STOCK OPTION” MEANS AN OPTION NOT INTENDED TO
QUALIFY AS AN INCENTIVE STOCK OPTION.

 

(S)           “NOTICE OF GRANT” MEANS A WRITTEN OR ELECTRONIC NOTICE EVIDENCING
CERTAIN TERMS AND CONDITIONS OF AN INDIVIDUAL AWARD GRANT.  THE NOTICE OF GRANT
IS PART OF THE AWARD AGREEMENT.

 

(T)            “OFFICER” MEANS A PERSON WHO IS AN OFFICER OF THE COMPANY WITHIN
THE MEANING OF SECTION 16 OF THE EXCHANGE ACT AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER.

 

(U)           “OPTION” MEANS A STOCK OPTION GRANTED PURSUANT TO THE PLAN.

 

(V)           “OPTION AGREEMENT” MEANS AN AGREEMENT BETWEEN THE COMPANY AND AN
OPTIONEE EVIDENCING THE TERMS AND CONDITIONS OF AN INDIVIDUAL OPTION GRANT.  THE
OPTION AGREEMENT IS SUBJECT TO THE TERMS AND CONDITIONS OF THE PLAN.

 

(W)          “OPTION EXCHANGE PROGRAM” MEANS A PROGRAM WHEREBY OUTSTANDING
OPTIONS ARE SURRENDERED IN EXCHANGE FOR (I) OPTIONS WITH A LOWER EXERCISE PRICE
OR (II) OTHER AWARDS OR CASH.

 

(X)            “OPTIONED STOCK” MEANS THE COMMON STOCK SUBJECT TO AN AWARD.

 

(Y)           “OPTIONEE” MEANS THE HOLDER OF AN OUTSTANDING OPTION GRANTED UNDER
THE PLAN.

 

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(Z)            “PARENT” MEANS A “PARENT CORPORATION,” WHETHER NOW OR HEREAFTER
EXISTING, AS DEFINED IN SECTION 424(E) OF THE CODE.

 

(AA)         “PARTICIPANT” MEANS THE HOLDER OF AN OUTSTANDING AWARD, INCLUDING
AN OPTIONEE.

 

(BB)         “PERIOD OF RESTRICTION” MEANS THE PERIOD DURING WHICH THE TRANSFER
OF SHARES OF RESTRICTED STOCK ARE SUBJECT TO RESTRICTIONS AND THEREFORE, THE
SHARES ARE SUBJECT TO A SUBSTANTIAL RISK OF FORFEITURE.  SUCH RESTRICTIONS MAY
BE BASED ON THE PASSAGE OF TIME, THE ACHIEVEMENT OF TARGET LEVELS OF
PERFORMANCE, OR THE OCCURRENCE OF OTHER EVENTS AS DETERMINED BY THE
ADMINISTRATOR.

 

(CC)         “PLAN” MEANS THIS 2003 STOCK OPTION PLAN.

 

(DD)         “RESTRICTED STOCK” MEANS SHARES ISSUED PURSUANT TO AN AWARD OF
RESTRICTED STOCK UNDER SECTION 7 OF THE PLAN.

 

(EE)         “RESTRICTED STOCK PURCHASE AGREEMENT” MEANS A WRITTEN AGREEMENT
BETWEEN THE COMPANY AND THE OPTIONEE EVIDENCING THE TERMS AND RESTRICTIONS
APPLYING TO STOCK PURCHASED UNDER A RESTRICTED STOCK.  THE RESTRICTED STOCK
PURCHASE AGREEMENT IS SUBJECT TO THE TERMS AND CONDITIONS OF THE PLAN AND THE
NOTICE OF GRANT.

 

(FF)           “RESTRICTED STOCK UNIT” MEANS A BOOKKEEPING ENTRY REPRESENTING AN
AMOUNT EQUAL TO THE FAIR MARKET VALUE OF ONE SHARE, GRANTED PURSUANT TO
SECTION 8.  EACH RESTRICTED STOCK UNIT REPRESENTS AN UNFUNDED AND UNSECURED
OBLIGATION OF THE COMPANY.

 

(GG)         “RULE 16B-3” MEANS RULE 16B-3 OF THE EXCHANGE ACT OR ANY SUCCESSOR
TO RULE 16B-3, AS IN EFFECT WHEN DISCRETION IS BEING EXERCISED WITH RESPECT TO
THE PLAN.

 

(HH)         “SECTION 16(B) “ MEANS SECTION 16(B) OF THE EXCHANGE ACT.

 

(II)           “SERVICE PROVIDER” MEANS AN EMPLOYEE, DIRECTOR OR CONSULTANT.

 

(JJ)           “SHARE” MEANS A SHARE OF THE COMMON STOCK, AS ADJUSTED IN
ACCORDANCE WITH SECTION 10 OF THE PLAN.

 

(KK)         “SUBSIDIARY” MEANS A “SUBSIDIARY CORPORATION”, WHETHER NOW OR
HEREAFTER EXISTING, AS DEFINED IN SECTION 424(F) OF THE CODE.

 

3.             STOCK SUBJECT TO THE PLAN.  SUBJECT TO THE PROVISIONS OF
SECTION 10 OF THE PLAN, THE MAXIMUM AGGREGATE NUMBER OF SHARES THAT MAY BE
OPTIONED AND SOLD UNDER THE PLAN IS 2,500,000 SHARES PLUS AN ANNUAL INCREASE TO
BE ADDED ON THE FIRST DAY OF THE COMPANY’S FISCAL YEAR BEGINNING IN 2004, EQUAL
TO THE LESSER OF (I) 1,250,000 SHARES, (II) 4% OF THE OUTSTANDING SHARES ON SUCH
DATE OR (III) SUCH AMOUNT DETERMINED BY THE BOARD.  THE SHARES MAY BE
AUTHORIZED, BUT UNISSUED, OR REACQUIRED COMMON STOCK.

