Unassociated Document


    EXHIBIT
      4.2

     

    


     

    AGILE
      SOFTWARE CORPORATION 

     

    1995
      STOCK OPTION PLAN 

     

    (As
      Amended through August 1, 2002) 

     

     

    ARTICLE
      ONE

    

      GENERAL
        PROVISIONS

    

     

    
      	
              I.

            	
              PURPOSE
                OF THE PLAN

            


    

     

    This
      1995
      Stock Option Plan is intended to promote the interests of Agile Software
      Corporation, a Delaware corporation, by providing eligible persons with the
      opportunity to acquire a proprietary interest, or otherwise increase their
      proprietary interest, in the Corporation as an incentive for them to remain
      in
      the service of the Corporation. 

     

    Unless
      otherwise defined herein, capitalized terms shall have the meanings assigned
      to
      such terms in the attached Appendix. 

     

    
      	
              II.

            	
              ADMINISTRATION
                OF THE PLAN

            


    

     

    A.    The
      Plan
      shall be administered by the Board. However, any or all administrative functions
      otherwise exercisable by the Board may be delegated to a Committee. Members
      of
      the Committee shall serve for such period of time as the Board may determine
      and
      shall be subject to removal by the Board at any time. The Board may also at
      any
      time terminate the functions of the Committee and reassume all powers and
      authority previously delegated to the Committee. 

     

    B.    Any
      officer of the Corporation shall have the authority to act on behalf of the
      Corporation with respect to any matter, right, obligation, determination or
      election which is the responsibility of or which is allocated to the Corporation
      herein, provided the officer has apparent authority with respect to such matter,
      right, obligation, determination or election. 

     

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

     

    1.    establish
      such rules and regulations as it may deem appropriate for proper administration
      of the Plan and to make such determinations under, and issue such
      interpretations of, the Plan and any outstanding option or stock issuance as
      it
      may deem necessary or advisable; 


    
      
        
        

      

      
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    2.    determine
      which eligible persons are to receive option grants and stock issuances under
      the Plan, the time or times when such option grants or stock issuances are
      to be
      made, the number of shares to be covered by each such grant, the status of
      the
      granted option as either an Incentive Option or a Non-Statutory Option, the
      time
      or times at which each option is to become exercisable, the vesting schedule
      (if
      any) applicable to each option or stock issuance, the maximum term for which
      the
      option is to remain outstanding; 

     

    3.    amend,
      modify, extend, cancel, or renew, any option or stock issuance or to waive
      any
      restrictions or conditions applicable to any option or shares acquired pursuant
      to a stock issuance or upon the exercise of an option; 

     

    4.    amend
      the
      exercisability of any option or the vesting of any shares acquired upon the
      exercise of any option or pursuant to any stock issuance, including with respect
      to the period following an Optionee’s termination of Service with the
      Corporation; 

     

    5.    delegate
      to any proper officer of the Corporation the authority to (a) grant one or
      more
      options or stock issuances, without further approval of the Board, to any person
      eligible pursuant to Section II below, other than a person who, at the time
      of
      such grant, is an Insider; provided, however, that (i) such options and stock
      issuances shall not be granted to any one person within any fiscal year of
      the
      Corporation in excess of such limits as may be specified by the Plan
      Administrator, (ii) the exercise price per share of each option shall be equal
      to the Fair Market Value per share of the Common Stock on the effective date
      of
      grant (or, if the Common Stock has not traded on such date, on the last day
      preceding the effective date of grant on which the Common Stock was traded),
      and
      (iii) each option or stock issuance shall be subject to the terms and conditions
      of the appropriate standard form of option agreement or Issuance Agreement
      approved by the Board and shall conform to the provisions of the Plan and such
      other guidelines as shall be established from time to time by the Board and
      (b)
      extend the post-termination exercise period of an option other than an option
      held by a person who is an Insider at the time of such amendment; and


     

    6.    correct
      any defect, supply any omission or reconcile any inconsistency in the Plan,
      any
      option agreement, or any stock issuance agreement and to make all other
      determinations and take such other actions with respect to the Plan or any
      option or stock issuance as the Board may deem advisable to the extent not
      inconsistent with the provisions of the Plan or applicable law. 

     

    Decisions
      of the Plan Administrator shall be final and binding on all parties who have
      an
      interest in the Plan or any option, stock issuance, or shares issued thereunder.
      

     

    D.    With
      respect to participation by Insiders in the Plan, at any time that any class
      of
      equity security of the Corporation is registered pursuant to Section 12 of
      the
      1934 Act, the Plan shall be administered in compliance with the requirements,
      if
      any, of Rule 16b-3 of the 1934 Act. 


    
      
        
        

      

      
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    E.    If
      the
      Corporation (or Parent or Subsidiary corporation) is a “publicly held
      corporation” within the meaning of Section 162(m) of the Code, the Board may
      establish a Committee of “outside directors” within the meaning of Section
      162(m) of the Code to approve the grant of any option or stock issuance which
      might reasonably be anticipated to result in the payment of employee
      remuneration that would otherwise exceed the limit on employee remuneration
      deductible for income tax purposes pursuant to Section 162(m). 

     

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

     

    
      	
              III.

            	
              ELIGIBILITY

            


    

     

    A.    Employees,
      Consultants and non-employee Directors are eligible to receive option grants
      pursuant to the Discretionary Option Grant Program and/or stock issuances under
      the Stock Issuance Program. For purposes of the foregoing sentence, Employees,
      Consultants, and non-employee Directors shall include prospective Employees,
      prospective Consultants and prospective non-employee Directors to whom options
      and/or stock issuances are granted in connection with written offers of
      employment or other service relationship with the Corporation or any Parent
      or
      Subsidiary corporation. Eligible persons may be granted more than one (1) option
      and/or stock issuance. 

