**Exhibit 10.22**

 

**RIGEL PHARMACEUTICALS, INC.**

 

**2000 NON-EMPLOYEE DIRECTORS’ STOCK OPTION PLAN**

 

**ADOPTED AUGUST 18, 2000**

**APPROVED BY STOCKHOLDERSSEPTEMBER 11, 2000**

**EFFECTIVE DATE: DECEMBER 4,2000**

**AMENDED AND RESTATED APRIL 24,2003**

**AMENDED AND RESTATED JUNE 20,2003**

**APPROVED BY STOCKHOLDERS JUNE20, 2003**

**AMENDED AND RESTATED APRIL 22,2005**

**APPROVED BY STOCKHOLDERS JUNE2, 2005**

**AMENDED AND RESTATED JANUARY31, 2007**

**APPROVED BY STOCKHOLDERS MAY 31,2007**

**AMENDED AND RESTATED SEPTEMBER18, 2007**

**AMENDED AND RESTATED FEBRUARY21, 2008**

**APPROVED BY STOCKHOLDERS MAY 29,2008**

**AMENDED AND RESTATED MAY 19,2009**

**AMENDED AND RESTATED JANUARY28, 2010**

**APPROVED BY STOCKHOLDERS MAY 27,2010**

 

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

 

**(a)****          ****Eligible Option Recipients**. The persons eligible to receive Options are the Non-Employee Directorsof the Company.

 

**(b)****          ****Available Options**.The purpose of the Plan is to provide a means by which Non-Employee Directorsmay be given an opportunity to benefit from increases in value of the CommonStock through the granting of Nonstatutory Stock Options.

 

**(c)****          ****General Purpose**.The Company, by means of the Plan, seeks to retain the services of itsNon-Employee Directors, to secure and retain the services of new Non-EmployeeDirectors and to provide incentives for such persons to exert maximum effortsfor the success of the Company and its Affiliates.

 

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

 

**(a)****          **“***Affiliate***”means, at the time of determination, any “parent” or “subsidiary” of theCompany as such terms are defined in Rule 405 of the Securities Act.  The Board shall have the authority todetermine the time or times at which “parent” or “subsidiary” status isdetermined within the foregoing definition.

 

**(b)****          *****“******Annual Grant”*** means an Option granted annually to all Non-Employee Directors who meetthe criteria specified in subsection 6(b) of the Plan.

 

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

 

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

 

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

 

**(i)****           **the acquisition (other than from the Company, by any person (as suchterm is defined in Section 13(c) or 14(d) of the Exchange Act ofbeneficial ownership (within the meaning of Rule 13d-3 promulgatedunder the Exchange Act) of fifty percent (50%) or more of thecombined voting power of the Company’s then outstanding voting securities;

 

**(ii)****          **the individuals who, as of the effective date of the Plan, are membersof the Board (the***“Incumbent Board”***), cease forany reason to constitute at least a majority of the Board, unless the election,or nomination for election by the Company’s stockholders, of any new directorwas approved by a vote of at least a majority of the Incumbent Board, and suchnew director shall, for purposes of this Plan, be considered as a member of theIncumbent Board; or

 

**(iii)****        **the closing of:

 

**(1)****          **a merger or consolidation involving the Company if the stockholders ofthe Company, immediately before such merger or consolidation, do not, as aresult of such merger or consolidation, own, directly or indirectly, morethan fifty percent (50%) of the combined voting power of the then outstandingvoting securities of the corporation resulting from such merger orconsolidation in substantially the same proportion as their ownership ofthe 

 

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combined voting power of the voting securities of theCompany outstanding immediately before such merger or consolidation; or

 

**(2)****          **a complete liquidation or dissolution of the Company or an agreement forthe sale or other disposition of all or substantially all of the assets of theCompany.

 

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 moreemployee benefit plans maintained by the Company or any of its subsidiaries or (ii) anycorporation which, immediately prior to such acquisition, is owneddirectly or indirectly by the stockholders of the Company in the sameproportion as their ownership of stock in the Company immediately prior tosuch acquisition.

