Exhibit
10.28


 


OMNICELL,
INC.


 


2004 Equity
Incentive Plan


 


Adopted by
the Board of Directors:  February 27,
2004


 


1.             Purposes.


 


(a)           General
Purpose.  The Company, by means of
the Plan, seeks to retain the services of persons not previously an employee or
director of the Company, or following a bona
fide period of non-employment, as an inducement material to the
individual’s entering into employment with the Company within the meaning of
Rule 4350(i)(1)(A)(iv) of the NASD Marketplace Rules, and to provide incentives
for such persons to exert maximum efforts for the success of the Company and
its Affiliates.


 


(b)           Eligible Stock Award Recipients.  The persons eligible to receive Stock Awards
are the Employees of the Company and its Affiliates subject to the limitations
set forth in Section 5.


 


(c)           Available Stock Awards.  The purpose of the Plan is to provide a
means by which eligible recipients of Stock Awards may be given an opportunity
to benefit from increases in value of the Common Stock through the granting of
the following Stock Awards: 
(i) Options, (ii) Stock Bonus Awards, (iii) Stock Purchase Awards,
(iv) Stock Appreciation Rights, (v) Stock Unit Awards and (vi) Other Stock
Awards.


 


2.             Definitions.


 


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


 


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


 


(c)           “Capitalization Adjustment”
has the meaning ascribed to that term in Section 11(a).


 


(d)           “Change in
Control” means the occurrence, in a single transaction or in a
series of related transactions, of any one or more of the following events:


 


(i)            any
Exchange Act Person becomes the Owner, directly or indirectly, of securities of
the Company representing more than fifty
percent (50%) of the combined voting power of the Company’s then
outstanding securities other than by virtue of a merger, consolidation or
similar transaction.  Notwithstanding the foregoing, a Change in
Control shall not be deemed to occur (A) on account of the acquisition of
securities of the Company by an investor, any affiliate thereof or any other
Exchange Act Person from the Company in a transaction or series of related
transactions the primary purpose of which is to obtain financing


 


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for the Company through the
issuance of equity securities or (B)  solely
because the level of Ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting
securities as a result of a repurchase or other acquisition of voting
securities by the Company reducing the number of shares outstanding, provided
that if a Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of voting securities by the Company,
and after such share acquisition, the Subject Person becomes the Owner of any
additional voting securities that, assuming the repurchase or other acquisition
had not occurred, increases the percentage of the then outstanding voting
securities Owned by the Subject Person over the designated percentage
threshold, then a Change in Control shall be deemed to occur;


 


(ii)           there
is consummated a merger, consolidation or similar transaction involving
(directly or indirectly) the Company and, immediately after the consummation of
such merger, consolidation or similar transaction, the stockholders of the
Company immediately prior thereto do not Own, directly or indirectly, either
(A) outstanding voting securities representing more than fifty percent (50%) of the combined
outstanding voting power of the surviving Entity in such merger, consolidation
or similar transaction or (B) more than fifty
percent (50%) of the combined outstanding voting power of the parent of
the surviving Entity in such merger, consolidation or similar transaction, in
each case in substantially the same proportions as their Ownership of the
outstanding voting securities of the Company immediately prior to such
transaction;


 


(iii)         the
stockholders of the Company approve or the Board approves a plan of complete
dissolution or liquidation of the Company, or a complete dissolution or
liquidation of the Company shall otherwise occur;


 


(iv)          there
is consummated a sale, lease, license or other disposition of all or
substantially all of the consolidated assets of the Company and its
Subsidiaries, other than a sale, lease, license or other disposition of all or
substantially all of the consolidated assets of the Company and its
Subsidiaries to an Entity, more than fifty
percent (50%) of the combined voting power of the voting securities of
which are Owned by stockholders of the Company in substantially the same
proportions as their Ownership of the outstanding voting securities of the
Company immediately prior to such sale, lease, license or other disposition; or


 


(v)            individuals
who, on the date this Plan is adopted by the Board, are members of the Board
(the “Incumbent Board”)
cease for any reason to constitute at least a majority of the members of the
Board; provided,
however, that if the appointment or election (or nomination for
election) of any new Board member was approved or recommended by a majority
vote of the members of the Incumbent Board then still in office, such new
member shall, for purposes of this Plan, be considered as a member of the
Incumbent Board.


 


Notwithstanding the foregoing or any other provision
of this Plan, the definition of Change in Control (or any analogous term) in an
individual written agreement between the Company or any Affiliate and the
Participant shall supersede the foregoing definition with respect to Stock
Awards subject to such agreement (it being understood, however, that if no
definition of Change


 


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in Control or any analogous term is set forth in such
an individual written agreement, the foregoing definition shall apply).


 


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


 


(f)            “Committee”
means a committee of one (1) or more members of the Board appointed by the
Board in accordance with Section 3(c).