 

If an Award expires or becomes unexercisable without having been exercised in
full, or is surrendered pursuant to an Option Exchange Program, or, with respect
to Restricted Stock and Restricted Stock Units, is forfeited to or repurchased
by the Company, the unpurchased Shares (or

 

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for Awards other than Options, the forfeited, repurchased or unissued Shares)
which were subject thereto shall become available for future grant or sale under
the Plan (unless the Plan has terminated); provided, however, that if unvested
Shares issued pursuant to Awards of Restricted Stock and Restricted Stock Units
are repurchased by the Company or are forfeited to the Company, such Shares will
become available for future grant under the Plan.  To the extent an Award under
the Plan is paid out in cash rather than Shares, such cash payment will not
result in reducing the number of Shares available for issuance under the Plan.

 

4.             ADMINISTRATION OF THE PLAN.

 

(A)           PROCEDURE.

 

(I)            MULTIPLE ADMINISTRATIVE BODIES.  DIFFERENT COMMITTEES WITH
RESPECT TO DIFFERENT GROUPS OF SERVICE PROVIDERS MAY ADMINISTER THE PLAN.

 

(II)           SECTION 162(M).  TO THE EXTENT THAT THE ADMINISTRATOR DETERMINES
IT TO BE DESIRABLE TO QUALIFY OPTIONS GRANTED HEREUNDER AS “PERFORMANCE-BASED
COMPENSATION” WITHIN THE MEANING OF SECTION 162(M) OF THE CODE, THE PLAN SHALL
BE ADMINISTERED BY A COMMITTEE OF TWO OR MORE “OUTSIDE DIRECTORS” WITHIN THE
MEANING OF SECTION 162(M) OF THE CODE.

 

(III)          RULE 16B-3.  TO THE EXTENT DESIRABLE TO QUALIFY TRANSACTIONS
HEREUNDER AS EXEMPT UNDER RULE 16B-3, THE TRANSACTIONS CONTEMPLATED HEREUNDER
SHALL BE STRUCTURED TO SATISFY THE REQUIREMENTS FOR EXEMPTION UNDER RULE 16B-3.

 

(IV)          OTHER ADMINISTRATION.  OTHER THAN AS PROVIDED ABOVE, THE PLAN
SHALL BE ADMINISTERED BY (A) THE BOARD OR (B) A COMMITTEE, WHICH COMMITTEE SHALL
BE CONSTITUTED TO SATISFY APPLICABLE LAWS.

 

(B)           POWERS OF THE ADMINISTRATOR.  SUBJECT TO THE PROVISIONS OF THE
PLAN, AND IN THE CASE OF A COMMITTEE, SUBJECT TO 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;

 

(II)           TO SELECT THE SERVICE PROVIDERS TO WHOM AWARDS MAY BE GRANTED
HEREUNDER;

 

(III)          TO DETERMINE THE NUMBER OF SHARES OF COMMON STOCK TO BE COVERED
BY EACH AWARD GRANTED HEREUNDER;

 

(IV)          TO APPROVE FORMS OF AGREEMENT FOR USE UNDER THE PLAN;

 

(V)           TO DETERMINE THE TERMS AND CONDITIONS, NOT INCONSISTENT WITH THE
TERMS OF THE PLAN, OF ANY AWARD GRANTED HEREUNDER.  SUCH TERMS AND CONDITIONS
INCLUDE, BUT ARE NOT LIMITED TO, THE EXERCISE 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 OR THE SHARES OF COMMON STOCK RELATING
THERETO, BASED IN EACH CASE ON SUCH FACTORS AS THE ADMINISTRATOR, IN ITS SOLE
DISCRETION, SHALL DETERMINE;

 

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(VI)          TO REDUCE THE EXERCISE PRICE OF ANY AWARD TO THE THEN CURRENT FAIR
MARKET VALUE IF THE FAIR MARKET VALUE OF THE COMMON STOCK COVERED BY SUCH AWARD
SHALL HAVE DECLINED SINCE THE DATE THE AWARD WAS GRANTED;

 

(VII)         TO INSTITUTE AN OPTION EXCHANGE PROGRAM;

 

(VIII)        TO CONSTRUE AND INTERPRET THE TERMS OF THE PLAN AND AWARDS GRANTED
PURSUANT TO THE PLAN;

 

(IX)           TO PRESCRIBE, AMEND AND RESCIND RULES AND REGULATIONS RELATING TO
THE PLAN, INCLUDING RULES AND REGULATIONS RELATING TO SUB-PLANS ESTABLISHED FOR
THE PURPOSE OF SATISFYING APPLICABLE FOREIGN LAWS;

 

(X)            TO MODIFY OR AMEND EACH AWARD (SUBJECT TO SECTION 13(C) OF THE
PLAN), INCLUDING THE DISCRETIONARY AUTHORITY TO EXTEND THE POST-TERMINATION
EXERCISABILITY PERIOD OF OPTIONS LONGER THAN IS OTHERWISE PROVIDED FOR IN THE
PLAN;

 

(XI)           TO ALLOW PARTICIPANTS TO SATISFY WITHHOLDING TAX OBLIGATIONS BY
ELECTING TO HAVE THE COMPANY WITHHOLD FROM THE SHARES TO BE ISSUED UPON EXERCISE
OF AN AWARD THAT NUMBER OF SHARES HAVING A FAIR MARKET VALUE EQUAL TO THE
MINIMUM AMOUNT REQUIRED TO BE WITHHELD.  THE FAIR MARKET VALUE OF THE SHARES TO
BE WITHHELD SHALL BE DETERMINED ON THE DATE THAT THE AMOUNT OF TAX TO BE
WITHHELD IS TO BE DETERMINED.  ALL ELECTIONS BY AN OPTIONEE TO HAVE SHARES
WITHHELD FOR THIS PURPOSE SHALL BE MADE IN SUCH FORM AND UNDER SUCH CONDITIONS
AS THE ADMINISTRATOR MAY DEEM NECESSARY OR ADVISABLE;

 

(XII)          TO AUTHORIZE ANY PERSON TO EXECUTE ON BEHALF OF THE COMPANY ANY
INSTRUMENT REQUIRED TO EFFECT THE GRANT OF AN AWARD PREVIOUSLY GRANTED BY THE
ADMINISTRATOR;

 

(XIII)         TO MAKE ALL OTHER DETERMINATIONS DEEMED NECESSARY OR ADVISABLE
FOR ADMINISTERING THE PLAN.

