Exhibit 10.15.8

PURE BIOSCIENCE

2007 EQUITY INCENTIVE PLAN

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TABLE OF CONTENTS

  Page

1.    ESTABLISHMENT, PURPOSE AND TERM OF PLAN 1

  1.1     Establishment 1

  1.2     Purpose 1

  1.3     Term of Plan 1

2.    DEFINITIONS AND CONSTRUCTION 1

  2.1     Definitions 1

  2.2     Construction 7

3.    ADMINISTRATION 7

  3.1     Administration by the Committee 7

  3.2     Authority of Officers 7

  3.3     Administration with Respect to Insiders 7

  3.4     Committee Complying with Section 162(m) 7

  3.5     Powers of the Committee 7

  3.6     Indemnification 9

  3.7     Arbitration 9

  3.8     Repricing Prohibited 9

4.    SHARES SUBJECT TO PLAN 9

  4.1     Maximum Number of Shares Issuable 9

  4.2     Adjustments for Changes in Capital Structure 10

5.    ELIGIBILITY AND AWARD LIMITATIONS 10

  5.1     Persons Eligible for Awards 10

  5.2     Participation 11

  5.3     Incentive Stock Option Limitations 11

  5.4     Award Limits 11

6.    TERMS AND CONDITIONS OF OPTIONS 12

  6.1     Exercise Price 12

  6.2     Exercisability and Term of Options 12

  6.3     Payment of Exercise Price 13

  6.4     Effect of Termination of Service 14

  6.5     Transferability of Options 14

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TABLE OF CONTENTS
(CONTINUED)

7.    TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS 14

  7.1     Types of SARs Authorized 14

  7.2     Exercise Price 15

  7.3     Exercisability and Term of SARs 15

  7.4     Deemed Exercise of SARs 15

  7.5     Effect of Termination of Service 15

  7.6     Nontransferability of SARs 15

8.    TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS 15

  8.1     Types of Restricted Stock Awards Authorized 16

  8.2     Purchase Price 16

  8.3     Purchase Period 16

  8.4     Vesting and Restrictions on Transfer 16

  8.5     Voting Rights; Dividends and Distributions 16

  8.6     Effect of Termination of Service 16

  8.7     Nontransferability of Restricted Stock Award Rights 17

9.    TERMS AND CONDITIONS OF PERFORMANCE AWARDS 17

  9.1    Types of Performance Awards Authorized 17

  9.2    Initial Value of Performance Share and Performance Units 117

  9.3     Establishment of Performance Period, Performance Goals and Performance
Award Formula 17

  9.4     Measurement of Performance Goals 18

  9.5     Settlement of Performance Awards 19

  9.6     Voting Rights; Dividend Equivalent Rights and Distributions 19

  9.7    Effect of Termination of Service 20

  9.8     Nontransferability of Performance Awards 20

10.    TERMS AND CONDITIONS OF RESTRICTED STOCK UNIT AWARDS 21

  10.1     Grant of Restricted Stock Unit Awards 21

  10.2     Vesting 21

  10.3     Voting Rights, Dividend Equivalent Rights and Distributions 21

  10.4     Effect of Termination of Service 22

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TABLE OF CONTENTS
(CONTINUED)

  10.5     Settlement of Restricted Stock Unit Awards 22

  10.6     Nontransferability of Restricted Stock Unit Awards 22

11.    DEFERRED COMPENSATION AWARDS 22

  11.1     Establishment of Deferred Compensation Award Programs 22

  11.2     Terms and Conditions of Deferred Compensation Awards 23

12.    OTHER STOCK-BASED AWARDS 24

13.    EFFECT OF CHANGE IN CONTROL ON OPTIONS AND SARS 24

  13.1     Accelerated Vesting 24

  13.2     Assumption or Substitution 24

  13.3     Effect of Change in Control on Restricted Stock and Other Type of
Awards 25

14.    COMPLIANCE WITH SECURITIES LAW 25

15.    TAX WITHHOLDING 26

  15.1     Tax Withholding in General 26

  15.2     Withholding in Shares 26

16.    AMENDMENT OR TERMINATION OF PLAN 26

17.    MISCELLANEOUS PROVISIONS 26

  17.1     Repurchase Rights 26

  17.2    Provision of Information 27

  17.3     Rights as Employee, Consultant or Director 27

  17.4     Rights as a Shareholder 27

  17.5     Fractional Shares 27

  17.6     Severability 27

  17.7     Beneficiary Designations 27

  17.8     Unfunded Obligation 27

CALIFORNIA ADDENDUM TO PURE BIOSCIENCE 2007 EQUITY INCENTIVE PLAN 29

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PURE BIOSCIENCE
2007 EQUITY INCENTIVE PLAN

        1.    ESTABLISHMENT, PURPOSE AND TERM OF PLAN.

               1.1    Establishment. The PURE Bioscience 2007 Equity Incentive
Plan (the “Plan”) is hereby adopted ___________, 2007 subject to approval by the
shareholders of the Company (the date of such approval, the “Effective Date”).

               1.2    Purpose. The purpose of the Plan is to advance the
interests of the Participating Company Group and its shareholders by providing
an incentive to attract and retain the best qualified personnel to perform
services for the Participating Company Group, by motivating such persons to
contribute to the growth and profitability of the Participating Company Group,
by aligning their interests with interests of the Company’s shareholders, and by
rewarding such persons for their services by tying a significant portion of
their total compensation package to the success of the Company. The Plan seeks
to achieve this purpose by providing for Awards in the form of Options, Stock
Appreciation Rights, Restricted Stock Awards, Performance Shares, Performance
Units, Restricted Stock Units, Deferred Compensation Awards and other
Stock-Based Awards as described below.

               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 Awards granted under the Plan have lapsed. However, Awards shall not
be granted later than ten (10) years from the Effective Date. The Company
intends that the Plan comply with Section 409A of the Code (including any
amendments to or replacements of such section), and the Plan shall be so
construed.

        2.    DEFINITIONS AND CONSTRUCTION.

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

                     (a)    “Affiliate” means (i) an entity, other than a Parent
Corporation, that directly, or indirectly through one or more intermediary
entities, controls the Company or (ii) an entity, other than a Subsidiary
Corporation, that is controlled by the Company directly, or indirectly through
one or more intermediary entities. For this purpose, the term “control”
(including the term “controlled by”) means the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
the relevant entity, whether through the ownership of voting securities, by
contract or otherwise; or shall have such other meaning assigned such term for
the purposes of registration on Form S-8 under the Securities Act.

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                     (b)    “Award” means any Option, SAR, Restricted Stock
Award, Performance Share, Performance Unit, Restricted Stock Unit or Deferred
Compensation Award or other Stock-Based Award granted under the Plan.

                     (c)    “Award Agreement” means a written agreement between
the Company and a Participant setting forth the terms, conditions and
restrictions of the Award granted to the Participant.

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

                     (e)    “Change in Control” means, unless such term or an
equivalent term is otherwise defined with respect to an Award by the
Participant’s Award Agreement or written contract of employment or service, the
occurrence of any of the following:

                           (i)     an Ownership Change Event or a series of
related Ownership Change Events (collectively, a “Transaction”) in which the
shareholders 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 securities of
the Company or, in the case of an Ownership Change Event described in Section
2.1(y)(iii), the entity to which the assets of the Company were transferred (the
“Transferee”), as the case may be; or

                           (ii)     the liquidation or dissolution of the
Company.

For purposes of the preceding sentence, indirect beneficial ownership shall
include, without limitation, an interest resulting from ownership of the voting
securities of one or more corporations or other business entities which own the
Company or the Transferee, as the case may be, either directly or through one or
more subsidiary corporations or other business entities. The Board shall have
the right to determine whether multiple sales or exchanges of the voting
securities of the Company or multiple Ownership Change Events are related, and
its determination shall be final, binding and conclusive.

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

                     (g)    “Committee” means the Compensation Committee or
other committee of the Board duly appointed to administer the Plan and having
such powers as shall be specified by the Board. If no committee of the Board has
been appointed to administer the Plan, the Board shall exercise all of the
powers of the Committee granted herein, and, in any event, the Board may in its
discretion exercise any or all of such powers. The Committee shall have the
exclusive authority to administer the Plan and shall have all of the powers
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.

                     (h)    “Company” means PURE Bioscience, a California
corporation, or any Successor.

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                     (i)    “Consultant” means a person engaged to provide
consulting or advisory services (other than as an Employee or a member of the
Board) to a Participating Company.

                     (j)    “Deferred Compensation Award” means an award of
Stock Units granted to a Participant pursuant to Section 11 of the Plan.

                     (k)    “Director” means a member of the Board or of the
board of directors of any Participating Company.

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

                     (m)    “Dividend Equivalent” means a credit, made at the
discretion of the Committee or as otherwise provided by the Plan, to the account
of a Participant in an amount equal to the cash dividends paid on one share of
Stock for each share of Stock represented by an Award held by such Participant.

                     (n)    “Employee” means any person treated as an employee
(including an Officer or a member of the Board who is also treated as an
employee) in the records of a Participating Company and, with respect to any
Incentive Stock Option granted to such person, who is an employee for purposes
of Section 422 of the Code; provided, however, that neither service as a member
of the Board nor payment of a director’s fee shall be sufficient to constitute
employment for purposes of the Plan. The Company shall determine in good faith
and in the exercise of its discretion whether an individual has become or has
ceased to be an Employee and the effective date of such individual’s employment
or termination of employment, as the case may be. For purposes of an
individual’s rights, if any, under the Plan as of the time of the Company’s
determination, all such determinations by the Company shall be final, binding
and conclusive, notwithstanding that the Company or any court of law or
governmental agency subsequently makes a contrary determination.