 

For the avoidance of doubt, the term Change in Controlshall not include a sale of assets, merger or other transaction effectedexclusively for the purpose of changing the domicile of the 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 of 1986, as amended.

 

**(g)****          **“***Common Stock***”means the 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 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 anAffiliate. However, the term “Consultant” shall not include either Directors ofthe Company who are not compensated by the Company for their services asDirectors or Directors of the Company who are merely paid a director’s fee bythe Company for their services as Directors.

 

**(j)****           **“***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. 

 

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The Optionholder’s Continuous Service shall not bedeemed to have terminated merely because of a change in the capacity in whichthe Optionholder renders service to the Company or an Affiliate as an Employee,Consultant or Director or a change in the entity for which the Optionholderrenders such service, provided that there is no interruption or termination ofthe Optionholder’s service. For example, a change in status withoutinterruption from a Non-Employee Director of the Company to a Consultant of anAffiliate or an Employee of the Company will not constitute an interruption ofContinuous Service. The Board or the chief executive officer of the Company, inthat party’s sole discretion, may determine whether Continuous Service shall beconsidered interrupted in the case of any leave of absence approved by thatparty, including sick leave, military leave or any other personal leave.

 

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

 

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

 

**(m)****         **“***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.

 

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

 

**(o)****          **“***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 any established stock exchange ortraded on the Nasdaq National Market or the Nasdaq SmallCap Market, the FairMarket Value of a share of Common Stock shall be the closing sales price forsuch stock (or the closing bid, if no sales were reported) as quoted on suchexchange or market (or the exchange or market with the greatest volume oftrading in the Common Stock) on the last market trading day prior to the day ofdetermination, as reported in The Wall Street Journal or such other source asthe Board deems reliable.

 

**(ii)****          **In the absence of such markets for the Common Stock, the Fair MarketValue shall be determined in good faith by the Board.

 

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**(p)****          *****“******Initial Grant”*** means an Option granted to a Non-Employee Director who meets the criteriaspecified in subsection 6(a) of the Plan.

 

**(q)****          *****“******IPO Date”*** means the effective date of the initial public offering of the CommonStock.

 

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

 

**(s)****          **“***Nonstatutory Stock Option***” means an Option not intended to qualify as an incentive stock optionwithin the meaning of Section 422 of the Code and the regulationspromulgated thereunder.

 

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

 

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

 

**(v)****           **“***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.

 

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

 

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

 

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

 

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**(z)****          **“***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 administrationof the Plan to a committee.

 

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

 

**(i)****           **To determine the provisions of each Option to the extent not specifiedin the Plan.

 

**(ii)****          **To construe and interpret the Plan and Options granted under it, and toestablish, amend and revoke rules and regulations for its administration.The Board, in the exercise of this power, may correct any defect, omission orinconsistency in the Plan or in any Option Agreement, in a manner and to theextent it shall deem necessary or expedient to make the Plan fully effective.

 

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

 

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

 

**(v)****           **Generally, to exercise such powers and to perform such acts as the Boarddeems necessary or expedient to promote the best interests of the Company thatare not in conflict with the provisions of the Plan.

 

**(c)****          ****Effect of Board’s Decision.** All determinations, interpretations and constructions made by the Boardin good faith shall not be subject to review by any person and shall be final,binding and conclusive on all persons.

 

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**(d)****          ****Cancellation and Re-Grant of Options**. Notwithstanding anything to the contrary in the Plan, neither theBoard nor any Committee shall have the authority to: (i) reprice anyoutstanding Option under the Plan, (ii) cancel and re-grant anyoutstanding Option under the Plan, or (iii) effect any other action thatis treated as a repricing under generally accepted accounting principlesunless, in each case, the stockholders of the Company have approved such anaction within twelve (12) months prior to such an event.

