EXHIBIT 10.20

 

BROADVISION, INC.
2000 NON-OFFICER EQUITY INCENTIVE PLAN

 

ADOPTED ON FEBRUARY 8, 2000
STOCKHOLDER APPROVAL NOT REQUIRED
AMENDED BY THE BOARD OF DIRECTORS ON SEPTEMBER 11, 2002

 

Reflects the three-for-one stock split effected February 22, 2000 and the
one-for-nine reverse stock split effected July 29, 2002

 

1.                                      PURPOSES.

 

(a)                                  The purpose of the Plan is to provide a
means by which selected Employees of and Consultants to the Company and its
Affiliates who are not Officers or Directors may be given an opportunity to
benefit from increases in value of the stock of the Company through the granting
of (i) Nonstatutory Stock Options, (ii) stock bonuses and (iii) rights to
purchase restricted stock, all as described below. The Plan is also intended to
provide a means by which the Company may grant options to persons not previously
employed by the Company as an inducement essential to those persons entering
employment contracts with the Company.  Such “inducement grants” may be made to
any Employee, including persons who ultimately are employed by the Company as
Officers.

 

(b)                                  The Company, by means of the Plan, seeks to
retain the services of persons who are now Employees or Consultants, to secure
and retain the services of new Employees and Consultants, and to provide
incentives for such persons to exert maximum efforts for the success of the
Company and its Affiliates.

 

(c)                                  The Company intends that the Stock Awards
issued under the Plan shall be, in the discretion of the Board or any Committee
to which responsibility for administration of the Plan has been delegated
pursuant to subsection 3(c), either (i) Nonstatutory Stock Options granted
pursuant to Section 6 hereof or (ii) stock bonuses or rights to purchase
restricted stock granted pursuant to Section 7 hereof.

 

2.                                      DEFINITIONS.

 

(a)                                  “Affiliate” means any parent corporation or
subsidiary corporation, whether now or hereafter existing, as those terms are
defined in Sections 424(e) and (f) respectively, of the Code.

 

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

 

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

 

(d)                                  “Committee” means a Committee appointed by
the Board in accordance with subsection 3(c) of the Plan.

 

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(e)                                  “Company” means BroadVision, Inc., a
Delaware corporation.

 

(f)                                    “Consultant” means any person, including
an advisor, engaged by the Company or an Affiliate to render consulting services
and who is compensated for such services; provided that the term “Consultant”
shall not include Directors.

 

(g)                                 “Continuous Service” (formerly “Continuous
Status as an Employee, Director or Consultant”) means that the Participant’s
service with the Company or an Affiliate, whether as an Employee, Officer,
Director or Consultant, is not interrupted or terminated.  The Participant’s
Continuous Service shall not be deemed to have terminated merely because of a
change in the capacity in which the Participant renders service to the Company
or an Affiliate as an Employee, Officer, Consultant or Director or a change in
the entity for which the Participant renders such service, provided that there
is no interruption or termination of the Participant’s Continuous Service.  For
example, a change in status from an Employee of the Company to a Consultant of
an Affiliate or a Director of the Company will not constitute an interruption of
Continuous Service.  The Board or the chief executive officer of the Company, in
that party’s sole discretion, may determine whether Continuous Service shall be
considered interrupted in the case of any leave of absence approved by that
party, including sick leave, military leave or any other personal leave.

 

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

 

(i)                                    “Employee” means any person employed by
the Company or any Affiliate of the Company; provided that except as provided
below, Officers and Directors of the Company shall not be considered Employees
for purposes of the Plan.  Notwithstanding the foregoing, an Officer shall be
considered an Employee for purposes of the grant under this Plan of a Stock
Award to that Officer as an inducement essential to such Officer’s entering into
an employment contract with the Company if such Officer was not an Employee of
the Company immediately prior to the date on which such Stock Award is granted.