 

(C)           EFFECT OF ADMINISTRATOR’S DECISION.  THE ADMINISTRATOR’S
DECISIONS, DETERMINATIONS AND INTERPRETATIONS SHALL BE FINAL AND BINDING ON ALL
PARTICIPANTS AND ANY OTHER HOLDERS OF AWARDS.

 

5.             ELIGIBILITY.  NONSTATUTORY STOCK OPTIONS, RESTRICTED STOCK AND
RESTRICTED STOCK UNITS MAY BE GRANTED TO SERVICE PROVIDERS.  INCENTIVE STOCK
OPTIONS MAY BE GRANTED ONLY TO EMPLOYEES.

 

6.             STOCK OPTIONS.

 

(A)           LIMITATIONS.

 

(I)            EACH OPTION SHALL BE DESIGNATED IN THE OPTION AGREEMENT AS EITHER
AN INCENTIVE STOCK OPTION OR A NONSTATUTORY STOCK OPTION.  HOWEVER,
NOTWITHSTANDING SUCH DESIGNATION, TO THE EXTENT THAT THE AGGREGATE FAIR MARKET
VALUE OF THE SHARES WITH RESPECT TO WHICH INCENTIVE STOCK OPTIONS ARE
EXERCISABLE FOR THE FIRST TIME BY THE OPTIONEE DURING ANY CALENDAR YEAR (UNDER
ALL PLANS OF THE COMPANY AND ANY PARENT OR SUBSIDIARY) EXCEEDS $100,000, SUCH
OPTIONS SHALL BE TREATED AS NONSTATUTORY STOCK OPTIONS.  FOR PURPOSES OF THIS
SECTION 6(A)(I), INCENTIVE STOCK OPTIONS SHALL

 

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BE TAKEN INTO ACCOUNT IN THE ORDER IN WHICH THEY WERE GRANTED.  THE FAIR MARKET
VALUE OF THE SHARES SHALL BE DETERMINED AS OF THE TIME THE OPTION WITH RESPECT
TO SUCH SHARES IS GRANTED.

 

(II)           NEITHER THE PLAN NOR ANY AWARD SHALL CONFER UPON AN OPTIONEE ANY
RIGHT WITH RESPECT TO CONTINUING THE OPTIONEE’S RELATIONSHIP AS A SERVICE
PROVIDER WITH THE COMPANY, NOR SHALL THEY INTERFERE IN ANY WAY WITH THE
OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE SUCH RELATIONSHIP AT ANY
TIME, WITH OR WITHOUT CAUSE.

 

(III)          THE FOLLOWING LIMITATIONS SHALL APPLY TO GRANTS OF OPTIONS:

 

(A)          NO SERVICE PROVIDER SHALL BE GRANTED, IN ANY FISCAL YEAR OF THE
COMPANY, OPTIONS TO PURCHASE MORE THAN 1,000,000 SHARES.

 

(B)           IN CONNECTION WITH HIS OR HER INITIAL SERVICE, A SERVICE PROVIDER
MAY BE GRANTED OPTIONS TO PURCHASE UP TO AN ADDITIONAL 1,000,000 SHARES, WHICH
SHALL NOT COUNT AGAINST THE LIMIT SET FORTH IN SUBSECTION (A) ABOVE.

 

(C)           THE FOREGOING LIMITATIONS SHALL BE ADJUSTED PROPORTIONATELY IN
CONNECTION WITH ANY CHANGE IN THE COMPANY’S CAPITALIZATION AS DESCRIBED IN
SECTION 10.

 

(D)          IF AN OPTION IS CANCELLED IN THE SAME FISCAL YEAR OF THE COMPANY IN
WHICH IT WAS GRANTED (OTHER THAN IN CONNECTION WITH A TRANSACTION DESCRIBED IN
SECTION 10), THE CANCELLED OPTION WILL BE COUNTED AGAINST THE LIMITS SET FORTH
IN SUBSECTIONS (A) AND (B) ABOVE.  FOR THIS PURPOSE, IF THE EXERCISE PRICE OF AN
OPTION IS REDUCED, THE TRANSACTION WILL BE TREATED AS A CANCELLATION OF THE
OPTION AND THE GRANT OF A NEW OPTION.

 

(B)           TERM OF OPTION.  THE TERM OF EACH OPTION SHALL BE STATED IN THE
AWARD AGREEMENT.  IN THE CASE OF AN INCENTIVE STOCK OPTION, THE TERM SHALL BE
TEN (10) YEARS FROM THE DATE OF GRANT OR SUCH SHORTER TERM AS MAY BE PROVIDED IN
THE AWARD AGREEMENT.  MOREOVER, IN THE CASE OF AN INCENTIVE STOCK OPTION GRANTED
TO AN OPTIONEE WHO, AT THE TIME THE INCENTIVE STOCK OPTION IS GRANTED, OWNS
STOCK REPRESENTING MORE THAN TEN PERCENT (10%) OF THE TOTAL COMBINED VOTING
POWER OF ALL CLASSES OF STOCK OF THE COMPANY OR ANY PARENT OR SUBSIDIARY, THE
TERM OF THE INCENTIVE STOCK OPTION SHALL BE FIVE (5) YEARS FROM THE DATE OF
GRANT OR SUCH SHORTER TERM AS MAY BE PROVIDED IN THE AWARD AGREEMENT.

 

(C)           OPTION EXERCISE PRICE AND CONSIDERATION.

