**Exhibit 10.34**

** **

**RIGEL PHARMACEUTICALS, INC.**

 

**2000 NON-EMPLOYEEDIRECTORS’ STOCK OPTION PLAN**

 

**ADOPTED AUGUST 18, 2000**

**APPROVED BY STOCKHOLDERSSEPTEMBER 11, 2000**

**EFFECTIVE DATE: DECEMBER4, 2000**

**AMENDED AND RESTATED APRIL24, 2003**

**AMENDED AND RESTATED JUNE20, 2003**

**APPROVED BY STOCKHOLDERS JUNE 20, 2003**

**AMENDED AND RESTATED APRIL 22, 2005**

**APPROVED BY STOCKHOLDERS JUNE 2, 2005**

**AMENDED AND RESTATED JANUARY 31, 2007**

**APPROVED BY STOCKHOLDERS MAY 31, 2007**

**AMENDED AND RESTATEDSEPTEMBER 18, 2007**

 

**1.**                                      PURPOSES.

** **

**(a)****                                 ****Eligible Option Recipients**. The persons eligible to receive Optionsare the Non-Employee Directors of the Company.

 

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

 

**2.**                                      DEFINITIONS.

** **

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

 

**(b)****                                 *****“Annual Grant”*** means an Option granted annually to allNon-Employee Directors who meet the criteria specified in subsection 6(b) ofthe Plan.

 

**(c)****                                 *****“Annual Meeting”*** means the annual meeting of thestockholders of the Company.

 

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

 

**(e)****                                 **“***Code***” meansthe Internal Revenue Code of 1986, as amended.

 

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

 

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

 

**(h)****                                **“***Consultant***”means any person, including an advisor, (i) engaged by the Company or anAffiliate to render consulting or advisory services and who is compensated forsuch services or (ii) who is a member of the Board of Directors of an Affiliate.However, the term “Consultant” shall not include either Directors of theCompany who are not compensated by the Company for their services as Directorsor Directors of the Company who are merely paid a director’s fee by the Companyfor their services as Directors.

 

**(i)****                                   **“***Continuous Service***”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 Continuous Service shall be considered interrupted in thecase of any leave of absence approved by that party, including sick leave,military leave or any other personal leave.

 

**(j)****                                   **“***Director***”means a member of the Board of Directors of the Company.

 

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

 

**(l)****                                   **“***Employee***”means any person employed by the Company or an Affiliate. Mere service as aDirector or payment of a director’s fee by the Company or an Affiliate shallnot be sufficient to constitute “employment” by the Company or an Affiliate.

 

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

 

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

 

**(i)****                                   **If the Common Stock is listed on 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.

 

**(o)****                                 *****“Initial Grant”*** means an Option granted to aNon-Employee Director who meets the criteria specified in subsection 6(a) ofthe Plan.

 

**(p)****                                 *****“IPO Date”*** means the effective date of the initialpublic offering of the Common Stock.

 

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

 

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**(r)****                                 **“***Nonstatutory Stock Option***”means an Option not intended to qualify as an incentive stock option within themeaning of Section 422 of the Code and the regulations promulgated thereunder.

 

**(s)****                                 **“***Officer***”means a person who is an officer of the Company within the meaning of Section16 of the Exchange Act and the rules and regulations promulgated thereunder.

 

**(t)****                                   **“***Option***”means a Nonstatutory Stock Option granted pursuant to the Plan.

 

**(u)****                                **“***Option Agreement***”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.

 

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

 

**(w)****                               **“***Plan***” meansthis Rigel Pharmaceuticals, Inc. 2000 Non-Employee Directors’ Stock OptionPlan.

 

**(x)****                                 **“***Rule 16b-3***”means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule16b-3, as in effect from time to time.

 

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

 

**3.**                                      ADMINISTRATION.

** **

**(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 ofBoard’s Decision.** All determinations, interpretations and constructionsmade by the Board in good faith shall not be subject to review by any personand shall be final, binding and conclusive on all persons.

