Exhibit 10.3

PROTEIN DESIGN LABS, INC.

1999 NONSTATUTORY STOCK OPTION PLAN

(As Amended through February 20, 2003)

1. ESTABLISHMENT, PURPOSE AND TERM OF PLAN.

1.1 Establishment. The Protein Design Labs, Inc. 1999 Nonstatutory Stock Option
Plan (the “Plan”) is hereby established effective as of August 19, 1999.

1.2 Purpose. The purpose of the Plan is to advance the interests of the
Participating Company Group and its stockholders by providing an incentive to
attract, retain and reward Persons performing services for the Participating
Company Group and by motivating such Persons to contribute to the goals of the
Participating Company Group.

1.3 Term of Plan. The Plan shall continue in effect until the earlier of its
termination by the Board or the date on which all of the shares of Stock
available for issuance under the Plan have been issued and all restrictions on
such shares under the terms of the Plan and the agreements evidencing Options
granted under the Plan have lapsed.

2. DEFINITIONS AND CONSTRUCTION.

2.1 Definitions. Whenever used herein, the following terms shall have their
respective meanings set forth below:

(a) “Board” means the Board of Directors of the Company. If one or more
Committees have been appointed by the Board to administer the Plan, “Board” also
means such Committee(s).

(b) “Code” means the Internal Revenue Code of 1986, as amended, and any
applicable regulations promulgated thereunder.

(c) “Committee” means the committee of the Board, if any, duly appointed to
administer the Plan and having such powers as shall be specified by the Board.
Unless the powers of the Committee have been specifically limited, the Committee
shall have all of the powers of the Board granted herein, including, without
limitation, the power to amend or terminate the Plan at any time, subject to the
terms of the Plan and any applicable limitations imposed by law.

(d) “Company” means Protein Design Labs, Inc., a Delaware corporation, or any
successor corporation thereto.

(e) “Consultant” means any Person, including an advisor, engaged by a
Participating Company to render services other than as an Employee or a member
of the Board.

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(f) “Disability” means the permanent and total disability of the Optionee within
the meaning of Section 22(e)(3) of the Code.

(g) “Employee” means any Person treated as an employee in the records of a
Participating Company.

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

(i) “Fair Market Value” means, as of any date, the value of a share of Stock or
other property as determined by the Board, in its discretion, subject to the
following:

(i) If, on such date, the Stock is listed on a national or regional securities
exchange or market system, the Fair Market Value of a share of Stock shall be
the closing sale price of a share of Stock (or the mean of the closing bid and
asked prices of a share of Stock if the Stock is so quoted instead) as quoted on
the Nasdaq National Market, The Nasdaq SmallCap Market or such other national or
regional securities exchange or market system constituting the primary market
for the Stock, as reported in the Wall Street Journal or such other source as
the Board deems reliable. If the relevant date does not fall on a day on which
the Stock has traded on such securities exchange or market system, the date on
which the Fair Market Value shall be established shall be the last day on which
the Stock was so traded prior to the relevant date, or such other appropriate
day as shall be determined by the Board, in its discretion.

(ii) If, on such date, the Stock is not listed on a national or regional
securities exchange or market system, the Fair Market Value of a share of Stock
shall be as determined by the Board without regard to any restriction other than
a restriction which, by its terms, will never lapse.

(j) “Nonstatutory Stock Option” means an Option not intended to be an incentive
stock option within the meaning of Section 422(b) of the Code.

(k) “Option” means a right to purchase Stock (subject to adjustment as provided
in Section 4.2) pursuant to the terms and conditions of the Plan. All Options
shall be Nonstatutory Stock Options.

(l) “Option Agreement” means a written agreement between the Company and an
Optionee setting forth the terms, conditions and restrictions of the Option
granted to the Optionee and any shares of Stock acquired upon the exercise
thereof.

(m) “Optionee” means a Person who has been granted one or more Options.

(n) “Parent Corporation” means any present or future “parent corporation” of the
Company, as defined in Section 424(e) of the Code.

 

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(o) “Participating Company” means the Company or any Parent Corporation or
Subsidiary Corporation.

