exv10w1






Exhibit 10.1




IDM PHARMA, INC.




2000 STOCK PLAN




Adopted: April 21, 2000

Approved by Stockholders: June 9, 2000

Amended by the Board: December 4, 2001

Amended by the Board: January 14, 2002

Amendment Approved by Stockholders: June 18, 2002

Amended by the Board: June 4, 2003

Amendment Approved by Stockholders: July 15, 2003

Amended by the Board: March 3, 2004

Amendment Approved by Stockholders: June 15, 2004

Amended by the Board: March 15, 2005

Amendment Approved by Stockholders: August 11, 2005

Amended by the Board: March 23, 2006

Amendment Approved by Stockholders: June 14, 2006

Amended by the Board: April 9, 2007

Amendment Approved by the Stockholders: June 14, 2007

Amended by the Board: April 3, 2008

Amendment Approved by the Stockholders: June 25, 2008




Termination Date: April 20, 2010




1. Purposes.




     (a) Eligible Stock Award Recipients. The persons eligible to receive Stock Awards are the
Employees, Directors and Consultants of the Company and its Affiliates.



     (b) Available Stock Awards. The purpose of the Plan is to provide a means by which eligible
recipients of Stock Awards may be given an opportunity to benefit from increases in value of the
Common Stock through the granting of the following Stock Awards: (i) Incentive Stock Options, (ii)
Nonstatutory Stock Options, (iii) stock bonuses and (iv) rights to acquire restricted stock.



     (c) General Purpose. The Company, by means of the Plan, seeks to retain the services of the
group of persons eligible to receive Stock Awards, to secure and retain the services of new members
of this group and to provide incentives for such persons to exert maximum efforts for the success
of the Company and its Affiliates.



2. Definitions.




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



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



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



     (d) “Committee” means a committee of one or more members of the Board appointed by the Board
in accordance with subsection 3(c).



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



     (f) “Company” means IDM Pharma, Inc., a Delaware corporation.



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



     (h) “Continuous Service” means that the Participant’s service with the Company or an
Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. The
Participant’s Continuous Service shall not be deemed to have terminated merely because of a change
in the capacity in which the Participant renders service to the Company or an Affiliate as an
Employee, Consultant or Director or a change in the entity for which the Participant renders such
service, provided that there is no interruption or termination of the Participant’s Continuous
Service. For example, a change in status from an Employee of the Company to a Consultant of an
Affiliate or a Director will not constitute an interruption of Continuous Service. To the extent
permitted by law, the Board or the chief executive officer of the Company, in that party’s sole
discretion, may determine whether Continuous Service shall be considered interrupted in the case of
any leave of absence approved by that party, including sick leave, military leave or any other
personal leave. Notwithstanding the foregoing, a leave of absence shall be treated as Continuous
Service for purposes of vesting in a Stock Award only to such extent as may be provided in the
Company’s leave of absence policy or in the written terms of the Participant’s leave of absence
agreement, to the extent permitted by law.



     (i) “Covered Employee” means the chief executive officer and the four (4) other highest
compensated officers of the Company for whom total compensation is required to be reported to
stockholders under the Exchange Act, as determined for purposes of Section 162(m) of the Code.



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



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



     (l) “Employee” means any person, including Officers and Directors, employed by the Company or
an Affiliate. Mere service as a Director or payment of a director’s fee by the



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Company or an Affiliate shall not 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 any established stock exchange or traded on the Nasdaq
National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share of Common Stock
shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or market (or the exchange or market with the greatest volume of trading in
the Common Stock) on the day of determination, as reported in The Wall Street Journal or such other
source as the Board deems reliable; provided, however, that if the day of determination is not a
market trading day, then the Fair Market Value of a share of Common Stock shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or market (or the exchange or market with the greatest volume of trading in the Common
Stock) on the last market trading day prior to the day of determination, as reported in The Wall
Street Journal or such other source as the Board deems reliable.




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




     (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) “Non-Employee Director” means a Director who either (i) is not a current Employee or
Officer of the Company or its parent or a subsidiary, does not receive compensation (directly or
indirectly) from the Company or its parent or a subsidiary for services rendered as a consultant or
in any capacity other than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
(“Regulation S-K”)), does not possess an interest in any other transaction as to which disclosure
would be required under Item 404(a) of Regulation S-K and is not engaged in a business relationship
as to which disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is otherwise
considered a “non-employee director” for purposes of Rule 16b-3. In addition, for purposes of
Section 8 only, “Non-Employee Director” also shall include any Director who is not an Employee of
the Company or an Affiliate at the time an Option is granted to such Director.



