**Exhibit10.2**

** **

**RIGEL PHARMACEUTICALS, INC.**

 

**2000 NON-EMPLOYEE DIRECTORS’ STOCKOPTION PLAN**

 

**ADOPTED AUGUST 18, 2000**

**APPROVEDBY STOCKHOLDERS SEPTEMBER 11, 2000**

**EFFECTIVEDATE: DECEMBER 4, 2000**

**AMENDEDAND RESTATED APRIL 24, 2003**

**AMENDEDAND RESTATED JUNE 20, 2003**

**APPROVEDBY STOCKHOLDERS JUNE 20, 2003**

**AMENDEDAND RESTATED APRIL 22, 2005**

**APPROVEDBY STOCKHOLDERS JUNE 2, 2005**

**AMENDEDAND RESTATED JANUARY 31, 2007**

**APPROVEDBY STOCKHOLDERS MAY 31, 2007**

**AMENDEDAND RESTATED SEPTEMBER 18, 2007**

**AMENDEDAND RESTATED FEBRUARY 21, 2008**

**AMENDEDAND RESTATED MAY 19, 2009**

**1.****                                          ****PURPOSES.**

 

**(a)****                            ****Eligible OptionRecipients**. Thepersons eligible to receive Options are the Non-Employee Directors of theCompany.

 

**(b)****                            ****Available Options**. The purpose of the Plan is to provide ameans by which Non-Employee Directors may be given an opportunity to benefitfrom increases in value of the Common Stock through the granting ofNonstatutory Stock Options.

 

**(c)****                            ****General Purpose**. The Company, by means of the Plan,seeks to retain the services of its Non-Employee Directors, to secure andretain the services of new Non-Employee Directors and to provide incentives forsuch persons to exert maximum efforts for the success of the Company and itsAffiliates.

 

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**2.****                                          ****DEFINITIONS.**

 

**(a)****                            ****“*****Affiliate***” means, at the time of determination,any “parent” or “subsidiary” of the Company as such terms are defined in Rule 405of the Securities Act.  The Board shallhave the authority to determine the time or times at which “parent” or “subsidiary”status is determined within the foregoing definition.

 

**(b)****                            ****“*****AnnualGrant”*** meansan Option granted annually to all Non-Employee Directors who meet the criteriaspecified in subsection 6(b) of the Plan.

 

**(c)****                            ****“*****AnnualMeeting”***means the annual meeting of the stockholders of the Company.

 

**(d)****                                 **“***Board***” means theBoard of Directors of the Company.

 

**(e)****                            ******A ***“Change in Control,”*** with respectto Options granted on or after the effective date of the Plan,will be deemed to have occurred upon the first to occur of an event set forthin any one of the following paragraphs:

 

**(i)****                                   **the acquisition(other than from the Company, by any person (as such term is defined in Section 13(c) or14(d) of the Exchange Act of beneficial ownership (within the meaningof Rule 13d-3 promulgated under the Exchange Act) of fifty (50%)or more of the combined voting power of the Company’s then outstanding votingsecurities; or

 

**(ii)****                               **the closing of:

 

**(****a****)****                              **a merger orconsolidation involving the Company if the stockholders of the Company,immediately before such merger or consolidation, do not, as a result of suchmerger or consolidation, own, directly or indirectly, more than fiftypercent (50%) of the combined voting power of the then outstanding votingsecurities of the corporation resulting from such merger or consolidation insubstantially the same proportion as their ownership of the combinedvoting power of the voting securities of the Company outstanding immediatelybefore such merger or consolidation; or

 

**(****b****)****                               **a completeliquidation or dissolution of the Company or an agreement for the sale or otherdisposition of all or substantially all of the assets of the Company.

 

Notwithstanding the foregoing, a Change in Controlshall not be deemed to occur solely because fifty percent (50%) or more of thecombined voting power of the Company’s then outstanding securities is acquiredby (i) a trustee or other fiduciary holding securities under one or more 

 

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employee benefit plans maintained by the Company orany of its subsidiaries or (ii) any corporation which, immediately priorto such acquisition, is owned directly or indirectly by the stockholdersof the Company in the same proportion as their ownership of stock in theCompany immediately prior to such acquisition.

 

For the avoidance of doubt,the term Change in Control shall not include a sale of assets, merger or othertransaction effected exclusively for the purpose of changing the domicile ofthe Company.

