EXHIBIT 10.9

CIRRUS LOGIC, INC.

2002 NON-QUALIFIED STOCK OPTION PLAN

     1. Purposes of the Plan. The purposes of this Non-Qualified Stock Option
Plan are to attract and retain the best available personnel, to provide
additional incentive to Employees and Consultants and to promote the success of
the Company’s business.

     2. Definitions. As used herein, the following definitions shall apply:

          (a) “Administrator” means the Board or the Committee.

          (b) “Affiliate” and “Associate” shall have the respective meanings
ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act.

          (c) “Applicable Laws” means the legal requirements relating to the
administration of stock incentive plans, if any, under applicable provisions of
federal securities laws, state corporate and securities laws, the Code, the
rules of any applicable stock exchange or national market system, and the rules
of any foreign jurisdiction applicable to Awards granted to residents therein.

          (d) “Award” means the grant of an Option under the Plan.

          (e) “Award Agreement” means the written agreement evidencing the grant
of an Award executed by the Company and the Grantee, including any amendments
thereto.

          (f) “Board” means the Board of Directors of the Company.

          (g) “Code” means the Internal Revenue Code of 1986, as amended.

          (h) “Committee” means the Compensation Committee of the Board.

          (i) “Common Stock” means the common stock of the Company.

          (j) “Company” means Cirrus Logic, Inc., a Delaware corporation.

          (k) “Consultant” means any person (other than an Employee or a
Director) who is engaged by the Company or any Related Entity to render
consulting or advisory services to the Company or such Related Entity.

          (l) “Continuous Service” means that the provision of services to the
Company or a Related Entity in any capacity of Employee or Consultant, is not
interrupted or terminated. Continuous Service shall not be considered
interrupted in the case of (i) any approved leave of absence, (ii) transfers
among the Company, any Related Entity, or any successor, in any capacity of
Employee or Consultant, or (iii) any change in status as long as the individual
remains in the service of the Company or a Related Entity in any capacity of
Employee or Consultant (except as

 

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otherwise provided in the Award Agreement). An approved leave of absence shall
include sick leave, military leave, or any other authorized personal leave.

          (m) “Corporate Transaction” means any of the following transactions:

               (i) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which is to
change the state in which the Company is incorporated;

               (ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company (including the capital stock of
the Company’s subsidiary corporations); or

               (iii) any reverse merger in which the Company is the surviving
entity but in which securities possessing more than fifty percent (50%) of the
total combined voting power of the Company’s outstanding securities are
transferred to a person or persons different from those who held such securities
immediately prior to such merger.

          (n) “Director” means a member of the Board.

          (o) “Disability” means a Grantee would qualify for benefit payments
under the long-term disability policy of the Company or the Related Entity to
which the Grantee provides services regardless of whether the Grantee is covered
by such policy. If the Company or the Related Entity to which the Grantee
provides service does not have a long-term disability plan in place,
“Disability” means that a Grantee is permanently unable to carry out the
responsibilities and functions of the position held by the Grantee by reason of
any medically determinable physical or mental impairment. A Grantee will not be
considered to have incurred a Disability unless he or she furnishes proof of
such impairment sufficient to satisfy the Administrator in its discretion.

          (p) “Employee” means any person, other than an Officer or Director,
who is an employee of the Company or any Related Entity.

          (q) “Exchange Act” means the Securities Exchange Act of 1934, as
amended.

          (r) “Fair Market Value” means, that as of any date, the value of
Common Stock shall be the closing price for a Share for the market trading day
on such date (or, if no closing price was reported on that date, on the last
trading date on which a closing price was reported) on the stock exchange
determined by the Administrator to be the primary market for the Common Stock or
the Nasdaq National Market, whichever is applicable, or if the Common Stock is
not traded on any exchange or national market system, the average of the closing
bid and ask prices of a Share on the Nasdaq Small Cap Market on such date (or,
if no closing prices were reported on that date, on the last trading date on
which closing prices were reported), in each case, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable.

          (s) “Grantee” means an Employee or Consultant who receives an Award
pursuant to an Award Agreement under the Plan.