 


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


 


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


 


(i)            “Consultant”
means any person, including an advisor, (i) engaged by the Company or an
Affiliate to render consulting or advisory services and who is compensated for
such services or (ii) serving as a member of the Board of Directors of an
Affiliate and who is compensated for such services.  However, the term “Consultant” shall not include Directors who
are not compensated by the Company for their services as Directors, and the
payment of a director’s fee by the Company solely for services as a Director
shall not cause a Director to be considered a “Consultant” for purposes of the
Plan.


 


(j)            “Continuous
Service” means that the Participant’s service with the Company
or an Affiliate, whether as an Employee, Director or Consultant, is not
interrupted or terminated.  A change in
the capacity in which the Participant renders service to the Company or an
Affiliate as an Employee, Consultant or Director or a change in the entity for
which the Participant renders such service, provided that there is no
interruption or termination of the Participant’s service with the Company or an
Affiliate, shall not terminate a Participant’s Continuous Service.  For example, a change in status from an
Employee of the Company to a Consultant of an Affiliate or a Director shall not
constitute an interruption of Continuous Service.  The Board or the chief executive officer of the Company, in that
party’s sole discretion, may determine whether Continuous Service shall be
considered interrupted in the case of any leave of absence approved by that
party, including sick leave, military leave or any other personal leave.  Notwithstanding the foregoing, an approved
leave of absence shall be treated as Continuous Service for purposes of vesting
in a Stock Award only to such extent as may be provided in the Company’s leave
of absence policy or in the written terms of the Participant’s leave of
absence.


 


(k)           “Corporate
Transaction” means the occurrence, in a single transaction or in
a series of related transactions, of any one or more of the following events:


 


(i)            a
sale  or
other disposition of all or substantially all, as determined by the Board in
its discretion, of the consolidated assets of the Company and its Subsidiaries;


 


(ii)           a
sale or other disposition of at least ninety
percent (90%) of the outstanding securities of the Company;


 


(iii)         a
merger, consolidation or similar transaction following which the Company is not
the surviving corporation; or


 


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(iv)          a
merger, consolidation or similar transaction following which the Company is the
surviving corporation but the shares of Common Stock outstanding immediately
preceding the merger, consolidation or similar transaction are converted or
exchanged by virtue of the merger, consolidation or similar transaction into
other property, whether in the form of securities, cash or otherwise.


 


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


 


(m)          “Disability”
means, with respect to a Participant, such Participant’s permanent and total
disability within the meaning of the Company’s long-term disability plan, as it
may be amended from time to time, or, if there is no such plan, as determined
by the Board.


 


(n)           “Employee”
means any person employed by the Company or an Affiliate.  Service as a Director or as a Consultant
shall not be sufficient to constitute “employment” by the Company or an
Affiliate.


 


(o)           “Entity”
means a corporation, partnership or other entity.


 


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


 


(q)           “Exchange
Act Person” means any natural person, Entity or “group” (within
the meaning of Section 13(d) or 14(d) of the Exchange Act), except that
“Exchange Act Person” shall not include (A) the Company or any Subsidiary of
the Company, (B) any employee benefit plan of the Company or any Subsidiary of
the Company or any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any Subsidiary of the Company, (C) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (D) an Entity Owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their Ownership of
stock of the Company.


 


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


 


(i)            If
the Common Stock is listed on any established stock exchange or traded on the
Nasdaq National Market or the Nasdaq SmallCap Market, the Fair Market Value of
a share of Common Stock shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or market
(or the exchange or market with the greatest volume of trading in the Common
Stock) on the last market trading day prior to the day of determination, as
reported in The
Wall Street Journal  or such other source as the
Board deems reliable.


 


(ii)           In
the absence of such markets for the Common Stock, the Fair Market Value shall
be determined in good faith by the Board.


 


(s)           “Non-Employee
Director”  means a Director who either (i) is not a current Employee
or Officer of the Company or an Affiliate, does not receive compensation
(directly or indirectly) from the Company or an Affiliate for services rendered
as a Consultant or in any


 


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capacity other than as a Director (except for an
amount as to which disclosure would not be required under Item 404(a) of
Regulation S-K promulgated pursuant to the Securities Act (“Regulation S-K”)),
does not possess an interest in any other transaction as to which disclosure
would be required under Item 404(a) of Regulation S-K and is not engaged in a
business relationship as to which disclosure would be required under
Item 404(b) of Regulation S-K; or (ii) is otherwise considered a
“non-employee director” for purposes of Rule 16b-3.


 


(t)            “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.


 


(u)           “Option”
means a nonstatutory stock option granted pursuant to the Plan that is not
intended to qualify as an incentive stock option under Section 422 of the Code
and the regulations promulgated thereunder.


 


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


 


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


 


(x)           “Other Stock Award”
means an award based in whole or in part by reference to the Common Stock which
is granted pursuant to the terms and conditions of Section 7(e).


 


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


 


(z)           “Own,”
“Owned,” “Owner,” “Ownership” 
A person or Entity shall be deemed to “Own,” to have “Owned,” to be
the “Owner” of, or to have acquired “Ownership” of securities if such person or
Entity, directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise, has or shares voting power, which
includes the power to vote or to direct the voting, with respect to such
securities.