 

(I)            EXERCISE PRICE.  THE PER SHARE EXERCISE PRICE FOR THE SHARES TO
BE ISSUED PURSUANT TO EXERCISE OF AN OPTION SHALL BE DETERMINED BY THE
ADMINISTRATOR, SUBJECT TO THE FOLLOWING:

 

(A)          IN THE CASE OF AN INCENTIVE STOCK OPTION

 

A)             GRANTED TO AN EMPLOYEE WHO, AT THE TIME THE INCENTIVE STOCK
OPTION IS GRANTED, OWNS STOCK REPRESENTING MORE THAN TEN PERCENT (10%) OF THE
VOTING POWER OF ALL CLASSES OF STOCK OF THE COMPANY OR ANY PARENT OR SUBSIDIARY,
THE PER SHARE EXERCISE PRICE SHALL BE NO LESS THAN 110% OF THE FAIR MARKET VALUE
PER SHARE ON THE DATE OF GRANT.

 

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B)            GRANTED TO ANY EMPLOYEE OTHER THAN AN EMPLOYEE DESCRIBED IN
PARAGRAPH (A) IMMEDIATELY ABOVE, THE PER SHARE EXERCISE PRICE SHALL BE NO LESS
THAN 100% OF THE FAIR MARKET VALUE PER SHARE ON THE DATE OF GRANT.

 

(B)           IN THE CASE OF A NONSTATUTORY STOCK OPTION, THE PER SHARE EXERCISE
PRICE SHALL BE DETERMINED BY THE ADMINISTRATOR.  IN THE CASE OF A NONSTATUTORY
STOCK OPTION INTENDED TO QUALIFY AS “PERFORMANCE-BASED COMPENSATION” WITHIN THE
MEANING OF SECTION 162(M) OF THE CODE, THE PER SHARE EXERCISE PRICE SHALL BE NO
LESS THAN 100% OF THE FAIR MARKET VALUE PER SHARE ON THE DATE OF GRANT.

 

(C)           NOTWITHSTANDING THE FOREGOING, OPTIONS MAY BE GRANTED WITH A PER
SHARE EXERCISE PRICE OF LESS THAN 100% OF THE FAIR MARKET VALUE PER SHARE ON THE
DATE OF GRANT PURSUANT TO A MERGER OR OTHER CORPORATE TRANSACTION.

 

(II)           WAITING PERIOD AND EXERCISE DATES.  AT THE TIME AN OPTION IS
GRANTED, THE ADMINISTRATOR SHALL FIX THE PERIOD WITHIN WHICH THE OPTION MAY BE
EXERCISED AND SHALL DETERMINE ANY CONDITIONS THAT MUST BE SATISFIED BEFORE THE
OPTION MAY BE EXERCISED.

 

(III)          FORM OF CONSIDERATION.  THE ADMINISTRATOR SHALL DETERMINE THE
ACCEPTABLE FORM OF CONSIDERATION FOR EXERCISING AN OPTION, INCLUDING THE METHOD
OF PAYMENT.  IN THE CASE OF AN INCENTIVE STOCK OPTION, THE ADMINISTRATOR SHALL
DETERMINE THE ACCEPTABLE FORM OF CONSIDERATION AT THE TIME OF GRANT.  SUCH
CONSIDERATION MAY CONSIST ENTIRELY OF:

 

(A)          CASH;

 

(B)           CHECK;

 

(C)           PROMISSORY NOTE;

 

(D)          OTHER SHARES WHICH, IN THE CASE OF SHARES ACQUIRED DIRECTLY OR
INDIRECTLY FROM THE COMPANY, (A) HAVE BEEN OWNED BY THE OPTIONEE FOR MORE THAN
SIX (6) MONTHS ON THE DATE OF SURRENDER, AND (B) HAVE A FAIR MARKET VALUE ON THE
DATE OF SURRENDER EQUAL TO THE AGGREGATE EXERCISE PRICE OF THE SHARES AS TO
WHICH SAID OPTION SHALL BE EXERCISED;

 

(E)           CONSIDERATION RECEIVED BY THE COMPANY UNDER A CASHLESS EXERCISE
PROGRAM IMPLEMENTED BY THE COMPANY IN CONNECTION WITH THE PLAN;

 

(F)           A REDUCTION IN THE AMOUNT OF ANY COMPANY LIABILITY TO THE
OPTIONEE, INCLUDING ANY LIABILITY ATTRIBUTABLE TO THE OPTIONEE’S PARTICIPATION
IN ANY COMPANY-SPONSORED DEFERRED COMPENSATION PROGRAM OR ARRANGEMENT;

 

(G)           ANY COMBINATION OF THE FOREGOING METHODS OF PAYMENT; OR

 

(H)          SUCH OTHER CONSIDERATION AND METHOD OF PAYMENT FOR THE ISSUANCE OF
SHARES TO THE EXTENT PERMITTED BY APPLICABLE LAWS.

 

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(D)           EXERCISE OF OPTION.

 

(I)            PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER.  ANY OPTION
GRANTED HEREUNDER SHALL BE EXERCISABLE ACCORDING TO THE TERMS OF THE PLAN AND AT
SUCH TIMES AND UNDER SUCH CONDITIONS AS DETERMINED BY THE ADMINISTRATOR AND SET
FORTH IN THE AWARD AGREEMENT.  UNLESS THE ADMINISTRATOR PROVIDES OTHERWISE,
VESTING OF OPTIONS GRANTED HEREUNDER SHALL BE SUSPENDED DURING ANY UNPAID LEAVE
OF ABSENCE.  AN OPTION MAY NOT BE EXERCISED FOR A FRACTION OF A SHARE.

 

An Option shall be deemed exercised when the Company receives: (i) written or
electronic notice of exercise (in accordance with the Award Agreement) from the
person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised.  Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Award Agreement and the Plan.  Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse.  Until the Shares
are issued (as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option.  The Company shall
issue (or cause to be issued) such Shares promptly after the Option is
exercised.  No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided
in Section 10 of the Plan.