 

Notwithstanding the foregoing or any other provisionof this Plan, the definition of Change in Control (or any analogous term) in anindividual written agreement between the Company or any Affiliate andthe Optionholder shall supersede the foregoing definition with respectto Options subject to such agreement; *provided,however,* that if no definition of Change in Control or any analogousterm is set forth in such an individual written agreement, the foregoingdefinition shall apply.

 

**(f)****                              ****“*****Code***” means the Internal Revenue Code of1986, as amended.

 

**(g)****                           ****“*****CommonStock***” meansthe common stock of the Company.

 

**(h)****                           ****“*****Company***” means Rigel Pharmaceuticals, Inc.,a Delaware corporation.

 

**(i)****                              ****“*****Consultant***” means any person, including an advisor,(i) engaged by the Company or an Affiliate to render consulting oradvisory services and who is compensated for such services or (ii) who isa member of the Board of Directors of an Affiliate. However, the term “Consultant”shall not include either Directors of the Company who are not compensated bythe Company for their services as Directors or Directors of the Company who aremerely paid a director’s fee by the Company for their services as Directors.

 

**(j)****                              ****“*****ContinuousService***”means that the Optionholder’s service with the Company or an Affiliate, whetheras an Employee, Director or Consultant, is not interrupted or terminated. TheOptionholder’s Continuous Service shall not be deemed to have terminated merelybecause of a change in the capacity in which the Optionholder renders serviceto the Company or an Affiliate as an Employee, Consultant or Director or achange in the entity for which the Optionholder renders such service, providedthat there is no interruption or termination of the Optionholder’s service. Forexample, a change in status without interruption from a Non-Employee Directorof the Company to a Consultant of an Affiliate or an Employee of the Companywill not constitute an interruption of Continuous Service. The Board or thechief executive officer of the Company, in that party’s sole discretion, maydetermine whether 

 

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Continuous Serviceshall be considered interrupted in the case of any leave of absence approved bythat party, including sick leave, military leave or any other personal leave.

 

**(k)****                          ****“*****Director***” means a member of the Board ofDirectors of the Company.

 

**(l)****                              ****“*****Disability”*** means the permanent and total disabilityof a person within the meaning of Section 22(e)(3) of the Code.

 

**(m)****                        ****“*****Employee***” means any person employed by theCompany or an Affiliate. Mere service as a Director or payment of a director’sfee by the Company or an Affiliate shall not be sufficient to constitute “employment”by the Company or an Affiliate.

 

**(n)****                           ****“*****ExchangeAct***” meansthe Securities Exchange Act of 1934, as amended.

 

**(o)****                            ****“*****FairMarket Value***”means, as of any date, the value of the Common Stock determined as follows:

 

**(i)****                         **If the Common Stock is listed on anyestablished stock exchange or traded on the Nasdaq National Market or theNasdaq SmallCap Market, the Fair Market Value of a share of Common Stock shallbe the closing sales price for such stock (or the closing bid, if no sales werereported) as quoted on such exchange or market (or the exchange or market withthe greatest volume of trading in the Common Stock) on the last market tradingday prior to the day of determination, as reported in The Wall Street Journalor such other source as the Board deems reliable.

 

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

 

**(p)****                            ****“*****InitialGrant”*** meansan Option granted to a Non-Employee Director who meets the criteria specifiedin subsection 6(a) of the Plan.

 

**(q)****                            ****“*****IPODate”*** meansthe effective date of the initial public offering of the Common Stock.

 

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**(r)****                            ****“*****Non-EmployeeDirector***”means a Director who is not an Employee.

 

**(s)****                            ****“*****NonstatutoryStock Option***”means an Option not intended to qualify as an incentive stock option within themeaning of Section 422 of the Code and the regulations promulgatedthereunder.

 

**(t)****                              ****“*****Officer***” means a person who is an officer of theCompany within the meaning of Section 16 of the Exchange Act and the rules andregulations promulgated thereunder.

 

**(u)****                           ****“*****Option***” means a Nonstatutory Stock Optiongranted pursuant to the Plan.

 

**(v)****                             ****“*****OptionAgreement***”means a written agreement between the Company and an Optionholder evidencingthe terms and conditions of an individual Option grant. Each Option Agreementshall be subject to the terms and conditions of the Plan.