 


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


 


(bb)         “Plan”
means this Omnicell, Inc. 2004 Equity Incentive Plan.


 


(cc)         “Rule 16b-3”
means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule
16b-3, as in effect from time to time.


 


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


 


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(ee)         “Stock
Appreciation Right” means a right to receive the appreciation of
Common Stock which is granted pursuant to the terms and conditions of Section
7(d).


 


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


 


(gg)         “Stock
Award” means any right granted under the Plan, including an
Option,  Stock Purchase Award, Stock
Bonus Award, Stock Unit Award, a Stock Appreciation Right and an Other Stock
Award.


 


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


 


(ii)           “Stock Bonus Award”
means an award of shares of Common Stock which is granted pursuant to the terms
and conditions of Section 7(a).


 


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


 


(kk)        “Stock
Purchase Award” means an award of shares of Common Stock which
is granted pursuant to the terms and conditions of Section 7(b).


 


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


 


(mm)       “Stock Unit
Award” means a right to receive shares of Common Stock which is
granted pursuant to the terms and conditions of Section 7(c).


 


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


 


(oo)         “Subsidiary”
means, with respect to the Company, (i) any corporation of which more than
fifty percent (50%) of the outstanding capital stock having ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, Owned by
the Company, and (ii) any partnership in which the Company has a direct or
indirect interest


 


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(whether in the form of voting or participation in
profits or capital contribution) of more than fifty percent (50%).


 


3.             Administration.


 


(a)           Administration
by Board.  The Board shall
administer the Plan unless and until the Board delegates administration of the
Plan to a committee, as provided in Section 3(c).


 


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


 


(i)            Subject
to Section 5 herein, to determine from time to time which of the persons
eligible under the Plan shall be granted Stock Awards; when and how each Stock
Award shall be granted; what type or combination of types of Stock Award shall
be granted; the provisions of each Stock Award granted (which need not be
identical), including the time or times when a person shall be permitted to
receive Common Stock pursuant to a Stock Award; and the number of shares of
Common Stock with respect to which a Stock Award shall be granted to each such
person.


 


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


 


(iii)         To
effect, at any time and from time to time, with the consent of any adversely
affected Optionholder, (1) the reduction of the exercise price of any
outstanding Option under the Plan or (2) any other action that is treated as a
repricing under generally accepted accounting principles to the extent such
action complies with Rule 4350(i)(1)(A)(iv) of the NASD Marketplace Rules.


 


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


 


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


 


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


 


(vii)         To
adopt such procedures and sub-plans as are necessary or appropriate to permit
participation in the Plan by employees who are foreign nationals or employed
outside the United States.


 


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(c)           Delegation to
Committee.


 


(i)            General.  The Board may delegate some or all of the
administration of the Plan to a Committee or Committees of one (1) or more
members of the Board, and the term “Committee” shall apply to any person or
persons to whom such authority has been delegated.  If administration is delegated to a Committee, the Committee
shall have, in connection with the administration of the Plan, the powers
theretofore possessed by the Board that have been delegated to the Committee,
including the power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise (and references in this Plan to
the Board shall thereafter be to the Committee or subcommittee), subject,
however, to such resolutions, not inconsistent with the provisions of the Plan,
as may be adopted from time to time by the Board.  The Board may retain the authority to concurrently administer the
Plan with the Committee and may, at any time, revest in the Board the
administration of the Plan.


 


(ii)           Rule
16b-3 Compliance.  In the discretion
of the Board, the Committee may consist solely of two (2) or more Non-Employee
Directors, in accordance with Rule 16b-3.


 


(d)           Effect of Board’s Decision.
All determinations, interpretations and constructions made by the Board in good
faith shall not be subject to review by any person and shall be final, binding
and conclusive on all persons.


 


4.             Shares Subject to
the Plan. 


 


(a)           Share
Reserve.  Subject to the provisions
of Section 11(a) relating to Capitalization Adjustments, the shares of Common
Stock that may be issued pursuant to Stock Awards shall not exceed in the
aggregate two hundred thousand (200,000) shares of Common Stock.


 


(b)           Reversion
of Shares to the Share Reserve.  If
any Stock Award shall for any reason expire or otherwise terminate, in whole or
in part, without having been exercised in full, or if any shares of Common
Stock issued to a Participant pursuant to a Stock Award are forfeited back to
or repurchased by the Company, including, but not limited to, any repurchase or
forfeiture caused by the failure to meet a contingency or condition required
for the vesting of such shares, then the shares of Common Stock not acquired
under such Stock Award shall revert to and again become available for issuance
under the Plan.  If any shares subject to
a Stock Award are not delivered to a Participant because such shares are
withheld for taxes or the Stock Award is exercised through a reduction of
shares subject to the Stock Award (i.e., “net exercised”), then the shares that
are not delivered shall revert to and again become available for issuance under
the Plan.  If the exercise price of any
Stock Award is satisfied by tendering shares of Common Stock held by the
Participant (either by actual delivery or attestation), then the number of such
tendered shares shall revert to and again become available for issuance under
the Plan.