 

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

 

(II)           TERMINATION OF RELATIONSHIP AS A SERVICE PROVIDER.  IF AN
OPTIONEE CEASES TO BE A SERVICE PROVIDER, OTHER THAN UPON THE OPTIONEE’S DEATH
OR DISABILITY, THE OPTIONEE MAY EXERCISE HIS OR HER OPTION WITHIN SUCH PERIOD OF
TIME AS IS SPECIFIED IN THE AWARD AGREEMENT TO THE EXTENT THAT THE OPTION IS
VESTED ON THE DATE OF TERMINATION (BUT IN NO EVENT LATER THAN THE EXPIRATION OF
THE TERM OF SUCH OPTION AS SET FORTH IN THE AWARD AGREEMENT).  IN THE ABSENCE OF
A SPECIFIED TIME IN THE AWARD AGREEMENT, THE OPTION SHALL REMAIN EXERCISABLE FOR
THREE (3) MONTHS FOLLOWING THE OPTIONEE’S TERMINATION.  IF, ON THE DATE OF
TERMINATION, THE OPTIONEE IS NOT VESTED AS TO HIS OR HER ENTIRE OPTION, THE
SHARES COVERED BY THE UNVESTED PORTION OF THE OPTION SHALL REVERT TO THE PLAN. 
IF, AFTER TERMINATION, THE OPTIONEE DOES NOT EXERCISE HIS OR HER OPTION WITHIN
THE TIME SPECIFIED BY THE ADMINISTRATOR, THE OPTION SHALL TERMINATE, AND THE
SHARES COVERED BY SUCH OPTION SHALL REVERT TO THE PLAN.

 

(III)          DISABILITY OF OPTIONEE.  IF AN OPTIONEE CEASES TO BE A SERVICE
PROVIDER AS A RESULT OF THE OPTIONEE’S DISABILITY, THE OPTIONEE MAY EXERCISE HIS
OR HER OPTION WITHIN SUCH PERIOD OF TIME AS IS SPECIFIED IN THE AWARD AGREEMENT
TO THE EXTENT THE OPTION IS VESTED ON THE DATE OF TERMINATION (BUT IN NO EVENT
LATER THAN THE EXPIRATION OF THE TERM OF SUCH OPTION AS SET FORTH IN THE AWARD
AGREEMENT).  IN THE ABSENCE OF A SPECIFIED TIME IN THE AWARD AGREEMENT, THE
OPTION SHALL REMAIN EXERCISABLE FOR TWELVE (12) MONTHS FOLLOWING THE
TERMINATION.  IF, ON THE DATE OF TERMINATION, THE OPTIONEE IS NOT VESTED AS TO
HIS OR HER ENTIRE OPTION, THE SHARES COVERED BY THE UNVESTED PORTION OF THE
OPTION SHALL REVERT TO THE PLAN.  IF, AFTER TERMINATION, THE OPTIONEE DOES NOT
EXERCISE HIS OR HER OPTION WITHIN THE TIME SPECIFIED HEREIN, THE OPTION SHALL
TERMINATE, AND THE SHARES COVERED BY SUCH OPTION SHALL REVERT TO THE PLAN.

 

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(IV)          DEATH OF OPTIONEE.  IF AN OPTIONEE DIES WHILE A SERVICE PROVIDER,
THE OPTION MAY BE EXERCISED FOLLOWING THE OPTIONEE’S DEATH WITHIN SUCH PERIOD OF
TIME AS IS SPECIFIED IN THE AWARD AGREEMENT TO THE EXTENT THAT THE OPTION IS
VESTED ON THE DATE OF DEATH (BUT IN NO EVENT MAY THE OPTION BE EXERCISED LATER
THAN THE EXPIRATION OF THE TERM OF SUCH OPTION AS SET FORTH IN THE AWARD
AGREEMENT), BY THE OPTIONEE’S DESIGNATED BENEFICIARY, PROVIDED SUCH BENEFICIARY
HAS BEEN DESIGNATED PRIOR TO OPTIONEE’S DEATH IN A FORM ACCEPTABLE TO THE
ADMINISTRATOR.  IF NO SUCH BENEFICIARY HAS BEEN DESIGNATED BY THE OPTIONEE, THEN
SUCH OPTION MAY BE EXERCISED BY THE PERSONAL REPRESENTATIVE OF THE OPTIONEE’S
ESTATE OR BY THE PERSON(S) TO WHOM THE OPTION IS TRANSFERRED PURSUANT TO THE
OPTIONEE’S WILL OR IN ACCORDANCE WITH THE LAWS OF DESCENT AND DISTRIBUTION.  IN
THE ABSENCE OF A SPECIFIED TIME IN THE AWARD AGREEMENT, THE OPTION SHALL REMAIN
EXERCISABLE FOR TWELVE (12) MONTHS FOLLOWING OPTIONEE’S DEATH.  IF, AT THE TIME
OF DEATH, OPTIONEE IS NOT VESTED AS TO HIS OR HER ENTIRE OPTION, THE SHARES
COVERED BY THE UNVESTED PORTION OF THE OPTION SHALL IMMEDIATELY REVERT TO THE
PLAN.  IF THE OPTION IS NOT SO EXERCISED WITHIN THE TIME SPECIFIED HEREIN, THE
OPTION SHALL TERMINATE, AND THE SHARES COVERED BY SUCH OPTION SHALL REVERT TO
THE PLAN.

 

7.             RESTRICTED STOCK.

 

(A)           GRANT OF RESTRICTED STOCK.  SUBJECT TO THE TERMS AND PROVISIONS OF
THE PLAN, THE ADMINISTRATOR, AT ANY TIME AND FROM TIME TO TIME, MAY GRANT SHARES
OF RESTRICTED STOCK TO SERVICE PROVIDERS IN SUCH AMOUNTS AS THE ADMINISTRATOR,
IN ITS SOLE DISCRETION, WILL DETERMINE.