     

    B.    Only
      non-employee Board members may receive grants under the Automatic Director
      Option Grant Program. 

     

    C.    Subject
      to adjustment as provided below, at any such time as the Corporation (or Parent
      or Subsidiary corporation) is a “publicly held corporation” within the meaning
      of Section 162(m) of the Code, no Employee shall be granted one or more options
      or stock issuances within a fiscal year of the Corporation which in the
      aggregate are for the purchase of more than 2,500,000 shares of Common Stock
      (the “Section 162(m) Grant Limit”). An option or stock issuance which is
      canceled in the same fiscal year of the Corporation in which it was granted
      shall continue to be counted against Section 162(m) Grant Limit for such period.
      


    
      
        
        

      

      
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      	IV.	
              STOCK
                SUBJECT TO THE PLAN 

            


    

     

    A.    The
      maximum number of shares of Common Stock which may be issued over the term
      of
      the Plan shall not exceed 10,750,000 shares, cumulatively increased on the
      first
      day of each fiscal year of the Corporation which begins on or after May 1,
      2000
      by an amount equal to the lesser of (a) one million (1,000,000) shares, (b)
      five
      percent (5%) of the number of shares of Common Stock issued and outstanding
      on
      the last day of the immediately preceding fiscal year, or (c) a lesser amount
      of
      shares determined by the Board, and shall consist of authorized but unissued
      or
      reacquired shares of Common Stock, or any combination thereof. Based on the
      foregoing, the Plan has a cumulative reserve of 13,750,000 shares, which is
      equal to the sum of the fixed reserve of 9,750,000 shares, plus the annual
      increase of 1,000,000 shares on each of May 1, 2000, May 1, 2001 and May 1,
      2002. If an outstanding option for any reason expires or is terminated or
      canceled or if shares of stock are acquired upon the exercise of an option
      or
      pursuant to a stock issuance are subject to repurchase by the Corporation and
      are repurchased by the Corporation, the shares of stock allocable to the
      unexercised portion of such option or such repurchased shares of stock shall
      again be available for issuance under the Plan. 

     

    B.    Should
      any change be made to the Common Stock by reason of any stock split, stock
      dividend, recapitalization, combination of shares, exchange of shares or other
      change affecting the outstanding Common Stock as a class without the
      Corporation’s receipt of consideration, appropriate adjustments shall be made to
      (i) the maximum number and/or class of securities issuable under the Plan,
      (ii)
      the number and/or class of securities and the exercise price per share in effect
      under each outstanding option, (iii) the number and/or class of securities
      acquired pursuant to each stock issuance that are subject to vesting and/or
      a
      repurchase right of the Corporation, (iv) the Section 162(m) Grant Limit, and
      (v) the size of the option grants in the Automatic Director Option Grant Program
      described in Article Three. The adjustments described in (ii) and (iii) of
      the
      previous sentence shall be made in a manner which will prevent the dilution
      or
      enlargement of benefits thereunder. The adjustments determined by the Plan
      Administrator shall be final, binding and conclusive. In no event shall any
      such
      adjustments be made in connection with the conversion of one or more outstanding
      shares of the Corporation’s preferred stock into shares of Common
      Stock.

     

    

      ARTICLE
        TWO

       

      DISCRETIONARY
        OPTION GRANT PROGRAM

    

     

    
      	
              I.

            	
              OPTION
                TERMS

            


    

     

    Each
      option shall be evidenced by one or more documents in the form approved by
      the
      Plan Administrator; provided, however, that each such document shall comply
      with
      the terms specified below. Each document evidencing an Incentive Option shall,
      in addition, comply with the terms of the Plan applicable to Incentive Options.
      

     

    A.    Exercise
      Price.

     

    1.    The
      exercise price per share shall be determined by the Plan Administrator.



    
      
        
        

      

      
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    2.    The
      exercise price shall become immediately due upon exercise of the option and
      shall, subject to the documents evidencing the option, be made: 

     

    a.    in
      cash,
      cash equivalent, or check made payable to the Corporation; 

     

    b.    in
      shares
      of Common Stock held for the requisite period necessary to avoid a charge to
      the
      Corporation’s earnings for financial reporting purposes and valued at Fair
      Market Value on the Exercise Date; 

     

    c.    to
      the
      extent the option is exercised for vested shares, through a special sale and
      remittance procedure pursuant to which the Optionee shall concurrently provide
      irrevocable instructions (a) to a Corporation-designated brokerage firm to
      effect the immediate sale of the purchased shares and remit to the Corporation,
      out of the sale proceeds available on the settlement date, sufficient funds
      to
      cover the aggregate exercise price payable for the purchased shares plus all
      applicable Federal, state and local income and employment taxes required to
      be
      withheld by the Corporation by reason of such exercise and (b) to the
      Corporation to deliver the certificates for the purchased shares directly to
      such brokerage firm in order to complete the sale; 

     

    d.    provided
      that the person to whom the option is granted is an Employee and in the
      Corporation’s sole discretion at the time the option is exercised, by delivery
      of a promissory note in a form approved by the Corporation for the aggregate
      exercise price, provided that, (1) any promissory note used to pay the exercise
      price shall be subject to the provisions of paragraph A.3 below, and (2) if
      the
      Corporation is incorporated in the State of Delaware, the portion of the
      aggregate exercise price not less than the par value of the shares being
      acquired shall be paid in cash; 

     

    e.    by
      such
      other consideration as may be approved by the Board from time to time to the
      extent permitted by applicable law; or 

     

    f.    by
      any
      combination thereof. 

     

    g.    The
      Board
      may at any time or from time to time, grant options which do not permit all
      of
      the foregoing forms of consideration to be used in payment of the exercise
      price
      or which otherwise restrict one or more forms of consideration. 

     

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


    
      
        
        

      

      
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    B.    Exercise
      and Term of Options.
      Each
      option shall be exercisable at such time or times, during such period and for
      such number of shares as shall be determined by the Plan Administrator and
      set
      forth in the documents evidencing the option grant; provided, however, that
      no
      option granted to a prospective Employee, prospective Consultant, prospective
      non-employee Director may become exercisable prior to the date on which such
      person commences services with the Corporation (or any Parent or Subsidiary
      corporation). 

