Exhibit 10.1

ADVENT SOFTWARE, INC.

 

2002 STOCK PLAN

 

(as amended May 8, 2002)

 

1.     PURPOSES OF THE PLAN.  THE PURPOSES OF THIS 2002 STOCK PLAN ARE:

 

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

 

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

 

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

 

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

 

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

 

(a)           “Administrator” means the Board or any of its Committees as shall
be administering the Plan, in accordance with Section 4 of the Plan.

 

(b)           “Applicable Laws” means the requirements relating to the
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options are, or will be, granted under
the Plan.

 

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

 

(d)           “Change in Control” means the occurrence of any of the following
events:

 

(i)            Any “person” (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of
the Exchange Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the total voting power represented
by the Company’s then outstanding voting securities;

 

(ii)           The consummation of the sale or disposition by the Company of all
or substantially all of the Company’s assets;

 

(iii)          A change in the composition of the Board occurring within a
two-year period, as a result of which fewer than a majority of the directors are
Incumbent Directors.  “Incumbent Directors” means directors who either (A) are
Directors as of the effective date of the Plan, or (B) are elected, or nominated
for election, to the Board with the affirmative votes of at least a majority of
the Incumbent Directors at the time of such election or nomination (but will not
include

 

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AN INDIVIDUAL WHOSE ELECTION OR NOMINATION IS IN CONNECTION WITH AN ACTUAL OR
THREATENED PROXY CONTEST RELATING TO THE ELECTION OF DIRECTORS TO THE COMPANY);
OR

 

(iv)          The consummation of a merger or consolidation of the Company with
any other corporation, other than a merger or consolidation which would result
in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or its parent) at least fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity or its parent outstanding immediately after
such merger or consolidation.

 

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

 

(f)            “Committee” means a committee of Directors appointed by the Board
in accordance with Section 4 of the Plan.

 

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

 

(h)           “Company” means Advent Software, Inc., a Delaware corporation.

 

(i)            “Consultant” means any natural person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services to such
entity.

 

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

 

(k)           “Disability” means total and permanent disability as defined in
Section 22(e)(3) of the Code.

 

(l)            “Employee” means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company.  A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor. 
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract.  If reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, then three (3) months following the 91st day of
such leave any Incentive Stock Option held by the Optionee shall cease to be
treated as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option.  Neither service as a Director nor payment of a
director’s fee by the Company shall be sufficient to constitute “employment” by
the Company.

 

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

 

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

 

(i)            If the Common Stock is listed on any established stock exchange
or a national market system, including without limitation the Nasdaq National
Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market
Value shall be the closing sales price

 

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FOR SUCH STOCK (OR THE CLOSING BID, IF NO SALES WERE REPORTED) AS QUOTED ON SUCH
EXCHANGE OR SYSTEM ON THE DAY OF DETERMINATION, AS REPORTED IN THE WALL STREET
JOURNAL OR SUCH OTHER SOURCE AS THE ADMINISTRATOR DEEMS RELIABLE;

 

(ii)           If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the day of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable; or

 

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

 

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

 

(p)           “Nonstatutory Stock Option” means an Option not intended to
qualify as an Incentive Stock Option.

 

(q)           “Notice of Grant” means a written or electronic notice evidencing
certain terms and conditions of an individual Option grant.  The Notice of Grant
is part of the Option Agreement.

 

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

 

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

 

(t)            “Option Agreement” means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant.  The
Option Agreement is subject to the terms and conditions of the Plan.

 

(u)           “Option Exchange Program” means a program whereby outstanding
Options are surrendered in exchange for Options with a lower exercise price.

 

(v)           “Optioned Stock” means the Common Stock subject to an Option.

 

(w)          “Optionee” means the holder of an outstanding Option granted under
the Plan.

 

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

 

(y)           “Plan” means this 2002 Stock Plan.

 

(z)            “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.

 

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(aa)         “Section 16(b)” means Section 16(b) of the Exchange Act.