(p) “Participating Company Group” means, at any point in time, all corporations
collectively which are then Participating Companies.

(q) “Person” means a natural person.

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

(s) “Service” means an Optionee’s employment or service with the Participating
Company Group, whether in the capacity of an Employee or a Consultant. Unless
otherwise provided by the Board, an Optionee’s Service shall not be deemed to
have terminated merely because of a change in the capacity in which the Optionee
renders Service to the Participating Company Group or a change in the
Participating Company for which the Optionee renders such Service, provided that
there is no interruption or termination of the Optionee’s Service. Furthermore,
an Optionee’s Service with the Participating Company Group shall not be deemed
to have terminated if the Optionee takes any bona fide leave of absence approved
by the Company. Notwithstanding the foregoing, unless otherwise required by law,
the Company may provide that an approved leave of absence shall not be treated
as Service for purposes of determining vesting under the Optionee’s Option
Agreement. An Optionee’s Service shall be deemed to have terminated either upon
an actual termination of Service or upon the corporation for which the Optionee
performs Service ceasing to be a Participating Company. Subject to the
foregoing, the Company, in its discretion, shall determine whether an Optionee’s
Service has terminated and the effective date of such termination.

(t) “Stock” means the common stock of the Company, as adjusted from time to time
in accordance with Section 4.2.

(u) “Subsidiary Corporation” means any present or future “subsidiary
corporation” of the Company, as defined in Section 424(f) of the Code.

2.2 Construction. Captions and titles contained herein are for convenience only
and shall not affect the meaning or interpretation of any provision of the Plan.
Except when otherwise indicated by the context, the singular shall include the
plural and the plural shall include the singular. Use of the term “or” is not
intended to be exclusive, unless the context clearly requires otherwise.

3. ADMINISTRATION.

3.1 Administration by the Board. The Plan shall be administered by the Board.
All questions of interpretation of the Plan or of any Option shall be determined
by the Board, and such determinations shall be final and binding upon all
Persons having an interest in the Plan or such Option.

 

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3.2 Authority of Officers. The Chief Executive Officer shall have the authority
to act on behalf of the Company with respect to any matter, right, obligation,
determination or election which is the responsibility of or which is allocated
to the Company herein.

3.3 Powers of the Board. In addition to any other powers set forth in the Plan
and subject to the provisions of the Plan, the Board shall have the full power
and authority, in its discretion:

(a) to determine the Persons to whom, and the time or times at which, Options
shall be granted and the number of shares of Stock to be subject to each Option;

(b) to determine the Fair Market Value of shares of Stock or other property in
the event such property is proposed as consideration for payment for the
exercise of an Option;

(c) to determine the terms, conditions and restrictions applicable to each
Option (which need not be identical) and any shares of Stock acquired upon the
exercise thereof, including, without limitation, (i) the exercise price of the
Option, (ii) the method of payment for shares of Stock purchased upon the
exercise of the Option, (iii) the method for satisfaction of any tax withholding
obligation arising in connection with the Option or such shares of Stock,
including by the withholding or delivery of shares of Stock, (iv) the timing,
terms and conditions of the exercisability of the Option or the vesting of any
shares of Stock acquired upon the exercise thereof, (v) the time of the
expiration of the Option, (vi) the effect of the Optionee’s termination of
Service with the Participating Company Group on any of the foregoing, and
(vii) all other terms, conditions and restrictions applicable to the Option or
such shares of Stock not inconsistent with the terms of the Plan;

(d) to approve one or more forms of Option Agreement;

(e) to amend, modify, extend, cancel, renew, or grant a new Option in
substitution for, any Option or to waive any restrictions or conditions
applicable to any Option or any shares acquired upon the exercise thereof;

(f) to accelerate, continue, extend or defer the exercisability of any Option or
the vesting of any shares acquired upon the exercise thereof, including with
respect to the period following an Optionee’s termination of Service with the
Participating Company Group;

(g) to prescribe, amend or rescind rules, guidelines and policies relating to
the Plan, or to adopt supplements to, or alternative versions of, the Plan,
including, without limitation, as the Board deems necessary or desirable to
comply with the laws of, or to accommodate the tax policy or custom of, foreign
jurisdictions whose citizens may be granted Options; and

 

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(h) to correct any defect, supply any omission or reconcile any inconsistency in
the Plan or any Option Agreement and to make all other determinations and take
such other actions with respect to the Plan or any Option as the Board may deem
advisable to the extent consistent with the Plan and applicable law.