     

    C.    Effect
      of Termination of Service.
      The
      following provisions shall govern the exercise of any options held by the
      Optionee at the time of cessation of Service or death except as otherwise set
      forth in the stock option agreement: 

     

    1.    Should
      the Optionee cease to remain in Service for any reason other than Disability,
      death or Misconduct, then the Optionee shall have a period of three (3) months
      following the date of such cessation of Service during which to exercise each
      outstanding option held by such Optionee. 

     

    2.    Should
      such Service terminate by reason of Disability, then the Optionee shall have
      a
      period of twelve (12) months following the date of such cessation of Service
      during which to exercise each outstanding option held by such Optionee.


     

    3.    Should
      the Optionee die while holding one or more outstanding options, then the
      personal representative of the Optionee’s estate or the person or persons to
      whom the option is transferred pursuant to the Optionee’s will or in accordance
      with the laws of descent and distribution shall have a period of twelve (12)
      months following the date of the Optionee’s death during which to exercise each
      such option. 

     

    4.    Notwithstanding
      the foregoing, if the exercise of an option within the applicable time periods
      set forth above is prevented by the provisions of Section V of Article Five
      below, the option shall remain exercisable until three (3) months after the
      date
      the Optionee is notified by the Corporation that the option is exercisable,
      but
      in any event no later than the specified expiration of the option term.


     

    5.    Notwithstanding
      the foregoing, if a sale within the applicable time periods set forth above
      of
      shares acquired upon the exercise of the option would subject the Optionee
      to
      suit under Section 16(b) of the 1934 Act, the option shall remain exercisable
      until the earliest to occur of (i) the tenth (10th) day following the date
      on
      which a sale of such shares by the Optionee would no longer be subject to such
      suit, (ii) the one hundred and ninetieth (190th) day after the Optionee’s
      termination of Service, or (iii) the specified expiration of the option term.
      

     

    6.    Under
      no
      circumstances, however, shall any option be exercisable after the specified
      expiration of the option term. 

     

    7.    During
      the applicable post-Service exercise period, the option may not be exercised
      in
      the aggregate for more than the number of vested shares for which the option
      is
      exercisable on the date of the Optionee’s cessation of Service. Upon the
      expiration of the applicable exercise period or (if earlier) upon the expiration
      of the option term, the


    
      
        
        

      

      
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    option
      shall terminate and cease to be outstanding for any vested shares for which
      the
      option has not been exercised. However, the option shall, immediately upon
      the
      Optionee’s cessation of Service, terminate and cease to be outstanding to the
      extent it is not exercisable for vested shares on the date of such cessation
      of
      Service. 

     

    8.    Should
      Optionee’s Service be terminated for Misconduct, then all outstanding options
      held by the Optionee shall terminate immediately and cease to remain
      outstanding. 

     

    D.    Stockholder
      Rights.
      The
      holder of an option shall have no stockholder rights with respect to the shares
      subject to the option until such person shall have exercised the option, paid
      the exercise price and become a holder of record of the purchased shares.


     

    E.    Transferability
      of Options.
      During
      the lifetime of the Optionee, an option shall be exercisable only by the
      Optionee or the Optionee’s guardian or legal representative. No option shall be
      assignable or transferable by the Optionee, except by will or by the laws of
      descent and distribution. Notwithstanding the foregoing, to the extent permitted
      by the Board, in its discretion, and set forth in the option agreement
      evidencing such option, a Non-Statutory option shall be assignable or
      transferable subject to the applicable limitations, if any, described in the
      General Instructions to Form S-8 Registration Statement under the Securities
      Act. 

     

    F.    Withholding.
      The
      Corporation’s obligation to deliver shares of Common Stock upon the exercise of
      any options granted under the Plan shall be subject to the satisfaction of
      all
      applicable federal, state, local, and foreign income and employment tax
      withholding requirements. 

     

    
      	
              II.

            	
              INCENTIVE
                OPTIONS

            


    

     

    The
      terms
      specified below shall be applicable to all Incentive Options. Except as modified
      by the provisions of this Section II, all the provisions of the Plan shall
      be
      applicable to Incentive Options. Options which are specifically designated
      as
      Non-Statutory Options shall not be subject to the terms specified in this
      Section II. 

     

    A.    Eligibility.
      Incentive Options may only be granted to Employees. Any person who is not an
      Employee on the effective date of the grant of an option to such person may
      be
      granted only a Non-Statutory Option. An Incentive Option granted to a
      prospective Employee upon the condition that such person become an Employee
      shall be deemed granted effective on the date such person commences service
      as
      an Employee with the Corporation or Parent or Subsidiary corporation, with
      an
      exercise price determined as of such date. 

     

    B.    Exercise
      Price.
      The
      exercise price per share shall be fixed by the Plan Administrator in accordance
      with the following provisions: 

     

    1.    The
      exercise price per share shall not be less than one hundred percent (100%)
      of
      the Fair Market Value per share of Common Stock on the option grant date.


     


    
      
        
        

      

      
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    2.    If
      the
      person to whom the option is granted is a Ten Percent Stockholder, then the
      exercise price per share shall not be less than one hundred ten percent (110%)
      of the Fair Market Value per share of Common Stock on the option grant date.
      

     

    C.    Dollar
      Limitation.
      The
      aggregate Fair Market Value of the shares of Common Stock (determined as of
      the
      respective date or dates of grant) for which one or more options granted to
      any
      Employee under the Plan (or any other option plan of the Corporation or any
      Parent or Subsidiary corporation) may for the first time become exercisable
      as
      Incentive Options during any one (1) calendar year shall not exceed the sum
      of
      One Hundred Thousand Dollars ($100,000). To the extent the Employee holds two
      (2) or more such options which become exercisable for the first time in the
      same
      calendar year, the foregoing limitation on the exercisability of such options
      as
      Incentive Options shall be applied on the basis of the order in which such
      options are granted. 