 

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

 

(k)                                “Fair Market Value” means, as of any date,
the value of the Common Stock of the Company determined as follows:

 

(1)                                 If the Common Stock is listed on any
established stock exchange or a national market system, including without
limitation the National Market of The Nasdaq Stock Market, the Fair Market Value
of a share of Common Stock shall be the closing sales price for such stock (or
the closing bid, if no sales were reported) as quoted on such system or exchange
(or the exchange with the greatest volume of trading in Common Stock) on the
last market trading day prior to the day of determination, as reported in the
Wall Street Journal or such other source as the Board deems reliable.

 

(2)                                 If the Common Stock is quoted on The Nasdaq
Stock Market (but not on the National Market thereof) or 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 bid and
asked prices for the Common Stock on the last market trading day prior to

 

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the day of determination, as reported in the Wall Street Journal or such other
source as the Board deems reliable.

 

(3)                                 In the absence of an established market for
the Common Stock, the Fair Market Value shall be determined in good faith by the
Board.

 

(l)                                    “Non-Employee Director” means a Director
of the Company who either (i) is not a current Employee or an officer (within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder) of the Company or its parent or a subsidiary, does not
receive compensation (directly or indirectly) from the Company or its parent or
a subsidiary for services rendered as a consultant or in any capacity other than
as a Director (except for an amount as to which disclosure would not be required
under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
(“Regulation S-K”)), does not possess an interest in any other transaction as to
which disclosure would be required under Item 404(a) of Regulation S-K and is
not engaged in a business relationship as to which disclosure would be required
under Item 404(b) of Regulation S-K or (ii) is otherwise considered a
“non-employee director” for purposes of Rule 16b-3.

 

(m)                              “Nonstatutory Stock Option” means an Option not
intended to qualify as an incentive stock option within the meaning of Section
422 of the Code and the regulations promulgated thereunder.

 

(n)                                 “Officer” means a person who is an officer
of the Company, including any corporate officer with a title of Vice President
or above or any other Employee of the Company whom the Board or the Committee
classifies as an “Officer.”

 

(o)                                  “Option” means a stock option granted
pursuant to the Plan.

 

(p)                                  “Option Agreement” means a written
agreement between the Company and an Optionee evidencing the terms and
conditions of an individual Option grant.  Each Option Agreement shall be
subject to the terms and conditions of the Plan.

 

(q)                                  “Optionee” means a person to whom an Option
is granted pursuant to the Plan or, if applicable, such other person who holds
an outstanding Option.

 

(r)                                  “Participant” means a person to whom a
Stock Award is granted pursuant to the Plan or, if applicable, such other person
who holds an outstanding Stock Award.

 

(s)                                  “Plan” means this BroadVision, Inc. 2000
Non-Officer Equity Incentive Plan.

 

(t)                                    “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.

 

(u)                                 “Securities Act” means the Securities Act of
1933, as amended.

 

(v)                                   “Stock Award” means any right granted
under the Plan, including any Option, any stock bonus and any right to purchase
restricted stock.

 

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(w)                                “Stock Award Agreement” means a written
agreement between the Company and a holder of a Stock Award evidencing the terms
and conditions of an individual Stock Award grant.  Each Stock Award Agreement
shall be subject to the terms and conditions of the Plan.

 

3.                                      ADMINISTRATION.

 

(a)                                  The Board shall administer the Plan unless
and until the Board delegates administration to a Committee, as provided in
subsection 3(c).

 

(b)                                  The Board shall have the power, subject to,
and within the limitations of, the express provisions of the Plan:

 

(1)                                 To determine from time to time which of the
persons eligible under the Plan shall be granted Stock Awards; when and how each
Stock Award shall be granted; whether a Stock Award will be an Option, a stock
bonus, a right to purchase restricted stock or the provisions of each Stock
Award granted (which need not be identical), including the time or times when a
person shall be permitted to receive stock pursuant to a Stock Award; and the
number of shares with respect to which a Stock Award shall be granted to each
such person.

 

(2)                                 To construe and interpret the Plan and Stock
Awards granted under it, and to establish, amend and revoke rules and
regulations for its administration.  The Board, in the exercise of this power,
may correct any defect, omission or inconsistency in the Plan or in any Stock
Award Agreement, in a manner and to the extent it shall deem necessary or
expedient to make the Plan fully effective.

 

(3)                                 To amend the Plan or a Stock Award as
provided in Section 12.