4. SHARES SUBJECT TO PLAN.

4.1 Maximum Number of Shares Issuable. Subject to adjustment as provided in
Section 4.2, the maximum aggregate number of shares of Stock that may be issued
under the Plan shall be eleven million (11,000,000) and shall consist of
authorized but unissued or reacquired shares of Stock or any combination
thereof. If an outstanding Option for any reason expires or is terminated or
canceled or if unvested shares of Stock are acquired upon the exercise of an
Option subject to a Company repurchase option and are repurchased by the
Company, the shares of Stock allocable to the unexercised portion of such Option
or such unvested repurchased shares of Stock shall again be available for
issuance under the Plan.

4.2 Adjustments for Changes in Capital Structure. In the event of any stock
dividend, stock split, reverse stock split, recapitalization, combination,
reclassification or similar change in the capital structure of the Company,
appropriate adjustments shall be made in the number and class of shares subject
to the Plan and to any outstanding Options and in the exercise price per share
of any outstanding Options. If a majority of the shares which are of the same
class as the shares that are subject to outstanding Options are exchanged for,
converted into, or otherwise become (whether or not pursuant to an Ownership
Change Event, as defined in Section 8.1) shares of another corporation (the “New
Shares”), the Board may unilaterally amend the outstanding Options to provide
that such Options are exercisable for New Shares. In the event of any such
amendment, the number of shares subject to, and the exercise price per share of,
the outstanding Options shall be adjusted in a fair and equitable manner as
determined by the Board, in its discretion. Notwithstanding the foregoing, any
fractional share resulting from an adjustment pursuant to this Section 4.2 shall
be rounded down to the nearest whole number, and in no event may the exercise
price of any Option be decreased to an amount less than the par value, if any,
of the stock subject to the Option. The adjustments determined by the Board
pursuant to this Section 4.2 shall be final and binding.

5. ELIGIBILITY AND OPTION LIMITATIONS.

5.1 Persons Eligible for Options. Options may be granted only to Employees and
Consultants. For purposes of the foregoing sentence, “Employees” and
“Consultants” shall include prospective Employees and prospective Consultants to
whom Options are granted in connection with written offers of employment or
other service relationship with the Participating Company Group. However,
notwithstanding any other provision herein to the contrary, no Person shall be
eligible to be granted an Option under the Plan whose eligibility would require
approval of the Plan by the Stockholders of the Company under any law or
regulation or the rules of any stock exchange or market system upon which the
Stock may then be listed. If not inconsistent with any such law, regulation or
rule, an Option may be granted to a Person, not previously employed by the
Company, as an inducement essential to entering into an employment contract with
the Company. Eligible Persons may be granted more than one (1) Option.

 

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5.2 Options Authorized. Options granted under the Plan may only be Nonstatutory
Stock Options.

6. TERMS AND CONDITIONS OF OPTIONS.

Options shall be evidenced by Option Agreements specifying the number of shares
of Stock covered thereby, in such form as the Board shall from time to time
establish. No Option or purported Option shall be a valid and binding obligation
of the Company unless evidenced by a fully executed Option Agreement. Option
Agreements may incorporate all or any of the terms of the Plan by reference and
shall comply with and be subject to the following terms and conditions:

6.1 Exercise Price. The exercise price for each Option shall be established in
the discretion of the Board.

6.2 Exercise Period. Options shall be exercisable at such time or times, or upon
such event or events, and subject to such terms, conditions, performance
criteria, and restrictions as shall be determined by the Board and set forth in
the Option Agreement evidencing such Option; provided, however, that no Option
granted to a prospective Employee or prospective Consultant may become
exercisable prior to the date on which such Person commences Service with a
Participating Company. Subject to the foregoing, unless otherwise specified by
the Board in the grant of an Option, any Option granted hereunder shall have a
term of ten (10) years from the effective date of grant of the Option.