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

                     (p)    “Fair Market Value” means, as of any date, the value
of a share of Stock or other property as determined by the Committee, in its
discretion, or by the Company, in its discretion, if such determination is
expressly allocated to the Company herein, subject to the following:

                           (i)     Except as otherwise determined by the
Committee, 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 price of a share of Stock as quoted on such national or
regional securities exchange or market system constituting the primary market
for the Stock on the date of determination, as reported in The Wall Street
Journal or such other source as the Company deems reliable.

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                           (ii)     Notwithstanding the foregoing, the Committee
may, in its discretion, determine the Fair Market Value on the basis of the
closing, high, low or average sale price of a share of Stock or the actual sale
price of a share of Stock received by a Participant, on such date, the preceding
trading day, the next succeeding trading day or an average determined over a
period of trading days. The Committee may vary its method of determination of
the Fair Market Value as provided in this Section for different purposes under
the Plan.

                           (iii)     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 Committee in good faith
without regard to any restriction other than a restriction which, by its terms,
will never lapse.

                     (q)    “Incentive Stock Option” means an Option intended to
be (as set forth in the Award Agreement) and which qualifies as an incentive
stock option within the meaning of Section 422(b) of the Code.

                     (r)    “Insider” means an Officer, a Director or any other
person whose transactions in Stock are subject to Section 16 of the Exchange
Act.

                     (s)    “Non-Control Affiliate” means any entity in which
any Participating Company has an ownership interest and which the Committee
shall designate as a Non-Control Affiliate.

                     (t)     “Nonemployee Director” means a Director who is not
an Employee.

                     (u)    “Nonstatutory Stock Option” means an Option not
intended to be (as set forth in the Award Agreement) an incentive stock option
within the meaning of Section 422(b) of the Code.

                     (v)     “Officer” means any person designated by the Board
as an officer of the Company.

                     (w)    “Option” means the right to purchase Stock at a
stated price for a specified period of time granted to a Participant pursuant to
Section 6 of the Plan. An Option may be either an Incentive Stock Option or a
Nonstatutory Stock Option.

                     (x)    “Option Expiration Date” means the date of
expiration of the Option’s term as set forth in the Award Agreement.

                     (y)     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 shareholders of the Company of more than fifty percent (50%)
of the voting stock of the Company; (ii) a merger or consolidation in which the
Company is a party; or (iii) the sale, exchange, or transfer of all or
substantially all, as determined by the Board in its discretion, of the assets
of the Company.

                     (z)    “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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                     (aa)    “Participant” means any eligible person who has
been granted one or more Awards.

                     (bb)    “Participating Company” means the Company or any
Parent Corporation, Subsidiary Corporation or Affiliate.

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

                     (dd)    “Performance Award” means an Award of Performance
Shares or Performance Units.

                     (ee)    “Performance Award Formula” means, for any
Performance Award, a formula or table established by the Committee pursuant to
Section 9.3 of the Plan which provides the basis for computing the value of a
Performance Award at one or more threshold levels of attainment of the
applicable Performance Goal(s) measured as of the end of the applicable
Performance Period.

                     (ff)    “Performance Goal” means a performance goal
established by the Committee pursuant to Section 9.3 of the Plan.

                     (gg)    “Performance Period” means a period established by
the Committee pursuant to Section 9.3 of the Plan at the end of which one or
more Performance Goals are to be measured.

                     (hh)    “Performance Share” means a bookkeeping entry
representing a right granted to a Participant pursuant to Section 9 of the Plan
to receive a payment equal to the value of a Performance Share, as determined by
the Committee, based on performance.

                     (ii)    “Performance Unit” means a bookkeeping entry
representing a right granted to a Participant pursuant to Section 9 of the Plan
to receive a payment equal to the value of a Performance Unit, as determined by
the Committee, based upon performance.

                     (jj)    “Restricted Stock Award” means an Award of
Restricted Stock.

                     (kk)    “Restricted Stock Unit” or “Stock Unit” means a
bookkeeping entry representing a right granted to a Participant pursuant to
Section 10 or Section 11 of the Plan, respectively, to receive a share of Stock
on a date determined in accordance with the provisions of Section 10 or Section
11, as applicable, and the Participant’s Award Agreement.

                     (ll)    “Restriction Period” means the period established
in accordance with Section 8.4 of the Plan during which shares subject to a
Restricted Stock Award are subject to Vesting Conditions.

                     (mm)    “Rule 16b-3” means Rule 16b-3 under the Exchange
Act, as amended from time to time, or any successor rule or regulation.

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                     (nn)    “SAR” or “Stock Appreciation Right” means a
bookkeeping entry representing, for each share of Stock subject to such SAR, a
right granted to a Participant pursuant to Section 7 of the Plan to receive
payment in any combination of shares of Stock or cash of an amount equal to the
excess, if any, of the Fair Market Value of a share of Stock on the date of
exercise of the SAR over the exercise price.

                     (oo)    “Section 162(m)” means Section 162(m) of the Code.

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

                     (qq)    “Service” means a Participant’s employment or
service with the Participating Company Group, whether in the capacity of an
Employee, a Director or a Consultant. Unless otherwise provided by the
Committee, a Participant’s Service shall not be deemed to have terminated merely
because of a change in the capacity in which the Participant renders such
Service or a change in the Participating Company for which the Participant
renders such Service, provided that there is no interruption or termination of
the Participant’s Service. Furthermore, a Participant’s Service shall not be
deemed to have terminated if the Participant takes any military leave, sick
leave, or other bona fide leave of absence approved by the Company. However, if
any such leave taken by a Participant exceeds ninety (90) days, then on the
ninety-first (91st) day following the commencement of such leave the
Participant’s Service shall be deemed to have terminated, unless the
Participant’s right to return to Service is guaranteed by statute or contract.
Notwithstanding the foregoing, unless otherwise designated by the Company or
required by law, a leave of absence shall not be treated as Service for purposes
of determining vesting under the Participant’s Award Agreement. A Participant’s
Service shall be deemed to have terminated either upon an actual termination of
Service or upon the entity for which the Participant performs Service ceasing to
be a Participating Company. Subject to the foregoing, the Company, in its
discretion, shall determine whether the Participant’s Service has terminated and
the effective date of such termination.

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

                     (ss)    “Stock-Based Awards” means any award that is valued
in whole or in part by reference to, or is otherwise based on, the Stock,
including dividends on the Stock, but not limited to those Awards described in
Sections 6 through 11 of the Plan.

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

                     (uu)    “Successor” means a corporation into or with which
the Company is merged or consolidated or which acquires all or substantially all
of the assets of the Company and which is designated by the Board as a Successor
for purposes of the Plan.

                     (vv)    “Ten Percent Owner” means a Participant who, at the
time an Option is granted to the Participant, owns stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
a Participating Company (other than an Affiliate) within the meaning of
Section 422(b)(6) of the Code.

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                     (ww)    “Vesting Conditions” means those conditions
established in accordance with Section 8.4 or Section 10.2 of the Plan prior to
the satisfaction of which shares subject to a Restricted Stock Award or
Restricted Stock Unit Award, respectively, remain subject to forfeiture or a
repurchase option in favor of the Company upon the Participant’s termination of
Service.

        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 Committee. The Plan shall be administered by
the Committee. All questions of interpretation of the Plan or of any Award shall
be determined by the Committee, and such determinations shall be final and
binding upon all persons having an interest in the Plan or such Award.

        3.2   Authority of Officers. Any 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, provided the Officer has apparent authority with respect
to such matter, right, obligation, determination or election.

        3.3   Administration with Respect to Insiders. With respect to
participation by Insiders in the Plan, at any time that any class of equity
security of the Company is registered pursuant to Section 12 of the Exchange
Act, the Plan shall be administered in compliance with the requirements, if any,
of Rule 16b-3.

        3.4   Committee Complying with Section 162(m). While the Company is a
“publicly held corporation”within the meaning of Section 162(m), the Board may
establish a Committee of “outside directors” within the meaning of
Section 162(m) to approve the grant of any Award which might reasonably be
anticipated to result in the payment of employee remuneration that would
otherwise exceed the limit on employee remuneration deductible for income tax
purposes pursuant to Section 162(m).