 

(4)                                 To terminate or suspend the Plan as provided
in Section 13.

 

(5)                                 Generally, to exercise such powers and to
perform such acts as the Board deems necessary or expedient to promote the best
interests of the Company which are not in conflict with the provisions of the
Plan.

 

(c)                                  The Board may delegate administration of
the Plan to a Committee or Committees of one or more members of the Board, and
the term “Committee” shall apply to any person or persons to whom such authority
has been delegated.  If administration is delegated to a Committee, the
Committee shall have, in connection with the administration of the Plan, the
powers theretofore possessed by the Board, including the power to delegate to a
subcommittee any of the administrative powers the Committee is authorized to
exercise (and references in this Plan to the Board shall thereafter be to the
Committee or subcommittee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board.  The Board may abolish the Committee at any time and revest
in the Board the administration of the Plan.  In the discretion of the Board, a
Committee may consist solely of two or more Non-Employee Directors, in
accordance with Rule 16b-3.  Within the scope of such authority, the Board or
the Committee may delegate to a committee of one or more members of the Board
who are not Non-Employee Directors the authority to grant Stock Awards to
eligible persons who are not then subject to Section 16 of the Exchange Act.

 

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4.                                      SHARES SUBJECT TO THE PLAN.

 

(a)                                  Subject to the provisions of Section 11
relating to adjustments upon changes in stock, the stock that may be issued
pursuant to Stock Awards shall not exceed in the aggregate two million six
hundred thousand six hundred and sixty-seven (2,666,667) shares of the Company’s
Common Stock.  If any Stock Award shall for any reason expire or otherwise
terminate, in whole or in part, without having been exercised in full, the stock
not acquired under such Stock Award shall revert to and again become available
for issuance under the Plan.

 

(b)                                  The stock subject to the Plan may be
unissued shares or reacquired shares, bought on the market or otherwise.

 

5.                                      ELIGIBILITY.

 

(a)                                  Stock Awards may be granted only to
Employees or Consultants.

 

(b)                                  A Consultant shall not be eligible for the
grant of a Stock Award if, at the time of grant, a Form S-8 Registration
Statement under the Securities Act (“Form S-8”) is not available to register
either the offer or the sale of the Company’s securities to such Consultant
because of the nature of the services that the Consultant is providing to the
Company, or because the Consultant is not a natural person, or as otherwise
provided by the rules governing the use of Form S-8, unless the Company
determines both (i) that such grant (A) shall be registered in another manner
under the Securities Act (e.g., on a Form S-3 Registration Statement) or (B)
does not require registration under the Securities Act in order to comply with
the requirements of the Securities Act, if applicable, and (ii) that such grant
complies with the securities laws of all other relevant jurisdictions.

 

6.                                      OPTION PROVISIONS.

 

Each Option shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate.  The provisions of separate Options need not
be identical, but each Option shall include (through incorporation of provisions
hereof by reference in the Option or otherwise) the substance of each of the
following provisions:

 

(a)                                  Term.  No Option shall be exercisable after
the expiration of ten (10) years from the date it was granted.

 

(b)                                  Price.  The exercise price of each Option
shall be not less than eighty-five percent (85%) of the Fair Market Value of the
stock subject to the Option on the date the Option is granted.

 

(c)                                  Consideration.  The purchase price of stock
acquired pursuant to an Option shall be paid, to the extent permitted by
applicable statutes and regulations, either (i) in cash at the time the Option
is exercised or (ii) at the discretion of the Board or the Committee, at the
time of the grant of the Option, (A) by delivery to the Company of other Common
Stock of the Company, (B) according to a deferred payment or other arrangement
(which may include, without limiting the generality of the foregoing, the use of
other Common Stock of the Company) with the person to whom the Option is granted
or to whom the Option is transferred

 

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pursuant to subsection 6(d) or (C) in any other form of legal consideration that
may be acceptable to the Board; provided, however, that at any time that the
Company is incorporated in Delaware, payment of the Common Stock’s “par value,”
as defined in the Delaware General Corporation Law, shall not be made by
deferred payment.