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          (t) “Immediate Family” means any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the
Grantee’s household (other than a tenant or employee), a trust in which these
persons have more than fifty percent (50%) of the beneficial interest, a
foundation in which these persons (or the Grantee) control the management of
assets, and any other entity in which these persons (or the Grantee) own more
than fifty percent (50%) of the voting interests.

          (u) “Incentive Stock Option” means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.

          (v) “Officer” means a person who is an officer of the Company or a
Related Entity within the meaning of Section 16 of the Exchange Act and the
rules and regulations promulgated thereunder.

          (w) “Option” means an option to purchase Shares pursuant to an Award
Agreement granted under the Plan that is not intended to qualify as an Incentive
Stock Option.

          (x) “Parent” means a “parent corporation,” whether now or hereafter
existing, as defined in Section 424(e) of the Code.

          (y) “Plan” means this 2002 Non-Qualified Stock Option Plan.

          (z) “Related Entity” means any Parent, Subsidiary and any business,
corporation, partnership, limited liability company or other entity in which the
Company, a Parent or a Subsidiary holds a substantial ownership interest,
directly or indirectly.

          (aa) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act
or any successor thereto.

          (bb) “Share” means a share of the Common Stock.

          (cc) “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.

          (a) Subject to the provisions of Section 10, below, the maximum
aggregate number of Shares that may be issued pursuant to all Awards is
6,000,000 (six million) Shares, and commencing with the first business day of
each fiscal year beginning with March 31, 2003, such maximum aggregate number of
Shares shall be increased by a number equal to four percent (4%) of the number
of Shares outstanding as of the last business day of the immediately preceding
fiscal year. The Shares to be issued pursuant to Awards may be authorized, but
unissued, or reacquired Common Stock.

          (b) Any Shares covered by an Award (or portion of an Award) that is
forfeited or canceled, expires or is settled in cash, shall be deemed not to
have been issued for purposes of

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determining the maximum aggregate number of Shares which may be issued under the
Plan. Shares that actually have been issued under the Plan pursuant to an Award
shall not be returned to the Plan and shall not become available for future
issuance under the Plan, except that if unvested Shares are forfeited, or
repurchased by the Company at their original purchase price, such Shares shall
become available for future grant under the Plan.

     4. Administration of the Plan.

          (a) Plan Administrator.

               (i) Administration. The Plan shall be administered by (A) the
Board or (B) the Committee. The Board may authorize one or more Officers to
grant such Awards and may limit such authority as the Board determines from time
to time.

               (ii) Administration Errors. In the event an Award is granted in a
manner inconsistent with the provisions of this subsection (a), such Award shall
be presumptively valid as of its grant date to the extent permitted by
Applicable Laws.

          (b) Powers of the Administrator. Subject to Applicable Laws and the
provisions of the Plan (including any other powers given to the Administrator
hereunder), and except as otherwise provided by the Board, the Administrator
shall have the authority, in its discretion:

               (i) to select the Employees and Consultants to whom Awards may be
granted from time to time hereunder;

               (ii) to determine whether and to what extent Awards are granted
hereunder;

               (iii) to determine the number of Shares to be covered by each
Award granted hereunder;

               (iv) to approve forms of Award Agreements for use under the Plan;

               (v) to determine the terms and conditions of any Award granted
hereunder;

               (vi) to amend the terms of any outstanding Award granted under
the Plan, provided that any amendment that would adversely affect the Grantee’s
rights under an outstanding Award shall not be made without the Grantee’s
written consent;

               (vii) to construe and interpret the terms of the Plan and Awards
granted pursuant to the Plan, including without limitation, any notice of Award
or Award Agreement, granted pursuant to the Plan;

               (viii) to establish additional terms, conditions, rules or
procedures to accommodate the rules or laws of applicable foreign jurisdictions;
provided, however, that no Award shall be granted under any such additional
terms, conditions, rules or procedures with terms or conditions which are
inconsistent with the provisions of the Plan; and

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               (ix) to take such other action, not inconsistent with the terms
of the Plan, as the Administrator deems appropriate.