 

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

 

**(x)****                            ****“*****Plan***” means this Rigel Pharmaceuticals, Inc.2000 Non-Employee Directors’ Stock Option Plan.

 

**(y)****                            ****“*****Rule 16b-3***” means Rule 16b-3 promulgated underthe Exchange Act or any successor to Rule 16b-3, as in effect from time totime.

 

**(z)****                            ****“*****SecuritiesAct***” meansthe Securities Act of 1933, as amended.

 

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**3.****                                          ****ADMINISTRATION.**

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**(a)****                            ****Administration by Board**. The Board shall administer the Plan.The Board may not delegate administration of the Plan to a committee.

 

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

 

**(i)****                         **To determine the provisions of eachOption to the extent not specified in the Plan.

 

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

 

**(iii)****                 **To amend the Plan or an Option asprovided in Section 12.

 

**(iv)****                    **To terminate or suspend the Plan asprovided in Section 13.

 

**(v)****                        **Generally, to exercise such powers and toperform such acts as the Board deems necessary or expedient to promote the bestinterests of the Company that are not in conflict with the provisions of thePlan.

 

**(c)****                            ****Effect of Board’sDecision.** Alldeterminations, interpretations and constructions made by the Board in goodfaith shall not be subject to review by any person and shall be final, bindingand conclusive on all persons.

 

**(d)****                            ****Cancellation andRe-Grant of Options**.Notwithstanding anything to the contrary in the Plan, neither the Board nor anyCommittee shall have the authority to: (i) reprice any outstanding Optionunder the Plan, (ii) cancel and re-grant any outstanding Option under thePlan, or (iii) effect any other action that is treated as a repricingunder generally accepted accounting principles unless, in each case, thestockholders of the Company have approved such an action within twelve (12)months prior to such an event.

 

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**4.****                                          ****SHARES SUBJECT TO THEPLAN.**

 

**(a)****                            ****Share Reserve**. Subject to the provisions of Section 11relating to adjustments upon changes in the Common Stock, the Common Stock thatmay be issued pursuant to Options shall not exceed in the aggregate 435,000shares of Common Stock, which number consists of (i) 33,333 shares ofCommon stock initially reserved for issuance under the Plan plus (ii) 66,667shares of Common stock approved by the Board in April 2003 andsubsequently approved by the Company’s stockholders plus (iii) 225,000shares of Common Stock approved by the Board in April 2005 andsubsequently approved by the Company’s stockholders plus (iv) 110,000shares of Common Stock approved by the Board in January 2007 andsubsequently approved by the Company’s stockholders.

 

**(b)****                            ****Reversion of Shares tothe Share Reserve**.If any Option shall for any reason expire or otherwise terminate, in whole orin part, without having been exercised in full, the shares of Common Stock notacquired under such Option shall revert to and again become available forissuance under the Plan. If any shares subject to an Option are not deliveredto an Optionholder because the Option is exercised through a reduction ofshares subject to the Option (*i.e*.., “net exercised”), the number of shares that are not delivered to theOptionholder shall not remain available for issuance under the Plan. If anyshares subject to an Option are not delivered to an Optionholder because suchshares are withheld in satisfaction of the withholding of taxes incurred inconnection with the exercise of an Option, the number of shares that are notdelivered to the Optionholder shall not remain available for subsequentissuance under the Plan. If the exercise price of any Option is satisfied bytendering shares of Common Stock held by the Optionholder (either by actualdelivery or attestation), then the number of shares so tendered shall notremain available for subsequent issuance under the Plan.

 

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

 

**5.****                                          ****ELIGIBILITY.**

 

The Options as set forth in section 6 automatically shall be grantedunder the Plan to all Non-Employee Directors who meet the specified criteria.

 

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**6.****                                          ****NON-DISCRETIONARYGRANTS.**

 

**(a)****                            ****Initial Grants.** Without any further action of the Board,each person who is elected or appointed for the first time to be a Non-EmployeeDirector after the IPO Date automatically shall, upon the date of his or herinitial election or appointment to be a Non-Employee Director by the Board orstockholders of the Company, be granted an Initial Grant to purchase twentythousand (20,000) shares of Common Stock on the terms and conditions set forthherein.