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

               (a)     to determine the persons to whom, and the time or times
at which, Awards shall be granted and the number of shares of Stock or units to
be subject to each Award;

               (b)     to determine the type of Award granted and to designate
Options as Incentive Stock Options or Nonstatutory Stock Options;

               (c)     to determine the Fair Market Value of shares of Stock or
other property;

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               (d)     to determine the terms, conditions and restrictions
applicable to each Award (which need not be identical) and any shares acquired
pursuant thereto, including, without limitation, (i) the exercise or purchase
price of shares purchased pursuant to any Award, (ii) the method of payment for
shares purchased pursuant to any Award, (iii) the method for satisfaction of any
tax withholding obligation arising in connection with Award, including by the
withholding or delivery of shares of Stock, (iv) the timing, terms and
conditions of the exercisability or vesting of any Award or any shares acquired
pursuant thereto, (v) the Performance Award Formula and Performance Goals
applicable to any Award and the extent to which such Performance Goals have been
attained, (vi) the time of the expiration of any Award, (vii) the effect of the
Participant’s termination of Service on any of the foregoing, and (viii) all
other terms, conditions and restrictions applicable to any Award or shares
acquired pursuant thereto not inconsistent with the terms of the Plan;

               (e)     to determine whether an Award will be settled in shares
of Stock, cash, or in any combination thereof;

               (f)     to approve one or more forms of Award Agreement;

               (g)     to amend, modify, extend, cancel or renew any Award or to
waive any restrictions or conditions applicable to any Award or any shares
acquired pursuant thereto;

               (h)     to accelerate, continue, extend or defer the
exercisability or vesting of any Award or any shares acquired pursuant thereto,
including with respect to the period following a Participant’s termination of
Service;

               (i)     without the consent of the affected Participant and
notwithstanding the provisions of any Award Agreement to the contrary, to
unilaterally substitute at any time a Stock Appreciation Right providing for
settlement solely in shares of Stock in place of any outstanding Option,
provided that such Stock Appreciation Right covers the same number of shares of
Stock and provides for the same exercise price (subject in each case to
adjustment in accordance with Section 4.2) as the replaced Option and otherwise
provides substantially equivalent terms and conditions as the replaced Option,
as determined by the Committee;

               (j)     to prescribe, amend or rescind rules, guidelines and
policies relating to the Plan, or to adopt sub-plans or supplements to, or
alternative versions of, the Plan, including, without limitation, as the
Committee deems necessary or desirable to comply with the laws or regulations of
or to accommodate the tax policy, accounting principles or custom of, foreign
jurisdictions whose citizens may be granted Awards;

               (k)     to correct any defect, supply any omission or reconcile
any inconsistency in the Plan or any Award Agreement and to make all other
determinations and take such other actions with respect to the Plan or any Award
as the Committee may deem advisable to the extent not inconsistent with the
provisions of the Plan or applicable law; and

               (l)     to delegate to any proper Officer the authority to grant
one or more Awards, without further approval of the Committee, to any person
eligible pursuant to Section 5, other than a person who, at the time of such
grant, is an Insider; provided, however, that (i) the exercise price per share
of each such Option shall be equal to the Fair Market Value per share of the
Stock on the effective date of grant, and (ii) each such Award shall be subject
to the terms and conditions of the appropriate standard form of Award Agreement
approved by the Committee and shall conform to the provisions of the Plan and
such other guidelines as shall be established from time to time by the
Committee.

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        3.6    Indemnification. In addition to such other rights of
indemnification as they may have as members of the Board or the Committee or as
officers or employees of the Participating Company Group, members of the Board
or the Committee and any officers or employees of the Participating Company
Group to whom authority to act for the Board, the Committee or the Company is
delegated shall be indemnified by the Company against all reasonable expenses,
including attorneys’ fees, actually and necessarily incurred in connection with
the defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan, or any right
granted hereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
the Company) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding, except in relation to matters as to which it shall be
adjudged in such action, suit or proceeding that such person is liable for gross
negligence, bad faith or intentional misconduct in duties; provided, however,
that within sixty (60) days after the institution of such action, suit or
proceeding, such person shall offer to the Company, in writing, the opportunity
at its own expense to handle and defend the same.

        3.7    Arbitration. Any dispute or claim concerning any Awards granted
(or not granted) pursuant to this Plan and any other disputes or claims relating
to or arising out of the Plan shall be fully, finally and exclusively resolved
by binding arbitration conducted pursuant to the Commercial Arbitration Rules of
the American Arbitration Association. By accepting an Award, Participants and
the Company waive their respective rights to have any such disputes or claims
tried by a judge or jury.

        3.8    Repricing Prohibited. Without the affirmative vote of holders of
a majority of the shares of Stock cast in person or by proxy at a meeting of the
shareholders of the Company at which a quorum representing a majority of all
outstanding shares of Stock is present or represented by proxy, the Committee
shall not approve a program providing for either (a) the cancellation of
outstanding Options or SARs and the grant in substitution therefore of new
Awards having a lower exercise price or (b) the amendment of outstanding Options
or SARs to reduce the exercise price thereof. This paragraph shall not be
construed to apply to the issuance or assumption of an Award in a transaction to
which Code section 424(a) applies, within the meaning of Section 424 of the
Code.

    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 [five million (5,000,000)] and shall
consist of authorized but unissued or reacquired shares of Stock or any
combination thereof. If an outstanding Award for any reason expires or is
terminated or canceled without having been exercised or settled in full, or if
shares of Stock acquired pursuant to an Award subject to forfeiture or
repurchase are forfeited or repurchased by the Company, the shares of Stock
allocable to the terminated portion of such Award or such forfeited or
repurchased shares of Stock shall again be available for issuance under the
Plan. When a SAR settled in shares of Stock is exercised, the total number of
shares subject to the SAR Agreement with respect to which the exercise occurs
shall count against the limit, regardless of the number of shares actually
issued in settlement of the SAR. Shares used to pay the exercise price of an
option shall not again become available for future grant or issuance under the
Plan. Shares used to satisfy tax withholding obligations shall not become
available for future grant or issuance under the Plan. To the extent an Award is
settled in cash rather than shares of Stock, such cash payment shall not reduce
the number of shares available for issuance under the Plan.

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        4.2    Adjustments for Changes in Capital Structure. Subject to any
required action by the shareholders of the Company, in the event of any change
in the Stock effected without receipt of consideration by the Company, whether
through merger, consolidation, reorganization, reincorporation,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, split-up, split-off, spin-off, combination of shares, exchange of shares,
or similar change in the capital structure of the Company, or in the event of
payment of a dividend or distribution to the shareholders of the Company in a
form other than Stock (excepting normal cash dividends) that has a material
effect on the Fair Market Value of shares of Stock, appropriate adjustments
shall be made in the number and kind of shares subject to the Plan and to any
outstanding Awards, in the Award limits set forth in Section 5.4, and in the
exercise or purchase price per share under any outstanding Award in order to
prevent dilution or enlargement of Participants’ rights under the Plan. For
purposes of the foregoing, conversion of any convertible securities of the
Company shall not be treated as “effected without receipt of consideration by
the Company.” If a majority of the shares which are of the same class as the
shares that are subject to outstanding Awards are exchanged for, converted into,
or otherwise become (whether or not pursuant to an Ownership Change Event)
shares of another corporation (the “New Shares”), the Committee 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 Awards shall be adjusted in
a fair and equitable manner as determined by the Board, in its discretion. Any
fractional share resulting from an adjustment pursuant to this Section 4.2 shall
be rounded down to the nearest whole number. The Committee in its sole
discretion, may also make such adjustments in the terms of any Award to reflect,
or related to, such changes in the capital structure of the Company or
distributions as it deems appropriate, including modification of Performance
Goals, Performance Award Formulas and Performance Periods. The adjustments
determined by the Committee pursuant to this Section 4.2 shall be final, binding
and conclusive.

    5.    ELIGIBILITY AND AWARD LIMITATIONS.

        5.1    Persons Eligible for Awards. Awards may be granted only to
Employees, Consultants and Directors. For purposes of the foregoing sentence,
“Employees,” “Consultants”and “Directors” shall include prospective Employees,
prospective Consultants and prospective Directors to whom Awards are offered to
be granted in connection with written offers of an employment or other service
relationship with the Participating Company Group; provided, however, that no
Stock subject to any such Award shall vest, become exercisable or be issued
prior to the date on which such person commences Service.

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               5.2    Participation. Awards other than Nonemployee Director
Awards are granted solely at the discretion of the Committee. Eligible persons
may be granted more than one Award. However, eligibility in accordance with this
Section shall not entitle any person to be granted an Award, or, having been
granted an Award, to be granted an additional Award.

               5.3    Incentive Stock Option Limitations.

                      (a)    Persons Eligible. An Incentive Stock Option may be
granted only to a person who, on the effective date of grant, is an Employee of
the Company, a Parent Corporation or a Subsidiary Corporation (each being an
“ISO-Qualifying Corporation”). Any person who is not an Employee of an
ISO-Qualifying Corporation on the effective date of the grant of an Option to
such person may be granted only a Nonstatutory Stock Option. An Incentive Stock
Option granted to a prospective Employee upon the condition that such person
become an Employee of an ISO-Qualifying Corporation shall be deemed granted
effective on the date such person commences Service with an ISO-Qualifying
Corporation, with an exercise price determined as of such date in accordance
with Section 6.1.

                      (b)    Fair Market Value Limitation. To the extent that
options designated as Incentive Stock Options (granted under all stock option
plans of the Participating Company Group, including the Plan) become exercisable
by a Participant for the first time during any calendar year for stock having a
Fair Market Value greater than One Hundred Thousand Dollars ($100,000), the
portion of such options which exceeds such amount shall be treated as
Nonstatutory Stock Options. For purposes of this Section, options designated as
Incentive Stock Options shall be taken into account in the order in which they
were granted, and the Fair Market Value of stock shall be determined as of the
time the option with respect to such stock is granted. If the Code is amended to
provide for a limitation different from that set forth in this Section, such
different limitation shall be deemed incorporated herein effective as of the
date and with respect to such Options as required or permitted by such amendment
to the Code. If an Option is treated as an Incentive Stock Option in part and as
a Nonstatutory Stock Option in part by reason of the limitation set forth in
this Section, the Participant may designate which portion of such Option the
Participant is exercising. In the absence of such designation, the Participant
shall be deemed to have exercised the Incentive Stock Option portion of the
Option first. Upon exercise, shares issued pursuant to each such portion shall
be separately identified.