6.3 Payment of Exercise Price.

(a) Forms of Consideration Authorized. Except as otherwise provided below,
payment of the exercise price for the number of shares of Stock being purchased
pursuant to any Option shall be made (i) in cash, by check or cash equivalent,
(ii) by tender to the Company, or attestation to the ownership, of shares of
Stock owned by the Optionee having a Fair Market Value not less than the
exercise price, (iii) by the assignment of the proceeds of a sale or loan with
respect to some or all of the shares being acquired upon the exercise of the
Option (including, without limitation, through an exercise complying with the
provisions of Regulation T as promulgated from time to time by the Board of
Governors of the Federal Reserve System) (a “Cashless Exercise”), (iv) by such
other consideration as may be approved by the Board from time to time to the
extent permitted by applicable law, or (v) by any combination thereof. The Board
may at any time or from time to time, by approval of or by amendment to the
standard form of Option Agreement described in Section 7, or by other means,
grant Options which do not permit all of the foregoing forms of consideration to
be used in payment of the exercise price or which otherwise restrict one or more
forms of consideration.

 

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(b) Limitations on Forms of Consideration.

(i) Tender of Stock. Notwithstanding the foregoing, an Option may not be
exercised by tender to the Company, or attestation to the ownership, of shares
of Stock to the extent such tender or attestation would constitute a violation
of the provisions of any law, regulation or agreement restricting the redemption
of the shares of Stock. Unless otherwise provided by the Board, an Option may
not be exercised by tender to the Company, or attestation to the ownership, of
shares of Stock unless such shares either have been owned by the Optionee for
more than six (6) months or were not acquired, directly or indirectly, from the
Company.

(ii) Cashless Exercise. The Company reserves, at any and all times, the right,
in the Company’s sole and absolute discretion, to establish, decline to approve
or terminate any program or procedures for the exercise of Options by means of a
Cashless Exercise.

6.4 Tax Withholding. The Company shall have the right, but not the obligation,
to deduct from the shares of Stock issuable upon the exercise of an Option, or
to accept from the Optionee the tender of, a number of whole shares of Stock
having a Fair Market Value equal to all or any part of the federal, state, local
and foreign taxes, if any, required by law to be withheld by the Participating
Company Group with respect to such Option or the shares of Stock acquired upon
the exercise thereof. Alternatively or in addition, in its discretion, the
Company shall have the right to require the Optionee, through payroll
withholding, cash payment or otherwise, including by means of a Cashless
Exercise, to make adequate provision for any such tax withholding obligations of
the Participating Company Group arising in connection with the Option or the
shares of Stock acquired upon the exercise thereof. The Company shall have no
obligation to deliver shares of Stock until the Participating Company Group’s
tax withholding obligations have been satisfied by the Optionee.

6.5 Effect of Termination of Service.

(a) Option Exercisability. Subject to earlier termination of the Option as
otherwise provided herein and unless otherwise provided by the Board in the
grant of an Option and set forth in the Option Agreement, an Option shall be
exercisable after an Optionee’s termination of Service as follows:

(i) Disability. If the Optionee’s Service with the Participating Company Group
is terminated because of the Disability of the Optionee, the Option, to the
extent unexercised and exercisable on the date on which the Optionee’s Service
terminated, may be exercised by the Optionee (or the Optionee’s guardian or
legal representative) at any time prior to the expiration of twelve (12) months
after the date on which the Optionee’s Service terminated, but in any event no
later than the date of expiration of the Option’s term as set forth in the
Option Agreement evidencing such Option (the “Option Expiration Date”).

(ii) Death. If the Optionee’s Service with the Participating Company Group is
terminated because of the death of the Optionee, the Option, to the extent
unexercised and exercisable on the date on which the Optionee’s Service
terminated, may be exercised by the Optionee’s legal representative or other
Person who acquired the right to

 

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exercise the Option by reason of the Optionee’s death at any time prior to the
expiration of twelve (12) months after the date on which the Optionee’s Service
terminated, but in any event no later than the Option Expiration Date. The
Optionee’s Service shall be deemed to have terminated on account of death if the
Optionee dies within three (3) months after the Optionee’s termination of
Service.