 


(c)           Source
of Shares.  The shares of Common
Stock subject to the Plan may be unissued shares or reacquired shares, bought
on the market or otherwise.


 


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5.             Eligibility.  Persons eligible for Stock Awards
shall consist of Employees whose potential contribution, in the judgment of the
Board, will benefit the future success of the Company and/or an Affiliate.   Stock Awards may be granted only to persons
not previously an Employee or Director of the Company, or following a bona fide period of non-employment, as an
inducement material to the individual’s entering into employment with the
Company within the meaning of Rule 4350(i)(1)(A)(iv) of the NASD Marketplace
Rules.  In addition, notwithstanding any
other provision of the Plan to the contrary, all Stock Awards must be granted
either by a majority of the Company’s independent directors or a committee
comprised of a majority of independent directors.


 


6.             Option Provisions.


 


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


 


(a)           Term.  The Board shall determine the term of an
Option.


 


(b)           Exercise
Price of an Option.  The Board, in
its discretion, shall determine the exercise price of each Option.


 


(c)           Consideration.  The purchase price of Common Stock acquired
pursuant to an Option shall be paid, to the extent permitted by applicable law,
either (i) in cash at the time the Option is exercised or (ii) at the
discretion of the Board (1) by delivery to the Company of other Common Stock,
(2) by a “net exercise” of the Option (as further described below), (3)
pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board that, prior to the issuance of Common Stock, results in
either the receipt of cash (or check) by the Company or the receipt of
irrevocable instructions to pay the aggregate exercise price to the Company
from the sales proceeds, (4) according to a deferred payment or other similar
arrangement with the Optionholder or (5) in any other form of legal
consideration that may be acceptable to the Board.  Unless otherwise specifically provided in the Option, the
purchase price of Common Stock acquired pursuant to an Option that is paid by
delivery to the Company of other Common Stock acquired, directly or indirectly
from the Company, shall be paid only by shares of the Common Stock of the
Company that have been held for more than six (6) months (or such longer or
shorter period of time required to avoid a charge to earnings for financial
accounting purposes).


 


In the case of a
“net exercise” of an Option, the Company will not require a payment of the
exercise price of the Option from the Participant but will reduce the number of
shares of Common Stock issued upon the exercise by the largest number of whole
shares that has a Fair Market Value that does not exceed the aggregate exercise
price.  With respect to any remaining
balance of the aggregate exercise price, the Company shall accept a cash
payment from the Participant.  The
shares of Common Stock so used to pay the exercise price of an Option under a
“net exercise” and any shares withheld for taxes will be considered to have
been withheld from


 


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the exercise of the Option. 
Accordingly, the Option will not again be exercisable with respect to
the shares deemed withheld to satisfy the exercise price, the shares actually
delivered to the Participant or any shares withheld for purposes of tax
withholding.


 


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


 


(c)           Transferability
of an Option.  An Option shall be
transferable to the extent provided in the Option Agreement.  If the Option does not provide for
transferability, then the Option shall not be transferable except by (i) will,
(ii) the laws of descent and distribution, or (iii) upon dissolution of the
Optionholder’s marriage pursuant to a domestic relations order.  Also, during the Optionholder’s lifetime,
only the Optionholder is entitled to exercise his or her Option.  Notwithstanding the foregoing, by delivering
written notice to the Company, in a form satisfactory to the Company, an
Optionholder may designate a third party who, in the event of such
Optionholder’s death, shall thereafter be entitled to exercise the Option.


 


(d)           Vesting
Generally.  The total number of
shares of Common Stock subject to an Option may, but need not, vest and
therefore become exercisable in periodic installments that may, but need not,
be equal.  The Option may be subject to
such other terms and conditions on the time or times when it may be exercised
(which may be based on performance or other criteria) as the Board may deem
appropriate.  The vesting provisions of
individual Options may vary.  The
provisions of this Section 6(e) are subject to any Option provisions governing
the minimum number of shares of Common Stock as to which an Option may be
exercised.


 


(e)           Termination
of Continuous Service.  In the event
that an Optionholder’s Continuous Service terminates (other than upon the
Optionholder’s death or Disability), the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise such
Option as of the date of termination of Continuous Service) but only within
such period of time ending on the earlier of (i) the date three (3) months
following the termination of the Optionholder’s Continuous Service (or such
longer or shorter period specified in the Option Agreement) or (ii) the
expiration of the term of the Option as set forth in the Option Agreement.  If, after termination of Continuous Service,
the Optionholder does not exercise his or her Option within the time specified
in the Option Agreement, the Option shall terminate.