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



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



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     (s) “Option” means an Incentive Stock Option or a Nonstatutory Stock Option granted pursuant
to the Plan.



     (t) “Option Agreement” means a written agreement between the Company and an Optionholder
evidencing the terms and conditions of an individual Option grant. Each Option Agreement shall be
subject to the terms and conditions of the Plan.



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



     (v) “Outside Director” means a Director who either (i) is not a current employee of the
Company or an “affiliated corporation” (within the meaning of Treasury Regulations promulgated
under Section 162(m) of the Code), is not a former employee of the Company or an “affiliated
corporation” receiving compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an “affiliated corporation” at any time and is
not currently receiving direct or indirect remuneration from the Company or an “affiliated
corporation” for services in any capacity other than as a Director or (ii) is otherwise considered
an “outside director” for purposes of Section 162(m) of the Code.



     (w) “Participant” means a person to whom a Stock Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Stock Award.



     (x) “Plan” means this IDM Pharma, Inc. 2000 Stock 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.



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



     (aa) “Stock Award” means any right granted under the Plan, including an Option, a stock bonus
and a right to acquire restricted stock.



     (bb) “Stock Award Agreement” means a written agreement between the Company and a holder of a
Stock Award evidencing the terms and conditions of an individual Stock Award grant. Each Stock
Award Agreement shall be subject to the terms and conditions of the Plan.



     (cc) “Ten Percent Stockholder” means a person who owns (or is deemed to own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of any of its Affiliates.



3. Administration.




     (a) Administration by Board. The Board shall administer the Plan unless and until the Board
delegates administration to a Committee, as provided in subsection 3(c). Any interpretation of the
Plan by the Board and any decision by the Board under the Plan shall be final and binding on all
persons.



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



          (i) To determine from time to time which of the persons eligible under the Plan shall be
granted Stock Awards; when and how each Stock Award shall be granted; what type or combination of
types of Stock Award shall be granted; the provisions of each Stock Award granted (which need not
be identical), including the time or times when a person shall be permitted to receive Common Stock
pursuant to a Stock Award; and the number of shares of Common Stock with respect to which a Stock
Award shall be granted to each such person.




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




          (iii) To amend the Plan or a Stock Award as provided in Section 13.




          (iv) To terminate or suspend the Plan as provided in Section 14.




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




          (vi) To adopt such procedures and sub-plans as are necessary or appropriate to permit
participation in the Plan by Employees and Consultants who are foreign nationals or employed or
providing services outside the United States.




     (c) Delegation to Committee.



          (i) General. The Board may delegate administration of the Plan to a Committee or Committees
of one (1) or more members of the Board, and the term “Committee” shall apply to any person or
persons to whom such authority has been delegated. If administration is delegated to a Committee,
the Committee shall have, in connection with the administration of the Plan, the powers theretofore
possessed by the Board, including the power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise (and references in this Plan to the Board shall
thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board.
The Board may abolish the Committee at any time and revest in the Board the administration of the
Plan.




          (ii) Committee Composition when Common Stock is Publicly Traded. At times when the Common
Stock is publicly traded, in the discretion of the Board, a Committee may consist solely of two or
more Outside Directors, in accordance with Section 162(m) of the Code, and/or solely of two or more
Non-Employee Directors, in accordance with Rule 16b-3. Within the scope of such authority, the
Board or the Committee may (1) delegate to a committee



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of one or more members of the Board who are not Outside Directors, the authority to grant
Stock Awards to eligible persons who are either (a) not then Covered Employees and are not expected
to be Covered Employees at the time of recognition of income resulting from such Stock Award or (b)
not persons with respect to whom the Company wishes to comply with Section 162(m) of the Code
and/or (2) delegate to a committee of one or more members of the Board who are not Non-Employee
Directors the authority to grant Stock Awards to eligible persons who are not then subject to
Section 16 of the Exchange Act.