 

**(b)****                            ****Annual Grants.** Without any further action of the Board,a Non-Employee Director shall be granted an Annual Grant as follows: On the dayfollowing each Annual Meeting commencing with the Annual Meeting in 2001, eachperson who is then a Non-Employee Director automatically shall be granted anAnnual Grant to purchase ten thousand (10,000) shares of Common Stock on theterms and conditions set forth herein;*provided, however*, that if the person has not been serving as aNon-Employee Director for the entire period since the preceding Annual Meeting,then the number of shares subject to the Annual Grant shall be reduced pro ratafor each full quarter prior to the date of grant during which such person didnot serve as a Non-Employee Director.

 

**7.****                                          ****OPTION PROVISIONS.**

 

Each Option shall be in such form and shall contain such terms andconditions as required by the Plan. Each Option shall contain such additionalterms and conditions, not inconsistent with the Plan, as the Board shall deemappropriate. Each Option shall include (through incorporation of provisionshereof by reference in the Option or otherwise) the substance of each of thefollowing provisions:

 

**(a)****                            ****Term**. No Option shall be exercisable afterthe expiration of ten (10) years from the date it was granted.

 

**(b)****                            ****Exercise Price**. The exercise price of each Option shallbe one hundred percent (100%) of the Fair Market Value of the stock subject tothe Option on the date the Option is granted. Notwithstanding the foregoing, anOption may be granted with an exercise price lower than that set forth in thepreceding sentence if such Option is granted pursuant to an assumption orsubstitution for another option in a manner satisfying the provisions of Section 424(a) ofthe Code.

 

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**(c)          Consideration**. The purchase price of stock acquiredpursuant to an Option may be paid, to the extent permitted by applicablestatutes and regulations, in any combination of the following methods:

 

**(i)        **By cash or check.

 

**(ii)      **Provided that at the time of exercise theCommon Stock is publicly traded and quoted regularly in*The Wall Street Journal* , by delivery tothe Company of shares of Common Stock that are owned free and clear of anyliens, claims, encumbrances or security interests, and that are valued at FairMarket Value on the date of exercise. “Delivery” for these purposes shallinclude delivery to the Company of the Optionholder’s attestation of ownershipof such shares of Common Stock in a form approved by the Company.Notwithstanding the foregoing, the Optionholder may not exercise the Option bytender to the Company of Common Stock to the extent such tender would violatethe provisions of any law, regulation or agreement restricting the redemptionof the Company’s stock.

 

**(iii)     **Provided that at the time of exercise theCommon Stock is publicly traded and quoted regularly in*The Wall Street Journal* , pursuant to aprogram developed under Regulation T as promulgated by the Federal ReserveBoard that, prior to the issuance of Common Stock, results in either thereceipt of cash (or check) by the Company or the receipt of irrevocableinstructions to pay the aggregate exercise price to the Company from the salesproceeds.

 

**(iv)      **By a “net exercise” arrangement pursuantto which the Company will reduce the number of shares of Common Stock issuedupon exercise by the largest whole number of shares with a Fair Market Valuethat does not exceed the aggregate exercise price;*  provided, however,*  that the Company shall accept a cash or otherpayment from the Optionholder to the extent of any remaining balance of theaggregate exercise price not satisfied by such holding back of whole shares;*  provided,further, however,*  that sharesof Common Stock will no longer be outstanding under an Option and will not be exercisablethereafter to the extent that (i) shares are used to pay the exerciseprice pursuant to the “net exercise,” (ii) shares are delivered to theOptionholder as a result of such exercise, and (iii) shares are withheldto satisfy tax withholding obligations.

 

**(d)          Transferability**. The Board may, in its sole discretion,impose such limitations on the transferability of Options as the Board shalldetermine.  In the absence of such adetermination by the Board to the contrary, the following restrictions on thetransferability of Options shall apply:

 

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**(i)            Restrictions on Transfer.** An Option shall not be transferable except by will or by the laws ofdescent and distribution and shall be exercisable during the lifetime of theOptionholder only by the Optionholder; *provided, however*,that the Board may, in its sole discretion, permit transfer of the Option in amanner that is not prohibited by applicable tax and securities laws upon theOptionholder’s request.  Except asexplicitly provided herein, an Option may not be transferred for consideration.

 

**(ii)           Domestic Relations Orders.** Notwithstanding the foregoing, an Option may be transferred pursuant toa domestic relations order.