               5.4    Award Limits.

                      (a)    Maximum Number of Shares Issuable Pursuant to
Incentive Stock Options. Subject to adjustment as provided in Section 4.2, the
maximum aggregate number of shares of Stock that may be issued under the Plan
pursuant to the exercise of Incentive Stock Options shall not exceed [five
million (5,000,000)] shares. The maximum aggregate number of shares of Stock
that may be issued under the Plan pursuant to all Awards other than Incentive
Stock Options shall be the number of shares determined in accordance with
Section 4.1, subject to adjustment as provided in Section 4.2.

                      (b)    Section 162(m) Award Limits. The following limits
shall apply to the grant of any Award if, at the time of grant, the Company is a
“publicly held corporation” within the meaning of Section 162(m).

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                            (i)    Options and SARs. Subject to adjustment as
provided in Section 4.2, no Employee shall be granted within any fiscal year of
the Company one or more Options or Freestanding SARs which in the aggregate are
for more than [five hundred thousand (500,000)] shares of Stock reserved for
issuance under the Plan.

                             (ii)    Restricted Stock, Restricted Stock Unit
Awards and Performance Shares. Subject to adjustment as provided in Section 4.2,
no Employee shall be granted within any fiscal year of the Company one or more
Restricted Stock Awards or Restricted Stock Unit Awards, subject to Vesting
Conditions based on the attainment of Performance Goals, or Performance Shares,
for more than [two hundred fifty thousand (250,000)] shares of Stock in the
aggregate under the Plan.

                             (iii)    Performance Units. Subject to adjustment
as provided in Section 4.2, no Employee shall be granted Performance Units which
could result in such Employee receiving more than [five million dollars
($5,000,000)] for each full fiscal year of the Company contained in the
Performance Period for such Award. No Participant may be granted more than one
Performance Award for the same Performance Period.

        6.    TERMS AND CONDITIONS OF OPTIONS.

        Options shall be evidenced by Award Agreements specifying the number of
shares of Stock covered thereby, in such form as the Committee 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 Award Agreement.
Award Agreements evidencing Options 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 Committee; provided, however, that (a)
the exercise price per share shall be not less than the Fair Market Value of a
share of Stock on the effective date of grant of the Option and (b) no Incentive
Stock Option granted to a Ten Percent Owner shall have an exercise price per
share less than one hundred ten percent (110%) of the Fair Market Value of a
share of Stock on the effective date of grant of the Option. Notwithstanding the
foregoing, an Option (whether an Incentive Stock Option or a Nonstatutory Stock
Option) may be granted with an exercise price lower than the minimum exercise
price set forth above if such Option is granted pursuant to an assumption or
substitution for another option in a manner qualifying under the provisions of
Section 424(a) of the Code.

               6.2    Exercisability and Term of Options.

                      (a)    Option Vesting and Exercisability. 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 Committee and set forth in the Award Agreement evidencing such
Option; provided, however, that (a) no Option shall be exercisable after the
expiration of ten (10) years after the effective date of grant of such Option,
(b) no Incentive Stock Option granted to a Ten Percent Owner shall be
exercisable after the expiration of five (5) years after the effective date of
grant of such Option, and (c) no Option offered or granted to a prospective
Employee, prospective Consultant or prospective Director may become exercisable
prior to the date on which such person commences Service. Subject to the
foregoing, unless otherwise specified by the Committee in the grant of an
Option, any Option granted hereunder shall terminate ten (10) years after the
effective date of grant of the Option, unless earlier terminated in accordance
with its provisions, or the terms of the Plan.

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                      (b)    Participant Responsibility for Exercise of Option.
Each Participant is responsible for taking any and all actions as may be
required to exercise any Option in a timely manner, and for properly executing
any documents as may be required for the exercise of an Option in accordance
with such rules and procedures as may be established from time to time. By
signing an Option Agreement each Participant acknowledges that information
regarding the procedures and requirements for the exercise of any Option is
available upon such Participant’s request. The Company shall have no duty or
obligation to notify any Participant of the expiration date of any 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 in cash equivalent, (ii) by tender to the Company, or attestation to
the ownership, of shares of Stock owned by the Participant having a Fair Market
Value not less than the exercise price, (iii) by such other consideration as may
be approved by the Committee from time to time to the extent permitted by
applicable law, or (iv) by any combination thereof. The Committee may at any
time or from time to time 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.

                      (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 Company’s stock.

                             (ii)    Payment by Promissory Note. No promissory
note shall be permitted if the exercise of an Option using a promissory note
would be a violation of any law. Any permitted promissory note shall be on such
terms as the Committee shall determine. The Committee shall have the authority
to permit or require the Participant to secure any promissory note used to
exercise an Option with the shares of Stock acquired upon the exercise of the
Option or with other collateral acceptable to the Company. Unless otherwise
provided by the Committee, if the Company at any time is subject to the
regulations promulgated by the Board of Governors of the Federal Reserve System
or any other governmental entity affecting the extension of credit in connection
with the Company’s securities, any promissory note shall comply with such
applicable regulations, and the Participant shall pay the unpaid principal and
accrued interest, if any, to the extent necessary to comply with such applicable
regulations.

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               6.4    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 Committee, an Option shall be exercisable after a Participant’s
termination of Service only during the applicable time periods provided in the
Award Agreement.

                             (b)    Extension if Exercise Prevented by Law.
Notwithstanding the foregoing, unless the Committee provides otherwise in the
Award Agreement, if the exercise of an Option within the applicable time periods
is prevented by the provisions of Section 14 below, the Option shall remain
exercisable until three (3) months (or such longer period of time as determined
by the Committee, in its discretion) after the date the Participant is notified
by the Company that the Option is exercisable, but in any event no later than
the Option Expiration Date.

                             (c)    Extension if Participant Subject to
Section 16(b). Notwithstanding the foregoing, if a sale within the applicable
time periods of shares acquired upon the exercise of the Option would subject
the Participant to suit under Section 16(b) of the Exchange Act, the Option
shall remain exercisable until the earliest to occur of (i) the tenth (10th) day
following the date on which a sale of such shares by the Participant would no
longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day
after the Participant’s termination of Service, or (iii) the Option Expiration
Date.

               6.5    Transferability of Options. During the lifetime of the
Participant, an Option shall be exercisable only by the Participant or the
Participant’s guardian or legal representative. Prior to the issuance of shares
of Stock upon the exercise of an Option, the Option shall not be subject in any
manner to anticipation, alienation, sale, exchange, transfer, assignment,
pledge, encumbrance, or garnishment by creditors of the Participant or the
Participant’s beneficiary, except transfer by will or by the laws of descent and
distribution. Notwithstanding the foregoing, to the extent permitted by the
Committee, in its discretion, and set forth in the Award Agreement evidencing
such Option, a Nonstatutory Stock Option shall be assignable or transferable
subject to the applicable limitations, if any, described in the General
Instructions to Form S-8 Registration Statement under the Securities Act.

               7.   TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS.

        Stock Appreciation Rights shall be evidenced by Award Agreements
specifying the number of shares of Stock subject to the Award, in such form as
the Committee shall from time to time establish. No SAR or purported SAR shall
be a valid and binding obligation of the Company unless evidenced by a fully
executed Award Agreement. Award Agreements evidencing SARs 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:

               7.1    Types of SARs Authorized. SARs may be granted in tandem
with all or any portion of a related Option (a “Tandem SAR”) or may be granted
independently of any Option (a “Freestanding SAR”). A Tandem SAR may be granted
either concurrently with the grant of the related Option or at any time
thereafter prior to the complete exercise, termination, expiration or
cancellation of such related Option.

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               7.2    Exercise Price. The exercise price for each SAR shall be
established in the discretion of the Committee; provided, however, that (a) the
exercise price per share subject to a Tandem SAR shall be the exercise price per
share under the related Option and (b) the exercise price per share subject to a
Freestanding SAR shall be not less than the Fair Market Value of a share of
Stock on the effective date of grant of the SAR.

               7.3    Exercisability and Term of SARs.

                             (a)    Tandem SARs. Tandem SARs shall be
exercisable only at the time and to the extent, and only to the extent, that the
related Option is exercisable, subject to such provisions as the Committee may
specify where the Tandem SAR is granted with respect to less than the full
number of shares of Stock subject to the related Option.

                             (b)    Freestanding SARs. Freestanding SARs 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 Committee and set forth in the Award Agreement evidencing such
SAR; provided, however, that no Freestanding SAR shall be exercisable after the
expiration of ten (10) years after the effective date of grant of such SAR.

               7.4    Deemed Exercise of SARs. If, on the date on which an SAR
would otherwise terminate or expire, the SAR by its terms remains exercisable
immediately prior to such termination or expiration and, if so exercised, would
result in a payment to the holder of such SAR, then any portion of such SAR
which has not previously been exercised shall automatically be deemed to be
exercised as of such date with respect to such portion.

               7.5    Effect of Termination of Service. Subject to earlier
termination of the SAR as otherwise provided herein and unless otherwise
provided by the Committee in the grant of an SAR and set forth in the Award
Agreement, an SAR shall be exercisable after a Participant’s termination of
Service only as provided in the Award Agreement.