 

(B)           RESTRICTED STOCK AGREEMENT.  EACH AWARD OF RESTRICTED STOCK WILL
BE EVIDENCED BY AN AWARD AGREEMENT THAT WILL SPECIFY THE PERIOD OF RESTRICTION,
THE NUMBER OF SHARES GRANTED, AND SUCH OTHER TERMS AND CONDITIONS AS THE
ADMINISTRATOR, IN ITS SOLE DISCRETION, WILL DETERMINE.  UNLESS THE ADMINISTRATOR
DETERMINES OTHERWISE, SHARES OF RESTRICTED STOCK WILL BE HELD BY THE COMPANY AS
ESCROW AGENT UNTIL THE RESTRICTIONS ON SUCH SHARES HAVE LAPSED.

 

(C)           TRANSFERABILITY.  EXCEPT AS PROVIDED IN THIS SECTION 7, SHARES OF
RESTRICTED STOCK MAY NOT BE SOLD, TRANSFERRED, PLEDGED, ASSIGNED, OR OTHERWISE
ALIENATED OR HYPOTHECATED UNTIL THE END OF THE APPLICABLE PERIOD OF RESTRICTION.

 

(D)           OTHER RESTRICTIONS.  THE ADMINISTRATOR, IN ITS SOLE DISCRETION,
MAY IMPOSE SUCH OTHER RESTRICTIONS ON SHARES OF RESTRICTED STOCK AS IT MAY DEEM
ADVISABLE OR APPROPRIATE.

 

(E)           REMOVAL OF RESTRICTIONS.  EXCEPT AS OTHERWISE PROVIDED IN THIS
SECTION 7, SHARES OF RESTRICTED STOCK COVERED BY EACH RESTRICTED STOCK GRANT
MADE UNDER THE PLAN WILL BE RELEASED FROM ESCROW AS SOON AS PRACTICABLE AFTER
THE LAST DAY OF THE PERIOD OF RESTRICTION.  THE ADMINISTRATOR, IN ITS
DISCRETION, MAY ACCELERATE THE TIME AT WHICH ANY RESTRICTIONS WILL LAPSE OR BE
REMOVED.

 

(F)            VOTING RIGHTS.  DURING THE PERIOD OF RESTRICTION, SERVICE
PROVIDERS HOLDING SHARES OF RESTRICTED STOCK GRANTED HEREUNDER MAY EXERCISE FULL
VOTING RIGHTS WITH RESPECT TO THOSE SHARES, UNLESS THE ADMINISTRATOR DETERMINES
OTHERWISE.

 

(G)           DIVIDENDS AND OTHER DISTRIBUTIONS.  DURING THE PERIOD OF
RESTRICTION, SERVICE PROVIDERS HOLDING SHARES OF RESTRICTED STOCK WILL BE
ENTITLED TO RECEIVE ALL DIVIDENDS AND OTHER DISTRIBUTIONS PAID WITH RESPECT TO
SUCH SHARES UNLESS THE ADMINISTRATOR DETERMINES OTHERWISE.  IF ANY SUCH
DIVIDENDS OR DISTRIBUTIONS ARE PAID IN SHARES, THE SHARES WILL BE SUBJECT TO THE
SAME RESTRICTIONS

 

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ON TRANSFERABILITY AND FORFEITABILITY AS THE SHARES OF RESTRICTED STOCK WITH
RESPECT TO WHICH THEY WERE PAID.

 

(H)           RETURN OF RESTRICTED STOCK TO COMPANY.  ON THE DATE SET FORTH IN
THE AWARD AGREEMENT, THE RESTRICTED STOCK FOR WHICH RESTRICTIONS HAVE NOT LAPSED
WILL REVERT TO THE COMPANY AND AGAIN WILL BECOME AVAILABLE FOR GRANT UNDER THE
PLAN.

 

8.             RESTRICTED STOCK UNITS.

 

(A)           GRANT.  RESTRICTED STOCK UNITS MAY BE GRANTED AT ANY TIME AND FROM
TIME TO TIME AS DETERMINED BY THE ADMINISTRATOR.  EACH RESTRICTED STOCK UNIT
GRANT WILL BE EVIDENCED BY AN AWARD AGREEMENT THAT WILL SPECIFY SUCH OTHER TERMS
AND CONDITIONS AS THE ADMINISTRATOR, IN ITS SOLE DISCRETION, WILL DETERMINE,
INCLUDING ALL TERMS, CONDITIONS, AND RESTRICTIONS RELATED TO THE GRANT, THE
NUMBER OF RESTRICTED STOCK UNITS AND THE FORM OF PAYOUT, WHICH, SUBJECT TO
SECTION 8(D), MAY BE LEFT TO THE DISCRETION OF THE ADMINISTRATOR.

 

(B)           VESTING CRITERIA AND OTHER TERMS.  THE ADMINISTRATOR WILL SET
VESTING CRITERIA IN ITS DISCRETION, WHICH, DEPENDING ON THE EXTENT TO WHICH THE
CRITERIA ARE MET, WILL DETERMINE THE NUMBER OF RESTRICTED STOCK UNITS THAT WILL
BE PAID OUT TO THE PARTICIPANT.  AFTER THE GRANT OF RESTRICTED STOCK UNITS, THE
ADMINISTRATOR, IN ITS SOLE DISCRETION, MAY REDUCE OR WAIVE ANY RESTRICTIONS FOR
SUCH RESTRICTED STOCK UNITS.  EACH AWARD OF RESTRICTED STOCK UNITS WILL BE
EVIDENCED BY AN AWARD AGREEMENT THAT WILL SPECIFY THE VESTING CRITERIA, AND SUCH
OTHER TERMS AND CONDITIONS AS THE ADMINISTRATOR, IN ITS SOLE DISCRETION, WILL
DETERMINE.

