**EXHIBIT 10.3**

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**AVISTAR COMMUNICATIONS CORPORATION**

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**2000 DIRECTOR OPTION PLAN**

 

**(As Amended Effective June 1, 2005)**

 

# 1.                                       Purposes of the Plan. The purposes of this 2000 Director Option Planare to attract and retain the best available personnel for service as OutsideDirectors (as defined herein) of the Company, to provide additional incentiveto the Outside Directors of the Company to serve as Directors, and to encouragetheir continued service on the Board.

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Alloptions granted hereunder shall be nonstatutory stock options.

 

# 2.                                       Definitions. As used herein, the following definitions shall apply:

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## (a)                                  “AnnualMeeting of Stockholders” shall mean the Company’s annual meeting ofstockholders.

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## (b)                                 “Board”shall mean the Board of Directors of the Company.

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## (c)                                  “Code”shall mean the Internal Revenue Code of 1986, as amended.

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## (d)                                 “CommonStock” shall mean the common stock of the Company.

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## (e)                                  “Company”shall mean Avistar Communications Corporation, a Delaware corporation.

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## (f)                                    “Consultant”means any person who is engaged by the Company or any Parent or Subsidiary torender consulting or advisory services to such entity.

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## (g)                                 “Director”shall mean a member of the Board.

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## (h)                                 “Disability”shall mean total and permanent disability as defined in section 22(e)(3) ofthe Code.

 

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## (i)                                     “Employee”shall mean any person, including officers and Directors, employed by theCompany or any Parent or Subsidiary of the Company. The payment of a Director’sfee by the Company shall not be sufficient in and of itself to constitute “employment”by the Company.

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## (j)                                     “ExchangeAct” shall mean the Securities Exchange Act of 1934, as amended.

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## (k)                                  “FairMarket Value” shall mean, as of any date, the value of Common Stockdetermined as follows:

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### (i)             If the Common Stockis listed on any established stock exchange or a national market system,including without limitation the Nasdaq National Market or The Nasdaq SmallCapMarket of The Nasdaq Stock Market, its Fair Market Value shall be the closingsales price for such stock (or the closing bid, if no sales were reported) asquoted on such exchange or system for the last market trading day prior to thetime of determination as reported in *The Wall Street Journal*or such other source as the Administrator deems reliable;

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### (ii)          If the Common Stock isregularly quoted by a recognized securities dealer but selling prices are notreported, the Fair Market Value of a Share of Common Stock shall be the meanbetween the high bid and low asked prices for the Common Stock for the lastmarket trading day prior to the time of determination, as reported in *The Wall Street Journal* or such other source as the Boarddeems reliable; or

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### (iii)       In the absence of anestablished market for the Common Stock, the Fair Market Value thereof shall bedetermined in good faith by the Board.

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## (l)                                     “InsideDirector” shall mean a Director who is an Employee.

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## (m)                               “Option”shall mean a stock option granted pursuant to the Plan.

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## (n)                                 “Optioned Stock”shall mean the Common Stock subject to an Option.

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## (o)                                 “Optionee”shall mean a Director who holds an Option.

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## (p)                                 “OutsideDirector” shall mean a Director who is not an Employee.

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## (q)                                 “Parent”shall mean a “parent corporation,” whether now or hereafter existing, asdefined in Section 424(e) of the Code.

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## (r)                                    “Plan”shall mean this 2000 Director Option Plan.

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## (s)                                  “ServiceProvider” means a Director or Consultant.

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## (t)                                    “Share”shall mean a share of the Common Stock, as adjusted in accordance with Section 10of the Plan.

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## (u)                                 “Subsidiary”shall mean a “subsidiary corporation,” whether now or hereafter existing, asdefined in Section 424(f) of the Internal Revenue Code of 1986.

 

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# 3.                                       Stock Subject to the Plan. Subject to the provisions of Section 10 ofthe Plan, the maximum aggregate number of Shares which may be optioned andsold under the Plan is 814,000 Shares (the “Pool”) (the Shares may beauthorized, but unissued, or reacquired Common Stock), together with an annualincrease to the number of Shares reserved thereunder on the first day of the Company’sfiscal year, beginning with January 1, 2004, equal to the lesser of (i) 175,000 Shares,(ii) 1.0% of the outstanding Shares of Common Stock on the last day ofeach prior fiscal year or (iii) such amount as determined by the Board.

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If anOption expires or becomes unexercisable without having been exercised in full,the unpurchased Shares which were subject thereto shall become available forfuture grant or sale under the Plan (unless the Plan has terminated). Sharesthat have actually been issued under the Plan shall not be returned to the Planand shall not become available for future distribution under the Plan.

