Exhibit 10.2


QUICKLOGIC
CORPORATION


1999
STOCK PLAN


1.             Purposes of the Plan.  The purposes of this 1999 Stock Plan are:


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


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


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


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


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


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


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


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


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


(e)           “Committee”  means a committee of Directors or other
individuals satisfying Applicable Laws appointed by the Board in accordance
with Section 4 of the Plan.


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


(g)           “Company” means QuickLogic
Corporation, a Delaware corporation.


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


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













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


(k)           “Employee” means any person,
including Officers and Directors, employed by the Company or any Parent or
Subsidiary of the Company.  A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any
successor.  For purposes of Incentive
Stock Options, no such leave may exceed ninety days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract.  If reemployment upon expiration of a leave of
absence approved by the Company is not so guaranteed, on the 181st day of such
leave any Incentive Stock Option held by the Optionee shall cease to be treated
as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option.  Neither
service as a Director nor payment of a director’s fee by the Company shall be
sufficient to constitute “employment” by the Company.


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


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


(i)            If the Common Stock is listed on any
estab­lished stock exchange or a national market system, including without
limitation the Nasdaq Global Market or The Nasdaq SmallCap Market of The Nasdaq
Stock Market, its Fair Market Value shall be the closing sales price for such
stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system for the last market trading day on or before the day of
determination, as reported in The Wall Street Journal
or such other source as the Administrator deems reliable;


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


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


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


(o)           “IPO Effective Date” means the
date upon which the Securities and Exchange Commission declares the initial
public offering of the Company’s common stock as effective.


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



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


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


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


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


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


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


(w)          “Optionee” means the holder of
an outstanding Option, Stock Purchase Right or Restricted Stock granted under
the Plan.


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


(y)           “Plan” means this QuickLogic
Corporation 1999 Stock Plan.


(z)            “Restricted Stock” means
shares of Common Stock acquired pursuant to a grant of Stock Purchase Rights
under Section 11 of the Plan.


(aa)         “Restricted Stock Purchase Agreement”
means a written agreement between the Company and the Optionee evidencing the
terms and restrictions applying to stock purchased under a Stock Purchase
Right.  The Restricted Stock Purchase
Agreement is subject to the terms and conditions of the Plan and the Notice of
Grant.


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


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


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


(ee)         “Share” means a share of the
Common Stock, as adjusted in accordance with Section 13 of the Plan.



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(ff)           “Stock Purchase Right” means
the right to purchase Common Stock pursuant to Section 11 of the Plan, as
evidenced by a Notice of Grant and a Restricted Stock Purchase Agreement.


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


3.             Stock Subject to the Plan.  Subject to the provisions of Section 13 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is (i) 5,000,000 Shares, including any Shares which have been
reserved but unissued under the Company’s 1989 Stock Option Plan (as amended)
(the “1989 Plan”) as of the IPO Effective Date and (ii) any Shares returned to
the 1989 Plan as a result of termination of options under the 1989 Plan.  In addition, an annual increase shall be
added to the Plan on the first day of the Company’s fiscal year beginning in
2000 equal to the lesser of (i) 5,000,000 Shares, (ii) five-percent (5%) of the
outstanding shares on such date or (iii) a lesser amount determined by the
Board.  The Shares may be authorized, but
unissued, or reacquired Common Stock.


If an Option or
Stock Purchase Right (a “Right”) expires or becomes unexercisable without
having been exercised in full, or is surrendered pursuant to an Option Exchange
Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been
issued under the Plan, whether upon exercise of an Option or Right, shall not
be returned to the Plan and shall not become available for future distribution
under the Plan, except that if Shares of Restricted Stock are repurchased by
the Company at their original purchase price or are forfeited to the Company,
such Shares shall become available for future grant under the Plan.


4.             Administration of the Plan.


(a)           Procedure.


(i)            Multiple Administrative Bodies.  The Plan may be administered by different
Committees with respect to different groups of Service Providers.


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


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



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


(v)           Delegation of
Authority for Day-to-Day Administration. 
Except to the extent prohibited by Applicable Law, the
Administrator may delegate to one or more individuals the day-to-day administration
of the Plan and any of the functions assigned to it in this Plan.  Such delegation may be revoked at any time.