 

(bb)         “Service Provider” means an Employee, Director or Consultant.

 

(cc)         “Share” means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.

 

(dd)         “Subsidiary” means a “subsidiary corporation”, whether now or
hereafter existing, as defined in Section 424(f) of the Code.

 

3.     STOCK SUBJECT TO THE PLAN.  SUBJECT TO THE PROVISIONS OF SECTION 12 OF
THE PLAN, THE MAXIMUM AGGREGATE NUMBER OF SHARES THAT MAY BE OPTIONED AND SOLD
UNDER THE PLAN IS THE TOTAL OF  (A) ANY SHARES WHICH HAVE BEEN RESERVED BUT NOT
ISSUED UNDER THE COMPANY’S 1992 STOCK PLAN (THE “1992 PLAN”) AS OF THE DATE OF
STOCKHOLDER APPROVAL OF THIS PLAN, (B) ANY SHARES RETURNED TO THE 1992 PLAN AS A
RESULT OF TERMINATION OF OPTIONS OR REPURCHASE OF SHARES ISSUED UNDER THE 1992
PLAN AND (C) AN ANNUAL INCREASE TO BE ADDED ON THE LAST DAY OF THE COMPANY’S
FISCAL YEAR BEGINNING IN 2002, EQUAL TO THE LESSER OF (I) 1,000,000 SHARES,
(II) 2% OF THE OUTSTANDING SHARES ON SUCH DATE OR (III) A LESSER AMOUNT
DETERMINED BY THE BOARD OF DIRECTORS.  THE SHARES MAY BE AUTHORIZED, BUT
UNISSUED, OR REACQUIRED COMMON STOCK.

 

        IF AN OPTION EXPIRES OR BECOMES UNEXERCISABLE WITHOUT HAVING BEEN
EXERCISED IN FULL, OR IS SURRENDERED PURSUANT TO AN OPTION EXCHANGE PROGRAM, THE
UNPURCHASED SHARES WHICH WERE SUBJECT THERETO SHALL BECOME AVAILABLE FOR FUTURE
GRANT OR SALE UNDER THE PLAN (UNLESS THE PLAN HAS TERMINATED); PROVIDED,
HOWEVER, THAT SHARES THAT HAVE ACTUALLY BEEN ISSUED UNDER THE PLAN SHALL NOT BE
RETURNED TO THE PLAN AND SHALL NOT BECOME AVAILABLE FOR FUTURE DISTRIBUTION
UNDER THE PLAN, EXCEPT THAT IF UNVESTED SHARES ARE REPURCHASED BY THE COMPANY AT
THEIR ORIGINAL PURCHASE PRICE, SUCH SHARES SHALL BECOME AVAILABLE FOR FUTURE
GRANT UNDER THE PLAN.

 

4.     ADMINISTRATION OF THE PLAN.

 

(a)           Procedure.

 

(i)            Multiple Administrative Bodies.  Different Committees with
respect to different groups of Service Providers may administer the Plan.

 

(ii)           Section 162(m).  To the extent that the Administrator determines
it to be desirable to qualify Options granted hereunder as “performance-based
compensation” within the meaning of Section 162(m) of the Code, the Plan shall
be administered by a Committee of two or more “outside directors” within the
meaning of Section 162(m) of the Code.

 

(iii)          Rule 16b-3.  To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder
shall be structured to satisfy the requirements for exemption under Rule 16b-3.

 

(iv)          Other Administration.  Other than as provided above, the Plan
shall be administered by (A) the Board or (B) a Committee, which committee shall
be constituted to satisfy Applicable Laws.