               7.6    Nontransferability of SARs. During the lifetime of the
Participant, an SAR shall be exercisable only by the Participant or the
Participant’s guardian or legal representative. Prior to the exercise of an SAR,
the SAR shall not be subject in any manner to anticipation, alienation, sale,
exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors
of the Participant or the Participant’s beneficiary, except transfer by will or
by the laws of descent and distribution.

               8.    TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS.

        Restricted Stock Awards shall be evidenced by Award Agreements
specifying the number of shares of Stock subject to the Award, in such form as
the Committee shall from time to time establish. No Restricted Stock Award or
purported Restricted Stock Award shall be a valid and binding obligation of the
Company unless evidenced by a fully executed Award Agreement. Award Agreements
evidencing Restricted Stock Awards 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:

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               8.1   Types of Restricted Stock Awards Authorized. Restricted
Stock Awards may or may not require the payment of cash compensation for the
stock. Restricted Stock Awards may be granted upon such conditions as the
Committee shall determine, including, without limitation, upon the attainment of
one or more Performance Goals described in Section 9.4. If either the grant of a
Restricted Stock Award or the lapsing of the Restriction Period is to be
contingent upon the attainment of one or more Performance Goals, the Committee
shall follow procedures substantially equivalent to those set forth in
Sections 9.3 through 9.5(a).

               8.2   Purchase Price. The purchase price, if any, for shares of
Stock issuable under each Restricted Stock Award and the means of payment shall
be established by the Committee in its discretion.

               8.3   Purchase Period. A Restricted Stock Award requiring the
payment of cash consideration shall be exercisable within a period established
by the Committee; provided, however, that no Restricted Stock Award granted to a
prospective Employee, prospective Consultant or prospective Director may become
exercisable prior to the date on which such person commences Service.

               8.4   Vesting and Restrictions on Transfer. Shares issued
pursuant to any Restricted Stock Award may or may not be made subject to Vesting
Conditions based upon the satisfaction of such Service requirements, conditions,
restrictions or performance criteria, including, without limitation, Performance
Goals as described in Section 9.4, as shall be established by the Committee and
set forth in the Award Agreement evidencing such Award. During any Restriction
Period in which shares acquired pursuant to a Restricted Stock Award remain
subject to Vesting Conditions, such shares may not be sold, exchanged,
transferred, pledged, assigned or otherwise disposed of other than as provided
in the Award Agreement or as provided in Section 8.7. Upon request by the
Company, each Participant shall execute any agreement evidencing such transfer
restrictions prior to the receipt of shares of Stock hereunder.

               8.5   Voting Rights; Dividends and Distributions. Except as
provided in this Section, Section 8.4 and any Award Agreement, during the
Restriction Period applicable to shares subject to a Restricted Stock Award, the
Participant shall have all of the rights of a shareholder of the Company holding
shares of Stock, including the right to vote such shares and to receive all
dividends and other distributions paid with respect to such shares. However, in
the event of a dividend or distribution paid in shares of Stock or any other
adjustment made upon a change in the capital structure of the Company as
described in Section 4.2, any and all new, substituted or additional securities
or other property (other than normal cash dividends) to which the Participant is
entitled by reason of the Participant’s Restricted Stock Award shall be
immediately subject to the same Vesting Conditions as the shares subject to the
Restricted Stock Award with respect to which such dividends or distributions
were paid or adjustments were made.

               8.6   Effect of Termination of Service. Unless otherwise provided
by the Committee in the grant of a Restricted Stock Award and set forth in the
Award Agreement, if a Participant’s Service terminates for any reason, whether
voluntary or involuntary (including the Participant’s death or disability), then
the Participant shall forfeit to the Company any shares acquired by the
Participant pursuant to a Restricted Stock Award which remain subject to Vesting
Conditions as of the date of the Participant’s termination of Service in
exchange for the payment of the purchase price, if any, paid by the Participant.
The Company shall have the right to assign at any time any repurchase right it
may have, whether or not such right is then exercisable, to one or more persons
as may be selected by the Company.

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               8.7   Nontransferability of Restricted Stock Award Rights. Prior
to the issuance of shares of Stock pursuant to a Restricted Stock Award, rights
to acquire such shares shall not be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge, encumbrance or
garnishment by creditors of the Participant or the Participant’s beneficiary,
except transfer by will or the laws of descent and distribution. All rights with
respect to a Restricted Stock Award granted to a Participant hereunder shall be
exercisable during his or her lifetime only by such Participant or the
Participant’s guardian or legal representative.

               9.   TERMS AND CONDITIONS OF PERFORMANCE AWARDS.

        Performance Awards shall be evidenced by Award Agreements in such form
as the Committee shall from time to time establish. No Performance Award or
purported Performance Award shall be a valid and binding obligation of the
Company unless evidenced by a fully executed Award Agreement. Award Agreements
evidencing Performance Awards 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:

               9.1   Types of Performance Awards Authorized. Performance Awards
may be in the form of either Performance Shares or Performance Units. Each Award
Agreement evidencing a Performance Award shall specify the number of Performance
Shares or Performance Units subject thereto, the Performance Award Formula, the
Performance Goal(s) and Performance Period applicable to the Award, and the
other terms, conditions and restrictions of the Award.

               9.2   Initial Value of Performance Shares and Performance Units.
Unless otherwise provided by the Committee in granting a Performance Award, each
Performance Share shall have an initial value equal to the Fair Market Value of
one (1) share of Stock, subject to adjustment as provided in Section 4.2, on the
effective date of grant of the Performance Share. Each Performance Unit shall
have an initial value determined by the Committee. The final value payable to
the Participant in settlement of a Performance Award determined on the basis of
the applicable Performance Award Formula will depend on the extent to which
Performance Goals established by the Committee are attained within the
applicable Performance Period established by the Committee.

               9.3   Establishment of Performance Period, Performance Goals and
Performance Award Formula. In granting each Performance Award, the Committee
shall establish in writing the applicable Performance Period, Performance Award
Formula and one or more Performance Goals which, when measured at the end of the
Performance Period, shall determine on the basis of the Performance Award
Formula the final value of the Performance Award to be paid to the Participant.
To the extent compliance with the requirements under Section 162(m) with respect
to “performance-based compensation” is desired, the Committee shall establish
the Performance Goal(s) and Performance Award Formula applicable to each
Performance Award no later than the earlier of (a) the date ninety (90) days
after the commencement of the applicable Performance Period or (b) the date on
which 25% of the Performance Period has elapsed, and, in any event, at a time
when the outcome of the Performance Goals remains substantially uncertain. Once
established, the Performance Goals and Performance Award Formula shall not be
changed during the Performance Period. The Company shall notify each Participant
granted a Performance Award of the terms of such Award, including the
Performance Period, Performance Goal(s) and Performance Award Formula.

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               9.4   Measurement of Performance Goals. Performance Goals shall
be established by the Committee on the basis of targets to be attained
(“Performance Targets”) with respect to one or more measures of business or
financial performance (each, a “Performance Measure”), subject to the following:

                             (a)     Performance Measures. Performance Measures
shall have the same meanings as used in the Company’s financial statements, or,
if such terms are not used in the Company’s financial statements, they shall
have the meaning applied pursuant to generally accepted accounting principles,
or as used generally in the Company’s industry. Performance Measures shall be
calculated with respect to the Company and each Subsidiary Corporation
consolidated therewith for financial reporting purposes or such division or
other business unit as may be selected by the Committee. For purposes of the
Plan, the Performance Measures applicable to a Performance Award shall be
calculated in accordance with generally accepted accounting principles, but
prior to the accrual or payment of any Performance Award for the same
Performance Period and excluding the effect (whether positive or negative) of
any change in accounting standards or any extraordinary, unusual or nonrecurring
item, as determined by the Committee, occurring after the establishment of the
Performance Goals applicable to the Performance Award. Each such adjustment, if
any, shall be made solely for the purpose of providing a consistent basis from
period to period for the calculation of Performance Measures in order to prevent
the dilution or enlargement of the Participant’s rights with respect to a
Performance Award. Performance Measures may be one or more of the following, as
determined by the Committee: [(i) sales revenue; (ii) gross margin;
(iii) operating margin; (iv) operating income; (v) pre-tax profit; (vi) earnings
before stock-based compensation expense, interest, taxes and depreciation and
amortization; (vii) earnings before interest, taxes and depreciation and
amortization; (viii) earnings before interest and taxes; (ix) net income;
(x) expenses; (xi) the market price of the Stock; (xii) stock price;
(xiii) earnings per share; (xiv) return on shareholder equity; (xv) return on
capital; (xvi) return on net assets; (xvii) economic value added; (xviii) market
share; (xix) customer service; (xx) customer satisfaction; (xxi) safety;
(xxii) total shareholder return; (xxiii) free cash flow; (xxiv) net operating
income; (xxv) operating cash flow; (xxvi) return on investment; (xxvii) employee
satisfaction; (xxviii) employee retention; (xxix) balance of cash, cash
equivalents and marketable securities; (xxx) product development; (xxxi)
research and development expenses; (xxxii) completion of an identified special
project; (xxxiii) completion of a joint venture or other corporate transaction;]
or (xxxiv) such other measures as determined by the Committee consistent with
this Section 9.4(a).

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                             (b)    Performance Targets. Performance Targets may
include a minimum, maximum, target level and intermediate levels of performance,
with the final value of a Performance Award determined under the applicable
Performance Award Formula by the level attained during the applicable
Performance Period. A Performance Target may be stated as an absolute value or
as a value determined relative to a standard selected by the Committee.