     

    D.    Term
      of Incentive Options.
      No
      Incentive Option shall be exercisable after the expiration of ten (10) years
      after the effective date of grant of such Incentive Option and no Incentive
      Option granted to a Ten Percent Stockholder shall be exercisable after the
      expiration of five (5) years after the effective date of grant of such option.
      

     

    

      ARTICLE
        THREE

       

      AUTOMATIC
        DIRECTOR OPTION GRANT PROGRAM

    

     

    The
      terms
      specified below shall be applicable to all Director Options. Each Director
      Option shall be evidenced by an option agreement in such form as the Board
      shall
      from time to time establish. 

     

    
      	
              I.

            	
              OPTION
                TERMS

            


    

     

    A.    Eligibility.
      Only
      individuals who are non-employee members of the Board are eligible to receive
      Director Options. 

     

    B.    Automatic
      Grant.
      Subject
      to the Optionee’s execution of an appropriate option agreement, Director Options
      shall be granted automatically and without further action of the Board, as
      follows: 

     

    1.    Each
      individual who is first elected or appointed to the Board on or after August
      1,
      2002, and who is not an Employee on the date of such election or appointment,
      shall be granted an option to purchase One Hundred Thousand (100,000) shares
      of
      Common Stock on the date of such initial election or appointment (an “Initial
      Grant”). 

     

    2.    On
      May 1
      of each year, beginning May 1, 2003, each individual who is serving as a
      non-employee member of the Board on such date shall be granted an option to
      purchase Twenty-five Thousand (25,000) shares of Common Stock (an “Annual
      Grant”). Notwithstanding the foregoing, a non-employee Director who has not
      served continuously as a member of the Board for at least six (6) months as
      of
      such date shall not receive a Director Option on such date. 


    
      
        
        

      

      
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    3.    Notwithstanding
      the foregoing, any person may elect not to receive a Director Option by
      delivering written notice of such election to the Board no later than the day
      prior to the date such Director Option would otherwise be granted. A person
      so
      declining a Director Option shall receive no payment or other consideration
      in
      lieu of such declined Director Option. A person who has declined a Director
      Option may revoke such election by delivering written notice of such revocation
      to the Board no later than the day prior to the date such Director Option would
      be granted pursuant this section. 

     

    C.    Exercise
      Price.
      The
      exercise price per share of Common Stock subject to a Director Option shall
      be
      the Fair Market Value of a share of Common Stock on the date the Director Option
      is granted. 

     

    D.    Term
      of Director Options.
      No
      Director Option shall be exercisable after the expiration of ten (10) years
      after the effective date of grant of such Director Option unless earlier
      terminated pursuant to the terms of the Plan or option agreement. 

     

    E.    Exercise
      and Vesting of Director Options.
      Each
      Initial Grant will become vested and exercisable in equal monthly increments
      over a period of four (4) years measured from the automatic grant date, subject
      to the Optionee’s continued Service. Each Annual Grant will become vested and
      exercisable in equal monthly increments over a period of one (1) year, with
      vesting commencing on the date three (3) years after the automatic grant date
      (i.e. the option will be fully vested four (4) years after the automatic grant
      date), subject to the Optionee’s continued Service. In addition, the shares
      subject to each Director Option outstanding at the time of a Corporate
      Transaction shall automatically vest in full so that each such Director Option
      shall, immediately prior to the effective date of the Corporate Transaction,
      become fully exercisable for all of the shares of Common Stock at the time
      subject to that option and may be exercised for any or all of those shares
      as
      fully-vested shares of Common Stock.

     

    F.    Termination
      of Service.
      The
      following provisions shall govern the exercise of any Director Options held
      by
      the Optionee upon his or her termination of Service: 

     

    1.    Should
      the Optionee cease to remain in Service for any reason, the Optionee (or, in
      the
      event of Optionee’s death, the personal representative of the Optionee’s estate
      or the person or persons to whom the option is transferred pursuant to the
      Optionee’s will or the laws of inheritance) shall have a period of twelve (12)
      months following the date of such cessation of Service during which to exercise
      each outstanding Director Option held by such Optionee. 

     

    2.    Notwithstanding
      the foregoing, if the exercise of an option within the applicable time period
      set forth above is prevented by the provisions of Section V of Article Five
      below, the option shall remain exercisable until three (3) months after the
      date
      the Optionee is notified by the Corporation that the option is exercisable,
      but
      in any event no later than the specified expiration of the option term.


     

    3.    Notwithstanding
      the foregoing, if a sale within the applicable time period set forth above
      of
      shares acquired upon the exercise of the option would subject the Optionee
      to
      suit under Section 16(b) of the 1934 Act, the option shall remain
      exercisable


    
      
        
        

      

      
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    until
      the
      earliest to occur of (i) the tenth (10th) day following the date on which a
      sale
      of such shares by the Optionee would no longer be subject to such suit, (ii)
      the
      one hundred and ninetieth (190th) day after the Optionee’s termination of
      Service, or (iii) the specified expiration of the option term. 

     

    4.    Under
      no
      circumstances, however, shall any option be exercisable after the specified
      expiration of the option term. 

     

    5.    During
      the post-Service exercise period, the option may not be exercised in the
      aggregate for more than the number of vested shares for which the option is
      exercisable on the date of the Optionee’s cessation of Service. Upon the
      expiration of the exercise period or (if earlier) upon the expiration of the
      option term, the option shall terminate and cease to be outstanding for any
      vested shares for which the option has not been exercised. However, the option
      shall, immediately upon the Optionee’s cessation of Service, terminate and cease
      to be outstanding to the extent it is not exercisable for vested shares on
      the
      date of such cessation of Service. 

     

    
      	
              II.

            	
              REMAINING
                TERMS

            


    

     

    Except
      as
      otherwise described above, the remaining terms of each option granted under
      the
      Automatic Director Option Grant Program shall be the same as the terms set
      forth
      in Section I of Article Two as in effect for the option grants made under the
      Discretionary Option Grant Program. 