 

**4.****            ****SHARES SUBJECT TO THE PLAN.**

 

**(a)****          ****Share Reserve**.Subject to the provisions of Section 11 relating to adjustments uponchanges in the Common Stock, the Common Stock that may be issued pursuant toOptions shall not exceed in the aggregate 885,000 shares of Common Stock, whichnumber consists of (i) 33,333 shares of Common stock initially reservedfor issuance under the Plan plus (ii) 66,667 shares of Common stockapproved by the Board in April 2003 and subsequently approved by theCompany’s stockholders plus (iii) 225,000 shares of Common Stock approvedby the Board in April 2005 and subsequently approved by the Company’sstockholders plus (iv) 110,000 shares of Common Stock approved by theBoard in January 2007 and subsequently approved by the Company’sstockholders plus (v) 100,000 shares of Common Stock approved by the Boardin February 2008 and subsequently approved by the Company’s stockholdersplus (vi) 350,000 shares of Common Stock approved by the Board in January 2010and subsequently approved by the Company’s stockholders.

 

**(b)****          ****Reversion of Shares to the Share Reserve**. If any Option shall for any reason expire or otherwise terminate, inwhole or in part, without having been exercised in full, the shares of CommonStock not acquired under such Option shall revert to and again become availablefor issuance under the Plan. If any shares subject to an Option are notdelivered to an Optionholder because the Option is exercised through areduction of shares subject to the Option (*i.e*., “net exercised”), the number of shares that are not deliveredto the Optionholder shall not remain available for issuance under the Plan. Ifany shares subject to an Option are not delivered to an Optionholder becausesuch shares are withheld in satisfaction of the withholding of taxes incurredin connection 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 to the Plan may be unissued shares orreacquired shares, bought on the market or otherwise.

 

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

 

The Options as set forth in section 6 automaticallyshall be granted under the Plan to all Non-Employee Directors who meet the specifiedcriteria.

 

**6.****            ****NON-DISCRETIONARY GRANTS.**

 

**(a)****          ****Initial Grants.**Without any further action of the Board, each person who is elected orappointed for the first time to be a Non-Employee Director automatically shall,upon the date of his or her initial election or appointment to be aNon-Employee Director by the Board or stockholders of the Company, be grantedan Initial Grant to purchase twenty-five thousand (25,000) shares of CommonStock on the terms and conditions set forth herein.

 

**(b)****          ****Annual Grants.**Without any further action of the Board, a Non-Employee Director shall begranted an Annual Grant as follows: On the day following each Annual Meetingcommencing with the Annual Meeting in 2010, each person who is then aNon-Employee Director automatically shall be granted an Annual Grant topurchase fifteen thousand (15,000) shares of Common Stock on the terms andconditions set forth herein;*provided,however*, that if the person has not been serving as a Non-EmployeeDirector for the entire period since the preceding Annual Meeting, then thenumber of shares subject to the Annual Grant shall be reduced pro rata for eachfull quarter prior to the date of grant during which such person did not serveas a Non-Employee Director.

 

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

 

Each Option shall be in such form and shall containsuch terms and conditions as required by the Plan. Each Option shall containsuch additional terms and conditions, not inconsistent with the Plan, as theBoard shall deem appropriate. Each Option shall include (through incorporationof provisions hereof by reference in the Option or otherwise) the substance ofeach of the following provisions:

 

**(a)****          ****Term**. NoOption shall be exercisable after the expiration of ten (10) years fromthe date it was granted.

 

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**(b)****          ****Exercise Price**.The exercise price of each Option shall be one hundred percent (100%) of theFair Market Value of the stock subject to the Option on the date the Option isgranted. Notwithstanding the foregoing, an Option may be granted with anexercise price lower than that set forth in the preceding sentence if suchOption is granted pursuant to an assumption or substitution for another optionin a manner satisfying the provisions of Section 424(a) of the Code.

