Exhibit 4.3


NEOMAGIC CORPORATION


2003 STOCK PLAN


1.             Purposes of the Plan.  The purposes of this 2003 Stock Plan are:


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


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


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


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


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


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


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


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


(d)           “Change
in Control” means the occurrence of any of the following events:


(i)    Any
“person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act),
directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the total voting power represented by the Company’s then
outstanding voting securities; or


(ii)   The
consummation of the sale or disposition by the Company of all or substantially
all of the Company’s assets;


(iii)  A change
in the composition of the Board occurring within a two-year period, as a result
of which fewer than a majority of the directors are Incumbent Directors.  “Incumbent Directors” means directors who
either (A) are Directors as of the effective date of the Plan, or
(B) are elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of the Incumbent Directors at the time
of such election or nomination (but will not include 


 


 

















 


an
individual whose election or nomination is in connection with an actual or
threatened proxy contest relating to the election of directors to the Company);
or


(iv)  The
consummation of a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or its parent) at least fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity or its parent outstanding immediately
after such merger or consolidation.


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


(f)            “Committee”
means a committee of Directors appointed by the Board in accordance with
Section 4 of the Plan.


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


(h)           “Company”
means NeoMagic Corporation, a Delaware corporation.


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


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


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


(l)            “Employee”
means any person, including Officers and Directors, employed by the Company or
any Parent or Subsidiary of the Company. 
A Service Provider will not cease to be an Employee in the case of
(i) any leave of absence approved by the Company or (ii) transfers
between locations of the Company or between the Company, its Parent, any
Subsidiary, or any successor.  For
purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract.  If reemployment upon
expiration of a leave of absence approved by the Company is not so guaranteed,
then three (3) months following the 91st day of such leave any
Incentive Stock Option held by the Optionee will cease to be treated as an
Incentive Stock Option and will be treated for tax purposes as a Non­statutory
Stock Option.  Neither service as a
Director nor payment of a director’s fee by the Company will be sufficient to
constitute “employment” by the Company.


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


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


(i)    If the
Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq National Market or The Nasdaq
SmallCap Market of The Nasdaq Stock Market, its Fair Market Value will be the
closing sales price 


 


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for such
stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the day of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems
reliable;


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


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


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


(p)           “Inside Director” means a Director who is an
Employee.


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


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


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


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


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


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


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


(x)            “Outside Director” means a Director who is not an
Employee.


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


(z)            “Plan”
means this 2003 Stock Plan.


 


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(aa)         “Restricted
Stock” means shares of Common Stock acquired pursuant to a grant of Stock
Purchase Rights under Section 11 of the Plan or Shares of restricted stock
issued pursuant to an Option.


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


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


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


(ee)         “Stock
Appreciation Right” or “SAR” means an award that pursuant to Section
12 is designated as a SAR.


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


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


(hh)         “Share”
means a share of the Common Stock, as adjusted in accordance with
Section 14 of the Plan.


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


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


3.             Stock Subject to the Plan.  Subject to the provisions of Section 14 of the Plan, the maximum aggregate
number of Shares that may be optioned and sold under the Plan is 500,000 Shares plus (a) any
Shares which have been reserved but not issued under the Company’s Amended 1993
Stock Plan (the “1993 Plan”) as of the date the 1993 Plan is scheduled to
terminate and (b) any Shares returned to the 1993 Plan as a result of
termination of options or repurchase of Shares issued under the 1993 Plan.  The
Shares may be authorized, but unissued, or reacquired Common Stock.  Notwithstanding the foregoing, the Company
may not grant more than 20% of the total Shares reserved for issuance hereunder
pursuant to Options, Stock Purchase Rights or Stock Appreciation Rights that
have a per share exercise or purchase price that is less than Fair Market Value
on the date of grant.


If an Option, Stock Purchase Right or Stock
Appreciation Right expires or becomes unexercisable without having been
exercised in full, the unpurchased Shares which were subject thereto will
become available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been
issued under the Plan, whether upon exercise of an Option or right, will not be
returned to the Plan and will not become available for future 


 


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distribution under the Plan, except that if unvested
Shares of Restricted Stock are repurchased by the Company, such Shares will
become available for future grant under the Plan.


4.             Administration of the Plan.


(a)           Procedure.


(i)    Multiple
Administrative Bodies.  Different
Committees with respect to different groups of Service Providers may administer
the Plan.


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


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


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


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


(i)    to
determine the Fair Market Value;


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


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


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


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


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


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(vii) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of satisfying applicable foreign laws;


(viii) to modify or amend each Option, Stock Purchase
Right or Stock Appreciation Right (subject to Section 16(c) of the Plan), including the
discretionary authority to extend the post-termination exercisability period of
Options longer than is otherwise provided for in the Plan;


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


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


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


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


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


6.             Limitations.


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


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


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(c)           The
following limitations will apply to grants of Options and Stock Appreciation
Rights:


(i)    No Service
Provider will be granted, in any fiscal year of the Company, Options or Stock
Appreciation Rights to purchase more than 2,000,000 Shares.