               9.5   Settlement of Performance Awards.

                             (a)    Determination of Final Value. As soon as
practicable following the completion of the Performance Period applicable to a
Performance Award, the Committee shall certify in writing the extent to which
the applicable Performance Goals have been attained and the resulting final
value of the Award earned by the Participant and to be paid upon its settlement
in accordance with the applicable Performance Award Formula.

                             (b)    Discretionary Adjustment of Award Formula.
In its discretion, the Committee may, either at the time it grants a Performance
Award or at any time thereafter, provide for the positive or negative adjustment
of the Performance Award Formula applicable to a Performance Award that is not
intended to constitute “qualified performance based compensation” to a “covered
employee” within the meaning of Section 162(m) (a “Covered Employee”) to reflect
such Participant’s individual performance in his or her position with the
Company or such other factors as the Committee may determine. With respect to a
Performance Award intended to constitute qualified performance-based
compensation to a Covered Employee, the Committee shall have the discretion to
reduce some or all of the value of the Performance Award that would otherwise be
paid to the Covered Employee upon its settlement notwithstanding the attainment
of any Performance Goal and the resulting value of the Performance Award
determined in accordance with the Performance Award Formula.

                             (c)    Payment in Settlement of Performance Awards.
As soon as practicable following the Committee’s determination and certification
in accordance with Sections 9.5(a) and (b), payment shall be made to each
eligible Participant (or such Participant’s legal representative or other person
who acquired the right to receive such payment by reason of the Participant’s
death) of the final value of the Participant’s Performance Award. Payment of
such amount shall be made in cash in a lump sum or in installments, shares of
Stock (either fully vested or subject to vesting), or a combination thereof, as
determined by the Committee.

               9.6   Voting Rights; Dividend Equivalent Rights and
Distributions. Participants shall have no voting rights with respect to shares
of Stock represented by Performance Share Awards until the date of the issuance
of such shares, if any (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company). However, the
Committee, in its discretion, may provide in the Award Agreement evidencing any
Performance Share Award that the Participant shall be entitled to receive
Dividend Equivalents with respect to the payment of cash dividends on Stock
having a record date prior to the date on which the Performance Shares are
settled or forfeited. Such Dividend Equivalents, if any, shall be credited to
the Participant in the form of additional whole Performance Shares as of the
date of payment of such cash dividends on Stock. The number of additional
Performance Shares (rounded to the nearest whole number) to be so credited shall
be determined by dividing (a) the amount of cash dividends paid on such date
with respect to the number of shares of Stock represented by the Performance
Shares previously credited to the Participant by (b) the Fair Market Value per
share of Stock on such date. Dividend Equivalents may be paid currently or may
be accumulated and paid to the extent that Performance Shares become
nonforfeitable, as determined by the Committee. Settlement of Dividend
Equivalents may be made in cash, shares of Stock, or a combination thereof as
determined by the Committee, and may be paid on the same basis as settlement of
the related Performance Share as provided in Section 9.5. Dividend Equivalents
shall not be paid with respect to Performance Units. In the event of a dividend
or distribution paid in shares of Stock or any other adjustment made upon a
change in the capital structure of the Company as described in Section 4.2,
appropriate adjustments shall be made in the Participant’s Performance Share
Award so that it represents the right to receive upon settlement any and all
new, substituted or additional securities or other property (other than normal
cash dividends) to which the Participant would entitled by reason of the shares
of Stock issuable upon settlement of the Performance Share Award, and all such
new, substituted or additional securities or other property shall be immediately
subject to the same Performance Goals as are applicable to the Award.

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               9.7   Effect of Termination of Service. Unless otherwise provided
by the Committee in the grant of a Performance Award and set forth in the Award
Agreement, the effect of a Participant’s termination of Service on the
Performance Award shall be as follows:

                             (a)    Death or Disability. If the Participant’s
Service terminates because of the death or Disability of the Participant before
the completion of the Performance Period applicable to the Performance Award,
the final value of the Participant’s Performance Award shall be determined by
the extent to which the applicable Performance Goals have been attained with
respect to the entire Performance Period and shall be prorated based on the
number of months of the Participant’s Service during the Performance Period.
Payment shall be made following the end of the Performance Period in any manner
permitted by Section 9.5.

                             (b)    Other Termination of Service. If the
Participant’s Service terminates for any reason except death or Disability
before the completion of the Performance Period applicable to the Performance
Award, such Award shall be forfeited in its entirety; provided, however, that in
the event of an involuntary termination of the Participant’s Service, the
Committee, in its sole discretion, may waive the automatic forfeiture of all or
any portion of any such Award.

               9.8   Nontransferability of Performance Awards. Prior to
settlement in accordance with the provisions of the Plan, no Performance Award
shall be subject in any manner to anticipation, alienation, sale, exchange,
transfer, assignment, pledge, encumbrance, or garnishment by creditors of the
Participant or the Participant’s beneficiary, except transfer by will or by the
laws of descent and distribution. All rights with respect to a Performance Award
granted to a Participant hereunder shall be exercisable during his or her
lifetime only by such Participant or the Participant’s guardian or legal
representative.

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               10.    TERMS AND CONDITIONS OF RESTRICTED STOCK UNIT AWARDS.

        Restricted Stock Unit Awards shall be evidenced by Award Agreements
specifying the number of Restricted Stock Units subject to the Award, in such
form as the Committee shall from time to time establish. No Restricted Stock
Unit Award or purported Restricted Stock Unit Award shall be a valid and binding
obligation of the Company unless evidenced by a fully executed Award Agreement.
Award Agreements evidencing Restricted Stock Units 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:

               10.1   Grant of Restricted Stock Unit Awards. Restricted Stock
Unit Awards may be granted upon such conditions as the Committee shall
determine, including, without limitation, upon the attainment of one or more
Performance Goals described in Section 9.4. If either the grant of a Restricted
Stock Unit Award or the Vesting Conditions with respect to such Award is to be
contingent upon the attainment of one or more Performance Goals, the Committee
shall follow procedures substantially equivalent to those set forth in
Sections 9.3 through 9.5(a).

               10.2   Vesting. Restricted Stock Units may or may not be made
subject to Vesting Conditions based upon the satisfaction of such Service
requirements, conditions, restrictions or performance criteria, including,
without limitation, Performance Goals as described in Section 9.4, as shall be
established by the Committee and set forth in the Award Agreement evidencing
such Award.

               10.3   Voting Rights, Dividend Equivalent Rights and
Distributions. Participants shall have no voting rights with respect to shares
of Stock represented by Restricted Stock Units until the date of the issuance of
such shares (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company). However, the Committee,
in its discretion, may provide in the Award Agreement evidencing any Restricted
Stock Unit Award that the Participant shall be entitled to receive Dividend
Equivalents with respect to the payment of cash dividends on Stock having a
record date prior to the date on which Restricted Stock Units held by such
Participant are settled. Such Dividend Equivalents, if any, shall be paid by
crediting the Participant with additional whole Restricted Stock Units as of the
date of payment of such cash dividends on Stock. The number of additional
Restricted Stock Units (rounded to the nearest whole number) to be so credited
shall be determined by dividing (a) the amount of cash dividends paid on such
date with respect to the number of shares of Stock represented by the Restricted
Stock Units previously credited to the Participant by (b) the Fair Market Value
per share of Stock on such date. Such additional Restricted Stock Units shall be
subject to the same terms and conditions and shall be settled in the same manner
and at the same time (or as soon thereafter as practicable) as the Restricted
Stock Units originally subject to the Restricted Stock Unit Award. In the event
of a dividend or distribution paid in shares of Stock or any other adjustment
made upon a change in the capital structure of the Company as described in
Section 4.2, appropriate adjustments shall be made in the Participant’s
Restricted Stock Unit Award so that it represents the right to receive upon
settlement any and all new, substituted or additional securities or other
property (other than normal cash dividends) to which the Participant would
entitled by reason of the shares of Stock issuable upon settlement of the Award,
and all such new, substituted or additional securities or other property shall
be immediately subject to the same Vesting Conditions as are applicable to the
Award.

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               10.4   Effect of Termination of Service. Unless otherwise
provided by the Committee in the grant of a Restricted Stock Unit Award and set
forth in the Award Agreement, if a Participant’s Service terminates for any
reason, whether voluntary or involuntary (including the Participant’s death or
disability), then the Participant shall forfeit to the Company any Restricted
Stock Units pursuant to the Award which remain subject to Vesting Conditions as
of the date of the Participant’s termination of Service.

               10.5   Settlement of Restricted Stock Unit Awards. The Company
shall issue to a Participant on the date on which Restricted Stock Units subject
to the Participant’s Restricted Stock Unit Award vest or on such other date
determined by the Committee, in its discretion, and set forth in the Award
Agreement one (1) share of Stock (and/or any other new, substituted or
additional securities or other property pursuant to an adjustment described in
Section 10.3) for each Restricted Stock Unit then becoming vested or otherwise
to be settled on such date, subject to the withholding of applicable taxes.
Notwithstanding the foregoing, if permitted by the Committee and set forth in
the Award Agreement, the Participant may elect in accordance with terms
specified in the Award Agreement to defer receipt of all or any portion of the
shares of Stock or other property otherwise issuable to the Participant pursuant
to this Section.