 

# 4.                                       Administration and Grants of Options underthe Plan.

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## (a)                                  Procedurefor Grants. All grants of Options to Outside Directors under this Planshall be automatic and nondiscretionary and shall be made strictly inaccordance with the following provisions:

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### (i)                       No personshall have any discretion to select which Outside Directors shall be grantedOptions or to determine the number of Shares to be covered by Options.

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### (ii)                    Each OutsideDirector shall be automatically granted a one-time Option to purchase 50,000Shares (the “First Option”) on the date on which such person first becomes anOutside Director, whether through election by the stockholders of the Companyor appointment by the Board to fill a vacancy; provided, however, that anInside Director who ceases to be an Inside Director but who remains a Directorshall not receive a First Option. The First Option for an Outside Director whohas not previously received a stock option grant from the Company shall be for50,000 Shares.

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### (iii)                 Each OutsideDirector shall subsequently be automatically granted an Option to purchaseShares (a “Subsequent Option”) on the date of the first meeting of the Boardfollowing the 2005 Annual Meeting of Stockholders, and on January 1stof each year thereafter, commencing with January 1, 2006, provided that (i) heor she is then an Outside Director and (ii) as of such date, he or sheshall have served on the Board for at least the preceding six (6) months. TheSubsequent Option shall be for 25,000 Shares.

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### (iv)                Each OutsideDirector who is a member of the Audit Committee of the Board of Directors shallalso be automatically granted an additional Option to purchase Shares (a “SubsequentAudit Committee Option”) on the date of the first meeting of the Boardfollowing the 2005 Annual Meeting of Stockholders, and on January 1stof each year thereafter, commencing with January 1, 2006, provided that (i) heor she is then a member of the Audit Committee of the Board of Directors. TheSubsequent Audit Committee Option shall be for 10,000 Shares for the Chairmanof the Audit Committee and 5,000 Shares for each other member of the AuditCommittee.

 

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### (v)                   Each OutsideDirector serving on the Board as of June 12, 2001 shall be automaticallygranted an Option to purchase 60,000 Shares at an exercise price equal to 100%of the fair market value on such date (a “One-Time Option”), as approved by thestockholders at the Company’s 2001 Annual Meeting of Stockholders.

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### (vi)                Notwithstandingthe provisions of subsections (ii), (iii), (iv) and (v) hereof,any exercise of an Option granted before the Company has obtained stockholderapproval of the Plan in accordance with Section 16 hereof shall beconditioned upon obtaining such stockholder approval of the Plan in accordancewith Section 16 hereof.

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### (vii)             The terms of a FirstOption granted hereunder shall be as follows:

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#### (A)                              theterm of the First Option shall be ten (10) years.

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#### (B)                                theFirst Option shall be exercisable only while the Optionee remains a ServiceProvider of the Company, except as set forth in Sections 8 and 10 hereof.

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#### (C)                                theexercise price per Share shall be 100% of the Fair Market Value per Share onthe date of grant of the First Option provided, however, that in the case of aFirst Option granted on the effective date of the Company’s initial publicoffering pursuant to a registration statement filed with the Securities andExchange Commission, the exercise price per share shall be the initial publicoffering price per share.

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#### (D)                               subjectto Section 10 hereof, the First Option shall become exercisable cumulativelyas to 1⁄4 of the Shares subject to the First Option on the first anniversary ofthe grant date and 1/48th of the Shares subject to the First Option in eachmonth thereafter on the same day of each month as the grant date (if there isno corresponding day in any month, then the last day of such month), so thatthe First Option shall be fully exercisable four years after its date of grant,provided that the Optionee continues to serve as a Service Provider on suchdates.

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### (viii)          The terms of aSubsequent Option granted hereunder shall be as follows:

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#### (A)                              theterm of the Subsequent Option shall be ten (10) years.

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#### (B)                                theSubsequent Option shall be exercisable only while the Optionee remains a ServiceProvider of the Company, except as set forth in Sections 8 and 10 hereof.

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#### (C)                                theexercise price per Share shall be 100% of the Fair Market Value per Share onthe date of grant of the Subsequent Option.

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#### (D)                               subjectto Section 10 hereof, the Subsequent Option shall become exercisablecumulatively as to 1⁄4 of the Shares subject to the Subsequent Option on thefirst anniversary of the grant date and 1/48th of the Shares subject to theSubsequent Option in each month thereafter on the same day of each month as thegrant date (if there is no corresponding day in any month, then the last day ofsuch month), so that the Subsequent Option shall be fully exercisable 

 

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#### four years after its dateof grant, provided that the Optionee continues to serve as a Service Provideron such dates.