 

**(iii)         Beneficiary Designation.** Notwithstanding the foregoing, the Optionholder may, by deliveringwritten notice to the Company, in a form provided by or otherwise satisfactoryto the Company and any broker designated by the Company to effect Optionexercises, designate a third party who, in the event of the death of theOptionholder, shall thereafter be entitled to exercise the Option and receivethe Common Stock or other consideration resulting from such exercise.  In the absence of such a designation, theexecutor or administrator of the Optionholder’s estate shall be entitled toexercise the Option and receive the Common Stock or other considerationresulting from such exercise.

 

**(e)          ExerciseSchedule**. TheOption shall be exercisable as the shares of Common Stock subject to the Optionvest.

 

**(f)          VestingSchedule.**

 

**(i)        **Each Option granted as an initial grantshall vest in accordance with the schedule set forth below that results in ashorter period of full vesting:

 

**(1)     **1/36th of the shares of Common Stock subject to theOption shall vest each month after the date of grant over a period of three (3) years;or

 

**(2)     **the Option shall vest in equal monthlyinstallments after the date of grant over a period commencing on the date thatthe Optionholder is appointed for the first time to be a Non-Employee Directorby the Board and ending on the date of the Annual Meeting at which theOptionholder is first scheduled to be considered for election to be aNon-Employee Director by the stockholders of the Company.

 

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**(ii)      **Each Option granted as an annual grantbefore the Annual Meeting in 2008 shall vest such that 1/36th of the sharesof Common Stock subject to such Option shall vest each month after the date ofgrant over a period of three (3) years; and each Option granted as anannual grant on or after the Annual Meeting in 2008 shall vest such that 1/12th  of the sharesof Common Stock subject to such Option shall vest each month after the date ofgrant over a period of one (1) year.

 

**(g)         Terminationof Continuous Service**. In the event an Optionholder’s Continuous Service terminates (otherthan upon the Optionholder’s death or Disability), the Optionholder mayexercise his or her Option (to the extent that the Optionholder was entitled toexercise it as of the date of termination) but only within such period of timeending on the earlier of (i) the date three (3) months following thetermination of the Optionholder’s Continuous Service, or (ii) theexpiration of the term of the Option as set forth in the Option Agreement. If,after termination, the Optionholder does not exercise his or her Option withinthe time specified in the Option Agreement, the Option shall terminate.

 

**(h)         Extensionof Termination Date**.If the exercise of the Option following the termination of the Optionholder’sContinuous Service (other than upon the Optionholder’s death or Disability)would be prohibited at any time solely because the issuance of shares wouldviolate the registration requirements under the Securities Act, then the Optionshall terminate on the earlier of (i) the expiration of the term of theOption set forth in subsection 7(a) or (ii) the expiration of a totalperiod of three (3) months (that need not be consecutive) after thetermination of the Optionholder’s Continuous Service during which the exerciseof the Option would not be in violation of such registration requirements.

 

**(i)          Disabilityof Optionholder**.In the event an Optionholder’s Continuous Service terminates as a result of theOptionholder’s Disability, the Optionholder may exercise his or her Option (tothe extent that the Optionholder was entitled to exercise it as of the date oftermination), but only within such period of time ending on the earlier of (i) thedate twelve (12) months following such termination or (ii) the expirationof the term of the Option as set forth in the Option Agreement. If, aftertermination, the Optionholder does not exercise his or her Option within thetime specified herein, the Option shall terminate.

 

**(j)          Deathof Optionholder**.In the event (i) an Optionholder’s Continuous Service terminates as aresult of the Optionholder’s death or (ii) the Optionholder dies withinthe three-month period after the termination of the Optionholder’s ContinuousService for a reason other than death, then the Option may be exercised (to theextent the Optionholder was entitled to exercise the Option as of the date ofdeath) by the Optionholder’s estate, by a person who acquired the right toexercise the Option by bequest or inheritance or by a person designated toexercise the Option upon the Optionholder’s death, but only within the periodending on the 

 

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earlier of (1) thedate eighteen (18) months following the date of death or (2) theexpiration of the term of such Option as set forth in the Option Agreement. If,after death, the Option is not exercised within the time specified herein, theOption shall terminate.