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


(i)            to determine the Fair Market Value;


(ii)           to select the Service Providers to
whom Options and Stock Purchase Rights may be granted hereunder;


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


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


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


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


(vii)         to institute an Option Exchange
Program;


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


(ix)           to prescribe, amend and rescind rules
and regulations relating to the Plan, including rules and regulations relating
to sub-plans established for the purpose of qualifying for preferred tax
treatment under foreign tax laws;



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(x)            to modify or amend each Option or
Stock Purchase Right (subject to Section 15(c) of the Plan) or Restricted
Stock, including the discretionary authority to extend the post-termination
exercisability period of Options longer than is otherwise provided for in the Plan;


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


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


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


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


5.             Eligibility.  Nonstatutory Stock Options and Stock Purchase
Rights may be granted to Service Providers. 
Incentive Stock Options may be granted only to Employees.


6.             Limitations.


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


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



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


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


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


(iii)          The foregoing limitations shall be
adjusted proportionately in connection with any change in the Company’s
capitalization as described in Section 13.


(iv)          If an Option is cancelled in the same
fiscal year of the Company in which it was granted (other than in connection
with a transaction described in Section 13), the cancelled Option will be
counted against the limits set forth in subsections (i) and (ii) above.  For this purpose, if the exercise price of an
Option is reduced, the transaction will be treated as a cancellation of the
Option and the grant of a new Option.


7.             Term of Plan.  Subject to Section 19 of the Plan, the Plan
shall become effective upon its adoption by the Board.  It shall continue in effect for a term of ten
(10) years unless terminated earlier under Section 15 of the Plan.


8.             Term of Option.  The term of each Option shall be stated in
the Option Agreement.  In the case of an
Incentive Stock Option, the term shall be ten (10) years from the date of
grant or such shorter term as may be provided in the Option Agreement.  Moreover, in the case of an Incentive Stock
Option granted to an Optionee who, at the time the Incentive Stock Option is
granted, owns stock representing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Incentive Stock Option shall be five (5) years from
the date of grant or such shorter term as may be provided in the Option
Agreement.


9.             Option Exercise Price and
Consideration.


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


(i)            In the case of an Incentive Stock
Option


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


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



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(ii)           In the case of a Nonstatutory Stock
Option, the per Share exercise price shall be determined by the
Administrator.  In the case of a
Nonstatutory Stock Option intended to qualify as “performance-based
compensation” within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.


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


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


(c)           Form of Consideration.  The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment.  In the case of an Incentive
Stock Option, the Administrator shall determine the acceptable form of consideration
at the time of grant.  Such consideration
may consist entirely of:


(i)            cash;


(ii)           check;


(iii)          other Shares which (A) in the
case of Shares acquired upon exercise of an option, have been owned by the
Optionee for more than six months on the date of sur­render, and (B) have
a Fair Market Value on the date of surrender equal to the aggregate exercise
price of the Shares as to which said Option shall be exercised;


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


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


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


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


10.           Exercise of Option.


(a)           Procedure for Exercise;
Rights as a Shareholder.  Any Option
granted hereunder shall be exercisable according to the terms of the Plan and
at such times and under such conditions as determined by the Administrator and
set forth in the Option Agreement. 
Unless the Administrator provides otherwise, vesting of Options granted
hereunder shall be



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tolled during any unpaid leave of absence.  An Option may not be exercised for a fraction
of a Share.


An Option shall be deemed exercised when the Company
receives: (i) written or electronic notice of exercise (in accordance with the
Option Agreement) from the person entitled to exercise the Option, and (ii)
full payment for the Shares with respect to which the Option is exercised.  Full payment may consist of any consideration
and method of payment authorized by the Administrator and permitted by the
Option Agreement and the Plan.  Shares
issued upon exercise of an Option shall be issued in the name of the Optionee
or, if requested by the Optionee, in the name of the Optionee and his or her
spouse.  Until the Shares are issued (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option.  The Company shall issue (or cause to be
issued) such Shares promptly after the Option is exercised.  No adjustment will be made for a dividend or
other right for which the record date is prior to the date the Shares are
issued, except as provided in Section 13 of the Plan.