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### (ix)                  The terms of aOne-Time Option granted hereunder shall be as follows:

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#### (A)                              theterm of the One-Time Option shall be ten (10) years.

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#### (B)                                theOne-Time Option shall be exercisable only while the Outside Director remains a Directorof the Company, except as set forth in Sections 8 and 10 hereof.

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#### (C)                                theexercise price per Share shall be 100% of the Fair Market Value per Share onthe date of grant of the One-Time Option.

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#### (D)                               subjectto Section 10 hereof, the One-Time Option shall become exercisablecumulatively with respect to 1/4th of the One-Time Option at the endof each year after the date of grant, so that the One-Time Option shall befully exercisable four years after its date of grant, provided that theOptionee continues to serve as a Director on such dates.

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### (x)                     In the eventthat any Option granted under the Plan would cause the number of Shares subjectto outstanding Options plus the number of Shares previously purchased underOptions to exceed the Pool, then the remaining Shares available for Optiongrant shall be granted under Options to the Outside Directors on a pro ratabasis. No further grants shall be made until such time, if any, as additionalShares become available for grant under the Plan through action of the Board orthe stockholders to increase the number of Shares which may be issuedunder the Plan or through cancellation or expiration of Options previouslygranted hereunder.

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# 5.                                       Eligibility. Options may be granted only to Outside Directors. All Options shallbe automatically granted in accordance with the terms set forth in Section 4hereof.

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ThePlan shall not confer upon any Optionee any right with respect to continuationof service as a Director or nomination to serve as a Director, nor shall itinterfere in any way with any rights which the Director or the Company may haveto terminate the Director’s relationship with the Company at any time.

 

# 6.                                       Term of Plan. The Plan shall become effective upon the earlierto occur of its adoption by the Board or its approval by the stockholders ofthe Company as described in Section 16 of the Plan; provided, however, thePlan shall not become effective until the effective date of the Company’sinitial public offering pursuant to a registration statement filed with theSecurities and Exchange Commission. It shall continue in effect for a term often (10) years unless sooner terminated under Section 11 of the Plan.

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# 7.                                       Form of Consideration. The consideration to be paid for the Shares tobe issued upon exercise of an Option, including the method of payment, shallconsist of (i) cash, (ii) check, (iii) other shares which(x) in the case of Shares acquired upon exercise of an option, have beenowned by the Optionee for more than six (6) months on the date ofsurrender, and (y) have a Fair Market Value on the date of surrender equalto the aggregate exercise price of the Shares as to which 

 

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# saidOption shall be exercised, (iv) consideration received by the Companyunder a cashless exercise program implemented by the Company in connection withthe Plan, or (v) any combination of the foregoing methods of payment.

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# 8.                                       Exercise of Option.

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## (a)  Procedure for Exercise;Rights as a Stockholder. Any Option granted hereunder shall be exercisableat such times as are set forth in Section 4 hereof; provided, however,that no Options shall be exercisable until stockholder approval of the Plan inaccordance with Section 16 hereof has been obtained.

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AnOption may not be exercised for a fraction of a Share.

 

AnOption shall be deemed to be exercised when written notice of such exercise hasbeen given to the Company in accordance with the terms of the Option by theperson entitled to exercise the Option and full payment for the Shares withrespect to which the Option is exercised has been received by the Company. Fullpayment may consist of any consideration and method of payment allowableunder Section 7 of the Plan. Until the issuance (as evidenced by theappropriate entry on the books of the Company or of a duly authorized transferagent of the Company) of the stock certificate evidencing such Shares, no rightto vote or receive dividends or any other rights as a stockholder shall existwith respect to the Optioned Stock, notwithstanding the exercise of the Option.A share certificate for the number of Shares so acquired shall be issued to theOptionee as soon as practicable after exercise of the Option. No adjustmentshall be made for a dividend or other right for which the record date is priorto the date the stock certificate is issued, except as provided in Section 10of the Plan.

 

Exerciseof an Option in any manner shall result in a decrease in the number of Shareswhich thereafter may be available, both for purposes of the Plan and forsale under the Option, by the number of Shares as to which the Option is exercised.