(iii) Termination After Change in Control. If the Optionee’s Service with the
Participating Company Group ceases as a result of Termination After Change in
Control (as defined below), then (1) the Option, to the extent unexercised on
the date on which the Optionee’s Service terminated, may be exercised by the
Optionee (or the Optionee’s guardian or legal representative) at any time prior
to the expiration of six (6) months after the date on which the Optionee’s
Service terminated, but in any event no later than the Option Expiration Date,
and (2) the exercisability and vesting of the Option shall be accelerated
effective as of the date on which the Optionee’s Service terminated to such
extent, if any, as shall have been determined by the Board, in its discretion,
and set forth in the Option Agreement. Notwithstanding the foregoing, if it is
determined that the provisions or operation of this Section 6.5(a)(iii) would
preclude treatment of a Change in Control as a “pooling-of-interests” for
accounting purposes and provided further that in the absence of the preceding
sentence such Change in Control would be treated as a “pooling-of-interests” for
accounting purposes, then this Section 6.5(a)(iii) shall be void ab initio, and
the vesting and exercisability of the Option shall be determined under any other
applicable provision of the Plan or the Option Agreement evidencing such Option.

(iv) Other Termination of Service. If the Optionee’s Service with the
Participating Company Group terminates for any reason, except Disability, death,
or Termination After Change in Control, the Option, to the extent unexercised
and exercisable by the Optionee on the date on which the Optionee’s Service
terminated, may be exercised by the Optionee within three (3) months (or such
longer period of time as determined by the Board, in its discretion) after the
date on which the Optionee’s Service terminated, but in any event no later than
the Option Expiration Date.

(b) Extension if Exercise Prevented by Law. Notwithstanding the foregoing, if
the exercise of an Option within the applicable time periods set forth in
Section 6.5(a) is prevented by the provisions of Section 11 below, the Option
shall remain exercisable until ninety (90) days after the date the Optionee is
notified by the Company that the Option is exercisable, but in any event no
later than the Option Expiration Date.

(c) Extension if Optionee Subject to Section 16(b). Notwithstanding the
foregoing, if a sale within the applicable time periods set forth in
Section 6.5(a) of shares acquired upon the exercise of the Option would subject
the Optionee to suit under Section 16(b) of the Exchange Act, the Option shall
remain exercisable until the earliest to occur of (i) the thirtieth (30th) day
following the date on which a sale of such shares by the Optionee would no
longer be subject to such suit, (ii) the two hundred tenth (210th) day after the
Optionee’s termination of Service, or (iii) the Option Expiration Date.

 

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(d) Certain Definitions. The following terms shall have their respective
meanings set forth below:

(i) “Termination After Change in Control” shall mean either of the following
events occurring within twelve (12) months after a Change in Control:

(1) termination by the Participating Company Group of the Optionee’s Service
with the Participating Company Group for any reason other than for Cause (as
defined below); or

(2) the Optionee’s resignation from all capacities in which the Optionee is then
rendering Service to the Participating Company Group within a reasonable period
of time following an event constituting a Constructive Termination (as defined
below).

Notwithstanding any provision herein to the contrary, Termination After Change
in Control shall not include any termination of the Optionee’s Service with the
Participating Company Group which (1) is for Cause (as defined below); (2) is a
result of the Optionee’s death or disability; (3) is a result of the Optionee’s
voluntary termination of Service other than upon a Constructive Termination; or
(4) occurs prior to the effectiveness of a Change in Control.

(ii) “Cause” shall mean any of the following: (1) the Optionee’s theft,
dishonesty, or falsification of any Participating Company documents or records;
(2) the Optionee’s improper use or disclosure of a Participating Company’s
confidential or proprietary information; (3) any action by the Optionee which
has a detrimental effect on a Participating Company’s reputation or business;
(4) the Optionee’s failure or inability to perform any reasonable assigned
duties after written notice from the Participating Company Group of, and a
reasonable opportunity to cure, such failure or inability; (5) any material
breach by the Optionee of any employment agreement between the Optionee and the
Participating Company Group, which breach is not cured pursuant to the terms of
such agreement; or (6) the Optionee’s conviction (including any plea of guilty
or nolo contendere) of any criminal act which impairs the Optionee’s ability to
perform his or her duties with the Participating Company Group.