     (d) Delegation to an Officer. The Board may delegate to one or more Officers of the Company
the authority to do one or both of the following (i) designate Officers and Employees of the
Company or any of its Subsidiaries to be recipients of Stock Awards and the terms thereof, and (ii)
determine the number of shares of Common Stock to be subject to such Stock Awards granted to such
Officers and Employees of the Company; provided, however, that the Board resolutions regarding such
delegation shall specify the total number of shares of Common Stock that may be subject to the
Stock Awards granted by such Officer and that such Officer may not grant a Stock Award to himself
or herself. Notwithstanding anything to the contrary in this Section 3(d), the Board may not
delegate to an Officer authority to determine the Fair Market Value of the Common Stock pursuant to
Section 2(n)(ii) above.



4. Shares Subject to the Plan.




     (a) Share Reserve. Subject to the provisions of Section 12 relating to adjustments upon
changes in Common Stock, the Common Stock that may be issued pursuant to Stock Awards shall not
exceed in the aggregate three million two hundred twenty-eight thousand five hundred seventy-one
(3,228,571) shares of Common Stock.



     (b) Reversion of Shares to the Share Reserve. If any Stock Award 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 acquired under such Stock Award shall revert to and again become available for
issuance under the Plan.



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



5. Eligibility.




     (a) Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to
Employees. Stock Awards other than Incentive Stock Options may be granted to Employees, Directors
and Consultants.



     (b) Ten Percent Stockholders. A Ten Percent Stockholder shall not be granted an Incentive
Stock Option unless the exercise price of such Option is at least one hundred ten percent (110%) of
the Fair Market Value of the Common Stock at the date of grant and the Option is not exercisable
after the expiration of five (5) years from the date of grant.



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     (c) Section 162(m) Limitation. Subject to the provisions of Section 12 relating to
adjustments upon changes in the shares of Common Stock, no Employee shall be eligible to be granted
Options subject to Section 6 and restricted stock purchase rights subject to subsection 7(b)
covering, in the aggregate, more than five hundred thousand (500,000) shares of the Common Stock
during any calendar year.



     (d) Consultants.



          (i) A Consultant shall not be eligible for the grant of a Stock Award if, at the time of
grant, a Form S-8 Registration Statement under the Securities Act (“Form S-8”) is not available to
register either the offer or the sale of the Company’s securities to such Consultant because of the
nature of the services that the Consultant is providing to the Company, or because the Consultant
is not a natural person, or as otherwise provided by the rules governing the use of Form S-8,
unless the Company determines both (i) that such grant (A) shall be registered in another manner
under the Securities Act (e.g., on a Form S-3 Registration Statement) or (B) does not require
registration under the Securities Act in order to comply with the requirements of the Securities
Act, if applicable, and (ii) that such grant complies with the securities laws of all other
relevant jurisdictions.




          (ii) Form S-8 generally is available to consultants and advisors only if (i) they are natural
persons; (ii) they provide bona fide services to the issuer, its parents, its majority-owned
subsidiaries or majority-owned subsidiaries of the issuer’s parent; and (iii) the services are not
in connection with the offer or sale of securities in a capital-raising transaction, and do not
promote or maintain, directly or indirectly, a market for the issuer’s securities.




6. Option Provisions.




     Each Option shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate. All Options shall be separately designated Incentive Stock Options or
Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate
certificate or certificates will be issued for shares of Common Stock purchased on exercise of each
type of Option. The provisions of separate Options need not be identical, but each Option shall
include (through incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:



     (a) Term. Subject to the provisions of subsection 5(b) regarding Ten Percent Stockholders, no
Incentive Stock Option shall be exercisable after the expiration of ten (10) years from the date it
was granted.



     (b) Exercise Price of an Incentive Stock Option. Subject to the provisions of subsection 5(b)
regarding Ten Percent Stockholders, the exercise price of each Incentive Stock Option shall be not
less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the
Option on the date the Option is granted. Notwithstanding the foregoing, an Incentive Stock Option
may be granted with an exercise price lower than that set forth in the preceding sentence if such
Option is granted pursuant to an assumption or



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substitution for another option in a manner satisfying the provisions of Section 424(a) of the
Code.




     (c) Exercise Price of a Nonstatutory Stock Option. The exercise price of each Nonstatutory
Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of the
Common Stock subject to the Option on the date the Option is granted. Notwithstanding the
foregoing, a Nonstatutory Stock Option may be granted with an exercise price lower than that set
forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution
for another option in a manner satisfying the provisions of Section 424(a) of the Code. This
Section 6(c) may not be amended without the affirmative vote of the holders of a majority of the
shares present and represented and entitled to vote at a duly convened meeting of stockholders of
the Company.