 

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**(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 Option underthe Plan, (ii) cancel and re-grant any outstanding Option under the Plan, or(iii) effect any other action that is treated as a repricing under generallyaccepted accounting principles unless, in each case, the stockholders of theCompany have approved such an action within twelve (12) months prior to such anevent.

 

**4.**                                      SHARESSUBJECT TO THE PLAN.

** **

**(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 435,000 shares of Common Stock, which numberconsists of (i) 33,333 shares of Common stock initially reserved for issuanceunder the Plan plus (ii) 66,667 shares of Common stock approved by the Board inApril 2003 and subsequently approved by the Company’s stockholders plus (iii)225,000 shares of Common Stock approved by the Board in April 2005 andsubsequently approved by the Company’s stockholders plus (iv) 110,000 shares ofCommon Stock approved by the Board in January 2007 and subsequently approved bythe Company’s stockholders.

 

**(b)****                                 ****Reversion of Shares to the ShareReserve**. If anyOption shall for any reason expire or otherwise terminate, in whole or in part,without having been exercised in full, the shares of Common Stock not acquiredunder such Option shall revert to and again become available for issuance underthe Plan. If any shares subject to an Option are not delivered to an Optionholderbecause the Option is exercised through a reduction of shares subject to theOption (*i.e*., “net exercised”), the number ofshares that are not delivered to the Optionholder shall not remain availablefor issuance under the Plan. If any shares subject to an Option are notdelivered to an Optionholder because such shares are withheld in satisfactionof the withholding of taxes incurred in connection with the exercise of anOption, the number of shares that are not delivered to the Optionholder shallnot remain available for subsequent issuance under the Plan. If the exerciseprice of any Option is satisfied by tendering shares of Common Stock held bythe Optionholder (either by actual delivery or attestation), then the number ofshares so tendered shall not remain available for subsequent issuance under thePlan.

 

**(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.

 

**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 

 

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conditions set forthherein; *provided, however*, that if the personhas not been serving as a Non-Employee Director for the entire period since thepreceding Annual Meeting, then the number of shares subject to the Annual Grantshall be reduced pro rata for each full quarter prior to the date of grantduring which such person did not serve as a Non-Employee Director.

 

**7.**                                      OPTIONPROVISIONS.

** **

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 ofSection 424(a) of the Code.

 

**(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 atthe time of exercise the Common Stock is publicly traded and quoted regularlyin *The Wall Street Journal*, by delivery ofalready-owned shares of Common Stock either that the Optionholder has held for more than six (6) months (orsuch longer or shorter period of time required to avoid a charge to earningsfor financial accounting purposes) or thatthe Optionholder did not acquire, directly or indirectly from the Company, thatare owned free and clear of any liens, claims, encumbrances or securityinterests, and that are valued at Fair Market Value on the date of exercise. “Delivery”for these purposes shall include delivery to the Company of the Optionholder’sattestation of ownership of such shares of Common Stock in a form approved bythe Company. Notwithstanding the foregoing, the Optionholder may not exercisethe Option by tender to the Company of Common Stock to the extent such tenderwould violate the provisions of any law, regulation or agreement restrictingthe redemption of the Company’s stock.

 

**(iii)****                           **Provided that atthe time of exercise the Common Stock is publicly traded and quoted regularlyin *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 orother payment from the Optionholder to the extent of any remaining balance ofthe aggregate exercise price not satisfied by such holding back of wholeshares; *provided, further, however,*that shares of Common Stock will no longer be outstanding under an Option andwill

 

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not be exercisablethereafter to the extent that (i) shares are used to pay the exercise pricepursuant to the “net exercise,” (ii) shares are delivered to the Optionholderas a result of such exercise, and (iii) shares are withheld to satisfy taxwithholding obligations.