     5. Eligibility. An Employee or Consultant who has been granted an Award
may, if otherwise eligible, be granted additional Awards. Awards may be granted
to such Employees or Consultants who are residing in foreign jurisdictions as
the Administrator may determine from time to time.

     6. Terms and Conditions of Awards.

          (a) Conditions of Award. Subject to the terms of the Plan, the
Administrator shall determine the provisions, terms, and conditions of each
Award including, but not limited to, the Award vesting schedule, repurchase
provisions, rights of first refusal, forfeiture provisions, form of payment
(cash, Shares, or other consideration) upon settlement of the Award, payment
contingencies, and satisfaction of any performance criteria. The performance
criteria established by the Administrator may be based on any one of, or
combination of, increase in Share price, earnings per Share, total shareholder
return, return on equity, return on assets, return on investment, net operating
income, cash flow, revenue, economic value added, personal management
objectives, or other measure of performance selected by the Administrator.
Partial achievement of the specified criteria may result in a payment or vesting
corresponding to the degree of achievement as specified in the Award Agreement.

          (b) Acquisitions and Other Transactions. The Administrator may issue
Awards under the Plan in settlement, assumption or substitution for, outstanding
awards or obligations to grant future awards in connection with the Company or a
Related Entity acquiring another entity, an interest in another entity or an
additional interest in a Related Entity whether by merger, stock purchase, asset
purchase or other form of transaction.

          (c) Term of Award. The term of each Award shall be the term stated in
the Award Agreement provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof.

          (d) Transferability of Awards. Awards may not be transferred except as
provided in the Award Agreement or in the manner and to the extent determined by
the Administrator.

          (e) 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 to
grant such Award, or such other date as is determined by the Administrator.
Notice of the grant 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.

     7. Award Exercise Price, Consideration and Taxes.

          (a) Exercise Price. The exercise price for an Option shall be
determined by the Administrator and stated in the Award Agreement, provided that
the per Share exercise price of an Option shall be not less than one hundred
percent (100%) of the Fair Market Value per Share on the date of grant.

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          (b) Consideration. Subject to Applicable Laws, the consideration to be
paid for the Shares to be issued upon exercise or purchase of an Award,
including the method of payment, shall be determined by the Administrator. In
addition to any other types of consideration the Administrator may determine,
the Administrator is authorized to accept as consideration for Shares issued
under the Plan the following:

               (i) cash;

               (ii) check;

               (iii) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;

               (iv) surrender of Shares or delivery of a properly executed form
of attestation of ownership of Shares as the Administrator may require
(including withholding of Shares otherwise deliverable upon exercise of the
Award) which have a Fair Market Value on the date of surrender or attestation
equal to the aggregate exercise price of the Shares as to which said Award shall
be exercised (but only to the extent that such exercise of the Award would not
result in an accounting compensation charge with respect to the Shares used to
pay the exercise price unless otherwise determined by the Administrator); or

               (v) any combination of the foregoing methods of payment.

          (c) Taxes. No Shares shall be delivered under the Plan to any Grantee
or other person until such Grantee or other person has made arrangements
acceptable to the Administrator for the satisfaction of any foreign, federal,
state, or local income and employment tax withholding obligations. Upon exercise
of an Award, the Company shall withhold or collect from Grantee an amount
sufficient to satisfy such tax obligations.

     8. Exercise of Award.

          (a) Procedure for Exercise; Rights as a Shareholder.

               (i) Any Award granted hereunder shall be exercisable at such
times and under such conditions as determined by the Administrator under the
terms of the Plan and specified in the Award Agreement.

               (ii) An Award shall be deemed to be exercised when written notice
of such exercise has been given to the Company in accordance with the terms of
the Award by the person entitled to exercise the Award and full payment for the
Shares with respect to which the Award is exercised. Until the issuance (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) of the stock certificate evidencing
such Shares, no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to Shares subject to an Award,
notwithstanding the exercise of the Award. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Award. 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 the
Award Agreement or Section 10, below.

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          (b) Exercise of Award Following Termination of Continuous Service.

               (i) An Award may not be exercised after the termination date of
such Award set forth in the Award Agreement and may be exercised following the
termination of a Grantee’s Continuous Service only to the extent provided in the
Award Agreement.