     (d) Consideration. The purchase price of Common Stock acquired pursuant to an Option shall be
paid, to the extent permitted by applicable statutes and regulations, either (i) in cash at the
time the Option is exercised or (ii) at the discretion of the Board (such Board discretion may be
exercised either at the time of the grant of the Option or at any time following the grant of the
Option to permit the following payment alternatives) (1) by delivery to the Company of other Common
Stock, (2) according to a deferred payment or other similar arrangement with the Optionholder or
(3) in any other form of legal consideration that may be acceptable to the Board; provided,
however, that at any time that the Company is incorporated in Delaware, payment of the Common
Stock’s “par value,” as defined in the Delaware General Corporation Law, shall not be made by
deferred payment.



          In the case of any deferred payment arrangement, interest shall compound at least annually and
shall be charged at the minimum rate of interest necessary to avoid (i) the imputation of interest
income to the Company and compensation income to the Optionholder under any applicable provisions
of the Code, and (ii) adverse financial accounting treatment of the Option.




     (e) Transferability of an Incentive Stock Option. An Incentive Stock Option shall not be
transferable except by will or by the laws of descent and distribution and shall be exercisable
during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing,
(i) the Optionholder may, by delivering written notice to the Company, in a form satisfactory to
the Company, designate a third party who, in the event of the death of the Optionholder, shall
thereafter be entitled to exercise the Incentive Stock Option, and (ii) the Incentive Stock Option
may be transferred pursuant to a domestic relations order.



     (f) Transferability of a Nonstatutory Stock Option. A Nonstatutory Stock Option shall be
transferable to the extent provided in the Option Agreement. If the Nonstatutory Stock Option does
not provide for transferability, then the Nonstatutory Stock Option shall not be transferable
except by will or by the laws of descent and distribution and shall be exercisable during the
lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, (i) the
Optionholder may, by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the



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Optionholder, shall thereafter be entitled to exercise the Nonstatutory Stock Option, and (ii)
the Nonstatutory Stock Option may be transferred pursuant to a domestic relations order.




     (g) Vesting Generally. The total number of shares of Common Stock subject to an Option may,
but need not, vest and therefore become exercisable in periodic installments that may, but need
not, be equal. The Option may be subject to such other terms and conditions on the time or times
when it may be exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary. The provisions of this
subsection 6(g) are subject to any Option provisions governing the minimum number of shares of
Common Stock as to which an Option may be exercised.



     (h) Termination of Continuous Service. In the event an Optionholder’s Continuous Service
terminates (other than upon the Optionholder’s death or Disability), the Optionholder may exercise
his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of
the date of termination) but only within such period of time ending on the earlier of (i) the date
three (3) months following the termination of the Optionholder’s Continuous Service (or such longer
or shorter period specified in the Option Agreement), or (ii) the expiration 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 within the time specified, the Option shall terminate.



     (i) Extension of Termination Date. An Optionholder’s Option Agreement may also provide that
if the exercise of the Option following the termination of the Optionholder’s Continuous Service
(other than upon the Optionholder’s death or Disability) would be prohibited at any time solely
because the issuance of shares of Common Stock would violate the registration requirements under
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 6(a) or (ii) the expiration of a period of three (3)
months after the termination of the Optionholder’s Continuous Service during which the exercise of
the Option would not be in violation of such registration requirements.



     (j) Disability of Optionholder. In the event that an Optionholder’s Continuous Service
terminates as a result of the Optionholder’s Disability, the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of
termination), but only within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period specified in the Option
Agreement) or (ii) the expiration 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 within the time
specified, the Option shall terminate.



     (k) Death of Optionholder. In the event (i) an Optionholder’s Continuous Service terminates
as a result of the Optionholder’s death or (ii) the Optionholder dies within the period (if any)
specified in the Option Agreement after the termination of the Optionholder’s Continuous Service
for a reason other than death, then the Option may be exercised (to the extent the Optionholder was
entitled to exercise such Option as of the date of death) by the Optionholder’s estate, by a person
who acquired the right to exercise the Option by bequest or inheritance or by a person designated
to exercise the option upon the Optionholder’s death



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pursuant to subsection 6(e) or 6(f), but only within the period ending on the earlier of (1)
the date eighteen (18) months following the date of death (or such longer or shorter period
specified in the Option Agreement) or (2) the expiration of the term of such Option as set forth in
the Option Agreement. If, after death, the Option is not exercised within the time specified, the
Option shall terminate.