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


(b)           Termination of Relationship
as a Service Provider or Provision of Notice of Employment Termination.  If an Optionee (i) ceases to provide
ongoing service as a Service Provider (for any reason and regardless of any
appropriate court finding such termination unfair or irregular on any basis
whatsoever), other than upon the Optionee’s death or Disability, or
(ii) is provided with notice of termination of employment (for any
reason and regardless of any appropriate court finding the related termination
unfair or irregular on any basis whatsoever) and ceases to provide ongoing
service during the notice period, the Optionee may exercise his or her Option
within such period of time as is specified in the Option Agreement to the extent
that the Option is vested on the earlier of the date of
such cessation as a Service Provider or the last date of ongoing
service after receiving a notice of termination of employment  (the  earlier of these dates is referred to herein
as the “Vesting Cessation Date”), but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement.  In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for three (3) months
following the Vesting Cessation Date.  
If, on the Vesting Cessation Date, the Optionee is not vested
as to his or her entire Option, the Shares covered by the unvested portion of
the Option shall revert to the Plan (unless the Administrator determines
otherwise).  If, after the Vesting
Cessation Date, the Optionee does not exercise his or her Option within
the time specified by the Administrator, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.


(c)           Disability of Optionee.  If an Optionee ceases to be a Service
Provider as a result of the Optionee’s Disability, the Optionee may exercise
his or her Option within such period of time as is specified in the Option
Agreement to the extent the Option is vested on the date of termination (but in
no event later than the expiration of the term of such Option as set forth in
the Option Agreement).  In the absence of
a specified time in the Option Agreement, the



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Option shall remain exercisable for twelve (12) months
following the Optionee’s termination. 
If, on the date of termination, the Optionee is not vested as to his or
her entire Option, the Shares covered by the unvested portion of the Option
shall revert to the Plan.  If, after
termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.


(d)           Death of Optionee.  If an Optionee dies while a Service Provider,
the Option may be exercised within such period of time as is specified in the
Option Agreement (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant), by the Optionee’s estate or by a
person who acquires the right to exercise the Option by bequest or inheritance,
but only to the extent that the Option is vested on the date of death.  In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for twelve (12) months
following the Optionee’s termination. 
If, at the time of death, the Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option shall
immediately revert to the Plan.  The
Option may be exercised by the executor or administrator of the Optionee’s
estate or, if none, by the person(s) entitled to exercise the Option under the
Optionee’s will or the laws of descent or distribution.  If the Option is not so exercised within the
time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.


(e)           Buyout Provisions.  The Administrator may at any time offer to
buy out for a payment in cash or Shares an Option previously granted based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.


11.           Stock Purchase Rights.


(a)           Rights to Purchase.  Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. 
After the Administrator determines that it will offer Stock Purchase
Rights under the Plan, it shall advise the offeree in writing or
electronically, by means of a Notice of Grant, of the terms, conditions and
restrictions related to the offer, includ­ing the number of Shares that the
offeree shall be entitled to purchase, the price to be paid, and the time
within which the offeree must accept such offer.  The offer shall be accepted by execution of a
Restricted Stock Purchase Agreement in the form determined by the
Administrator.


(b)           Repurchase Option.  Unless the Administrator deter­mines other­wise,
the Restricted Stock Purchase Agreement shall grant the Company a repurchase
option exercisable upon the volun­tary or involuntary termination of the purchaser’s
service with the Company for any reason (including death or Disability).  The pur­chase price for Shares repurchased
pursuant to the Restricted Stock Purchase Agreement shall be the original price
paid by the purchaser and may be paid by cancellation of any indebtedness of
the purchaser to the Company.  The
repurchase option shall lapse at a rate determined by the Administrator.



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(c)           Other Provisions.  The Restricted Stock Purchase Agree­ment
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Admin­istrator in its sole discretion.


(d)           Rights as a Shareholder.  Once the Stock Purchase Right is exercised,
the purchaser shall have the rights equivalent to those of a shareholder, and
shall be a shareholder when his or her pur­chase is entered upon the records of
the duly authorized trans­fer agent of the Company.  No adjustment will be made for a divi­dend or
other right for which the record date is prior to the date the Stock Purchase Right
is exercised, except as provided in Section 13 of the Plan.