     

    

      ARTICLE
        FOUR

       

      STOCK
        ISSUANCE PROGRAM

    

     

    
      	
              I.

            	
              TERMS
                AND CONDITIONS OF STOCK
                ISSUANCES

            


    

     

    Shares
      of
      Common Stock shall be issued under the Stock Issuance Program through direct
      and
      immediate purchases without any intervening stock options grants. The issued
      shares shall be evidenced by a Stock Issuance Agreement (“Issuance Agreement”)
      that complies with the terms and conditions of this Article Four. 

     

    A.    Consideration.

     

    Shares
      of
      Common Stock shall be issued under the Plan for one or more of the following
      items of consideration, which the Plan Administrator may deem appropriate in
      each individual instance: 

     

    1.    cash
      or
      cash equivalents (such as a personal check or bank draft) paid to the
      Corporation; 

     

    2.    Common
      Stock of the Corporation valued at Fair Market Value on the date of issuance;
      


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    


    3.    a
      promissory note payable to the Corporation’s order in one or more installments,
      which may be subject to cancellation in whole or in part upon terms and
      conditions established by the Plan Administrator; 

     

    4.    past
      services rendered to the Corporation or any parent or subsidiary corporation;
      or


     

    5.    any
      combination of the above approved by the Plan Administrator. 

     

    Shares
      may, in the absolute discretion of the Plan Administrator, be issued for
      consideration with a value less than one-hundred percent (100%) of the Fair
      Market Value of such shares, but in no event less than eighty-five percent
      (85%)
      of such Fair Market Value. 

     

    B.    Vesting
      Provisions.
      

     

    1.    Shares
      of
      Common Stock issued under this Article Four may, in the absolute discretion
      of
      the Plan Administrator, be fully and immediately vested upon issuance or may
      vest in one or more installments over the Participant’s period of Service. The
      effect which death, disability or other event designated by the Plan
      Administrator is to have upon the vesting schedule shall be determined by the
      Plan Administrator and incorporated into the Issuance Agreement executed by
      the
      Corporation and the Participant at the time such unvested shares are issued.
      

     

    2.    The
      Participant shall have full stockholder rights with respect to any shares of
      Common Stock issued to him or her under this Article Four, whether or not his
      or
      her interest in those shares is vested. Accordingly, the Participant shall
      have
      the right to vote such shares and to receive any regular cash dividends paid
      on
      such shares. Any new, additional or different shares of stock or other property
      (including money paid other than as a regular cash dividend) which the
      Participant may have the right to receive with respect to his or her unvested
      shares by reason of any stock dividend, stock split, reclassification of Common
      Stock or other similar change in the Corporation’s capital structure or by
      reason of any Corporate Transaction shall be issued, subject to (i) the same
      vesting requirements applicable to his or her unvested shares and (ii) such
      escrow arrangements as the Plan Administrator shall deem appropriate.


     

    3.    Should
      the Participant cease to remain in Service while holding one or more unvested
      shares of Common Stock under this Article Four, then those shares shall be
      immediately surrendered to the Corporation for cancellation, and the Participant
      shall have no further stockholder rights with respect to those shares. The
      Corporation shall repay to the Participant the cash consideration paid for
      the
      surrendered shares and shall cancel the principal balance of any outstanding
      purchase-money note of the Participant to the extent attributable to such
      surrendered shares. The surrendered shares may, at the Plan Administrator’s
      discretion, be retained by the Corporation as treasury shares or may be retired
      to authorized but unissued share status. 

     

    4.    The
      Plan
      Administrator may in its discretion elect to waive the surrender and
      cancellation of one or more unvested shares of Common Stock (or other assets
      attributable thereto) which should otherwise occur upon the non-completion
      of
      the


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    


    vesting
      schedule applicable to such shares. Such waiver shall result in the immediate
      vesting of the Participant’s interest in the shares of Common Stock as to which
      the waiver applies. Such wavier may be effected at any time, whether before
      or
      after the Participant’s cessation of Service. 

     

    
      	
              II.

            	
              TRANSFER
                RESTRICTIONS/SHARE ESCROW 

            


    

     

    A.    Certificates
      evidencing unvested shares issued pursuant to this Article Four may, in the
      Plan
      Administrator’s discretion, be held in escrow by the Corporation until the
      Participant’s interest in such shares vests or may be held directly to the
      Participant with restrictive legends indicating that the shares are unvested.
      To
      the extent an escrow arrangement is utilized, the unvested shares and any
      securities or other assets issued with respect to such shares (other than
      regular cash dividends) shall be delivered in escrow to the Corporation to
      be
      held until the Participant’s interest in such shares (or other securities or
      assets) vests. Alternatively, if the unvested shares are issued directly to
      the
      Participant, the restrictive legend on the certificates for such shares shall
      read substantially as follows: 

     

    “THE
      SHARES REPRESENTED BY THIS CERTIFICATE ARE UNVESTED AND ARE ACCORDINGLY SUBJECT
      TO (I) CERTAIN TRANSFER RESTRICTIONS AND TO (II) CANCELLATION OR OTHER
      REPURCHASE IN THE EVENT THE REGISTERED HOLDER (OR HIS/HER PREDECESSOR IN
      INTEREST) CEASES TO REMAIN IN THE CORPORATION’S SERVICE. SUCH TRANSFER
      RESTRICTIONS AND THE TERMS AND CONDITIONS OF SUCH CANCELLATION OR REPURCHASE
      ARE
      SET FORTH IN A STOCK ISSUANCE AGREEMENT BETWEEN THE CORPORATION AND THE
      REGISTERED HOLDER (OR HIS/HER PREDECESSOR IN INTEREST) DATED __________, A
      COPY
      OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION.” 