 


(f)            Extension
of Termination Date.  An
Optionholder’s Option Agreement may (but need not) provide that if the exercise
of the Option following the termination of the Optionholder’s Continuous
Service (other than upon the Optionholder’s death or Disability) would be
prohibited at any time solely because the issuance of shares of Common Stock
would violate the registration requirements under the Securities Act, then the
Option shall terminate on the earlier of (i) the expiration of the term of the
Option set forth in the Option Agreement or (ii) the expiration of a period of
three (3) months after the termination of the Optionholder’s Continuous Service
during which the exercise of the Option would not be in violation of such
registration requirements.


 


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(g)           Disability
of Optionholder.  In the event that
an Optionholder’s Continuous Service terminates as a result of the
Optionholder’s Disability, the Optionholder may exercise his or her Option (to
the extent that the Optionholder was entitled to exercise such Option as of the
date of termination of Continuous Service), but only within such period of time
ending on the earlier of (i) the date twelve (12) months following such
termination of Continuous Service (or such longer or shorter period specified
in the Option Agreement) or (ii) the expiration of the term of the Option as
set forth in the Option Agreement.  If,
after termination of Continuous Service, the Optionholder does not exercise his
or her Option within the time specified herein, the Option shall terminate.


 


(h)           Death
of Optionholder.  In the event that
(i) an Optionholder’s Continuous Service terminates as a result of the
Optionholder’s death or (ii) the Optionholder dies within the period (if any)
specified in the Option Agreement after the termination of the Optionholder’s
Continuous Service for a reason other than death, then the Option may be
exercised (to the extent the Optionholder was entitled to exercise such Option
as of the date of death) by the Optionholder’s estate, by a person who acquired
the right to exercise the Option by bequest or inheritance or by a person
designated to exercise the option upon the Optionholder’s death pursuant to
Section 6(d), but only within the period ending on the earlier of (1) the date
eighteen (18) months following the date of death (or such longer or shorter
period specified in the Option Agreement) or (2) the expiration of the term of
such Option as set forth in the Option Agreement.  If, after death, the Option is not exercised within the time
specified herein, the Option shall terminate.


 


(i)            Early
Exercise.  The Option may, but need
not, include a provision whereby the Optionholder may elect at any time before
the Optionholder’s Continuous Service terminates to exercise the Option as to
any part or all of the shares of Common Stock subject to the Option prior to
the full vesting of the Option.  Any
unvested shares of Common Stock so purchased may be subject to a repurchase
option in favor of the Company or to any other restriction the Board determines
to be appropriate.  The Company shall
not be required to exercise its repurchase option until at least six (6) months
(or such longer or shorter period of time required to avoid a charge to
earnings for financial accounting purposes) have elapsed following exercise of
the Option unless the Board otherwise specifically provides in the Option.


 


7.             Provisions of Stock Awards other than Options.



 


(a)           Stock
Bonus Awards.  Each Stock Bonus
Award Agreement shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate.  At the Board’s election, shares of Common Stock may be (i) held in
book entry form subject to the Company’s instructions until any restrictions
relating to the Stock Bonus Award lapse; or (ii) evidenced by a certificate,
which certificate shall be held in such form and manner as determined by the
Board.  The terms and conditions of
Stock Bonus Award Agreements may change from time to time, and the terms and
conditions of separate Stock Bonus Award Agreements need not be identical, but
each Stock Bonus Award Agreement shall include (through incorporation of
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:


 


11

















 


(i)            Consideration.  A Stock Bonus Award may be awarded in
consideration for past services actually rendered to the Company or an
Affiliate for its benefit or in any other form of legal consideration that may
be acceptable to the Board in its discretion.


 


(ii)           Vesting.  Shares of Common Stock awarded under the
Stock Bonus Award Agreement may, but need not, be subject to forfeiture to the
Company or a share repurchase option in favor of the Company in accordance with
a vesting schedule to be determined by the Board.


 


(iii)         Termination
of Participant’s Continuous Service. 
In the event a Participant’s Continuous Service terminates, the Company
may reacquire (or receive via  a
forfeiture condition) any or all of the shares of Common Stock held by the
Participant which have not vested as of the date of termination of Continuous
Service under the terms of the Stock Bonus Award Agreement.


 


(iv)          Transferability.  Rights to acquire shares of Common Stock
under the Stock Bonus Award Agreement shall be transferable by the Participant
only upon such terms and conditions as are set forth in the Stock Bonus Award
Agreement, as the Board shall determine in its discretion, so long as Common
Stock awarded under the Stock Bonus Award Agreement remains subject to the
terms of the Stock Bonus Award Agreement.


 


(b)           Stock
Purchase Awards.  Each Stock
Purchase Award Agreement shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate.  At the Board’s election, shares of Common Stock may be (i) held
in book entry form subject to the Company’s instructions until any restrictions
relating to the Stock Purchase Award lapse; or (ii) evidenced by a certificate,
which certificate shall be held in such form and manner as determined by the
Board.  The terms and conditions of
Stock Purchase Award Agreements may change from time to time, and the terms and
conditions of separate Stock Purchase Award Agreements need not be identical, provided, however, that each Stock
Purchase Award Agreement shall include (through incorporation of the provisions
hereof by reference in the agreement or otherwise) the substance of each of the
following provisions:


 


(i)            Purchase
Price.  At the time of the grant of
a Stock Purchase Award, the Board will determine the price to be paid by the
Participant for each share subject to the Stock Purchase Award. To the extent
required by applicable law, the price to be paid by the Participant for each
share of the Stock Purchase Award will not be less than the par value of a
share of Common Stock.