 

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(b)           Powers of the Administrator.  Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:

 

(i)            to determine the Fair Market Value;

 

(ii)           to select the Service Providers to whom Options may be granted
hereunder;

 

(iii)          to determine the number of shares of Common Stock to be covered
by each Option granted hereunder;

 

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

 

(v)           to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any Option granted hereunder.  Such terms and conditions
include, but are not limited to, the exercise price, the time or times when
Options may be exercised (which may be based on performance criteria), any
vesting acceleration or waiver of forfeiture restrictions, and any restriction
or limitation regarding any Option or the shares of Common Stock relating
thereto, based in each case on such factors as the Administrator, in its sole
discretion, shall determine;

 

(vi)          to reduce the exercise price of any Option to the then current
Fair Market Value if the Fair Market Value of the Common Stock covered by such
Option shall have declined since the date the Option was granted;

 

(vii)         to institute an Option Exchange Program;

 

(viii)        to construe and interpret the terms of the Plan and awards granted
pursuant to the Plan;

 

(ix)           to prescribe, amend and rescind rules and regulations relating to
the Plan, including rules and regulations relating to sub-plans established for
the purpose of satisfying applicable foreign laws;

 

(x)            to modify or amend each Option (subject to Section 14(c) of the
Plan), including the discretionary authority to extend the post-termination
exercisability period of Options longer than is otherwise provided for in the
Plan;

 

(xi)           to allow Optionees to satisfy withholding tax obligations by
electing to have the Company withhold from the Shares to be issued upon exercise
of an Option that number of Shares having a Fair Market Value equal to the
minimum amount required to be withheld.  The Fair Market Value of the Shares to
be withheld shall be determined on the date that the amount of tax to be
withheld is to be determined.  All elections by an Optionee to have Shares
withheld for this purpose shall be made in such form and under such conditions
as the Administrator may deem necessary or advisable;

 

(xii)          to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Option previously granted by the
Administrator; and

 

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(xiii)         to make all other determinations deemed necessary or advisable
for administering the Plan.

 

(c)           Effect of Administrator’s Decision.  The Administrator’s
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options.

 

5.     ELIGIBILITY.  NONSTATUTORY STOCK OPTIONS MAY BE GRANTED TO SERVICE
PROVIDERS.  INCENTIVE STOCK OPTIONS MAY BE GRANTED ONLY TO EMPLOYEES.

 

6.     LIMITATIONS.

 

(a)           Each Option shall be designated in the Option Agreement as either
an Incentive Stock Option or a Nonstatutory Stock Option.  However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options.  For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted.  The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.

 

(b)           Neither the Plan nor any Option shall confer upon an Optionee any
right with respect to continuing the Optionee’s relationship as a Service
Provider with the Company, nor shall they interfere in any way with the
Optionee’s right or the Company’s right to terminate such relationship at any
time, with or without cause.

 

(c)           The following limitations shall apply to grants of Options:

 

(i)            No Service Provider shall be granted, in any fiscal year of the
Company, Options to purchase more than 1,000,000 Shares.

 

(ii)           In connection with his or her initial service, a Service Provider
may be granted Options to purchase up to an additional 1,000,000 Shares, which
shall not count against the limit set forth in subsection (i) above.

 

(iii)          The foregoing limitations shall be adjusted proportionately in
connection with any change in the Company’s capitalization as described in
Section 12.

 

(iv)          If an Option is cancelled in the same fiscal year of the Company
in which it was granted (other than in connection with a transaction described
in Section 12), the cancelled Option will be counted against the limits set
forth in subsections (i) and (ii) above.  For this purpose, if the exercise
price of an Option is reduced, the transaction will be treated as a cancellation
of the Option and the grant of a new Option.

 

(d)           Service Providers who are Directors but are not otherwise
Employees shall not receive grants of Options under this Plan unless such grants
are non-discretionary grants specifed in the terms of this Plan.

 

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7.     TERM OF PLAN.  SUBJECT TO SECTION 18 OF THE PLAN, THE PLAN SHALL BECOME
EFFECTIVE UPON ITS ADOPTION BY THE BOARD.  IT SHALL CONTINUE IN EFFECT FOR A
TERM OF TEN (10) YEARS UNLESS TERMINATED EARLIER UNDER SECTION 14 OF THE PLAN.