 

**(d)****                                 ****Transferability**. AnOption is transferable by will or by the laws of descent and distribution. AnOption also is transferable (i) by instrument to an inter vivos or testamentarytrust, in a form accepted by the Company, in which the Option is to be passed to beneficiaries upon the death ofthe trustor (settlor) and (ii) by gift, in a form accepted by theCompany, to a member of the “immediatefamily” of the Optionholder as that term is defined in 17 C.F.R. 240.16a-1(e). AnOption shall be exercisable during the lifetime of the Optionholder onlyby the Optionholder and a permittedtransferee as provided herein. However, the Optionholder may, bydelivering written notice to the Company, in a form satisfactory to theCompany, designate a third party who, in the event of the death of theOptionholder, shall thereafter be entitled to exercise the Option.

 

**(e)****                                 ****Exercise Schedule**. The Option shall be exercisable as theshares of Common Stock subject to the Option vest.

 

**(f)****                                   ****Vesting Schedule.**

 

**(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 CommonStock subject to the Option shall vest each month after the date of grant overa 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.

 

**(ii)**                                Each Optiongranted as an annual grant before the Annual Meeting in 2008 shall vest suchthat 1/36th of the shares of Common Stock subject to such Optionshall vest each month after the date of grant over a period of three (3) years;and each Option granted as an annual grant on or after the Annual Meeting in2008 shall vest such that 1/12th of the shares of Common Stocksubject to such Option shall vest each month after the date of grant over aperiod of one (1) year.

 

**(g)****                                ****Termination of Continuous Service**. In the event an Optionholder’sContinuous Service terminates (other than upon the Optionholder’s death orDisability), the Optionholder may exercise his or her Option (to the extentthat 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)the date three (3) months following the termination of the Optionholder’sContinuous Service, or (ii) the expiration of the term of the Option as setforth in the Option Agreement. If, after termination, the Optionholder does notexercise his or her Option within the time specified in the Option Agreement,the Option shall terminate.

 

**(h)****                                ****Extension of Termination Date**. If the exercise of the Option followingthe termination of the Optionholder’s Continuous Service (other than upon theOptionholder’s death or Disability) would be prohibited at any time solelybecause the issuance of shares would violate the registration requirementsunder the Securities Act, then the Option shall terminate on the earlier of (i)the expiration of the term of the Option set forth in subsection 7(a) or (ii)the expiration of a period of three (3) months after the termination of theOptionholder’s Continuous Service during which the exercise of the Option wouldnot be in violation of such registration requirements.

 

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**(i)****                                   ****Disability of Optionholder**. In the event an Optionholder’sContinuous Service terminates as a result of the Optionholder’s Disability, theOptionholder may exercise his or her Option (to the extent that the Optionholderwas entitled to exercise it as of the date of termination), but only withinsuch period of time ending on the earlier of (i) the date twelve (12) monthsfollowing such termination or (ii) the expiration of the term of the Option asset forth in the Option Agreement. If, after termination, the Optionholder doesnot exercise his or her Option within the time specified herein, the Optionshall terminate.

 

**(j)****                                   ****Death of Optionholder**. In the event (i) an Optionholder’sContinuous Service terminates as a result of the Optionholder’s death or (ii)the Optionholder dies within the three-month period after the termination ofthe Optionholder’s Continuous Service for a reason other than death, then theOption may be exercised (to the extent the Optionholder was entitled toexercise the Option as of the date of death) by the Optionholder’s estate, by aperson who acquired the right to exercise the Option by bequest or inheritanceor by a person designated to exercise the Option upon the Optionholder’s death,but only within the period ending on the earlier of (1) the date eighteen (18)months following the date of death or (2) the expiration of the term of suchOption as set forth in the Option Agreement. If, after death, the Option is notexercised within the time specified herein, the Option shall terminate.