               (ii) Where the Award Agreement permits a Grantee to exercise an
Award following the termination of the Grantee’s Continuous Service for a
specified period, the Award shall terminate to the extent not exercised on the
last day of the specified period or the last day of the original term of the
Award, whichever occurs first.

     9. Conditions Upon Issuance of Shares.

          (a) 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
pursuant thereto shall comply with all Applicable Laws, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

          (b) 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 by any
Applicable Laws.

     10. Adjustments Upon Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the number of Shares covered by each
outstanding Award, and the number of Shares which 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, the exercise or purchase price of each such
outstanding Award, as well as any other terms that the Administrator determines
require adjustment shall be proportionately adjusted for (i) any increase or
decrease in the number of issued Shares resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Shares, or
similar event affecting the Shares, (ii) any other increase or decrease in the
number of issued Shares effected without receipt of consideration by the
Company, or (iii) as the Administrator may determine in its discretion, any
other transaction with respect to Common Stock to which Section 424(a) of the
Code applies or any similar transaction; 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 and its determination shall be final, binding and conclusive.
Except as the Administrator determines, 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 hereof shall be made with respect to,
the number or price of Shares subject to an Award.

     11. Corporate Transactions. In the event of a Corporate Transaction, 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, or in the event that the successor corporation refuses to assume or
substitute for the Award, the Grantee shall have the right to

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exercise the Award as to all of the stock subject to the Award, including Shares
that would not otherwise be exercisable. If an Award is exercisable in lieu of
assumption or substitution in the event of a Corporate Transaction, the
Administrator shall notify the Grantee that the Award shall be fully 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
paragraph, the Award shall be considered assumed if, following the Corporate
Transaction, the Award confers the right to purchase or receive, for each Share
subject to the Award immediately prior to the Corporate Transaction, the
consideration received in the Corporate Transaction 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 Corporate Transaction was 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 Corporate Transaction.

     12. Dissolution or Liquidation. In the event of the dissolution or
liquidation of the Company, the Administrator shall notify each Grantee as soon
as practicable prior to the effective date of such proposed transaction. The
Administrator in its discretion may provide for a Grantee to have the right to
exercise his or her Award until ten (10) days prior to such transaction as to
all of the Shares covered thereby, including Shares that 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.

     13. Effective Date and Term of Plan. The Plan shall become effective upon
its adoption by the Board. It shall continue in effect indefinitely until it is
terminated by the Board. Subject to Applicable Laws, Awards may be granted under
the Plan upon it becoming effective.

     14. Amendment, Suspension or Termination of the Plan.

          (a) The Board may at any time amend, suspend or terminate the Plan.

          (b) The Administrator may amend the terms of any outstanding Award,
prospectively or retroactively, but no such amendment shall (i) impair the
rights of any Grantee without the Grantee’s consent or (ii) modify the terms of
any Award in a manner inconsistent with the provisions of the Plan. Subject to
the above provisions, the Board shall have authority to amend the Plan to take
into account changes in Applicable Laws and accounting rules as well as other
developments, and to grant Awards which qualify for beneficial treatment under
such rules.

          (c) No Award may be granted during any suspension of the Plan or after
termination of the Plan.

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          (d) Any amendment, suspension or termination of the Plan shall not
affect Awards already granted, and such Awards shall remain in full force and
effect as if the Plan had not been amended, suspended or terminated, unless
mutually agreed otherwise between the Grantee and the Administrator, which
agreement must be in writing and signed by the Grantee and the Company.

     15. Reservation of Shares.

          (e) The Company, during the term of the Plan, will at all times
reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.

          (f) 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 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. No Effect on Terms of Employment/Consulting Relationship. The Plan
shall not confer upon any Grantee any right with respect to the Grantee’s
Continuous Service, nor shall it interfere in any way with his or her right or
the Company’s right to terminate the Grantee’s Continuous Service at any time,
with or without cause.