 

## (b)  Terminationof Continuous Status as a Service Provider. Subject to Section 10hereof, in the event an Optionee’s status as a Service Provider terminates(other than upon the Optionee’s death or Disability), the Optionee may exercisehis or her vested Options in accordance with the following provisions:

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### (i)             An Optionee whoserved as a Director on the Board less than twenty-four (24) months from thetime of his or her appointment to the Board shall have three (3) months toexercise his or her Option(s) following his or her date of termination as aService Provider;

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### (ii)          An Optionee who served asa Director on the Board for at least twenty-four (24) months but less thanthirty-six (36) months from the time of his or her first appointment to the Boardshall have one (1) year to exercise his or her Option(s) following his orher date of termination as a Service Provider.

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### (iii)       An Optionee who served as aDirector on the Board for at least thirty-six (36) months from the time of hisor her first appointment to the Board shall have two (2) years to exercisehis or her Option(s) following his or her date of termination as a ServiceProvider.

 

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TheOptionee shall exercise his or her Option to the extent that the Optionee wasentitled to exercise it on the date of such termination. To the extent that theOptionee was not entitled to exercise an Option on the date of suchtermination, and to the extent that the Optionee does not exercise such Option(to the extent otherwise so entitled) within the time specified herein, theOption shall terminate.

 

## (c)  Disabilityof Optionee. In the event Optionee’s status as a Service Providerterminates as a result of Disability, the Optionee may exercise his or herOption, but only within twelve (12) months following the date of suchtermination, and only to the extent that the Optionee was entitled to exerciseit on the date of such termination (but in no event later than the expirationof its ten (10) year term). To the extent that the Optionee was notentitled to exercise an Option on the date of termination, or if he or she doesnot exercise such Option (to the extent otherwise so entitled) within the timespecified herein, the Option shall terminate.

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## (d)  Death of Optionee.In the event of an Optionee’s death, the Optionee’s estate or a person whoacquired the right to exercise the Option by bequest or inheritance may exercisethe Option, but only within twelve (12) months following the date of death, andonly to the extent that the Optionee was entitled to exercise it on the date ofdeath (but in no event later than the expiration of its ten (10) yearterm). To the extent that the Optionee was not entitled to exercise an Optionon the date of death, and to the extent that the Optionee’s estate or a personwho acquired the right to exercise such Option does not exercise such Option(to the extent otherwise so entitled) within the time specified herein, theOption shall terminate.

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# 9.                                       Non-Transferability of Options. The Option may not be sold, pledged,assigned, hypothecated, transferred, or disposed of in any manner other than bywill or by the laws of descent or distribution and may be exercised,during the lifetime of the Optionee, only by the Optionee.

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# 10.                                 Adjustments upon Changes in Capitalization,Dissolution, Merger or Asset Sale.

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## (a)  Changesin Capitalization. Subject to any required action by the stockholders ofthe Company, the number of Shares covered by each outstanding Option, thenumber of Shares which have been authorized for issuance under the Plan but asto which no Options have yet been granted or which have been returned to thePlan upon cancellation or expiration of an Option, as well as the price perShare covered by each such outstanding Option, and the number of Sharesissuable pursuant to the automatic grant provisions of Section 4 hereofshall be proportionately adjusted for any increase or decrease in the number ofissued Shares resulting from a stock split, reverse stock split, stockdividend, combination or reclassification of the Common Stock, or any otherincrease or decrease in the number of issued Shares effected without receipt ofconsideration by the Company; provided, however, that conversion of anyconvertible securities of the Company shall not be deemed to have been “effectedwithout receipt of consideration.” Except as expressly provided herein, no issuance by the Company ofshares of stock of any class, or securities convertible into shares of stock ofany class, shall affect, and no adjustment by reason thereof shall be made withrespect to, the number or price of Shares subject to an Option.

 

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## (b)  Dissolutionor Liquidation. In the event of the proposed dissolution or liquidation ofthe Company, to the extent that an Option has not been previously exercised, itshall terminate immediately prior to the consummation of such proposed action.

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## (c)  Mergeror Asset Sale. In the event of a merger of the Company with or into anothercorporation or the sale of substantially all of the assets of the Company,outstanding Options may be assumed or equivalent options may besubstituted by the successor corporation or a Parent or Subsidiary thereof (the“Successor Corporation”). If an Option is assumed or substituted for, theOption or equivalent option shall continue to be exercisable as provided in Section 4hereof for so long as the Optionee serves as a Director or a director of theSuccessor Corporation. Following such assumption or substitution, if theOptionee’s status as a Director or director of the Successor Corporation, asapplicable, is terminated other than upon a voluntary resignation by theOptionee, the Option or option shall become fully exercisable, including as toShares for which it would not otherwise be exercisable. Thereafter, the Optionor option shall remain exercisable in accordance with Sections 8(b) through(d) above.