 

**8.****            ****COVENANTS OF THE COMPANY.**

 

**(a)          Availabilityof Shares**. Duringthe terms of the Options, the Company shall keep available at all times thenumber of shares of Common Stock required to satisfy such Options.

 

**(b)          SecuritiesLaw Compliance**.The Company shall seek to obtain from each regulatory commission or agencyhaving jurisdiction over the Plan such authority as may be required to grantOptions and to issue and sell shares of Common Stock upon exercise of theOptions; provided, however, that this undertaking shall not require the Companyto register under the Securities Act the Plan, any Option or any stock issuedor issuable pursuant to any such Option. If, after reasonable efforts, theCompany is unable to obtain from any such regulatory commission or agency theauthority which counsel for the Company deems necessary for the lawful issuanceand sale of stock under the Plan, the Company shall be relieved from anyliability for failure to issue and sell stock upon exercise of such Optionsunless and until such authority is obtained.

 

**9.****            ****USE OF PROCEEDS FROM STOCK.**

 

Proceeds from the sale of stock pursuant to Options shall constitutegeneral funds of the Company.

 

**10.****         ****MISCELLANEOUS.**

 

**(a)          StockholderRights**. NoOptionholder shall be deemed to be the holder of, or to have any of the rightsof a holder with respect to, any shares subject to such Option unless and untilsuch Optionholder has satisfied all requirements for exercise of the Optionpursuant to its terms.

 

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**(b)          NoService Rights**.Nothing in the Plan or any instrument executed or Option granted pursuantthereto shall confer upon any Optionholder any right to continue to serve theCompany as a Non-Employee Director or shall affect the right of the Company oran Affiliate to terminate (i) the employment of an Employee with orwithout notice and with or without cause, (ii) the service of a Consultantpursuant to the terms of such Consultant’s agreement with the Company or anAffiliate or (iii) the service of a Director pursuant to the Bylaws of theCompany or an Affiliate, and any applicable provisions of the corporate law ofthe state in which the Company or the Affiliate is incorporated, as the casemay be.

 

**(c)          InvestmentAssurances**. TheCompany may require an Optionholder, as a condition of exercising or acquiringstock under any Option, (i) to give written assurances satisfactory to theCompany as to the Optionholder’s knowledge and experience in financial andbusiness matters and/or to employ a purchaser representative reasonablysatisfactory to the Company who is knowledgeable and experienced in financialand business matters and that he or she is capable of evaluating, alone ortogether with the purchaser representative, the merits and risks of exercisingthe Option; and (ii) to give written assurances satisfactory to theCompany stating that the Optionholder is acquiring the stock subject to theOption for the Optionholder’s own account and not with any present intention ofselling or otherwise distributing the stock. The foregoing requirements, andany assurances given pursuant to such requirements, shall be inoperative if (iii) theissuance of the shares upon the exercise or acquisition of stock under theOption has been registered under a then currently effective registrationstatement under the Securities Act or (iv) as to any particularrequirement, a determination is made by counsel for the Company that suchrequirement need not be met in the circumstances under the then applicablesecurities laws. The Company may, upon advice of counsel to the Company, placelegends on stock certificates issued under the Plan as such counsel deemsnecessary or appropriate in order to comply with applicable securities laws,including, but not limited to, legends restricting the transfer of the stock.

 

**(d)          WithholdingObligations**. TheOptionholder may satisfy any federal, state or local tax withholding obligationrelating to the exercise or acquisition of stock under an Option by any of thefollowing means (in addition to the Company’s right to withhold from anycompensation paid to the Optionholder by the Company) or by a combination ofsuch means:  (i) tendering a cash payment; (ii) authorizing theCompany to withhold shares from the shares of the Common Stock otherwiseissuable to the Optionholder as a result of the exercise or acquisition ofstock under the Option, provided, however, that no shares of Common Stock arewithheld with a value exceeding the minimum amount of tax required to bewithheld by law; or (iii) delivering to the Company owned and unencumberedshares of the Common Stock.

 

**(e)**          **Electronic Delivery**. Any reference herein to a “written” agreement or document shall includeany agreement or document delivered electronically or posted on the Company’sintranet.