 

In the case of any deferred payment arrangement, interest shall be compounded at
least annually and shall be charged at the minimum rate of interest necessary to
avoid the treatment as interest, under any applicable provisions of the Code, of
any amounts other than amounts stated to be interest under the deferred payment
arrangement.

 

(d)                                  Transferability. An Option shall be
transferable to the extent provided in the Option Agreement.  If the Option does
not provide for transferability, then the Option shall not be transferable
except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Optionholder only by the Optionholder. 
Notwithstanding the foregoing, the person to whom the Option is granted may, by
delivering written notice to the Company, in a form satisfactory to the Company,
designate a third party who, in the event of the death of the Optionee, shall
thereafter be entitled to exercise the Option.

 

(e)                                  Vesting.  The total number of shares of
stock subject to an Option may, but need not, be allotted in periodic
installments (which may, but need not, be equal).  The Option Agreement may
provide that from time to time during each of such installment periods, the
Option may become exercisable (“vest”) with respect to some or all of the shares
allotted to that period, and may be exercised with respect to some or all of the
shares allotted to such period and/or any prior period as to which the Option
became vested but was not fully exercised.  The Option may be subject to such
other terms and conditions on the time or times when it may be exercised (which
may be based on performance or other criteria) as the Board may deem
appropriate.  The provisions of this subsection 6(e) are subject to any Option
provisions governing the minimum number of shares as to which an Option may be
exercised.

 

(f)                                    Termination of Continuous Service.  In
the event an Optionee’s Continuous Service terminates (other than upon the
Optionee’s death or disability), the Optionee may exercise his or her Option (to
the extent that the Optionee was entitled to exercise it at the date of
termination) but only within such period of time ending on the earlier of (i)
the date three (3) months after the termination of the Optionee’s Continuous
Service (or such longer or shorter period specified in the Option Agreement) or
(ii) the expiration of the term of the Option as set forth in the Option
Agreement.  If, after termination, the Optionee does not exercise his or her
Option within the time specified in the Option Agreement, the Option shall
terminate, and the shares covered by such Option shall revert to and again
become available for issuance under the Plan.

 

An Optionee’s Option Agreement may also provide that if the exercise of the
Option following the termination of the Optionee’s Continuous Service (other
than upon the Optionee’s death or disability) would result in liability under
Section 16(b) of the Exchange Act, then the Option shall terminate on the
earlier of (i) the expiration of the term of the Option set forth in the Option
Agreement, or (ii) the tenth (10th) day after the last date on which such
exercise would result in such liability under Section 16(b) of the Exchange Act.

 

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Finally, an Optionee’s Option Agreement may also provide that if the exercise of
the Option following the termination of the Optionee’s Continuous Service (other
than upon the Optionee’s death or disability) would be prohibited at any time
solely because the issuance of shares would violate the registration
requirements under the Securities Act, then the Option shall terminate on the
earlier of (i) the expiration of the term of the Option set forth in the first
paragraph of this subsection 6(f) or (ii) the expiration of a period of three
(3) months after the termination of the Optionee’s Continuous Service during
which the exercise of the Option would not be in violation of such registration
requirements.

 

(g)                                 Disability of Optionee.  In the event an
Optionee’s Continuous Service terminates as a result of the Optionee’s
disability, the Optionee may exercise his or her Option (to the extent that the
Optionee was entitled to exercise it at the date of termination), but only
within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period specified in
the Option Agreement) or (ii) the expiration of the term of the Option as set
forth in the Option Agreement.  If, at the date of termination, the Optionee is
not entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option shall revert to and again become available
for issuance under 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 and again
become available for issuance under the Plan.

 

(h)                                 Death of Optionee.  In the event of the
death of an Optionee during, or within a period specified in the Option after
the termination of, the Optionee’s Continuous Service, the Option may be
exercised (to the extent the Optionee was entitled to exercise the Option at the
date of death) by the Optionee’s estate, by a person who acquired the right to
exercise the Option by bequest or inheritance or by a person designated to
exercise the option upon the Optionee’s death pursuant to subsection 6(d), but
only within the period ending on the earlier of (i) the date eighteen (18)
months following the date of death (or such longer or shorter period specified
in the Option Agreement) or (ii) the expiration of the term of such Option as
set forth in the Option Agreement.  If, at the time of death, the Optionee was
not entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option shall revert to and again become available
for issuance under the Plan.  If, after death, the Option is not exercised
within the time specified herein, the Option shall terminate, and the shares
covered by such Option shall revert to and again become available for issuance
under the Plan.