     17. No Effect on Retirement and Other Benefit Plans. Except as specifically
provided in a retirement or other benefit plan of the Company or a Related
Entity, Awards shall not be deemed compensation for purposes of computing
benefits or contributions under any retirement plan of the Company or a Related
Entity, and shall not affect any benefits under any other benefit plan of any
kind or any benefit plan subsequently instituted under which the availability or
amount of benefits is related to level of compensation. The Plan is not a
“Retirement Plan” or “Welfare Plan” under the Employee Retirement Income
Security Act of 1974, as amended.

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EXHIBIT 10.9-A

AMENDMENT TO THE
CIRRUS LOGIC, INC. 2002 STOCK OPTION PLAN

     In accordance with the provisions of Section 14 of the Cirrus Logic, Inc.
2002 Stock Option Plan (the “Plan”), Cirrus Logic, Inc. hereby amends the Plan,
effective as of November 1, 2002, as follows:

     1. Section 2 of the Plan is amended by re-designating the existing clauses
(x) through (cc) thereof as clauses (y) through (dd), respectively, and adding a
new clause (x) to read as follows:

            “(x) “Option Exchange Program” means a program approved by the
Administrator whereby outstanding Options are exchanged for Options (or stock
options granted pursuant to a plan of a Parent or Subsidiary of the Company)
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.”

     2. Section 4(b) of the Plan is amended by re-designating the existing
clauses (vii), (viii) and (ix) thereof as clauses (viii), (ix) and (x),
respectively, and adding a new clause (vii) to read as follows:

            “(vii) 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;”

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EXHIBIT 10.9-B

CIRRUS LOGIC, INC. 2002 NON-QUALIFIED STOCK OPTION PLAN
NON-QUALIFIED STOCK OPTION AWARD AGREEMENT

     1. Grant of Option. Cirrus Logic, Inc., a Delaware corporation (the
“Company”), hereby grants to the Grantee (the “Grantee”) named in the Notice of
Stock Option Award (the “Notice”), a non-qualified stock option (the “Option”)
to purchase the Total Number of Shares of Common Stock subject to the Option
(the “Shares”) set forth in the Notice, at the Exercise Price per Share set
forth in the Notice (the “Exercise Price”) subject to the terms and provisions
of the Notice, this Non-Qualified Stock Option Award Agreement (the “Option
Agreement”) and the Company’s 2002 Non-Qualified Stock Option Plan, as amended
from time to time (the “Plan”), which are incorporated herein by reference.
Unless otherwise defined herein, the terms defined in the Plan shall have the
same defined meanings in this Option Agreement.

     2. Exercise of Option.

          (a) Right to Exercise. The Option shall be exercisable during its term
in accordance with the Vesting Schedule set out in the Notice and with the
applicable provisions of the Plan and this Option Agreement. During any
authorized leave of absence, the continued vesting of the Option shall be
determined in accordance with the Company’s leave of absence policy as may be
amended from time to time. The Option shall be subject to the provisions of
Sections 11 and 12 of the Plan relating to the exercisability or termination of
the Option in the event of certain transactions. The Grantee shall be subject to
reasonable limitations on the number of requested exercises during any monthly
or weekly period as determined by the Administrator. In no event shall the
Company issue fractional Shares.

          (b) Method of Exercise. This Option is exercisable by delivery of an
exercise notice, in the form attached as Exhibit A (the “Exercise Notice”),
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the “Exercised Shares”), and
such other representations and agreements as may be required by the Company
pursuant to the provisions of the Plan. The Exercise Notice shall be completed
by the Optionee and delivered to E*Trade as the Company’s Plan Administrator.
The Exercise Notice shall be accompanied by payment of the aggregate Exercise
Price as to all Exercised Shares. This Option shall be deemed to be exercised
upon receipt by E*Trade on behalf of the Company of such fully executed Exercise
Notice accompanied by such aggregate Exercise Price.

     No Shares shall be issued pursuant to the exercise of this Option unless
such issuance and exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Exercised Shares shall be considered
transferred to the Optionee on the date the Option is exercised with respect to
such Exercised Shares.