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


(iii)  The
foregoing limitations will be adjusted proportionately in connection with any
change in the Company’s capitalization as described in Section 14.


(iv)  If an
Option or Stock Appreciation Right is cancelled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 14), the cancelled Option will be counted against the
limits set forth in subsections (i) and (ii) above.  For this purpose, if the exercise price of an Option is reduced,
the transaction will be treated as a cancellation of the Option and the grant
of a new Option.


7.             Term
of Plan.  Subject to Section 20  of
the Plan, the Plan will become effective upon its adoption by the Board.  It will continue in effect for a term of ten
(10) years unless terminated earlier under Section 16  of the Plan.


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


9.             Option Exercise Price and Consideration.


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


(i)    In the
case of an Incentive Stock Option


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


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


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


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


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


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


(i)    cash;


(ii)   check;


(iii)  promissory
note;


(iv)  other
Shares, provided Shares acquired directly or indirectly from the Company,
(A) have been vested and owned by the Optionee for more than six (6)
months on the date of surrender, and (B) have a Fair Market Value on the
date of surrender equal to the aggregate exercise price of the Shares as to
which said Option will be exercised;


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


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


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


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


10.           Exercise of Option.


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


 


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Administrator provides otherwise, vesting of Options
granted hereunder will be suspended during any unpaid leave of absence.  An Option may not be exercised for a
fraction of a Share.


An Option will be deemed exercised when the Company
receives: (i) written or electronic notice of exercise (in accordance with
the Option Agreement) from the person entitled to exercise the Option, and
(ii) full payment for the Shares with respect to which the Option is
exercised.  Full payment may consist of
any consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan.  Shares issued upon exercise of an Option will be issued in the
name of the Optionee or, if requested by the Optionee, in the name of the
Optionee and his or her spouse.  Until
the Shares are issued (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company), no right to
vote or receive dividends or any other rights as a stockholder will exist with
respect to the Optioned Stock, notwithstanding the exercise of the Option.  The Company will issue (or cause to be
issued) such Shares promptly after the Option is exercised.  No adjustment will be made for a dividend or
other right for which the record date is prior to the date the Shares are
issued, except as provided in Section 14  of the Plan.


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


(b)           Termination
of Relationship as a Service Provider. 
If an Optionee ceases to be a Service Provider, other than upon the
Optionee’s death or Disability, the Optionee may exercise his or her Option
within such period of time as is specified in the Option Agreement to the
extent that the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement).  In the absence of a
specified time in the Option Agreement, the Option will remain exercisable for
three (3) months following the Optionee’s termination.  Unless otherwise provided by the
Administrator, if on the date of termination the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option will revert to the Plan.  If
after termination the Optionee does not exercise his or her Option within the
time specified by the Administrator, the Option will terminate, and the Shares
covered by such Option will revert to the Plan.


(c)           Disability
of Optionee.  If an Optionee ceases
to be a Service Provider as a result of the Optionee’s Disability, the Optionee
may exercise his or her Option within such period of time as is specified in
the Option Agreement to the extent the Option is vested on the date of termi­nation
(but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement).  In the
absence of a specified time in the Option Agreement, the Option will remain
exercisable for twelve (12) months following the Optionee’s termination.  Unless otherwise provided by the
Administrator, if on the date of termination the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option will revert to the Plan.  If
after termination the Optionee does not exercise his or her Option within the
time specified herein, the Option will terminate, and the Shares covered by
such Option will revert to the Plan.


(d)           Death
of Optionee.  If an Optionee dies
while a Service Provider, the Option may be exercised following the Optionee’s
death within such period of time as is specified in the Option Agreement to the
extent that the Option is vested on the date of death (but in no event may 


 


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the option be exercised later than the expiration of
the term of such Option as set forth in the Option Agreement), by the Optionee’s
designated beneficiary, provided such beneficiary has been designated prior to
Optionee’s death in a form acceptable to the Administrator.  If no such beneficiary has been designated
by the Optionee, then such Option may be exercised by the personal
representative of the Optionee’s estate or by the person(s) to whom the Option
is transferred pursuant to the Optionee’s will or in accordance with the laws
of descent and distribution.  In the
absence of a specified time in the Option Agreement, the Option will remain
exercisable for twelve (12) months following Optionee’s death.  Unless otherwise provided by the
Administrator, if at the time of death Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option will
immediately revert to the Plan.  If the
Option is not so exercised within the time specified herein, the Option will
terminate, and the Shares covered by such Option will revert to the Plan.


11.           Stock Purchase Rights.


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


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


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


(d)           Rights
as a Stockholder.  Once the Stock
Purchase Right is exercised, the purchaser will have the rights equivalent to
those of a stockholder, and will be a stockholder when his or her purchase is
entered upon the records of the duly authorized transfer agent of the
Company.  No adjustment will be made for
a dividend or other right for which the record date is prior to the date the
Stock Purchase Right is exercised, except as provided in Section 14 of the
Plan.