 

(i)                                    Early Exercise.  The Option may, but need
not, include a provision whereby the Optionee may elect at any time while an
Employee, Officer, Director or Consultant to exercise the Option as to any part
or all of the shares subject to the Option prior to the full vesting of the
Option.  Any unvested shares so purchased may be subject to a repurchase right
in favor of the Company or to any other restriction the Board determines to be
appropriate.

 

(j)                                    Re-Load Options.  Without in any way
limiting the authority of the Board or Committee to make or not to make grants
of Options hereunder, the Board or Committee shall have the authority (but not
an obligation) to include as part of any Option Agreement a provision entitling
the Optionee to a further Option (a “Re-Load Option”) in the event the Optionee
exercises the Option evidenced by the Option agreement, in whole or in part, by
surrendering other shares of Common Stock in accordance with this Plan and the
terms and conditions of the

 

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Option Agreement.  Any such Re-Load Option (i) shall be for a number of shares
equal to the number of shares surrendered as part or all of the exercise price
of such Option, (ii) shall have an expiration date that is the same as the
expiration date of the Option the exercise of which gave rise to such Re-Load
Option, and (iii) shall have an exercise price that is at least eighty-five
percent (85%) of the Fair Market Value of the Common Stock subject to the
Re-Load Option on the date of exercise of the original Option.

 

There shall be no Re-Load Options on a Re-Load Option.  Any such Re-Load Option
shall be subject to the availability of sufficient shares under subsection 4(a)
and shall be subject to such other terms and conditions as the Board or
Committee may determine which are not inconsistent with the express provisions
of the Plan regarding the terms of Options.

 

7.                                      TERMS OF STOCK BONUSES AND PURCHASES OF
RESTRICTED STOCK.

 

Each stock bonus or restricted stock purchase agreement shall be in such form
and shall contain such terms and conditions as the Board or the Committee shall
deem appropriate.  The terms and conditions of stock bonus or restricted stock
purchase agreements may change from time to time, and the terms and conditions
of separate agreements need not be identical, but each stock bonus or restricted
stock purchase agreement shall include (through incorporation of provisions
hereof by reference in the agreement or otherwise) the substance of each of the
following provisions as appropriate:

 

(a)                                  Purchase Price.  The purchase price under
each restricted stock purchase agreement shall be such amount as the Board or
Committee shall determine and designate in such agreement but in no event shall
the purchase price be less than eighty-five percent (85%) of the stock’s Fair
Market Value on the date such award is made.  Notwithstanding the foregoing, the
Board or the Committee may determine that eligible participants in the Plan may
be awarded stock pursuant to a stock bonus agreement in consideration for past
services actually rendered to the Company for its benefit.

 

(b)                                  Transferability.  Rights to acquire shares
under the stock bonus or restricted stock purchase agreement shall be
transferable only upon such terms and conditions as are set forth in the
agreement, as the Board shall determine in its discretion, so long as stock
awarded under the agreement remains subject to the terms of the agreement.

 

(c)                                  Consideration.  The purchase price of stock
acquired pursuant to a stock purchase agreement shall be paid either:  (i) in
cash at the time of purchase, (ii) at the discretion of the Board or the
Committee, according to a deferred payment or other arrangement with the person
to whom the stock is sold or (iii) in any other form of legal consideration that
may be acceptable to the Board or the Committee in its discretion; provided,
however, that at any time that the Company is incorporated in Delaware, payment
of the Common Stock’s “par value,” as defined in the Delaware General
Corporation Law, shall not be made by deferred payment.  Notwithstanding the
foregoing, the Board or the Committee to which administration of the Plan has
been delegated may award stock pursuant to a stock bonus agreement in
consideration for past services actually rendered to the Company or for its
benefit.