 

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

 

9.     OPTION EXERCISE PRICE AND CONSIDERATION.

 

(a)           Exercise Price.  The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

 

(i)            In the case of an Incentive Stock Option

 

(A)          granted to an Employee who, at the time the Incentive Stock Option
is granted, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
per Share exercise price shall be no less than 110% of the Fair Market Value per
Share on the date of grant.

 

(B)           granted to any Employee other than an Employee described in
paragraph (A) immediately above, the per Share exercise price shall be no less
than 100% of the Fair Market Value per Share on the date of grant.

 

(ii)           In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant except that if the Administrator expressly determines that
such Nonstatutory Stock Option is granted in lieu of salary or cash bonus, the
per Share exercise price shall be no less than 85% of the Fair Market Value per
Share on the date of grant.  In the case of a Nonstatutory Stock Option intended
to qualify as “performance-based compensation” within the meaning of
Section 162(m) of the Code, the per Share exercise price shall be no less than
100% of the Fair Market Value per Share on the date of grant.

 

(iii)          Notwithstanding the foregoing, Options may be granted with a per
Share exercise price of less than 100% of the Fair Market Value per Share on the
date of grant pursuant to a merger or other corporate transaction.

 

(b)           Waiting Period and Exercise Dates.  At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions that must be satisfied before the
Option may be exercised.

 

(c)           Form of Consideration.  The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment.  In the case of an

 

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Incentive Stock Option, the Administrator shall determine the acceptable form of
consideration at the time of grant.  Such consideration may consist entirely of:

 

(i)            cash;

 

(ii)           check;

 

(iii)          promissory note;

 

(iv)          other Shares which, in the case of Shares acquired directly or
indirectly from the Company, (A) have been owned by the Optionee for more than
six (6) months on the date of surrender, and (B) have a Fair Market Value on the
date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised;

 

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

 

(vi)          a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee’s participation
in any Company-sponsored deferred compensation program or arrangement;

 

(vii)         any combination of the foregoing methods of payment; or

 

(viii)        such other consideration and method of payment for the issuance of
Shares to the extent permitted by Applicable Laws.

 

10.   EXERCISE OF OPTION.

 

(a)           Procedure for Exercise; Rights as a Stockholder.  Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement.  Unless the Administrator provides otherwise,
vesting of Options granted hereunder shall be suspended during any unpaid leave
of absence.  An Option may not be exercised for a fraction of a Share.

 

                An Option shall be deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised.  Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan.  Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse. 
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option. 
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised.  No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 12 of the Plan.

 

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

 

(b)           Termination of Relationship as a Service Provider.  If an Optionee
ceases to be a Service Provider, other than upon the Optionee’s death or
Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement).  In the absence
of a specified time in the Option Agreement, the Option shall remain exercisable
for three (3) months following the Optionee’s termination.  If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan. 
If, after termination, the Optionee does not exercise his or her Option within
the time specified by the Administrator, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

 

(c)           Disability of Optionee.  If an Optionee ceases to be a Service
Provider as a result of the Optionee’s Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option Agreement
to the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement).  In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee’s
termination.  If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan.  If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

 

(d)           Death of Optionee.  If an Optionee dies while a Service Provider,
the Option may be exercised following the Optionee’s death within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of death (but in no event may the option be exercised later
than the expiration of the term of such Option as set forth in the Option
Agreement), by the Optionee’s designated beneficiary, provided such beneficiary
has been designated prior to Optionee’s death in a form acceptable to the
Administrator.  If no such beneficiary has been designated by the Optionee, then
such Option may be exercised by the personal representative of the Optionee’s
estate or by the person(s) to whom the Option is transferred pursuant to the
Optionee’s will or in accordance with the laws of descent and distribution.  In
the absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following Optionee’s death.  If, at the time
of death, Optionee is not vested as to his or her entire Option, the Shares
covered by the unvested portion of the Option shall immediately revert to the
Plan.  If the Option is not so exercised within the time specified herein, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.