 

(C)           EARNING RESTRICTED STOCK UNITS.  UPON MEETING THE APPLICABLE
VESTING CRITERIA, THE PARTICIPANT WILL BE ENTITLED TO RECEIVE A PAYOUT AS
SPECIFIED IN THE AWARD AGREEMENT.  NOTWITHSTANDING THE FOREGOING, AT ANY TIME
AFTER THE GRANT OF RESTRICTED STOCK UNITS, THE ADMINISTRATOR, IN ITS SOLE
DISCRETION, MAY REDUCE OR WAIVE ANY VESTING CRITERIA THAT MUST BE MET TO RECEIVE
A PAYOUT.

 

(D)           FORM AND TIMING OF PAYMENT.  PAYMENT OF EARNED RESTRICTED STOCK
UNITS WILL BE MADE AS SOON AS PRACTICABLE AFTER THE DATE(S) SET FORTH IN THE
AWARD AGREEMENT.  THE ADMINISTRATOR, IN ITS SOLE DISCRETION, MAY PAY EARNED
RESTRICTED STOCK UNITS IN CASH, SHARES, OR A COMBINATION THEREOF.  SHARES
REPRESENTED BY RESTRICTED STOCK UNITS THAT ARE FULLY PAID IN CASH AGAIN WILL BE
AVAILABLE FOR GRANT UNDER THE PLAN.

 

(E)           CANCELLATION.  ON THE DATE SET FORTH IN THE AWARD AGREEMENT, ALL
UNEARNED RESTRICTED STOCK UNITS WILL BE FORFEITED TO THE COMPANY.

 

9.             TRANSFERABILITY OF AWARDS.  UNLESS DETERMINED OTHERWISE BY THE
ADMINISTRATOR, AN AWARD 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 AND MAY BE EXERCISED, DURING THE LIFETIME OF THE
OPTIONEE, ONLY BY THE OPTIONEE.  IF THE ADMINISTRATOR MAKES AN AWARD
TRANSFERABLE, SUCH AWARD SHALL CONTAIN SUCH ADDITIONAL TERMS AND CONDITIONS AS
THE ADMINISTRATOR DEEMS APPROPRIATE.

 

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10.           ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, MERGER OR CHANGE IN
CONTROL.

 

(A)           CHANGES IN CAPITALIZATION.  SUBJECT TO ANY REQUIRED ACTION BY THE
STOCKHOLDERS OF THE COMPANY, 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 WHICH HAVE BEEN RETURNED TO THE PLAN UPON CANCELLATION OR EXPIRATION
OF AN AWARD, THE NUMBER OF SHARES THAT MAY BE ADDED ANNUALLY TO THE PLAN
PURSUANT TO SECTION 3 AND THE NUMBER OF SHARES OF COMMON STOCK 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 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 BOARD, WHOSE DETERMINATION IN THAT RESPECT SHALL BE FINAL, BINDING
AND CONCLUSIVE.  EXCEPT AS EXPRESSLY PROVIDED HEREIN, NO ISSUANCE BY THE COMPANY
OF SHARES OF STOCK OF ANY CLASS, OR SECURITIES CONVERTIBLE INTO SHARES OF STOCK
OF ANY CLASS, SHALL AFFECT, AND NO ADJUSTMENT BY REASON THEREOF SHALL BE MADE
WITH RESPECT TO, THE NUMBER OR PRICE OF SHARES OF COMMON STOCK SUBJECT TO AN
AWARD.

 

(B)           DISSOLUTION OR LIQUIDATION.  IN THE EVENT OF THE PROPOSED
DISSOLUTION OR LIQUIDATION OF THE COMPANY, THE ADMINISTRATOR SHALL NOTIFY EACH
OPTIONEE AS SOON AS PRACTICABLE PRIOR TO THE EFFECTIVE DATE OF SUCH PROPOSED
TRANSACTION.  THE ADMINISTRATOR IN ITS DISCRETION MAY PROVIDE FOR AN OPTIONEE TO
HAVE THE RIGHT TO EXERCISE HIS OR HER OPTION UNTIL TEN (10) DAYS PRIOR TO SUCH
TRANSACTION AS TO ALL OF THE OPTIONED STOCK COVERED THEREBY, INCLUDING SHARES AS
TO WHICH THE OPTION WOULD NOT OTHERWISE BE EXERCISABLE.  IN ADDITION, THE
ADMINISTRATOR MAY PROVIDE THAT ANY COMPANY REPURCHASE OPTION APPLICABLE TO ANY
SHARES PURCHASED UPON EXERCISE OF AN AWARD SHALL LAPSE AS TO ALL SUCH SHARES,
PROVIDED THE PROPOSED DISSOLUTION OR LIQUIDATION TAKES PLACE AT THE TIME AND IN
THE MANNER CONTEMPLATED.  TO THE EXTENT IT HAS NOT BEEN PREVIOUSLY EXERCISED, AN
AWARD WILL TERMINATE IMMEDIATELY PRIOR TO THE CONSUMMATION OF SUCH PROPOSED
ACTION.

 

(C)           MERGER OR CHANGE IN CONTROL.  IN THE EVENT OF A MERGER OF THE
COMPANY WITH OR INTO ANOTHER CORPORATION, OR A CHANGE IN CONTROL, EACH
OUTSTANDING AWARD SHALL BE ASSUMED OR AN EQUIVALENT OPTION OR RIGHT SUBSTITUTED
BY THE SUCCESSOR CORPORATION OR A PARENT OR SUBSIDIARY OF THE SUCCESSOR
CORPORATION.  IN THE EVENT THAT THE SUCCESSOR CORPORATION REFUSES TO ASSUME OR
SUBSTITUTE FOR THE AWARDS, THE PARTICIPANT SHALL FULLY VEST IN AND HAVE THE
RIGHT TO EXERCISE THE AWARDS AS TO ALL OF THE OPTIONED STOCK, INCLUDING SHARES
AS TO WHICH IT WOULD NOT OTHERWISE BE VESTED OR EXERCISABLE, ALL RESTRICTIONS ON
RESTRICTED STOCK WILL LAPSE, AND, WITH RESPECT TO RESTRICTED STOCK UNITS, ALL
VESTING CRITERIA WILL BE DEEMED ACHIEVED AT TARGET LEVELS AND ALL OTHER TERMS
AND CONDITIONS MET.  IF AN AWARD BECOMES FULLY VESTED AND EXERCISABLE IN LIEU OF
ASSUMPTION OR SUBSTITUTION IN THE EVENT OF A MERGER OR SALE OF ASSETS, THE
ADMINISTRATOR SHALL NOTIFY THE PARTICIPANT IN WRITING OR ELECTRONICALLY THAT THE
AWARD SHALL BE FULLY VESTED AND EXERCISABLE FOR A PERIOD OF FIFTEEN (15) DAYS
FROM THE DATE OF SUCH NOTICE, AND THE AWARD SHALL TERMINATE UPON THE EXPIRATION
OF SUCH PERIOD.