 

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**11.****         ****ADJUSTMENTS UPON CHANGES IN STOCK.**

 

**(a)          CapitalizationAdjustments**. Ifany change is made in the stock subject to the Plan, or subject to any Option,without the receipt of consideration by the Company (through merger,consolidation, reorganization, recapitalization, reincorporation, stockdividend, dividend in property other than cash, stock split, liquidatingdividend, combination of shares, exchange of shares, change in corporatestructure or other transaction not involving the receipt of consideration by theCompany), the Board shall appropriately and proportionately adjust (i) theclass(es) and maximum number of securities subject both to the Plan pursuant tosubsection 4(a) and to the nondiscretionary Options specified in Section 5,(ii) the class(es) and number of securities and price per share of stocksubject to outstanding Options. The Board shall make such adjustments, and itsdetermination shall be final, binding and conclusive. (The conversion of anyconvertible securities of the Company shall not be treated as a transaction “withoutreceipt of consideration” by the Company.)

 

**(b)           CorporateTransaction**. Inthe event of (i) a sale, lease or other disposition of all orsubstantially all of the securities or assets of the Company, (ii) amerger or consolidation in which the Company is not the surviving corporationor (iii) a reverse merger in which the Company is the survivingcorporation but the shares of Common Stock outstanding immediately precedingthe merger are converted by virtue of the merger into other property, whetherin the form of securities, cash or otherwise, then any surviving corporation oracquiring corporation may assume any Options outstanding under the Plan or maysubstitute similar Options (including an option to acquire the same considerationpaid to the stockholders in the transaction described in this subsection 11(b))for those outstanding under the Plan. In the event no surviving corporation oracquiring corporation assumes such Options or substitutes similar Options forthose outstanding under the Plan, then with respect to Options held byOptionholders who are in Continuous Service immediately prior to such an event,the vesting of such Options (and the time during which such Options may beexercised) shall be accelerated in full, and the Options shall terminate if notexercised at or prior to such event. With respect to any other Optionsoutstanding under the Plan, such Options shall terminate if not exercised priorto such event.

 

**(c)           Changein Control**.  Upon a Change in Control, all Options held byeach Optionholder whose Continuous Service has not terminated immediately priorto the Change in Control shall become fully vested and exercisable immediatelyprior to the effectiveness of such Change in Control.

 

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**12.****         ****AMENDMENT OF THE PLAN AND OPTIONS.**

 

**(a)          Amendmentof Plan**. TheBoard at any time, and from time to time, may amend the Plan. However, exceptas provided in Section 11 relating to adjustments upon changes in stock,no amendment shall be effective unless approved by the stockholders of theCompany to the extent stockholder approval is necessary to satisfy therequirements of Rule 16b-3 or any Nasdaq or securities exchange listingrequirements.

 

**(b)          StockholderApproval**. TheBoard may, in its sole discretion, submit any other amendment to the Plan forstockholder approval.

 

**(c)          NoImpairment of Rights**.Rights under any Option granted before amendment of the Plan shall not beimpaired by any amendment of the Plan unless (i) the Company requests theconsent of the Optionholder and (ii) the Optionholder consents in writing.

 

**(d)          Amendmentof Options**. TheBoard at any time, and from time to time, may amend the terms of any one ormore Options including, but not limited to, amendments to provide terms morefavorable than previously provided in the agreement evidencing an Option,subject to any specified limits in the Plan that are not subject to Boarddiscretion; provided, however, that the rights under any Option shall not be impairedby any such amendment unless (i) the Company requests the consent of theOptionholder and (ii) the Optionholder consents in writing.

 

**13.****         ****TERMINATION OR SUSPENSION OF THEPLAN.**

 

**(a)          PlanTerm**. The Boardmay suspend or terminate the Plan at any time. No Options may be granted underthe Plan while the Plan is suspended or after it is terminated.

 

**(b)          NoImpairment of Rights**.Suspension or termination of the Plan shall not impair rights and obligationsunder any Option granted while the Plan is in effect except with the writtenconsent of the Optionholder.

 

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**14.****         ****EFFECTIVE DATE OF PLAN.**

 

The Plan shall become effective on the IPO Date, but no Option shall beexercised unless and until the Plan has been approved by the stockholders ofthe Company, which approval shall be within twelve (12) months before or afterthe date the Plan is adopted by the Board.

 

**15.****         ****CHOICE OF LAW.**

 

All questions concerning the construction, validity and interpretationof this Plan shall be governed by the law of the State of Delaware, withoutregard to such state’s conflict of laws rules.

 

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