 


(ii)           Consideration.  At the time of the grant of a Stock Purchase
Award, the Board will determine the consideration permissible for the payment
of the purchase price of the Stock Purchase Award.  The purchase price of Common Stock acquired pursuant to the Stock
Purchase Award shall be paid either: (i) in cash at the time of purchase or
(ii) in any other form of legal consideration that may be acceptable to the
Board in its discretion.


 


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(iii)         Vesting.
Shares of Common Stock acquired under a Stock Purchase Award may, but need not,
be subject to forfeiture to the Company or a share repurchase option in favor
of the Company in accordance with a vesting schedule to be determined by the
Board.


 


(iv)          Termination
of Participant’s Continuous Service. In the event that a Participant’s
Continuous Service terminates, the Company shall have the right, but not the
obligation, to repurchase or otherwise reacquire, any or all of the shares of
Common Stock held by the Participant that have not vested as of the date of
termination under the terms of the Stock Purchase Award Agreement.  At the Board’s election, the repurchase
price, if any, paid by the Company may be at the lower of: (i) the Fair Market
Value on the relevant date; or (ii) the Participant’s original cost.  The Company shall not be required to exercise
its repurchase option until at least six (6) months (or such longer or shorter
period of time required to avoid a charge to earnings for financial accounting
purposes) have elapsed following the purchase of the restricted stock unless
otherwise determined by the Board or provided in the Stock Purchase Award
Agreement.


 


(v)            Transferability.
Rights to purchase or receive shares of Common Stock granted under a Stock
Purchase Award shall be transferable by the Participant only upon such terms
and conditions as are set forth in the Stock Purchase Award Agreement, as the
Board shall determine in its discretion, and so long as Common Stock awarded
under the Stock Purchase Award remains subject to the terms of the Stock
Purchase Award Agreement.


 


(c)           Stock Unit Awards.  Each Stock Unit Award Agreement shall be
in such form and shall contain such terms and conditions as the Board shall
deem appropriate.  The terms and
conditions of Stock Unit Award Agreements may change from time to time, and the
terms and conditions of separate Stock Unit Award Agreements need not be
identical, provided, however, that
each Stock Unit Award Agreement shall include (through incorporation of the
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:


 


(i)            Consideration.  At the time of grant of a Stock Unit Award,
the Board will determine the consideration, if any, to be paid by the
Participant upon delivery of each share of Common Stock subject to the Stock
Unit Award. To the extent required by applicable law, the consideration to be
paid by the Participant for each share of Common Stock subject to a Stock Unit
Award will not be less than the par value of a share of Common Stock.  The consideration may be paid in any form
permitted under applicable law.


 


(ii)           Vesting.  At the time of the grant of a Stock Unit
Award, the Board may impose such restrictions or conditions to the vesting of
the Stock Unit Award as it, in its absolute discretion, deems appropriate.


 


(iii)         Additional
Restrictions.  At the time of the
grant of Stock Unit, the Board may impose such restrictions or conditions that
delay the delivery of the consideration after its vesting as the Board, in its
absolute discretion, deems appropriate, with such terms to be contained in the
Stock Unit agreement.


 


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(iv)          Payment.  Stock Unit Awards may be settled in Common Stock or in cash or
any combination of the two, or in any other form of consideration as determined
by the Board and contained in the Stock Unit Award Agreement.


 


(v)            Dividend
Equivalents.  Dividend equivalents
may be credited in respect of shares covered by a Stock Unit Award, as
determined by the Board and contained in the Stock Unit Award Agreement.  At the discretion of the Board, such
dividend equivalents may be converted into additional shares covered by the
Stock Unit Award in such manner as determined by the Board.  Any additional shares covered by the Stock
Unit Award credited by reason of such dividend equivalents will be subject to
all the terms and conditions of the underlying Stock Unit Award Agreement to
which they relate.


 


(vi)          Termination
of Participant’s Continuous Service.  Except
as otherwise provided in the applicable Stock Unit Award Agreement, such
portion of the Stock Unit Award that has not vested will be forfeited upon the
Participant’s termination of Continuous Service for any reason.