          (c) Taxes. No Shares will be delivered to the Grantee or other person
pursuant to the exercise of the Option until the Grantee or other person has
made arrangements acceptable to the Administrator for the satisfaction of
applicable income tax, employment tax, and social security tax withholding
obligations. Upon exercise of the Option, the Company or the Grantee’s employer
may offset or withhold (from any amount owed by the Company or the

 

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Grantee’s employer to the Grantee) or collect from the Grantee or other person
an amount sufficient to satisfy such tax obligations and/or the employer’s
withholding obligations.

     3. Method of Payment. Payment of the Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Grantee; provided,
however, that such exercise method does not then violate any Applicable Law:

          (a) cash;

          (b) check;

          (c) consideration received by the Company under a cashless exercise
program implemented by the Company in connection with the Plan; or

          (d) surrender of Shares (including withholding of Shares otherwise
deliverable upon exercise of the Option) which 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 being exercised (but only to the extent that such exercise
of the Option would not result in an accounting compensation charge with respect
to the Shares used to pay the exercise price).

     4. Restrictions on Exercise. The Option may not be exercised if the
issuance of the Shares subject to the Option upon such exercise would constitute
a violation of any Applicable Laws.

     5. Termination or Change of Continuous Service. In the event the Grantee’s
Continuous Service terminates, the Grantee may, to the extent otherwise so
entitled at the date of such termination (the “Termination Date”), exercise the
Option during the ninety (90)-day period that begins on the day following the
Termination Date. In no event shall the Option be exercised later than the
Expiration Date set forth in the Notice. In the event of the Grantee’s change in
status from Employee or Consultant to any other status of Employee or
Consultant, the Option shall remain in effect and, except to the extent
otherwise determined by the Administrator, continue to vest. Except as provided
in Sections 6 and 7 below, to the extent that the Grantee is not entitled to
exercise the Option on the Termination Date, or if the Grantee does not exercise
the Option within the 90 days following termination, the Option shall terminate.

     6. Disability of Grantee. In the event the Grantee’s Continuous Service
terminates as a result of his or her Disability, the Grantee may, but only
within twelve (12) months from the Termination Date (and in no event later than
the Expiration Date), exercise the Option to the extent he or she was otherwise
entitled to exercise it on the Termination Date. To the extent that the Grantee
is not entitled to exercise the Option on the Termination Date, or if the
Grantee does not exercise the Option to the extent so entitled within the time
specified herein, the Option shall terminate.

     7. Death of Grantee. In the event of the termination of the Grantee’s
Continuous Service as a result of his or her death, the Grantee’s estate, or a
person who acquired the right to exercise the Option by bequest or inheritance,
may exercise the Option, but only to the extent the Grantee could exercise the
Option at the date of termination, within twelve (12) months from the date of
death (but in no event later than the Expiration Date). To the extent that the
Grantee is

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not entitled to exercise the Option on the date of death, or if the Option is
not exercised to the extent so entitled within the time specified herein, the
Option shall terminate.

     8. Non-Transferability of Option. An Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than as
set forth in this Section 8. The Option may be transferred to any person by will
and by the laws of descent and distribution. In addition, the Option also may be
transferred during the lifetime of the Grantee pursuant to a domestic relations
order to members of the Grantee’s Immediate Family to the extent and in the
manner determined by the Administrator. The terms of the Option shall be binding
upon the executors, administrators, heirs, successors and transferees of the
Grantee.

     9. Term of Option. The Option may be exercised no later than the Expiration
Date set forth in the Notice or such earlier date as otherwise provided herein.

     10. Tax Consequences. Set forth below is a brief summary as of the date of
this Option Agreement of some of the federal tax consequences of exercise of the
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE GRANTEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.

          (a) Exercise of Options. On exercise of an Option, the Grantee will be
treated as having received compensation income (taxable at ordinary income tax
rates) equal to the excess, if any, of the Fair Market Value of the Shares on
the date of exercise over the Exercise Price. If the Grantee is an Employee or a
former Employee, the Company will be required to withhold from the Grantee’s
compensation or collect from the Grantee and pay to the applicable taxing
authorities an amount in cash equal to a percentage of this compensation income
at the time of exercise, and may refuse to honor the exercise and refuse to
deliver Shares if such withholding amounts are not delivered at the time of
exercise.