 

**8.**                                      COVENANTSOF THE COMPANY.

** **

**(a)****                                 ****Availability of Shares**. During the terms of the Options, theCompany shall keep available at all times the number of shares of Common Stockrequired to satisfy such Options.

 

**(b)****                                 ****Securities Law Compliance**. The Company shall seek to obtain fromeach regulatory commission or agency having jurisdiction over the Plan suchauthority as may be required to grant Options and to issue and sell shares ofCommon Stock upon exercise of the Options; provided, however, that thisundertaking shall not require the Company to register under the Securities Actthe Plan, any Option or any stock issued or issuable pursuant to any suchOption. If, after reasonable efforts, the Company is unable to obtain from anysuch regulatory commission or agency the authority which counsel for theCompany deems necessary for the lawful issuance and sale of stock under thePlan, the Company shall be relieved from any liability for failure to issue andsell stock upon exercise of such Options unless and until such authority isobtained.

 

**9.**                                      USE OFPROCEEDS FROM STOCK.

** **

Proceeds from the sale of stock pursuant to Optionsshall constitute general funds of the Company.

 

**10.**                               MISCELLANEOUS.

** **

**(a)****                                 ****Stockholder Rights**. No Optionholder shall be deemed to bethe holder of, or to have any of the rights of a holder with respect to, anyshares subject to such Option unless and until such Optionholder has satisfiedall requirements for exercise of the Option pursuant to its terms.

 

**(b)****                                 ****No Service Rights**. Nothing in the Plan or any instrumentexecuted or Option granted pursuant thereto shall confer upon any Optionholderany right to continue to serve the Company as a Non-Employee Director or shallaffect the right of the Company or an Affiliate to terminate (i) the employmentof an Employee with or without notice and with or without cause, (ii) theservice of a Consultant pursuant to the terms of such Consultant’s agreementwith the Company or an Affiliate or 

 

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(iii) the service of aDirector pursuant to the Bylaws of the Company or an Affiliate, and anyapplicable provisions of the corporate law of the state in which the Company orthe Affiliate is incorporated, as the case may be.

 

**(c)****                                 ****Investment Assurances**. The Company may require anOptionholder, as a condition of exercising or acquiring stock under any Option,(i) to give written assurances satisfactory to the Company as to theOptionholder’s knowledge and experience in financial and business mattersand/or to employ a purchaser representative reasonably satisfactory to theCompany who is knowledgeable and experienced in financial and business mattersand that he or she is capable of evaluating, alone or together with thepurchaser representative, the merits and risks of exercising the Option; and(ii) to give written assurances satisfactory to the Company stating that theOptionholder is acquiring the stock subject to the Option for the Optionholder’sown account and not with any present intention of selling or otherwisedistributing the stock. The foregoing requirements, and any assurances givenpursuant to such requirements, shall be inoperative if (iii) the issuance ofthe shares upon the exercise or acquisition of stock under the Option has beenregistered under a then currently effective registration statement under theSecurities Act or (iv) as to any particular requirement, a determination ismade by counsel for the Company that such requirement need not be met in thecircumstances under the then applicable securities laws. The Company may, uponadvice of counsel to the Company, place legends on stock certificates issuedunder the Plan as such counsel deems necessary or appropriate in order tocomply with applicable securities laws, including, but not limited to, legendsrestricting the transfer of the stock.

 

**(d)****                                 ****Withholding Obligations**. The Optionholder may satisfy anyfederal, state or local tax withholding obligation relating to the exercise oracquisition of stock under an Option by any of the following means (in additionto the Company’s right to withhold from any compensation paid to theOptionholder by the Company) or by a combination of such means:  (i) tendering a cash payment; (ii)authorizing the Company to withhold shares from the shares of the Common Stockotherwise issuable to the Optionholder as a result of the exercise oracquisition of stock under the Option, provided, however, that no shares ofCommon Stock are withheld with a value exceeding the minimum amount of taxrequired to be withheld by law; or (iii) delivering to the Company owned andunencumbered shares of the Common Stock.