(iii) “Constructive Termination” shall mean any one or more of the following:

(1) without the Optionee’s express written consent, any assignment to the
Optionee of any duties, or any limitation of the Optionee’s responsibilities,
substantially inconsistent with the Optionee’s positions, duties,
responsibilities and status with a Participating Company immediately prior to
the date of the Change in Control;

(2) without the Optionee’s express written consent, the relocation of the
principal place of the Optionee’s Service to a location that is more than fifty
(50) miles from the Optionee’s principal place of Service immediately prior to
the date of the Change in Control, or the imposition of travel requirements
substantially more demanding of the Optionee than such travel requirements
existing immediately prior to the date of the Change in Control;

 

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(3) any failure by a Participating Company to pay, or any material reduction by
a Participating Company of, (A) the Optionee’s base salary in effect immediately
prior to the date of the Change in Control, or (B) the Optionee’s bonus
compensation, if any, in effect immediately prior to the date of the Change in
Control (subject to applicable performance requirements with respect to the
actual amount of bonus compensation earned by the Optionee); or

(4) any failure by a Participating Company to (A) continue to provide the
Optionee with the opportunity to participate, on terms not materially less
favorable than those in effect for the benefit of any employee group which
customarily includes a Person holding the employment position or a comparable
position with the Participating Company then held by the Optionee, in any
benefit or compensation plans and programs, including, but not limited to, the
Participating Company’s life, disability, health, dental, medical, savings,
profit sharing, stock purchase and retirement plans, if any, in which the
Optionee was participating immediately prior to the date of the Change in
Control, or their equivalent, or (B) provide the Optionee with all other fringe
benefits (or their equivalent) from time to time in effect for the benefit of
any employee group which customarily includes a Person holding the employment
position or a comparable position with the Participating Company then held by
the Optionee.

7. STANDARD FORMS OF OPTION AGREEMENT.

7.1 Nonstatutory Stock Option Agreement. Unless otherwise provided by the Board
at the time the Option is granted, each Option shall comply with and be subject
to the terms and conditions set forth in the appropriate form of Nonstatutory
Stock Option Agreement adopted by the Board concurrently with its adoption of
the Plan and as amended from time to time.

7.2 Authority to Vary Terms. The Board shall have the authority from time to
time to vary the terms of the standard form of Option Agreement described in
this Section 7 either in connection with the grant or amendment of an individual
Option or in connection with the authorization of a new standard form or forms;
provided, however, that the terms and conditions of any such new, revised or
amended standard form or forms of Option Agreement are not inconsistent with the
terms of the Plan.

8. CHANGE IN CONTROL.

8.1 Definitions. The following terms shall have their respective meanings set
forth below:

(a) An “Ownership Change Event” shall be deemed to have occurred if any of the
following occurs with respect to the Company: (i) the direct or indirect sale or
exchange in a single or series of related transactions by the stockholders of
the Company of more

 

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than fifty percent (50%) of the voting stock of the Company; (ii) a merger or
consolidation in which the Company is a party; (iii) the sale, exchange, or
transfer of all or substantially all of the assets of the Company; or (iv) a
liquidation or dissolution of the Company.

(b) A “Change in Control” shall mean an Ownership Change Event or a series of
related Ownership Change Events (collectively, the “Transaction”) wherein the
stockholders of the Company immediately before the Transaction do not retain
immediately after the Transaction, in substantially the same proportions as
their ownership of shares of the Company’s voting stock immediately before the
Transaction, direct or indirect beneficial ownership of more than fifty percent
(50%) of the total combined voting power of the outstanding voting stock of the
Company or the corporation or corporations to which the assets of the Company
were transferred (the “Transferee Corporation(s)”), as the case may be. For
purposes of the preceding sentence, indirect beneficial ownership shall include,
without limitation, an interest resulting from ownership of the voting stock of
one or more corporations which, as a result of the Transaction, own the Company
or the Transferee Corporation(s), as the case may be, either directly or through
one or more subsidiary corporations. The Board shall have the right to determine
whether multiple sales or exchanges of the voting stock of the Company or
multiple Ownership Change Events are related, and its determination shall be
final, binding and conclusive.