 

11.   TRANSFERABILITY OF OPTIONS.  UNLESS DETERMINED OTHERWISE BY THE
ADMINISTRATOR, AN OPTION MAY NOT BE SOLD, PLEDGED, ASSIGNED, HYPOTHECATED,
TRANSFERRED, OR DISPOSED OF IN ANY MANNER OTHER THAN BY WILL OR BY THE LAWS OF
DESCENT OR DISTRIBUTION AND MAY BE EXERCISED, DURING THE LIFETIME OF THE
OPTIONEE, ONLY BY THE OPTIONEE.  IF THE ADMINISTRATOR MAKES AN OPTION
TRANSFERABLE, SUCH OPTION SHALL CONTAIN SUCH ADDITIONAL TERMS AND CONDITIONS AS
THE ADMINISTRATOR DEEMS APPROPRIATE.

 

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

 

(a)           Changes in Capitalization.  Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock that have been
authorized for issuance under the Plan but as to which no Options have yet been
granted or which have been returned to the Plan upon cancellation or expiration
of an Option, the number of Shares that may be added annually to the Plan
pursuant to Section 3(i) and the number of shares of Common Stock as well as the
price per share of Common Stock covered by each such outstanding Option, shall
be proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been “effected without receipt of consideration.”  Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive.  Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to an
Option.

 

(b)           Dissolution or Liquidation.  In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction.  The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable.  In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and in
the manner contemplated.  To the extent it has not been previously exercised, an
Option will terminate immediately prior to the consummation of such proposed
action.

 

(c)           Merger or Change in Control.  In the event of a merger of the
Company with or into another corporation, or a Change in Control, each
outstanding Option shall be assumed or an equivalent option substituted by the
successor corporation or a Parent or Subsidiary of the successor corporation.

 

                In the event that the successor corporation refuses to assume or
substitute for the Option, the Optionee shall fully vest in and have the right
to exercise the Option as to all of the Optioned Stock, including Shares as to
which it would not otherwise be vested or exercisable.  If an Option becomes
fully vested and exercisable in lieu of assumption or substitution in the event
of a merger or sale of assets, the Administrator shall notify the Optionee in
writing or electronically that the Option shall be fully vested and exercisable
for a period of fifteen (15) days from the date of such notice, and the Option
shall terminate upon the expiration of such period.

 

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

 

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

 

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

 

14.   AMENDMENT AND TERMINATION OF THE PLAN.

 

(a)           Amendment and Termination.  The Board may at any time amend,
alter, suspend or terminate the Plan; provided, however, that without
stockholder approval the Company shall not amend the Plan to materially (i)
increase the number of Shares which may be issued under the Plan, (ii) increase
the benefits (taken as a whole) accruing to Service Providers under the Plan or
(iii) modify the requirements for participation in the Plan.  Materiality shall
be determined in the sole judgment of the Board for purposes of this Section
14(a).

 

(b)           Stockholder Approval.  The Company shall obtain stockholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.

 

(c)           Effect of Amendment or Termination.  No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company. 
Termination of the Plan shall not affect the Administrator’s ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.

 

15.   CONDITIONS UPON ISSUANCE OF SHARES.

 

(a)           Legal Compliance.  Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

 

(b)           Investment Representations.  As a condition to the exercise of an
Option, the Company may require the person exercising such Option to represent
and warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required.

 

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

 

17.   RESERVATION OF SHARES.  THE COMPANY, DURING THE TERM OF THIS PLAN, WILL AT
ALL TIMES RESERVE AND KEEP AVAILABLE SUCH NUMBER OF SHARES AS SHALL BE
SUFFICIENT TO SATISFY THE REQUIREMENTS OF THE PLAN.

 

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

 

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