 

**11.**                               ADJUSTMENTSUPON CHANGES IN STOCK.

** **

**(a)****                                 ****Capitalization Adjustments**. If any change is made in the stocksubject to the Plan, or subject to any Option, without the receipt of considerationby the Company (through merger, consolidation, reorganization,recapitalization, reincorporation, stock dividend, dividend in property otherthan cash, stock split, liquidating dividend, combination of shares, exchangeof shares, change in corporate structure or other transaction not involving thereceipt of consideration by the Company), the Plan will be appropriatelyadjusted in the class(es) and maximum number of securities subject both to thePlan pursuant to subsection 4(a) and to the nondiscretionary Options specifiedin Section 5, and the outstanding Options will be appropriately adjusted in theclass(es) and number of securities and price per share of stock subject to suchoutstanding Options. The Board shall make such adjustments, and its determinationshall be final, binding and conclusive. (The conversion of any convertiblesecurities of the Company shall not be treated as a transaction “withoutreceipt of consideration” by the Company.)

 

**(b)****                                 ****Dissolution or Liquidation**. In the event of a dissolution orliquidation of the Company, then all outstanding Options shall terminateimmediately prior to such event.

 

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**(c)****                                 ****Corporate Transaction**. In the event of (i) a sale, lease orother disposition of all or substantially all of the securities or assets ofthe Company, (ii) a merger or consolidation in which the Company is not thesurviving corporation or (iii) a reverse merger in which the Company is thesurviving corporation but the shares of Common Stock outstanding immediatelypreceding the merger are converted by virtue of the merger into other property,whether in the form of securities, cash or otherwise, then any survivingcorporation or acquiring corporation may assume any Options outstanding underthe Plan or may substitute similar Options (including an option to acquire thesame consideration paid to the stockholders in the transaction described inthis subsection 11(c)) for those outstanding under the Plan. In the event nosurviving corporation or acquiring corporation assumes such Options orsubstitutes similar Options for those outstanding under the Plan, then withrespect to Options held by Optionholders whose Continuous Service has notterminated, the vesting of such Options (and the time during which such Optionsmay be exercised) shall be accelerated in full, and the Options shall terminateif not exercised 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.

 

**12.**                               AMENDMENTOF THE PLAN AND OPTIONS.

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**(a)****                                 ****Amendment of Plan**. The Board at any time, and from time totime, may amend the Plan. However, except as provided in Section 11 relating toadjustments upon changes in stock, no amendment shall be effective unlessapproved by the stockholders of the Company to the extent stockholder approvalis necessary to satisfy the requirements of Rule 16b-3 or any Nasdaq orsecurities exchange listing requirements.

 

**(b)****                                 ****Stockholder Approval**. The Board may, in its sole discretion,submit any other amendment to the Plan for stockholder approval.

 

**(c)****                                 ****No Impairment of Rights**. Rights under any Option granted beforeamendment of the Plan shall not be impaired by any amendment of the Plan unless(i) the Company requests the consent of the Optionholder and (ii) theOptionholder consents in writing.

 

**(d)****                                 ****Amendment of Options**. The Board at any time, and from time totime, may amend the terms of any one or more Options; provided, however, thatthe rights under any Option shall not be impaired by any such amendment unless(i) the Company requests the consent of the Optionholder and (ii) theOptionholder consents in writing.

 

**13.**                               TERMINATIONOR SUSPENSION OF THE PLAN.

** **

**(a)****                                 ****Plan Term**. The Board may suspend or terminate thePlan at any time. No Options may be granted under the Plan while the Plan issuspended or after it is terminated.

 

**(b)****                                 ****No Impairment of Rights**. Suspension or termination of the Planshall not impair rights and obligations under any Option granted while the Planis in effect except with the written consent of the Optionholder.

 

**14.**                               EFFECTIVEDATE 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 OFLAW.

** **

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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