     

    B.    The
      Participant shall have no right to transfer any unvested shares of Common Stock
      issued to him or her under this Article Four. For purposes of this restriction,
      the term (“transfer”) shall include (without limitation) any sale, pledge,
      assignment, encumbrance, gift, or other disposition of such shares, whether
      voluntary or involuntary, other than an Ownership Change Event. Upon any such
      attempted transfer, the unvested shares shall immediately be cancelled, and
      neither the Participant nor the proposed transferee shall have any rights with
      respect to those shares. However, the Participant shall have the right to make
      a
      gift of unvested shares acquired under the Plan to his or her spouse or issue,
      including adopted children, or to a trust established for such spouse or issue,
      provided the donee of such shares delivers to the Corporation a written
      agreement to be bound by all the provisions of the Plan and the Issuance
      Agreement applicable to the gifted shares. 

     

    

      ARTICLE
        FIVE

       

      MISCELLANEOUS

    

     

    
      	
              I.

            	
              CORPORATE
                TRANSACTIONS

            


    

     

    A.    The
      shares subject to each option outstanding under the Plan (other than a Director
      Option) at the time of a Corporate Transaction shall automatically vest in
      full
      so that each such option shall, immediately prior to the effective date of
      the
      Corporate Transaction,


    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    


    become
      fully exercisable for all of the shares of Common Stock at the time subject
      to
      that option and may be exercised for any or all of those shares as fully-vested
      shares of Common Stock. However, the shares subject to an outstanding option
      shall not vest on such an accelerated basis if and to the extent: (i) such
      option is assumed by the successor corporation (or parent thereof) in the
      Corporate Transaction and the Corporation’s repurchase rights with respect to
      the unvested option shares are concurrently assigned to such successor
      corporation (or parent thereof) or (ii) such option is to be replaced with
      a
      cash incentive program of the successor corporation which preserves the spread
      existing on the unvested option shares at the time of the Corporate Transaction
      and provides for subsequent payout in accordance with the same vesting schedule
      applicable to those unvested option shares or (iii) the acceleration of such
      option is subject to other limitations imposed by the Plan Administrator at
      the
      time of the option grant. The acceleration of vesting of Director Options shall
      be governed by Section I(E) of Article Three, and accordingly, this Section
      I(A)
      of Article Five shall not be applicable to Director Options. 

     

    B.    All
      outstanding repurchase rights shall also terminate automatically, and the shares
      of Common Stock subject to those terminated rights shall immediately vest in
      full, in the event of any Corporate Transaction, except to the extent: (i)
      those
      repurchase rights are assigned to the successor corporation (or parent thereof)
      in connection with such Corporate Transaction or (ii) such accelerated vesting
      is precluded by other limitations imposed by the Plan Administrator at the
      time
      the repurchase right is issued. 

     

    C.    The
      Corporation shall use its best efforts to provide at least twenty (20) days
      prior written notice of the occurrence of any Corporate Transaction in which
      the
      options or repurchase rights under the Plan are not to be assumed by or assigned
      to the successor corporation and such options or repurchase rights vest or
      terminate on an accelerated basis. 

     

    D.    Immediately
      following the consummation of the Corporate Transaction, all outstanding options
      shall terminate and cease to be outstanding, except to the extent assumed by
      the
      successor corporation (or parent thereof). 

     

    E.    Each
      option which is assumed in connection with a Corporate Transaction shall be
      appropriately adjusted, immediately after such Corporate Transaction, to apply
      to the number and class of securities which would have been issuable to the
      Optionee in consummation of such Corporate Transaction, had the option been
      exercised immediately prior to such Corporate Transaction. Appropriate
      adjustments shall also be made to (i) the number and class of securities
      available for issuance under the Plan following the consummation of such
      Corporate Transaction and (ii) the exercise price payable per share under each
      outstanding option, provided the aggregate exercise price payable for such
      securities shall remain the same. 

     

    F.    The
      Plan
      Administrator shall have the discretion, exercisable either at the time the
      option or stock issuance is granted or at any time while the option remains
      outstanding or shares acquired pursuant to a stock issuance are unvested, to
      provide for the automatic acceleration (in whole or in part) of one or more
      outstanding options and the immediate termination of the Corporation’s
      repurchase rights with respect to the shares subject to those options or any
      stock issuance upon the occurrence of a Corporate Transaction, whether or not
      those options or repurchase rights are to be assumed or assigned in the
      Corporate Transaction. 


    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    


    G.    The
      Plan
      Administrator shall also have full power and authority, exercisable either
      at
      the time the option or stock issuance is granted or at any time while the option
      remains outstanding or shares acquired pursuant to a stock issuance are
      unvested, to structure such option or stock issuance so that the shares subject
      to that option or stock issuance will automatically vest on an accelerated
      basis
      should the Optionee’s or Participant’s Service terminate by reason of an
      Involuntary Termination, as defined in the agreement evidencing the option
      or
      stock issuance, within a designated period (not to exceed eighteen (18) months)
      following the effective date of any Corporate Transaction in which the option
      or
      stock issuance are assumed and the repurchase rights applicable to the unvested
      option shares or stock issuance shares do not otherwise terminate. Any option
      so
      accelerated shall remain exercisable for the fully-vested option shares until
      the earlier of (i) the expiration of the option term or (ii) the expiration
      of
      the one (1)-year period measured from the effective date of the Involuntary
      Termination. In addition, the Plan Administrator may provide that one or more
      of
      the Corporation’s outstanding repurchase rights with respect to shares held by
      the Optionee or Participant at the time of such Involuntary Termination shall
      immediately terminate on an accelerated basis, and the shares subject to those
      terminated rights shall accordingly vest at that time. 

     

    H.    The
      portion of any Incentive Option accelerated in connection with a Corporate
      Transaction shall remain exercisable as an Incentive Option only to the extent
      the applicable One Hundred Thousand Dollar limitation is not exceeded. To the
      extent such dollar limitation is exceeded, the accelerated portion of such
      option shall be exercisable as a Non-Statutory Option under federal tax laws.
      

     

    I.    The
      grant
      of options or stock issuances under the Plan shall in no way affect the right
      of
      the Corporation to adjust, reclassify, reorganize or otherwise change its
      capital or business structure or to merge, consolidate, dissolve, liquidate
      or
      sell or transfer all or any part of its business or assets. 