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If the SuccessorCorporation does not assume an outstanding Option or substitute for it anequivalent option, the Option shall become fully vested and exercisable,including as to Shares for which it would not otherwise be exercisable. In suchevent the Board shall notify the Optionee that the Option shall be fullyexercisable for a period of fifteen (15) days from the date of such notice, andupon the expiration of such period the Option shall terminate.

 

Forthe purposes of this Section 10(c), an Option shall be considered assumedif, following the merger or sale of assets, the Option confers the right to purchaseor receive, for each Share of Optioned Stock subject to the Option immediatelyprior to the merger or sale of assets, the consideration (whether stock, cash,or other securities or property) received in the merger or sale of assets byholders of Common Stock for each Share held on the effective date of thetransaction (and if holders were offered a choice of consideration, the type ofconsideration chosen by the holders of a majority of the outstanding Shares). Ifsuch consideration received in the merger or sale of assets is not solelycommon stock of the successor corporation or its Parent, the Administrator may,with the consent of the successor corporation, provide for the consideration tobe received upon the exercise of the Option, for each Share of Optioned Stocksubject to the Option, to be solely common stock of the successor corporationor its Parent equal in fair market value to the per share considerationreceived by holders of Common Stock in the merger or sale of assets.

 

# 11.                                 Amendment and Termination of the Plan.

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## (a)  Amendmentand Termination. The Board may at any time amend, alter, suspend, ordiscontinue the Plan, but no amendment, alteration, suspension, ordiscontinuation shall be made which would impair the rights of any Optionee underany grant theretofore made, without his or her consent. In addition, to theextent necessary and desirable to comply with any applicable law, regulation orstock exchange rule, the Company shall obtain stockholder approval of any Planamendment in such a manner and to such a degree as required.

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## (b)  Effect of Amendment or Termination.Unless the Board expressly provides otherwise, any amendment or termination ofthe Plan shall not affect Options already granted and 

 

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## such Options shall remainin full force and effect as if this Plan had not been amended or terminated. TheBoard may expressly provide with respect to a particular amendment or series ofamendments of the Plan, that such amendment(s) shall be deemed to amend Optionsgranted on or after the date of the amendment(s) and Options granted prior tothe date of the amendment(s), provided however that no amendment shall be madewhich would impair the rights of any Optionee under any grant made prior to thedate of the amendment without his or her consent. Amendments to the Planeffective June     , 2005 shall not affect Optionsalready granted under the Plan prior to such date and such Options shall remainin full force and effect as if this Plan had not been amended. Any terminationof the Plan shall not affect Options already granted and such Options shallremain in full force and effect as if this Plan had not been terminated.

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# 12.                                 Time of Granting Options. The date of grant of an Option shall, for allpurposes, be the date determined in accordance with Section 4 hereof.

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# 13.                                 Conditions Upon Issuance of Shares. Shares shall not be issued pursuant to theexercise of an Option unless the exercise of such Option and the issuance anddelivery of such Shares pursuant thereto shall comply with all relevantprovisions of law, including, without limitation, the Securities Act of 1933,as amended, the Exchange Act, the rules and regulations promulgatedthereunder, state securities laws, and the requirements of any stock exchangeupon which the Shares may then be listed, and shall be further subject tothe approval of counsel for the Company with respect to such compliance.

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As acondition to the exercise of an Option, the Company may require the personexercising such Option to represent and warrant at the time of any suchexercise that the Shares are being purchased only for investment and withoutany present intention to sell or distribute such Shares, if, in the opinion ofcounsel for the Company, such a representation is required by any of theaforementioned relevant provisions of law.

 

Inabilityof the Company to obtain authority from any regulatory body havingjurisdiction, which authority is deemed by the Company’s counsel to benecessary to the lawful issuance and sale of any Shares hereunder, shallrelieve the Company of any liability in respect of the failure to issue or sellsuch Shares as to which such requisite authority shall not have been obtained.

 

# 14.                                 Reservation of Shares. The Company, during the term of this Plan, willat all times reserve and keep available such number of Shares as shall besufficient to satisfy the requirements of the Plan.

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# 15.                                 Option Agreement. Options shall be evidenced by written option agreements in such form asthe Board shall approve.

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# 16.                                 Stockholder Approval. The Plan shall be subject to approval by thestockholders of the Company within twelve (12) months after the date the Planis adopted. Such stockholder approval shall be obtained in the degree andmanner required under applicable state and federal law and any stock exchangerules.

 

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