 

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(d)                                  Vesting.  Shares of stock sold or awarded
under the Plan may, but need not, be subject to a repurchase option in favor of
the Company in accordance with a vesting schedule to be determined by the Board
or the Committee.

 

(e)                                  Termination of Continuous Service.  In the
event a Participant’s Continuous Service terminates, the Company may repurchase
or otherwise reacquire any or all of the shares of stock held by that person
which have not vested as of the date of termination under the terms of the stock
bonus or restricted stock purchase agreement between the Company and such
person.

 

8.                                      COVENANTS OF THE COMPANY.

 

(a)                                  During the terms of the Stock Awards, the
Company shall keep available at all times the number of shares of stock required
to satisfy such Stock Awards.

 

(b)                                  The Company shall seek to obtain from each
regulatory commission or agency having jurisdiction over the Plan such authority
as may be required to issue and sell shares of stock upon exercise of the Stock
Award; provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any Stock Award or any stock
issued or issuable pursuant to any such Stock Award.  If, after reasonable
efforts, the Company is unable to obtain from any such regulatory commission or
agency the authority which counsel for the Company deems necessary for the
lawful issuance and sale of stock under the Plan, the Company shall be relieved
from any liability for failure to issue and sell stock upon exercise of such
Stock Awards unless and until such authority is obtained.

 

9.                                      USE OF PROCEEDS FROM STOCK.

 

Proceeds from the sale of stock pursuant to Stock Awards shall constitute
general funds of the Company.

 

10.                               MISCELLANEOUS.

 

(a)                                  The Board shall have the power to
accelerate the time at which a Stock Award may first be exercised or the time
during which a Stock Award or any part thereof will vest pursuant to subsection
6(e) or 7(d) notwithstanding the provisions in the Stock Award stating the time
at which it may first be exercised or the time during which it will vest.

 

(b)                                  Neither an Employee, an Officer nor a
Consultant nor any person to whom a Stock Award is transferred in accordance
with the Plan shall be deemed to be the holder of, or to have any of the rights
of a holder with respect to, any shares subject to such Stock Award unless and
until such person has exercised the Stock Award pursuant to its terms.

 

(c)                                  Nothing in the Plan or any instrument
executed or Stock Award granted pursuant thereto shall confer upon any Employee,
Officer, Consultant or other holder of Stock Awards any right to continue in the
employ of the Company or any Affiliate or to continue acting as a Consultant or
shall affect the right of the Company or any Affiliate to terminate the
employment of any Employee or Officer with or without notice and with or without
cause, or the right to

 

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terminate the relationship of any Consultant pursuant to the terms of such
Consultant’s agreement with the Company or Affiliate.

 

(d)                                  The Company may require any person to whom
a Stock Award is granted, or any person to whom a Stock Award is transferred in
accordance with the Plan, as a condition of exercising or acquiring stock under
any Stock Award, (i) to give written assurances satisfactory to the Company as
to such person’s knowledge and experience in financial and business matters
and/or to employ a purchaser representative reasonably satisfactory to the
Company who is knowledgeable and experienced in financial and business matters,
and that he or she is capable of evaluating, alone or together with the
purchaser representative, the merits and risks of exercising the Stock Award and
(ii) to give written assurances satisfactory to the Company stating that such
person is acquiring the stock subject to the Stock Award for such person’s own
account and not with any present intention of selling or otherwise distributing
the stock.  The foregoing requirements, and any assurances given pursuant to
such requirements, shall be inoperative if (A) the issuance of the shares upon
the exercise or acquisition of stock under the Stock Award has been registered
under a then currently effective registration statement under the Securities
Act, or (B) as to any particular requirement, a determination is made by counsel
for the Company that such requirement need not be met in the circumstances under
the then applicable securities laws.  The Company may, upon advice of counsel to
the Company, place legends on stock certificates issued under the Plan as such
counsel deems necessary or appropriate in order to comply with applicable
securities laws, including, but not limited to, legends restricting the transfer
of the stock.