     

    
      	
              II.

            	
              EFFECTIVE
                DATE AND TERM OF THE PLAN

            


    

     

    A.    The
      Plan
      became effective when adopted by the Board on May 8, 1995. 

     

    B.    The
      Plan
      shall terminate upon the earliest of: (i) the date on which all shares available
      for issuance under the Plan have been issued and all restrictions on such shares
      under the terms of the Plan and the agreements evidencing options or stock
      issuances granted under the Plan have lapsed, or (ii) its termination by the
      Board; provided, however, that, all Incentive Options shall be granted, if
      at
      all, on or before May 7, 2005. 

     

    
      	
              III.

            	
              AMENDMENT
                OF THE PLAN

            


    

     

    The
      Board
      shall have complete and exclusive power and authority to amend or modify the
      Plan in any or all respects. However, subject to changes in applicable law,
      regulations or rules that would permit otherwise, without the approval of the
      Corporation’s stockholders, there shall be (i) no increase in the maximum
      aggregate number of shares of Common Stock that may be issued under the Plan
      (except by operation of the provisions of Section IV(B) of Article One), (ii)
      no
      change in the class of persons eligible to receive Incentive Options, and (iii)
      no other amendment of the Plan that would require approval of the Corporation’s
      stockholders under any


    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    


    applicable
      law, regulation or rule. No amendment or modification of the Plan shall affect
      any then outstanding option or unvested shares acquired pursuant to a stock
      issuance unless expressly provided by the Board. In any event, no amendment
      or
      modification of the Plan may adversely affect any then outstanding option or
      unvested shares acquired pursuant to a stock issuance without the consent of
      the
      Optionee or Participant, unless such amendment or modification is required
      to
      enable an option designated as an Incentive Option to qualify as an Incentive
      Option or is necessary to comply with any applicable law, regulation or rule.
      

     

    
      	
              IV.

            	
              USE
                OF PROCEEDS

            


    

     

    Any
      cash
      proceeds received by the Corporation from the sale of shares of Common Stock
      under the Plan shall be used for general corporate purposes. 

     

    
      	
              V.

            	
              REGULATORY
                APPROVALS

            


    

     

    The
      implementation of the Plan, the granting of any option hereunder and the
      issuance of any shares of Common Stock upon the exercise of any option shall
      be
      subject to the Corporation’s procurement of all approvals and permits required
      by regulatory authorities having jurisdiction over the Plan, the options granted
      under it and the shares of Common Stock issued pursuant to it. 

     

    
      	
              VI.

            	
              NO
                EMPLOYMENT OR SERVICE
                RIGHTS

            


    

     

    Nothing
      in the Plan shall confer upon the Optionee or Participant any right to continue
      in Service for any period of specific duration or interfere with or otherwise
      restrict in any way the rights of the Corporation (or any Parent or Subsidiary
      corporation employing or retaining the Optionee or Participant) or of the
      Optionee or Participant, which rights are hereby expressly reserved by each,
      to
      terminate the Optionee’s or Participant’s Service at any time for any reason,
      with or without cause. 

     

    
      	
              VII.

            	
              FINANCIAL
                REPORTS

            


    

     

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


    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    


    APPENDIX

     

    The
      following definitions shall be in effect under the Plan:

     

    A.    Board
      shall
      mean the Corporation’s Board of Directors. 

     

    B.    Code
      shall
      mean the Internal Revenue Code of 1986, as amended. 

     

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

     

    D.    Common
      Stock
      shall
      mean the Corporation’s common stock. 

     

    E.    Consultant
      shall
      mean a person engaged to provide consulting or advisory services (other than
      as
      an Employee or a Director) to the Corporation or any Parent or Subsidiary
      corporation, provided that the identity of such person, the nature of such
      services or the entity to which such services are provided would not preclude
      the Corporation from offering or selling securities to such person pursuant
      to
      the Plan in reliance on either the exemption from registration provided by
      Rule
      701 under the Securities Act or, if the Corporation is required to file reports
      pursuant to Section 13 or 15(d) of the Exchange Act, registration on a Form
      S-8
      Registration Statement under the Securities Act. 

     

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

     

    G.    Corporation
      shall
      mean Agile Software Corporation, a Delaware corporation, and any successor
      corporation thereto. 

     

    H.    Director
      shall
      means a member of the Board or of the board of directors of any other Parent
      or
      Subsidiary corporation. 


    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    


    I.    Disability
      shall
      mean the permanent and total disability on the Optionee or Participant within
      the meaning of Section 22(e)(3) of the Code. 

     

    J.    Employee
      shall
      mean an individual who is in the employ of the Corporation (or any Parent or
      Subsidiary corporation), subject to the control and direction of the employer
      entity as to both the work to be performed and the manner and method of
      performance. 

     

    K.    Exercise
      Date
      shall
      mean the date on which the Corporation shall have received written notice of
      the
      option exercise. 

     

    L.    Fair
      Market Value
      per
      share of Common Stock on any relevant date shall be determined in accordance
      with the following provisions: 

     

    (i)    If
      the
      Common Stock is at the time traded on the Nasdaq National Market, then the
      Fair
      Market Value shall be the closing selling price per share of Common Stock on
      the
      date in question, as such price is reported by the National Association of
      Securities Dealers on the Nasdaq National Market or any successor system. If
      there is no closing selling price for the Common Stock on the date in question,
      then the Fair Market Value shall be the closing selling price on the last
      preceding date for which such quotation exists. 

     

    (ii)    If
      the
      Common Stock is at the time listed on any Stock Exchange, then the Fair Market
      Value shall be the closing selling price per share of Common Stock on the date
      in question on the Stock Exchange determined by the Plan Administrator to be
      the
      primary market for the Common Stock, as such price is officially quoted in
      the
      composite tape of transactions on such exchange. If there is no closing selling
      price for the Common Stock on the date in question, then the Fair Market Value
      shall be the closing selling price on the last preceding date for which such
      quotation exists. 