12.           Non-Transferability of Options,
Stock Purchase Rights and Restricted Stock. 
Unless determined otherwise by the Administrator, an Option, Stock
Purchase Right or Restricted Stock award may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or
by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee. 
If the Administrator makes an Option, Stock Purchase Right or Restricted
Stock award transferable, such Option, Stock Purchase Right or Restricted Stock
award shall contain such additional terms and conditions as the Administrator
deems appropriate.


13.           Adjustments Upon Changes in Capitalization,
Dissolution, Merger or Asset Sale.


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


(b)           Dissolution or Liquidation.  In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Optionee as
soon as practicable prior to the effective date of such proposed
transaction.  The Administrator in its
discretion may provide for an Optionee to have the right to exercise his or her
Option until ten (10) days prior to



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such transaction as to all of the Optioned Stock
covered thereby, including Shares as to which the Option would not otherwise be
exercisable.  In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option or Stock Purchase Right shall lapse
as to all such Shares, provided the proposed dissolution or liquidation takes
place at the time and in the manner contemplated.  To the extent it has not been previously exer­cised,
an Option or Stock Purchase Right will terminate immediately prior to the
consum­mation of such proposed action.


(c)           Merger or Asset Sale.


(i)            Stock Options and Stock Purchase
Rights.  In the event of a merger of the Company with or into another
corporation, or the sale of substantially all of the assets of the Company,
each outstanding Option and Stock Purchase Right shall be assumed or an
equivalent option or right substituted by the successor corporation or a Parent
or Subsidiary of the successor corporation. 
In the event that the successor corporation refuses to assume or
substitute for the Option or Stock Purchase Right, the Optionee shall fully
vest in and have the right to exercise the Option or Stock Purchase Right as to
all of the Optioned Stock, including shares to which it would not otherwise be
vested or exercisable. If an Option or Stock Purchase Right becomes fully
vested and exercisable in lieu of assumption or substitution in the event of a
merger or sale of assets, the Administrator shall notify the Optionee in
writing or electronically that the Option or Stock Purchase Right shall be
fully vested and exercisable for a period of fifteen (15) days from the date of
such notice, and the Option or Stock Purchase Right shall terminate upon the
expiration of such period.  For the
purposes of this paragraph, the Option or Stock Purchase Right shall be
considered assumed if, following the merger or sale of assets, the option or
right confers the right to purchase or receive, for each Share of Optioned
Stock subject to the Option or Stock Purchase Right immediately prior 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 by holders of
Common Stock for each Share held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the merger or sale of assets is
not solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation, provide for
the consideration to be received upon the exercise of the Option or Stock
Purchase Right, for each Share of Optioned Stock subject to the Option or Stock
Purchase Right, to be solely common stock of the successor corporation or its
Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger or sale of assets.


(ii)           Restricted Stock.  In the event of a merger of the Company with
or into another corporation, or the sale of substantially all of the assets of
the Company, each outstanding Restricted Stock award shall be assumed or
an equivalent Restricted Stock award substituted by the successor corporation
or a Parent or Subsidiary of the successor corporation.  In the event that the successor corporation
refuses to assume or substitute for the Restricted Stock award, the Participant
shall fully vest in the Restricted Stock, including shares which would not
otherwise be vested.  For the purposes of
this paragraph, a Restricted Stock award shall be considered assumed if,
following the merger or sale of assets, the award confers



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


14.           Date of Grant.  The date of grant of an Option or Stock
Purchase Right shall be, for all purposes, the date on which the Administrator
makes the determination granting such Option or Stock Purchase Right, or such
other later date as is determined by the Administrator.  Notice of the determination shall be provided
to each Optionee within a reasonable time after the date of such grant.


15.           Amendment and Termination of the Plan.


(a)           Amendment and Termination.  The Board may at any time amend, alter, suspend
or terminate the Plan.


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


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


16.           Conditions Upon Issuance of Shares.


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


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



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17.           Inability to Obtain Authority.  The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is deemed
by the Company’s counsel to be necessary to the lawful issuance and sale of any
Shares hereunder, shall relieve the Company of any liability in respect of the
failure to issue or sell such Shares as to which such requisite authority shall
not have been obtained.


18.           Reservation of Shares.  The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.


19.           Shareholder Approval.  The Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months after the date the Plan
is adopted.  Such shareholder approval
shall be obtained in the manner and to the degree required under Applicable
Laws.



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