 

**(c)****          ****Consideration**.The purchase price of stock acquired pursuant to an Option may be paid, to theextent permitted by applicable statutes and regulations, in any combination ofthe following methods:

 

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

 

**(ii)****          **Provided that at the time of exercise the Common Stock is publiclytraded and quoted regularly in*The WallStreet Journal*, by delivery to the Company of shares of Common Stockthat are 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 at the time of exercise the Common Stock is publiclytraded and quoted regularly in*The WallStreet Journal*, pursuant to a program developed under Regulation Tas promulgated by the Federal Reserve Board that, prior to the issuance ofCommon Stock, results in either the receipt of cash (or check) by the Companyor the receipt of irrevocable instructions to pay the aggregate exercise priceto the Company from the sales proceeds.

 

**(iv)****         **By a “net exercise” arrangement pursuant to which the Company will reducethe number of shares of Common Stock issued upon exercise by the largest wholenumber of shares with a Fair Market Value that does not exceed the aggregateexercise price;*  provided, however,* that theCompany shall accept a cash or other payment from the Optionholder to theextent of any remaining balance of the aggregate exercise price not satisfiedby such holding back of whole shares;*  provided, further, however,* thatshares of Common Stock will no longer be outstanding under an Option and willnot be exercisable thereafter to the extent that (i) shares are used topay the exercise price pursuant to the “net exercise,” (ii) shares 

 

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are delivered to the Optionholder as a result of suchexercise, and (iii) shares are withheld to satisfy tax withholdingobligations.

 

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

 

**(i)****           ****Restrictions on Transfer.**  An Option shall not be transferable except bywill or by the laws of descent and distribution and shall be exercisable duringthe lifetime of the Optionholder only by the Optionholder; *provided,however*, that the Board may, in its sole discretion, permit transferof the Option in a manner that is not prohibited by applicable tax andsecurities laws upon the Optionholder’s request.  Except as explicitly provided herein, anOption may not be transferred for consideration.

 

**(ii)****          ****Domestic Relations Orders.**  Notwithstanding the foregoing, an Option maybe transferred pursuant to a domestic relations order.

 

**(iii)****        ****Beneficiary Designation.**  Notwithstanding the foregoing, theOptionholder may, by delivering written notice to the Company, in a formprovided by or otherwise satisfactory to the Company and any broker designatedby the Company to effect Option exercises, designate a third party who, in theevent of the death of the Optionholder, shall thereafter be entitled toexercise the Option and receive the Common Stock or other considerationresulting from such exercise.  In theabsence of such a designation, the executor or administrator of theOptionholder’s estate shall be entitled to exercise the Option and receive theCommon Stock or other consideration resulting from such exercise.

 

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

 

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

 

**(i)****           **Each Option granted as an initial grant shall vest in accordance withthe schedule set forth below that results in a shorter period of full vesting:

 

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

 

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**(2)**           the Option shall vest in equal monthly installments after the date ofgrant over a period commencing on the date that the Optionholder is appointedfor the first time to be a Non-Employee Director by the Board and ending on thedate of the Annual Meeting at which the Optionholder is first scheduled to beconsidered for election to be a Non-Employee Director by the stockholders ofthe Company.

 

**(ii)**           Each Option granted as an annual grant before the Annual Meeting in 2008shall vest such that 1/36th of the shares of Common Stock subject to suchOption shall 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 1/12 th of the shares of Common Stock subject to suchOption shall vest each month after the date of grant over a period of one (1) year.

 

**(g)****          ****Termination of 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)****          ****Extension of Termination Date**. If the exercise of the Option following the termination of theOptionholder’s Continuous Service (other than upon the Optionholder’s death orDisability) would be prohibited at any time solely because the issuance ofshares would violate the registration requirements under the Securities Act,then the Option shall terminate on the earlier of (i) the expiration ofthe term of the Option set forth in subsection 7(a) or (ii) theexpiration of a total period of three (3) months (that need not beconsecutive) after the termination of the Optionholder’s Continuous Serviceduring which the exercise of the Option would not be in violation of suchregistration requirements.

 

**(i)****           ****Disability of Optionholder**. In the event an Optionholder’s Continuous Service terminates as aresult of the Optionholder’s Disability, the Optionholder may exercise his orher Option (to the extent that the Optionholder was entitled to exercise it asof the date of termination), but only within such period of time ending on theearlier of (i) the date twelve (12) months following such termination 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 herein, the Option shall terminate.