8.2 Effect of Change in Control on Options. In the event of a Change in Control,
the surviving, continuing, successor, or purchasing corporation or parent
corporation thereof, as the case may be (the “Acquiring Corporation”), may
either assume the Company’s rights and obligations under outstanding Options or
substitute for outstanding Options substantially equivalent options for the
Acquiring Corporation’s stock. In the event the Acquiring Corporation elects not
to assume or substitute for outstanding Options in connection with a Change in
Control, the exercisability and vesting of each such outstanding Option held by
an Optionee whose Service has not terminated prior to such date shall be
accelerated effective as of the date ten (10) days prior to the date of the
Change in Control to such extent, if any, as shall have been determined by the
Board, in its discretion, and set forth in the Option Agreement evidencing such
Option. The exercise or vesting of any Option that was permissible solely by
reason of this Section 8.2 and the provisions of such Option Agreement shall be
conditioned upon the consummation of the Change in Control. Any Options which
are neither assumed or substituted for by the Acquiring Corporation in
connection with the Change in Control nor exercised as of the date of the Change
in Control shall terminate and cease to be outstanding effective as of the date
of the Change in Control. Notwithstanding the foregoing, if the corporation the
stock of which is subject to the outstanding Options immediately prior to an
Ownership Change Event described in Section 8.1(a)(i) constituting a Change in
Control is the surviving or continuing corporation and immediately after such
Ownership Change Event less than fifty percent (50%) of the total combined
voting power of its voting stock is held by another corporation or by other
corporations that are members of an affiliated group within the meaning of
Section 1504(a) of the Code without regard to the provisions of Section 1504(b)
of the Code, the outstanding Options shall not terminate unless the Board
otherwise provides in its discretion.

 

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9. PROVISION OF INFORMATION.

Each Optionee shall be given access to information concerning the Company
equivalent to that information generally made available to the Company’s common
stockholders.

10. TRANSFERABILITY OF OPTIONS.

During the lifetime of the Optionee, an Option shall be exercisable only by the
Optionee or the Optionee’s guardian or legal representative. No Option shall be
assignable or transferable by the Optionee, except by will or by the laws of
descent and distribution. Notwithstanding the foregoing, an Option shall be
assignable or transferable to the extent permitted by the Board and set forth in
the Option Agreement evidencing such Option.

11. COMPLIANCE WITH SECURITIES LAW.

The grant of Options and the issuance of shares of Stock upon exercise of
Options shall be subject to compliance with all applicable requirements of
federal, state or foreign law with respect to such securities. Options may not
be exercised if the issuance of shares of Stock upon exercise would constitute a
violation of any applicable federal, state or foreign securities laws or other
law or regulations or the requirements of any stock exchange or market system
upon which the Stock may then be listed. In addition, no Option may be exercised
unless (a) a registration statement under the Securities Act shall at the time
of exercise of the Option be in effect with respect to the shares of Stock
issuable upon exercise of the Option or (b) in the opinion of legal counsel to
the Company, the shares of Stock issuable upon exercise of the Option may be
issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company’s legal counsel to be necessary to the lawful issuance and
sale of any shares of Stock hereunder shall relieve the Company of any liability
in respect of the failure to issue or sell such shares of Stock as to which such
requisite authority shall not have been obtained. As a condition to the exercise
of any Option, the Company may require the Optionee to satisfy any
qualifications that may be necessary or appropriate, to evidence compliance with
any applicable law or regulation and to make any representation or warranty with
respect thereto as may be requested by the Company.

12. TERMINATION OR AMENDMENT OF PLAN.

The Board may terminate or amend the Plan at any time. However, no termination
or amendment of the Plan shall affect any then outstanding Option unless
expressly provided by the Board. In any event, no termination or amendment of
the Plan may adversely affect any then outstanding Option without the consent of
the Optionee, unless such termination or amendment is necessary to comply with
any applicable law, regulation or rule.

 

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