          (b) Disposition of Shares. If Shares acquired as a result of an Option
exercise are held for more than one year, any gain realized on disposition of
the Shares will be treated as long-term capital gain for federal income tax
purposes.

     11. Entire Agreement: Governing Law. The Notice, the Plan and this Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee’s interest except by
means of a writing signed by the Company and the Grantee. Nothing in the Notice,
the Plan and this Option Agreement (except as expressly provided therein) is
intended to confer any rights or remedies on any persons other than the parties.
The Notice, the Plan and this Option Agreement are to be construed in accordance
with and governed by the internal laws of the State of Texas without giving
effect to any choice of law rule that would cause the application of the laws of
any jurisdiction other than the internal laws of the State of Texas to the
rights and duties of the parties. Should any provision of the Notice, the Plan
or this Option Agreement be determined by a court of law to be illegal or
unenforceable,

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such provision shall be enforced to the fullest extent allowed by law and the
other provisions shall nevertheless remain effective and shall remain
enforceable.

     12. Headings. The captions used in the Notice and this Option Agreement are
inserted for convenience and shall not be deemed a part of the Option for
construction or interpretation.

     13. Dispute Resolution The provisions of this Section 13 shall be the
exclusive means of resolving disputes arising out of or relating to the Notice,
the Plan and this Option Agreement. The Company, the Grantee, and the Grantee’s
assignees pursuant to Sections 7 and 8 (the “parties”) shall attempt in good
faith to resolve any disputes arising out of or relating to the Notice, the Plan
and this Option Agreement by negotiation between individuals who have authority
to settle the controversy. Negotiations shall be commenced by either party by
notice of a written statement of the party’s position and the name and title of
the individual who will represent the party. Within thirty (30) days of the
written notification, the parties shall meet at a mutually acceptable time and
place, and thereafter as often as they reasonably deem necessary, to resolve the
dispute.

     Any controversy, dispute or claim that has not been settled by negotiation
within thirty (30) days of the written notification as set forth above shall be
finally settled by arbitration under the Commercial Arbitration Rules of the
American Arbitration Association (“AAA”) by three arbitrators. In such event,
the claimant will deliver a written notice to the respondent(s) and the AAA
initiating arbitration and naming an arbitrator. Within twenty (20) days after
receipt of such arbitration notice, the respondent(s) shall name an arbitrator.
Within twenty (20) days from the naming of the two arbitrators, the two
arbitrators shall name a third arbitrator. If there are multiple claimants
and/or multiple respondents, all claimants and/or all respondents shall attempt
to agree upon naming their respective arbitrator. If the claimants or
respondents, as the case may be, fail to name their respective arbitrator, or if
the two arbitrators fail to name a third arbitrator, or if within twenty
(20) days after any arbitrator shall resign or otherwise cease to serve as such
a replacement arbitrator is not named by the party that originally named such
arbitrator, such arbitrator as to which agreement cannot be reached or as to
which a timely appointment is not made shall be named by the AAA. The place of
arbitration shall be Austin, Texas. The award of the arbitrators may be entered
in any court of competent jurisdiction. The costs of the arbitration shall be
shared by the disputing parties equally. Notwithstanding anything to the
contrary herein, the arbitrators shall not award nor shall the Company have any
liability for any consequential, punitive, special, incidental, indirect or
similar damages.

     14. Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States mail by certified mail (if the parties are within
the United States) or upon deposit for delivery by an internationally recognized
express mail courier service (for international delivery of notice), with
postage and fees prepaid, addressed to the other party at its address as such
party may designate in writing from time to time to the other party.

     By your signature below, you agree that this Option is granted under and
governed by the terms and conditions of the Plan and this Option Agreement.
Optionee has reviewed the Plan and this Option Agreement in their entirety, has
had an opportunity to obtain the advice of

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counsel prior to executing this Option Agreement and fully understands all
provisions of the Plan and Option Agreement. Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions relating to the Plan and Option Agreement.
Optionee further agrees to notify the Company upon any change in the residence
address indicated below.

          OPTIONEE:              

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Signature      

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Printed Name      

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Date

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