     (l) Early Exercise. The Option may, but need not, include a provision whereby the
Optionholder may elect at any time before the Optionholder’s Continuous Service terminates to
exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior
to the full vesting of the Option. Any unvested shares of Common Stock so purchased may be subject
to a repurchase option in favor of the Company or to any other restriction the Board determines to
be appropriate. The price paid for all shares of Common Stock so repurchased by the Company may be
at the lesser of: (i) the Fair Market Value on the relevant date, or (ii) the Participant’s
original cost for such shares. The Company shall not be required to exercise its repurchase option
until at least six (6) months (or such longer or shorter period of time necessary to avoid a charge
to earnings for financial accounting purposes) have elapsed following exercise of the Option unless
the Board otherwise specifically provides in the Option.



     (m) Re-Load Options. Without in any way limiting the authority of the Board to make or not to
make grants of Options hereunder, the Board shall have the authority (but not an obligation) to
include as part of any Option Agreement a provision entitling the Optionholder to a further Option
(a “Re-Load Option”) in the event the Optionholder exercises the Option evidenced by the Option
Agreement, in whole or in part, by surrendering other shares of Common Stock in accordance with
this Plan and the terms and conditions of the Option Agreement. Any such Re-Load Option shall (i)
except as provided in this subsection 6(m) below, be exercisable for a number of shares of Common
Stock equal to the number of shares of Common Stock surrendered as part or all of the exercise
price of such Option; (ii) have an expiration date which is the same as the expiration date of the
Option the exercise of which gave rise to such Re-Load Option; and (iii) have an exercise price
which is equal to one hundred percent (100%) of the Fair Market Value of the Common Stock subject
to the Re-Load Option on the date of exercise of the original Option. Notwithstanding the
foregoing, a Re-Load Option shall be subject to the same exercise price and term provisions
heretofore described for Options under the Plan.



          Any such Re-Load Option may be an Incentive Stock Option or a Nonstatutory Stock Option, as
the Board may designate at the time of the grant of the original Option; provided, however, that
the designation of any Re-Load Option as an Incentive Stock Option shall be subject to the one
hundred thousand dollar ($100,000) annual limitation on the exercisability of Incentive Stock
Options described in subsection 11(d) and in Section 422(d) of the Code. There shall be no Re-Load
Options on a Re-Load Option. Any such Re-Load Option shall be subject to the availability of
sufficient shares of Common Stock under subsection 4(a) and the “Section 162(m) Limitation” on the
grants of Options under subsection 5(c) and shall be subject to such other terms and conditions as
the Board may determine which are not inconsistent with the express provisions of the Plan
regarding the terms of Options.




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7. Provisions of Stock Awards other than Options.




     (a) Stock Bonus Awards. Each stock bonus agreement shall be in such form and shall contain
such terms and conditions as the Board shall deem appropriate. The terms and conditions of stock
bonus agreements may change from time to time, and the terms and conditions of separate stock bonus
agreements need not be identical, but each stock bonus agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:



          (i) Consideration. A stock bonus may be awarded in consideration for past services actually
rendered to the Company or an Affiliate for its benefit.




          (ii) Vesting. Shares of Common Stock awarded under the stock bonus agreement may, but need
not, be subject to a share repurchase option in favor of the Company in accordance with a vesting
schedule to be determined by the Board.




          (iii) Termination of Participant’s Continuous Service. In the event a Participant’s
Continuous Service terminates, the Company may reacquire any or all of the shares of Common Stock
held by the Participant which have not vested as of the date of termination under the terms of the
stock bonus agreement.




          (iv) Transferability. Rights to acquire shares under the stock bonus agreement shall be
transferable by the Participant only upon such terms and conditions as are set forth in the stock
bonus agreement, as the Board shall determine in its discretion, so long as Common Stock awarded
under the stock bonus agreement remains subject to the terms of the stock bonus agreement.