12.           Stock
Appreciation Rights.  Each SAR grant
will be evidenced by a SAR Agreement that will specify the terms of the SAR,
the conditions of exercise, the expiration date, and such other terms and
conditions as the Administrator, in its sole discretion, will determine.  Notwithstanding the foregoing, the rules of
Sections 9(c) and 10 of the Plan also will apply to SARs.  Upon exercise of a SAR, an Optionee will be
entitled to receive a payment from the Company (at the discretion of the 


 


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Administrator, in cash, in Shares of equivalent value,
or in some combination thereof) in an amount determined by multiplying (i) the
difference between the Fair Market Value of a Share on the date of exercise
over the exercise price, by (ii) the number of Shares with respect to which the
SAR is exercised.


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


14.           Adjustments;
Dissolution or Liquidation; Merger or Change in Control.


(a)           Adjustments.  In the event that any dividend or other
distribution (whether in the form of cash, Shares, other securities, or other
property), recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase, or exchange
of Shares or other securities of the Company, or other change in the corporate
structure of the Company affecting the Shares occurs, the Administrator, in
order to prevent diminution or enlargement of the benefits or potential
benefits intended to be made available under the Plan, may (in its sole
discretion) adjust the number and class of Shares that may be delivered under
the Plan and/or the number, class, and price of Shares covered by each
outstanding Option, Stock Purchase Right or Stock Appreciation Right, as well
as the numerical Share limits in Section 6 of the Plan.


(b)           Dissolution
or Liquidation.  In the event of the
proposed dissolution or liquidation of the Company, the Administrator will
notify each Optionee as soon as practicable prior to the effective date of such
proposed transaction.  The Administrator
in its discretion may provide for an Optionee to have the right to exercise his
or her Option or Stock Appreciation Right until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares
as to which the Option or Stock Appreciation Right would not otherwise be
exercisable.  In addition, the Administrator
may provide that any Company repurchase option applicable to any Shares
purchased upon exercise of an Option or Stock Purchase Right will lapse as to
all such Shares, provided the proposed dissolution or liquidation takes place
at the time and in the manner contemplated. 
To the extent it has not been previously exercised, an Option, Stock Purchase Right or Stock
Appreciation Right will terminate immediately prior to the consummation of such
proposed action.


(c)           Merger
or Change in Control.  In the event
of a merger of the Company with or into another corporation, or a Change in
Control, each outstanding Option, Stock Purchase Right and Stock Appreciation Right
will be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation.  In the event that the successor corporation
refuses to assume or substitute for the Option, Stock Purchase Right or Stock Appreciation Right, the
Optionee will fully vest in and have the right to exercise the Option, Stock Purchase Right or Stock
Appreciation Right as to all of the Optioned Stock, including Shares as to
which it would not otherwise be vested or exercisable.  If an Option, Stock Purchase Right or Stock 


 


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Appreciation Right becomes fully vested and
exercisable in lieu of assumption or substitution in the event of a merger or
Change in Control, the Administrator will notify the Optionee in writing or
electronically that the Option, Stock Purchase Right or Stock Appreciation Right will
be fully vested and exercisable for a period of fifteen (15) days from the date
of such notice, and the Option, Stock Purchase Right or Stock Appreciation Right will
terminate upon the expiration of such period.


For the purposes of this subsection (c), the Option, Stock Purchase Right or Stock
Appreciation Right will be considered assumed if, following the merger or
Change in Control, the option or right confers the right to purchase or
receive, for each Share subject to the Option, Stock Purchase Right or Stock Appreciation Right
immediately prior to the merger or Change in Control, the consideration
(whether stock, cash, or other securities or property) or, in the case of a
Stock Appreciation Right upon the exercise of which the Administrator determines
to pay cash, the fair market value of the consideration, received in the merger
or Change in Control by holders of Common Stock for each Share held on the
effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
in the merger or Change in Control is not solely common stock of the successor
corporation or its Parent, the Administrator may, with the consent of the
successor corporation, provide for the consideration to be received upon the
exercise of the Option, Stock Purchase Right or Stock Appreciation Right, for each Share
subject to the Option, Stock Purchase Right or Stock Appreciation Right, to be solely common
stock of the successor corporation or its Parent equal in fair market value to
the per share consideration received by holders of Common Stock in the merger
or Change in Control.


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


16.           Amendment and Termination of the
Plan.


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


(b)           Stockholder
Approval.  The Company will obtain
stockholder approval of any Plan amendment to the extent necessary and
desirable to comply with Applicable Laws.


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


17.           Conditions Upon Issuance of Shares.


(a)           Legal
Compliance.  Shares will not be
issued pursuant to the exercise of an Option, Stock Purchase Right or Stock Appreciation Right
unless the exercise of such Option, Stock 


 


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Purchase Right or Stock Appreciation Right and the
issuance and delivery of such Shares will comply with Applicable Laws and will
be further subject to the approval of counsel for the Company with respect to
such compliance.


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


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


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


20.           Stockholder
Approval.  The Plan will be subject
to approval by the stockholders of the Company within twelve (12) months after
the date the Plan is adopted.  Such
stockholder approval will be obtained in the manner and to the degree required
under Applicable Laws.


 


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