               10.6   Nontransferability of Restricted Stock Unit Awards. Prior
to the issuance of shares of Stock in settlement of a Restricted Stock Unit
Award, the Award shall not be subject in any manner to anticipation, alienation,
sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by
creditors of the Participant or the Participant’s beneficiary, except transfer
by will or by the laws of descent and distribution. All rights with respect to a
Restricted Stock Unit Award granted to a Participant hereunder shall be
exercisable during his or her lifetime only by such Participant or the
Participant’s guardian or legal representative.

            11.    DEFERRED COMPENSATION AWARDS.

               11.1   Establishment of Deferred Compensation Award Programs.
This Section 11 shall not be effective unless and until the Committee determines
to establish a program pursuant to this Section. The Committee, in its
discretion and upon such terms and conditions as it may determine, may establish
one or more programs pursuant to the Plan under which:

                             (a)     Participants designated by the Committee
who are Insiders or otherwise among a select group of highly compensated
Employees may irrevocably elect, prior to a date specified by the Committee, to
reduce such Participant’s compensation otherwise payable in cash (subject to any
minimum or maximum reductions imposed by the Committee) and to be granted
automatically at such time or times as specified by the Committee one or more
Awards of Stock Units with respect to such numbers of shares of Stock as
determined in accordance with the rules of the program established by the
Committee and having such other terms and conditions as established by the
Committee.

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                      (b)     Participants designated by the Committee who are
Insiders or otherwise among a select group of highly compensated Employees may
irrevocably elect, prior to a date specified by the Committee, to be granted
automatically an Award of Stock Units with respect to such number of shares of
Stock and upon such other terms and conditions as established by the Committee
in lieu of:

                             (i)     shares of Stock otherwise issuable to such
Participant upon the exercise of an Option;

                             (ii)     cash or shares of Stock otherwise issuable
to such Participant upon the exercise of an SAR; or

                             (iii)     cash or shares of Stock otherwise
issuable to such Participant upon the settlement of a Performance Award or
Performance Unit.

               11.2   Terms and Conditions of Deferred Compensation Awards.
Deferred Compensation Awards granted pursuant to this Section 11 shall be
evidenced by Award Agreements in such form as the Committee shall from time to
time establish. No such Deferred Compensation Award or purported Deferred
Compensation Award shall be a valid and binding obligation of the Company unless
evidenced by a fully executed Award Agreement. Award Agreements evidencing
Deferred Compensation Awards 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:

                      (a)    Vesting Conditions. Deferred Compensation Awards
shall not be subject to any vesting conditions.

                      (b)    Terms and Conditions of Stock Units.

                             (i)    Voting Rights; Dividend Equivalent Rights
and Distributions. Participants shall have no voting rights with respect to
shares of Stock represented by Stock Units until the date of the issuance of
such shares (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company). However, a Participant
shall be entitled to receive Dividend Equivalents with respect to the payment of
cash dividends on Stock having a record date prior to date on which Stock Units
held by such Participant are settled. Such Dividend Equivalents shall be paid by
crediting the Participant with additional whole and/or fractional Stock Units as
of the date of payment of such cash dividends on Stock. The method of
determining the number of additional Stock Units to be so credited shall be
specified by the Committee and set forth in the Award Agreement. Such additional
Stock Units shall be subject to the same terms and conditions and shall be
settled in the same manner and at the same time (or as soon thereafter as
practicable) as the Stock Units originally subject to the Stock Unit Award. In
the event of a dividend or distribution paid in shares of Stock or any other
adjustment made upon a change in the capital structure of the Company as
described in Section 4.2, appropriate adjustments shall be made in the
Participant’s Stock Unit Award so that it represent the right to receive upon
settlement any and all new, substituted or additional securities or other
property (other than normal cash dividends) to which the Participant would be
entitled by reason of the shares of Stock issuable upon settlement of the Award.

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                             (ii)    Settlement of Stock Unit Awards. A
Participant electing to receive an Award of Stock Units pursuant to this
Section 11 shall specify at the time of such election a settlement date with
respect to such Award. The Company shall issue to the Participant as soon as
practicable following the earlier of the settlement date elected by the
Participant or the date of termination of the Participant’s Service, a number of
whole shares of Stock equal to the number of whole Stock Units subject to the
Stock Unit Award. Such shares of Stock shall be fully vested, and the
Participant shall not be required to pay any additional consideration (other
than applicable tax withholding) to acquire such shares. Any fractional Stock
Unit subject to the Stock Unit Award shall be settled by the Company by payment
in cash of an amount equal to the Fair Market Value as of the payment date of
such fractional share.

                             (iii)    Nontransferability of Stock Unit Awards.
Prior to their settlement in accordance with the provision of the Plan, no Stock
Unit Award shall be subject in any manner to anticipation, alienation, sale,
exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors
of the Participant or the Participant’s beneficiary, except transfer by will or
by the laws of descent and distribution. All rights with respect to a Stock Unit
Award granted to a Participant hereunder shall be exercisable during his or her
lifetime only by such Participant or the Participant’s guardian or legal
representative.

     12.    OTHER STOCK-BASED AWARDS.

        In addition to the Awards set forth in Sections 6 through 11 above, the
Committee, in its sole discretion, may carry out the purpose of this Plan by
awarding Stock-Based Awards as it determines to be in the best interests of the
Company and subject to such other terms and conditions as it deems necessary and
appropriate.

     13.    EFFECT OF CHANGE IN CONTROL ON OPTIONS AND SARS.

               13.1   Accelerated Vesting. The Committee, in its sole
discretion, may provide in any Award Agreement or, in the event of a Change in
Control, may take such actions as it deems appropriate to provide for the
acceleration of the exercisability and vesting in connection with such Change in
Control of any or all outstanding Options and SARs and shares acquired upon the
exercise of such Options and SARs upon such conditions and to such extent as the
Committee shall determine.

               13.2   Assumption or Substitution. In the event of a Change in
Control, the surviving, continuing, successor, or purchasing corporation or
other business entity or parent thereof, as the case may be (the “Acquiring
Corporation”), may, without the consent of the Participant, either assume the
Company’s rights and obligations under outstanding Options and SARs or
substitute for outstanding Options and SARs substantially equivalent options or
stock appreciation rights for the Acquiring Corporation’s stock. Any Options or
SARs 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, shares
acquired upon exercise of an Option or SAR prior to the Change in Control and
any consideration received pursuant to the Change in Control with respect to
such shares shall continue to be subject to all applicable provisions of the
Award Agreement evidencing such Award except as otherwise provided in such Award
Agreement. Furthermore, notwithstanding the foregoing, if the corporation the
stock of which is subject to the outstanding Options or SARs immediately prior
to an Ownership Change Event described in Section 2.1(y)(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 and SARs shall not terminate unless the
Board otherwise provides in its discretion.

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               13.3   Effect of Change in Control on Restricted Stock and Other
Type of Awards. The Committee may, in its discretion, provide in any Award
Agreement evidencing a Restricted Stock or Other Type of Award that, in the
event of a Change in Control, the lapsing of any applicable Vesting Condition,
Restriction Period or Performance Goal applicable to the shares subject to such
Award held by a Participant whose Service has not terminated prior to the Change
in Control shall be accelerated and/or waived effective immediately prior to the
consummation of the Change in Control to such extent as specified in such Award
Agreement; provided, however, that such acceleration or waiver shall not occur
to the extent an Award is assumed or substituted with a substantially equivalent
Award in connection with the Change in Control. Any acceleration, waiver or the
lapsing of any restriction that was permissible solely by reason of this
Section 13.3 and the provisions of such Award Agreement shall be conditioned
upon the consummation of the Change in Control.

     14.    COMPLIANCE WITH SECURITIES LAW.

        The grant of Awards and the issuance of shares of Stock pursuant to any
Award shall be subject to compliance with all applicable requirements of
federal, state and foreign law with respect to such securities and the
requirements of any stock exchange or market system upon which the Stock may
then be listed. In addition, no Award may be exercised or shares issued pursuant
to an Award unless (a) a registration statement under the Securities Act shall
at the time of such exercise or issuance be in effect with respect to the shares
issuable pursuant to the Award or (b) in the opinion of legal counsel to the
Company, the shares issuable pursuant to the Award 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 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. As a condition to issuance of any Stock, the Company may require the
Participant 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.

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     15.    TAX WITHHOLDING.

               15.1   Tax Withholding in General. The Company shall have the
right to deduct from any and all payments made under the Plan, or to require the
Participant, through payroll withholding, cash payment or otherwise, including
by means of a Cashless Exercise or Net Exercise of an Option, to make adequate
provision for, the federal, state, local and foreign taxes, if any, required by
law to be withheld by the Participating Company Group with respect to an Award
or the shares acquired pursuant thereto. The Company shall have no obligation to
deliver shares of Stock, to release shares of Stock from an escrow established
pursuant to an Award Agreement, or to make any payment in cash under the Plan
until the Participating Company Group’s tax withholding obligations have been
satisfied by the Participant.

               15.2   Withholding in Shares. The Company shall have the right,
but not the obligation, to deduct from the shares of Stock issuable to a
Participant upon the exercise or settlement of an Award, or to accept from the
Participant the tender of, a number of whole shares of Stock having a Fair
Market Value, as determined by the Company, equal to all or any part of the tax
withholding obligations of the Participating Company Group. The Fair Market
Value of any shares of Stock withheld or tendered to satisfy any such tax
withholding obligations shall not exceed the amount determined by the applicable
minimum statutory withholding rates.