 

For the purposes of this subsection (c), the Award shall be considered assumed
if, following the merger or Change in Control, the Award confers the right to
purchase or receive, for each Share subject to the Award immediately prior to
the merger or Change in Control, the consideration (whether stock, cash, or
other securities or property) received in the merger or

 

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Change in Control by holders of Common Stock for each Share held on the
effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
in the merger or Change in Control is not solely common stock of the successor
corporation or its Parent, the Administrator may, with the consent of the
successor corporation, provide for the consideration to be received upon the
exercise of the Award, for each Share subject to the Award, to be solely common
stock of the successor corporation or its Parent equal in fair market value to
the per share consideration received by holders of Common Stock in the merger or
Change in Control.

 

11.           DATE OF GRANT.  THE DATE OF GRANT OF AN AWARD SHALL BE, FOR ALL
PURPOSES, THE DATE ON WHICH THE ADMINISTRATOR MAKES THE DETERMINATION GRANTING
SUCH AWARD, OR SUCH OTHER LATER DATE AS IS DETERMINED BY THE ADMINISTRATOR. 
NOTICE OF THE DETERMINATION SHALL BE PROVIDED TO EACH OPTIONEE WITHIN A
REASONABLE TIME AFTER THE DATE OF SUCH GRANT.

 

12.           TERM OF PLAN.  SUBJECT TO SECTION 17 OF THE PLAN, THE PLAN SHALL
BECOME EFFECTIVE UPON ITS ADOPTION BY THE BOARD.  IT SHALL CONTINUE IN EFFECT
FOR A TERM OF TEN (10) YEARS UNLESS TERMINATED EARLIER UNDER SECTION 13 OF THE
PLAN.

 

13.           AMENDMENT AND TERMINATION OF THE PLAN.

 

(A)           AMENDMENT AND TERMINATION.  THE BOARD MAY AT ANY TIME AMEND,
ALTER, SUSPEND OR TERMINATE THE PLAN.

 

(B)           STOCKHOLDER APPROVAL.  THE COMPANY SHALL OBTAIN STOCKHOLDER
APPROVAL OF ANY PLAN AMENDMENT TO THE EXTENT NECESSARY AND DESIRABLE TO COMPLY
WITH APPLICABLE LAWS.

 

(C)           EFFECT OF AMENDMENT OR TERMINATION.  NO AMENDMENT, ALTERATION,
SUSPENSION OR TERMINATION OF THE PLAN SHALL IMPAIR THE RIGHTS OF ANY OPTIONEE,
UNLESS MUTUALLY AGREED OTHERWISE BETWEEN THE OPTIONEE AND THE ADMINISTRATOR,
WHICH AGREEMENT MUST BE IN WRITING AND SIGNED BY THE OPTIONEE AND THE COMPANY. 
TERMINATION OF THE PLAN SHALL NOT AFFECT THE ADMINISTRATOR’S ABILITY TO EXERCISE
THE POWERS GRANTED TO IT HEREUNDER WITH RESPECT TO AWARDS GRANTED UNDER THE PLAN
PRIOR TO THE DATE OF SUCH TERMINATION.

 

14.           CONDITIONS UPON ISSUANCE OF SHARES.

 

(A)           LEGAL COMPLIANCE.  SHARES SHALL NOT BE ISSUED PURSUANT TO THE
EXERCISE OF AN AWARD UNLESS THE EXERCISE OF SUCH AWARD AND THE ISSUANCE AND
DELIVERY OF SUCH SHARES SHALL COMPLY WITH APPLICABLE LAWS AND SHALL BE FURTHER
SUBJECT TO THE APPROVAL OF COUNSEL FOR THE COMPANY WITH RESPECT TO SUCH
COMPLIANCE.

 

(B)           INVESTMENT REPRESENTATIONS.  AS A CONDITION TO THE EXERCISE OF AN
AWARD, THE COMPANY MAY REQUIRE THE PERSON EXERCISING SUCH AWARD 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.

 

15.           INABILITY TO OBTAIN AUTHORITY.  THE INABILITY OF THE COMPANY TO
OBTAIN AUTHORITY FROM ANY REGULATORY BODY HAVING JURISDICTION, WHICH AUTHORITY
IS DEEMED BY THE COMPANY’S COUNSEL TO BE

 

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NECESSARY TO THE LAWFUL ISSUANCE AND SALE OF ANY SHARES HEREUNDER, SHALL RELIEVE
THE COMPANY OF ANY LIABILITY IN RESPECT OF THE FAILURE TO ISSUE OR SELL SUCH
SHARES AS TO WHICH SUCH REQUISITE AUTHORITY SHALL NOT HAVE BEEN OBTAINED.

 

16.           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.

 

17.           STOCKHOLDER APPROVAL.  THE PLAN SHALL BE SUBJECT TO APPROVAL BY
THE STOCKHOLDERS OF THE COMPANY WITHIN TWELVE (12) MONTHS AFTER THE DATE THE
PLAN IS ADOPTED.  SUCH STOCKHOLDER APPROVAL SHALL BE OBTAINED IN THE MANNER AND
TO THE DEGREE REQUIRED UNDER APPLICABLE LAWS.

 

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