 


(d)           Stock Appreciation
Rights.  Each Stock Appreciation
Right Agreement shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate.  The terms and conditions of Stock Appreciation Right Agreements
may change from time to time, and the terms and conditions of separate Stock
Appreciation Right Agreements need not be identical, but each Stock
Appreciation Right Agreement shall include (through incorporation of provisions
hereof by reference in the agreement or otherwise) the substance of each of the
following provisions:


 


(i)            Strike
Price and Calculation of Appreciation. Each Stock Appreciation Right will be
denominated in share of Common Stock equivalents.  The appreciation distribution payable on the exercise of a Stock
Appreciation Right will be not greater than an amount equal to the excess of
(A) the aggregate Fair Market Value (on the date of the exercise of the Stock
Appreciation Right) of a number of shares of Common Stock equal to the number
of share of Common Stock equivalents in which the Participant is vested under
such Stock Appreciation Right and with respect to which the Participant is
exercising the Stock Appreciation Right on such date, over (B) an amount that
will be determined by the Board at the time of grant of the Stock Appreciation
Right.


 


(ii)           Vesting.  At the time of the grant of a Stock
Appreciation Right, the Board may impose such restrictions or conditions to the
vesting of such Stock Appreciate Right as it, in its absolute discretion, deems
appropriate.


 


(iii)         Exercise.  To exercise any outstanding Stock
Appreciation Right, the Participant must provide written notice of exercise to
the Company in compliance with the provisions of the Stock Appreciation Right
Agreement evidencing such Stock Appreciation Right.


 


(iv)          Payment.  The appreciation distribution in respect to a Stock Appreciation
Right may be paid in Common Stock, in cash, in any combination of the two or in
any other


 


14

















 


form of consideration as determined by the Board and
contained in the Stock Appreciation Right Agreement evidencing such Stock
Appreciation Right.


 


(v)            Termination
of Continuous Service.  In the event
that a Participant’s Continuous Service terminates, the Participant may
exercise his or her Stock Appreciation Right (to the extent that the
Participant was entitled to exercise such Stock Appreciation Right as of the
date of termination) but only within such period of time ending on the earlier
of (i) the date three (3) months following the termination of the Participant’s
Continuous Service (or such longer or shorter period specified in the Stock
Appreciation Right Agreement) or (ii) the expiration of the term of the Stock
Appreciation Right as set forth in the Stock Appreciation Right Agreement.  If, after termination, the Participant does
not exercise his or her Stock Appreciation Right within the time specified in
the Stock Appreciation Right Agreement, the Stock Appreciation Right shall
terminate.


 


(e)           Other Stock Awards.  Other forms of Stock Awards valued in whole
or in part by reference to, or otherwise based on, Common Stock may be granted
either alone or in addition to Stock Awards provided for under Section 6 and
the preceding provisions of this Section 7. 
Subject to the provisions of the Plan, the Board shall have sole and complete
authority to determine the persons to whom and the time or times at which such
Other Stock Awards will be granted, the number of shares of Common Stock (or
the cash equivalent thereof) to be granted pursuant to such Awards and all
other terms and conditions of such Awards.


 


8.             Securities Law Compliance.


 


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


 


9.             Use of Proceeds from Stock.


 


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


 


10.          Miscellaneous.


 


(a)           Acceleration
of Exercisability and Vesting.  The
Board shall have the power to accelerate the time at which a Stock Award may
first be exercised or the time during which a Stock Award or any part thereof
will vest in accordance with the Plan, notwithstanding the


 


15

















 


provisions in the Stock Award stating the time at
which it may first be exercised or the time during which it will vest.


 


(b)           Shareholder
Rights.  No Participant shall be
deemed to be the holder of, or to have any of the rights of a holder with
respect to, any shares of Common Stock subject to such Stock Award unless and
until such Participant has satisfied all requirements for exercise of the Stock
Award pursuant to its terms.


 


(c)           No
Employment or other Service Rights. 
Nothing in the Plan or any instrument executed or Stock Award granted
pursuant thereto shall confer upon any Participant any right to continue to
serve the Company or an Affiliate in the capacity in effect at the time the
Stock Award was granted or shall affect the right of the Company or an
Affiliate to terminate (i) the employment of an Employee with or without notice
and with or without cause, (ii) the service of a Consultant pursuant to the
terms of such Consultant’s agreement with the Company or an Affiliate or (iii)
the service of a Director pursuant to the Bylaws of the Company or an
Affiliate, and any applicable provisions of the corporate law of the state in
which the Company or the Affiliate is incorporated, as the case may be.


 


(d)           Investment
Assurances.  The Company may require
a Participant, as a condition of exercising or acquiring Common Stock under any
Stock Award, (i) to give written assurances satisfactory to the Company as to
the Participant’s knowledge and experience in financial and business matters
and/or to employ a purchaser representative reasonably satisfactory to the
Company who is knowledgeable and experienced in financial and business matters
and that he or she is capable of evaluating, alone or together with the
purchaser representative, the merits and risks of exercising the Stock Award;
and (ii) to give written assurances satisfactory to the Company stating that
the Participant is acquiring Common Stock subject to the Stock Award for the
Participant’s own account and not with any present intention of selling or
otherwise distributing the Common Stock. 
The foregoing requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (1) the issuance of the shares of Common
Stock upon the exercise or acquisition of Common Stock under the Stock Award
has been registered under a then currently effective registration statement
under the Securities Act or (2) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then applicable securities laws.  The Company may, upon advice of counsel to
the Company, place legends on stock certificates issued under the Plan as such
counsel deems necessary or appropriate in order to comply with applicable
securities laws, including, but not limited to, legends restricting the
transfer of the Common Stock.