     16.  AMENDMENT OR TERMINATION OF PLAN.

        The Board or the Committee may amend, suspend or terminate the Plan at
any time. However, without the approval of the Company’s shareholders, there
shall be (a) no increase in the maximum aggregate number of shares of Stock that
may be issued under the Plan (except by operation of the provisions of Section
4.2), (b) no change in the class of persons eligible to receive Incentive Stock
Options, and (c) no other amendment of the Plan that would require approval of
the Company’s shareholders under any applicable law, regulation or rule. No
amendment, suspension or termination of the Plan shall affect any then
outstanding Award unless expressly provided by the Board or the Committee. In
any event, no amendment, suspension or termination of the Plan may adversely
affect any then outstanding Award without the consent of the Participant unless
necessary to comply with any applicable law, regulation or rule.

     17.  MISCELLANEOUS PROVISIONS.

               17.1   Repurchase Rights. Shares issued under the Plan may be
subject to one or more repurchase options, or other conditions and restrictions
as determined by the Committee in its discretion at the time the Award is
granted. The Company shall have the right to assign at any time any repurchase
right it may have, whether or not such right is then exercisable, to one or more
persons as may be selected by the Company. Upon request by the Company, each
Participant shall execute any agreement evidencing such transfer restrictions
prior to the receipt of shares of Stock hereunder and shall promptly present to
the Company any and all certificates representing shares of Stock acquired
hereunder for the placement on such certificates of appropriate legends
evidencing any such transfer restrictions.

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               17.2   Provision of Information. Each Participant shall be given
access to information concerning the Company equivalent to that information
generally made available to the Company’s common shareholders.

               17.3   Rights as Employee, Consultant or Director. No person,
even though eligible pursuant to Section 5, shall have a right to be selected as
a Participant, or, having been so selected, to be selected again as a
Participant. Nothing in the Plan or any Award granted under the Plan shall
confer on any Participant a right to remain an Employee, Consultant or Director
or interfere with or limit in any way any right of a Participating Company to
terminate the Participant’s Service at any time. To the extent that an Employee
of a Participating Company other than the Company receives an Award under the
Plan, that Award shall in no event be understood or interpreted to mean that the
Company is the Employee’s employer or that the Employee has an employment
relationship with the Company.

               17.4   Rights as a Shareholder. A Participant shall have no
rights as a shareholder with respect to any shares covered by an Award until the
date of the issuance of such shares (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer agent of the Company).
No adjustment shall be made for dividends, distributions or other rights for
which the record date is prior to the date such shares are issued, except as
provided in Section 4.2 or another provision of the Plan.

               17.5   Fractional Shares. The Company shall not be required to
issue fractional shares upon the exercise or settlement of any Award.

               17.6   Severability. If any one or more of the provisions (or any
part thereof) of this Plan shall be held invalid, illegal or unenforceable in
any respect, such provision shall be modified so as to make it valid, legal and
enforceable, and the validity, legality and enforceability of the remaining
provisions (or any part thereof) of the Plan shall not in any way be affected or
impaired thereby.

               17.7   Beneficiary Designation. Subject to local laws and
procedures, each Participant may file with the Company a written designation of
a beneficiary who is to receive any benefit under the Plan to which the
Participant is entitled in the event of such Participant’s death before he or
she receives any or all of such benefit. Each designation will revoke all prior
designations by the same Participant, shall be in a form prescribed by the
Company, and will be effective only when filed by the Participant in writing
with the Company during the Participant’s lifetime. If a married Participant
designates a beneficiary other than the Participant’s spouse, the effectiveness
of such designation may be subject to the consent of the Participant’s spouse.
If a Participant dies without an effective designation of a beneficiary who is
living at the time of the Participant’s death, the Company will pay any
remaining unpaid benefits to the Participant’s legal representative.

               17.8   Unfunded Obligation. Participants shall have the status of
general unsecured creditors of the Company. Any amounts payable to Participants
pursuant to the Plan shall be unfunded and unsecured obligations for all
purposes, including, without limitation, Title I of the Employee Retirement
Income Security Act of 1974. No Participating Company shall be required to
segregate any monies from its general funds, or to create any trusts, or
establish any special accounts with respect to such obligations.

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The Company shall retain at all times beneficial ownership of any investments,
including trust investments, which the Company may make to fulfill its payment
obligations hereunder. Any investments or the creation or maintenance of any
trust or any Participant account shall not create or constitute a trust or
fiduciary relationship between the Committee or any Participating Company and a
Participant, or otherwise create any vested or beneficial interest in any
Participant or the Participant’s creditors in any assets of any Participating
Company. The Participants shall have no claim against any Participating Company
for any changes in the value of any assets which may be invested or reinvested
by the Company with respect to the Plan. Each Participating Company shall be
responsible for making benefit payments pursuant to the Plan on behalf of its
Participants or for reimbursing the Company for the cost of such payments, as
determined by the Company in its sole discretion. In the event the respective
Participating Company fails to make such payment or reimbursement, a
Participant’s (or other individual’s) sole recourse shall be against the
respective Participating Company, and not against the Company. A Participant’s
acceptance of an Award pursuant to the Plan shall constitute agreement with this
provision.

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CALIFORNIA ADDENDUM TO

PURE BIOSCIENCE 2007 EQUITY INCENTIVE PLAN

        This Addendum to the PURE Bioscience 2007 Equity Incentive Plan (the
“Plan”) is intended to apply to all Awards granted under the Plan. Capitalized
terms contained herein shall have the same meanings given to them in the Plan,
unless otherwise provided in this Addendum. Notwithstanding any provision
contained in the Plan to contrary and to the extent required by applicable law,
the Plan is hereby amended as follows:

    1.        Exercise Price. To the extent required by applicable securities
law of California (“Applicable California Law”), the exercise price per share
for an Award shall be not less than eighty five percent (85%) of the Fair Market
Value of a share of Stock on the effective date of grant of the Award.
Notwithstanding the above, to the extent required by Applicable California Law,
the exercise price per share for an Award shall be not less than one hundred ten
percent (110%) of the Fair Market Value of a share of Stock on the effective
date of grant of the Award if the recipient possesses more than 10% of the total
combined voting power of the Company as described by Applicable California Law.

    2.        Exercisability of stock options. To the extent required by
Applicable California Law, with the exception of an Option granted to an
officer, a director or a consultant of the Company, no Option shall become
exercisable at a rate less than twenty percent (20%) per year over a period of
five (5) years from the effective date of grant of such Option, subject to the
Participant’s continued Service.

    3.        Effect of Termination of Service. Subject to earlier termination
of the Option as otherwise provided by the Plan or Option Agreement and unless a
longer exercise period is provided by the Committee in the grant of an Option
and set forth in the Option Agreement, an Option shall terminate immediately
upon the Participant’s termination of Service to the extent that it is then
unvested. To the extent required by Applicable California Law, the Option shall
be exercisable after the Participant’s termination of Service to the extent it
is then vested only during the applicable time period determined in accordance
with this section (or such longer period specified in the Option Agreement and
thereafter shall terminate:

    A.        Death or Disability. If the Participant’s Service terminates
because of the death or Disability of the Participant, the Option, to the extent
unexercised and exercisable on the date on which the Participant’s Service
terminated, may be exercised by the Participant (or the Participant’s guardian,
legal representative, or other person who acquired the right to exercise the
Option by reason of the Participant’s death, as applicable) at any time prior to
the expiration of six (6) months after the date on which the Participant’s
Service terminated, but in any event no later than the date of expiration of the
Option (the “Option Expiration Date”).

    B.        Other Termination of Service. If the Participant’s Service
terminates for any reason, except for Disability or death, the Option, to the
extent unexercised and exercisable by the Participant on the date on which the
Participant’s Service terminated, may be exercised by the Participant at any
time prior to the expiration of three (3) months after the date on which the
Participant’s Service terminated, but in any event no later than the Option
Expiration Date.

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    4.        Repurchase Provisions. Unless otherwise provided by the Committee
in the grant of a Restricted Stock Award or RSU and set forth in the Agreement
memorializing the Award, if a Participant’s Service terminates for any reason,
whether voluntary or involuntary (including the Participant’s death or
Disability), then the Company shall have the option to repurchase for the cash
purchase price paid by the Participant any shares acquired by the Participant
which remain subject to restrictions as of the date of the Participant’s
termination of Service; provided, however, that with the exception of shares
acquired by an officer, a director or a consultant of the Company, the Company’s
repurchase option must lapse, to the extent required by Applicable California
Law, at the rate of at least twenty percent (20%) of the shares per year over
the period of five (5) years from the effective date of grant of the Award and
the repurchase option must be exercised, if at all, for cash or cancellation of
purchase money indebtedness for the shares within ninety (90) days following the
Participant’s termination of Service. The Company shall have the right to assign
at any time any repurchase right it may have, whether or not such right is then
exercisable, to one or more persons as may be selected by the Company.

    5.        Information. To the extent required by Applicable California Law,
at least annually, copies of the Company’s balance sheet and income statement
for the just completed fiscal year shall be made available to each Participant.
The Company shall not be required to provide such information to key employees
whose duties in connection with the Company assure them access to equivalent
information.

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PLAN HISTORY AND NOTES TO COMPANY

_______, 2007 Board adopts Plan with a reserve of five million (5,000,000)
shares.

March 1, 2007 Shareholders approve Plan.

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