     

    (iii)    If
      the
      Common Stock is at the time neither listed on any Stock Exchange nor traded
      on
      the Nasdaq National Market, then the Fair Market Value shall be determined
      by
      the Plan Administrator after taking into account such factors as the Plan
      Administrator shall deem appropriate. 

     

    M.    Incentive
      Option
      shall
      mean an option which satisfies the requirements of Code Section 422.


     

    N.    Insider
      shall
      mean an officer or Director of the Corporation or any other person whose
      transactions in Common Stock are subject to Section 16 of the 1934 Act.


     

    O.    Involuntary
      Termination
      shall
      mean the termination of the Service of any individual as defined in the
      agreement evidencing the option or stock issuance. 

     

    P.    Misconduct
      shall
      mean the commission of any act of fraud, embezzlement or dishonesty by the
      Optionee or Participant, any unauthorized use or disclosure by such person
      of
      confidential information or trade secrets of the Corporation (or any Parent
      or
      Subsidiary corporation), or any other intentional misconduct by such person
      adversely affecting the business or affairs of the Corporation (or any Parent
      or
      Subsidiary corporation) in a material manner. The


    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    


    foregoing
      definition shall not be deemed to be inclusive of all the acts or omissions
      which the Corporation (or any Parent or Subsidiary corporation) may consider
      as
      grounds for the dismissal or discharge of any Optionee, Participant or other
      person in the Service of the Corporation (or any Parent or Subsidiary
      corporation). 

     

    Q.    1934
      Act
      shall
      mean the Securities Exchange Act of 1934, as amended. 

     

    R.    Non-Statutory
      Option
      shall
      mean an option not intended to satisfy the requirements of Code Section 422.
      

     

    S.    Ownership
      Change Event
      shall be
      deemed to have occurred if any of the following occurs with respect to the
      Corporation: (i) the direct or indirect sale or exchange in a single or series
      of related transactions by the stockholders of the Corporation of more than
      fifty percent (50%) of the voting stock of the Corporation; (ii) a merger or
      consolidation in which the Corporation is a party; (iii) the sale, exchange,
      or
      transfer of all or substantially all of the assets of the Corporation; or (iv)
      a
      liquidation or dissolution of the Corporation. 

     

    T.    Optionee
      shall
      mean any person to whom an option is granted pursuant to the Option Grant
      Program under the Plan. 

     

    U.    Parent
      shall
      mean any corporation (other than the Corporation) in an unbroken chain of
      corporations ending with the Corporation, provided each corporation in the
      unbroken chain (other than the Corporation) owns, at the time of the
      determination, stock possessing fifty percent (50%) or more of the total
      combined voting power of all classes of stock in one of the other corporations
      in such chain. 

     

    V.    Participant
      shall
      mean any person to whom a stock issuance or stock bonus is granted pursuant
      to
      the Stock Issuance Program under the Plan. 

     

    W.    Plan
      shall
      mean the Corporation’s 1995 Stock Option Plan, as set forth in this document.


     

    X.    Plan
      Administrator
      shall
      mean either the Board or the Committee, to the extent the Committee is at the
      time responsible for the administration of the Plan. 

     

    Y.    Securities
      Act
      shall
      mean the Securities Act of 1933, as amended. 

     

    Z.    Service
      shall
      mean an Optionee’s or Participant’s employment or service with the Corporation
      or Parent or Subsidiary corporation, whether in the capacity of an Employee,
      a
      Director or a Consultant. Unless otherwise determined by the Board, an
      Optionee’s or Participant’s Service shall not be deemed to have terminated
      merely because of a change in the capacity in which the Optionee or Participant
      renders Service to the Corporation or Parent or Subsidiary corporation or a
      change in the Corporation or Parent or Subsidiary corporation for which the
      Optionee or Participant renders such Service, provided that there is no
      interruption or termination of the Optionee’s or Participant’s Service.
      Furthermore, an Optionee’s or Participant’s Service with the Corporation or
      Parent or Subsidiary corporation shall not be deemed to have terminated if
      the
      Optionee or Participant takes any military leave, sick leave, or other bona
      fide
      leave of absence approved by the Corporation; provided, however, that if
      any


    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    


    such
      leave exceeds ninety (90) days, on the one hundred eighty-first (181st) day
      following the commencement of such leave any Incentive Option held by the
      Optionee shall cease to be treated as an Incentive Option and instead shall
      be
      treated thereafter as a Non-Statutory Option unless the Optionee’s right to
      return to Service with the Corporation or Parent or Subsidiary corporation
      is
      guaranteed by statute or contract. Notwithstanding the foregoing, unless
      otherwise designated by the Corporation or required by law, a leave of absence
      shall not be treated as Service for purposes of determining vesting under the
      Optionee’s option agreement or Participant’s stock issuance agreement. An
      Optionee’s or Participant’s Service shall be deemed to have terminated either
      upon an actual termination of Service or upon the corporation for which the
      Optionee or Participant performs Service ceasing to be a Parent or Subsidiary.
      Subject to the foregoing, the Corporation, in its discretion, shall determine
      whether an Optionee’s or Participant’s Service has terminated and the effective
      date of such termination. 

     

    AA.    Stock
      Exchange
      shall
      mean either the American Stock Exchange or the New York Stock Exchange.


     

    BB.    Subsidiary
      shall
      mean any corporation (other than the Corporation) in an unbroken chain of
      corporations beginning with the Corporation, provided each corporation (other
      than the last corporation) in the unbroken chain owns, at the time of the
      determination, stock possessing fifty percent (50%) or more of the total
      combined voting power of all classes of stock in one of the other corporations
      in such chain. 

     

    CC.    Ten
      Percent Stockholder
      shall
      mean the owner of stock (as determined under Code Section 424(d)) possessing
      more than ten percent (10%) of the total combined voting power of all classes
      of
      stock of the Corporation (or any Parent or Subsidiary corporation).


     

    
      
        
        

      

      19