 

(e)                                  To the extent provided by the terms of a
Stock Award Agreement, the person to whom a Stock Award is granted may satisfy
any federal, state or local tax withholding obligation relating to the exercise
or acquisition of stock under a Stock Award by any of the following means or by
a combination of such means:  (1) tendering a cash payment, (2) authorizing the
Company to withhold shares from the shares of the Common Stock otherwise
issuable to the participant as a result of the exercise or acquisition of stock
under the Stock Award or (3) delivering to the Company owned and unencumbered
shares of the Common Stock of the Company.  Notwithstanding the foregoing, the
Company shall not be authorized to withhold shares of Common Stock at rates in
excess of the minimum statutory withholding rates for federal and state tax
purposes, including payroll taxes, if such excess withholding would result in a
charge to the Company’s earnings for accounting purposes.

 

11.                               ADJUSTMENTS UPON CHANGES IN STOCK.

 

(a)                                  If any change is made in the stock subject
to the Plan, or subject to any Stock Award, without the receipt of consideration
by the Company (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan will be appropriately adjusted in the
class(es) and maximum number of shares subject to the Plan pursuant to
subsection 4(a) and the outstanding Stock Awards will be appropriately adjusted
in the class(es) and number of shares and price per share of stock subject to
such outstanding Stock Awards.  Such adjustments shall be made by the Board or
the Committee, the determination of which shall be final, binding and
conclusive.  (The conversion

 

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of any convertible securities of the Company shall not be treated as a
“transaction not involving the receipt of consideration by the Company.”)

 

(b)                                  In the event of: (1) a dissolution,
liquidation or sale of substantially all of the assets of the Company, (2) a
merger or consolidation in which the Company is not the surviving corporation or
(3) a reverse merger in which the Company is the surviving corporation but the
shares of the Company’s Common Stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property, whether in the
form of securities, cash or otherwise, then to the extent permitted by
applicable law, any surviving corporation or an Affiliate of such surviving
corporation shall assume any Stock Awards outstanding under the Plan or shall
substitute similar Stock Awards for those outstanding under the Plan.  In the
event any surviving corporation and its Affiliates refuse to assume or continue
such Stock Awards, or to substitute similar options for those outstanding under
the Plan, then, with respect to Stock Awards held by persons then performing
services as Employees, Directors or Consultants, the time during which such
Stock Awards may be exercised shall be accelerated and the Stock Awards
terminated if not exercised prior to such event.  With respect to any other
Stock Awards outstanding under the Plan, such Stock Awards shall terminate if
not exercised prior to such event.

 

12.                               AMENDMENT OF THE PLAN AND STOCK AWARDS.

 

(a)                                  The Board at any time, and from time to
time, may amend the Plan.  However, except as provided in Section 11 relating to
adjustments upon changes in stock, no amendment shall be effective unless
approved by the stockholders if such modification requires stockholder approval
in order for the Plan to satisfy the requirements of Section 422 of the Code or
any Nasdaq or securities exchange listing requirements, or to comply with the
requirements of Rule 16b-3.  The Board may in its sole discretion submit any
other amendment to the Plan for stockholder approval.

 

(b)                                  Rights and obligations under any Stock
Award granted before amendment of the Plan shall not be impaired by any
amendment of the Plan unless (i) the Company requests the consent of the person
to whom the Stock Award was granted and (ii) such person consents in writing.

 

(c)                                  The Board at any time, and from time to
time, may amend the terms of any one or more Stock Award; provided, however,
that the rights and obligations under any Stock Award shall not be impaired by
any such amendment unless (i) the Company requests the consent of the person to
whom the Stock Award was granted and (ii) such person consents in writing.

 

13.                               TERMINATION OR SUSPENSION OF THE PLAN.

 

(a)                                  The Board may suspend or terminate the Plan
at any time. No Stock Awards may be granted under the Plan while the Plan is
suspended or after it is terminated.

 

(b)                                  Rights and obligations under any Stock
Award granted while the Plan is in effect shall not be impaired by suspension or
termination of the Plan, except with the consent of the person to whom the Stock
Award was granted.

 

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14.                               EFFECTIVE DATE OF PLAN.

 

The Plan shall become effective on the date on which it is adopted by the Board.

 

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