 

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**(j)****           ****Death of Optionholder**. Inthe event (i) an Optionholder’s Continuous Service terminates as a resultof the Optionholder’s death or (ii) the Optionholder dies within thethree-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 earlier of (1) the date eighteen (18) months following thedate of death or (2) the expiration of the term of such Option as setforth in the Option Agreement. If, after death, the Option is not exercisedwithin the time specified herein, the Option shall terminate.

 

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

 

**(a)****          ****Availability of Shares**.During the terms of the Options, the Company shall keep available at all timesthe number of shares of Common Stock required to satisfy such Options.

 

**(b)****          ****Securities Law Compliance**. The Company shall seek to obtain from each regulatory commission oragency having jurisdiction over the Plan such authority as may be required togrant Options 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 Optionsshall constitute general funds of the Company.

 

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

 

**(a)****          ****Stockholder Rights**. 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.

 

**(b)****          ****No Service 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 case maybe.

 

**(c)****          ****Investment Assurances**.The Company may require an Optionholder, as a condition of exercising oracquiring stock under any Option, (i) to give written assurancessatisfactory to the Company as to the Optionholder’s knowledge and experiencein financial and business matters and/or to employ a purchaser representativereasonably satisfactory to the Company who is knowledgeable and experienced infinancial and business matters and that he or she is capable of evaluating,alone or together with the purchaser representative, the merits and risks ofexercising the Option; and (ii) to give written assurances satisfactory tothe Company 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)****          ****Withholding Obligations**.The Optionholder may satisfy any federal, state or local tax withholdingobligation relating to the exercise or acquisition of stock under an Option byany of the following means (in addition to the Company’s right to withhold fromany compensation paid to the Optionholder by the Company) or by a combinationof such means:  (i) tendering a cash payment; (ii) authorizingthe Company 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 

 

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with a value exceeding the minimum amount of taxrequired to be withheld by law; or (iii) delivering to the Company ownedand unencumbered shares of the Common Stock.

 

**(e)**           **Electronic Delivery**.  Any reference herein to a “written” agreementor document shall include any agreement or document delivered electronically orposted on the Company’s intranet.

 

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

 

**(a)****          ****Capitalization Adjustments**. If any change is made in the stock subject to the Plan, or subject toany Option, without the receipt of consideration by the Company (throughmerger, 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 bythe Company), 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)****          ****Corporate Transaction**. 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 surviving corporationbut the shares of Common Stock outstanding immediately preceding the merger areconverted by virtue of the merger into other property, whether in the form ofsecurities, cash or otherwise, then any surviving corporation or acquiringcorporation may assume any Options outstanding under the Plan or may substitutesimilar Options (including an option to acquire the same consideration paid tothe stockholders in the transaction described in this subsection 11(b)) forthose 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)****          ****Change in Control**.  Upon a Change in Control, all Options held byeach Optionholder whose Continuous Service has not terminated immediately priorto the Change in 

 

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Control shall become fully vested and exercisableimmediately prior to the effectiveness of such Change in Control.

 

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

 

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

 

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

 

**(c)****          ****No Impairment 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)****          ****Amendment of 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 beimpaired by any such amendment unless (i) the Company requests the consentof the Optionholder and (ii) the Optionholder consents in writing.

 

**13.****         ****TERMINATION OR SUSPENSION OF THE PLAN.**

 

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

 

**(b)****          ****No Impairment of Rights**. Suspensionor termination of the Plan shall not impair rights and obligations under anyOption granted while the Plan is in effect except with the written consent ofthe Optionholder.

 

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

 

The Plan shall become effective on the IPO Date, butno Option shall be exercised unless and until the Plan has been approved by thestockholders of the Company, which approval shall be within twelve (12) monthsbefore or after the date the Plan is adopted by the Board.

 

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

 

All questions concerning the construction, validityand interpretation of this Plan shall be governed by the law of the State ofDelaware, without regard to such state’s conflict of laws rules.

 

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