 


(e)           Withholding
Obligations.  To the extent provided
by the terms of a Stock Award Agreement, the Participant shall, as may be
determined by the Company in its sole discretion, satisfy any federal, state or
local tax withholding obligation relating to a Stock Award by any of the
following means (in addition to the Company’s right to withhold from any
compensation paid to the Participant by the Company) or by a combination of
such means:  (i) tendering a cash
payment; (ii) authorizing the Company to withhold shares of Common Stock from
the shares of


 


16

















 


Common Stock issued or otherwise issuable to the
Participant in connection with the Stock Award; or (iii) such other
consideration as may be set forth in the Stock Award Agreement.


 


11.          Adjustments upon Changes in Stock. 


 


(a)           Capitalization
Adjustments.  If any change is made
in, or other event occurs with respect to, the Common Stock subject to the Plan
or subject to any Stock Award without the receipt of consideration by the
Company (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
consideration by the Company (each a “Capitalization Adjustment”), the Plan
will be appropriately adjusted in the class(es) and maximum number of
securities subject to the Plan pursuant to Section 4(a) and the outstanding
Stock Awards will be appropriately adjusted in the class(es) and number of
securities and price per share of Common Stock subject to such outstanding
Stock Awards.  The Board shall make such
adjustments, and its determination shall be final, binding and conclusive.  (The conversion of any convertible securities
of the Company shall not be treated as a transaction “without receipt of
consideration” by the Company.)


 


(b)           Dissolution
or Liquidation.  In the event of a
dissolution or liquidation of the Company, then all outstanding Stock Awards
shall terminate immediately prior to the completion of such dissolution or
liquidation


 


(c)           Corporate Transaction.  In the event of a Corporate Transaction, any
surviving corporation or acquiring corporation may assume or continue any or
all Stock Awards outstanding under the Plan or may substitute similar stock
awards for Stock Awards outstanding under the Plan (it being understood that
similar stock awards include, but are not limited to, awards to acquire the
same consideration paid to the stockholders or the Company, as the case may be,
pursuant to the Corporate Transaction), and any reacquisition or repurchase
rights held by the Company in respect of Common Stock issued pursuant to Stock
Awards may be assigned by the Company to the successor of the Company (or the successor’s
parent company), if any, in connection with such Corporate Transaction.  In the event that any surviving corporation
or acquiring corporation does not assume or continue all such outstanding Stock
Awards or substitute similar stock awards for all such outstanding Stock
Awards, then with respect to Stock Awards that have been not assumed, continued
or substituted and that are held by Participants whose Continuous Service has
not terminated prior to the effective time of the Corporate Transaction, the
vesting of such Stock Awards (and, if applicable, the time at which such Stock
Awards may be exercised) shall (contingent upon the effectiveness of the
Corporate Transaction) be accelerated in full to a date prior to the effective
time of such Corporate Transaction as the Board shall determine (or, if the
Board shall not determine such a date, to the date that is five (5) days prior
to the effective time of the Corporate Transaction), the Stock Awards shall
terminate if not exercised (if applicable) at or prior to such effective time,
and any reacquisition or repurchase rights held by the Company with respect to
such Stock Awards held by Participants whose Continuous Service has not
terminated shall (contingent upon the effectiveness of the Corporate Transaction)
lapse.


 


17

















 


(d)           Change in
Control.  A Stock Award may
be subject to additional acceleration of vesting and exercisability upon or
after a Change in Control as may be provided in the Stock Award Agreement for
such Stock Award or as may be provided in any other written agreement between
the Company or any Affiliate and the Participant, but in the absence of such
provision, no such acceleration shall occur.


 


12.          Amendment of the Plan and Stock Awards.


 


(a)           Amendment
of Plan.  Subject to the
limitations, if any, of applicable law, the Board at any time, and from time to
time, may amend the Plan.  The Board
may, in its discretion, provide that any such amendment is effective upon
obtaining the approval of the stockholders of the Company.


 


(b)           No
Impairment of Rights.  Rights under
any Stock Award granted before amendment of the Plan shall not be impaired by
any amendment of the Plan unless (i) the Company requests the consent of the
Participant and (ii) the Participant consents in writing.


 


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


 


13.          Termination or Suspension of the Plan.


 


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


 


(b)           No
Impairment of Rights.  Suspension or
termination of the Plan shall not impair rights and obligations under any Stock
Award granted while the Plan is in effect except with the consent of the
Participant.


 


14.          Effective Date of Plan.


 


The Plan shall become
effective as determined by the Board.


 


15.          Choice of Law.


 


The law of the
State of California shall govern all questions concerning the construction,
validity and interpretation of this Plan, without regard to such state’s
conflict of laws rules.


 


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