     (b) Restricted Stock Awards. Each restricted stock purchase agreement shall be in such form
and shall contain such terms and conditions as the Board shall deem appropriate. The terms and
conditions of restricted stock purchase agreements may change from time to time, and the terms and
conditions of separate restricted stock purchase agreements need not be identical, but each
restricted stock purchase agreement shall include (through incorporation of provisions hereof by
reference in the agreement or otherwise) the substance of each of the following provisions:



          (i) Purchase Price. The purchase price under each restricted stock purchase agreement shall
be such amount as the Board shall determine and designate in such restricted stock purchase
agreement. The purchase price shall not be less than one hundred percent (100%) of the Common
Stock’s Fair Market Value on the date such award is made or at the time the purchase is
consummated; provided, however, that this Section 7(b)(i) may be amended to provide, or any
restricted stock purchase agreement granted under the Plan may provide, that the purchase price
shall not be less than eighty five percent (85%) of the Common Stock’s Fair Market Value on the
date such award is made or at the time the purchase is consummated if such amendment or grant is
approved by the holders of a majority of the shares present or represented and entitled to vote at
a duly convened meeting of stockholders. This Section 7(b)(i) may not be



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amended without the affirmative vote of the holders of a majority of the shares present and
represented and entitled to vote at a duly convened meeting of stockholders of the Company.




          (ii) Consideration. The purchase price of Common Stock acquired pursuant to the restricted
stock purchase agreement shall be paid either: (i) in cash at the time of purchase; (ii) at the
discretion of the Board, according to a deferred payment or other similar arrangement with the
Participant; or (iii) in any other form of legal consideration that may be acceptable to the Board
in its discretion; provided, however, that at any time that the Company is incorporated in
Delaware, then payment of the Common Stock’s “par value,” as defined in the Delaware General
Corporation Law, shall not be made by deferred payment. Additionally, in the case of any deferred
payment arrangement, interest shall compound at least annually and shall be charged at the minimum
rate of interest necessary to avoid (i) the imputation of interest income to the Company and
compensation income to the Participant under any applicable provisions of the Code, and (ii)
adverse financial accounting treatment of the restricted stock award.




          (iii) Vesting. Shares of Common Stock acquired under the restricted stock purchase agreement
may, but need not, be subject to a share repurchase option in favor of the Company in accordance
with a vesting schedule to be determined by the Board.




          (iv) Termination of Participant’s Continuous Service. In the event a Participant’s Continuous
Service terminates, the Company may repurchase or otherwise reacquire any or all of the shares of
Common Stock held by the Participant which have not vested as of the date of termination under the
terms of the restricted stock purchase agreement. The price paid for all shares of Common Stock so
repurchased or reacquired by the Company may be at the lesser of: (i) the Fair Market Value on the
relevant date, or (ii) the Participant’s original cost for such shares. The Company shall not be
required to exercise its repurchase or reacquisition option until at least six (6) months (or such
longer or shorter period of time necessary to avoid a charge to earnings for financial accounting
purposes) have elapsed following the Participant’s purchase of the shares of stock acquired
pursuant to the restricted stock award unless otherwise determined by the Board or provided in the
restricted stock purchase agreement.




          (v) Transferability. Rights to acquire shares under the restricted stock purchase agreement
shall be transferable by the Participant only upon such terms and conditions as are set forth in
the restricted stock purchase agreement, as the Board shall determine in its discretion, so long as
Common Stock awarded under the restricted stock purchase agreement remains subject to the terms of
the restricted stock purchase agreement.




8. Non-Employee Directors.




     (a) Non-Employee Directors shall be eligible to receive any form of Stock Award provided for
by the Plan, other than Incentive Stock Options, and such Stock Awards shall be subject to all the
terms of the Plan, including Sections 6 and 12, except as modified by this Section 8. Unless
otherwise specifically provided in the applicable Option Agreement, Nonstatutory Options granted to
Non-Employee Directors (“Non-Employee Director Options”) shall be subject to the provisions of this
Section 8.



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     (b) The term of each Non-Employee Director Option shall commence on the date it is granted and
expire on the date ten (10) years from the date of grant, unless sooner terminated due to the
Non-Employee Director’s termination of Continuous Service. Non-Employee Director Options may be
exercised following the Optionholder’s termination of Continuous Service, for whatever reason (to
the extent such Optionholder was entitled to exercise such Option on the date of such termination),
within the period of time ending on the earlier of (i) the date twelve (12) months following such
termination or (ii) the expiration of the Option as set forth in the Option Agreement.



     (c) The exercise price of each Nonstatutory Option granted to a Non-Employee Director Option
shall be one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the
Option on the date of grant.



     (d) In the event of a transaction or event described in any of subsections 12(b), 12(c), 12(d)
or 12(e), then, with respect to Non-Employee Director Options held by Participants whose Continuous
Service has not terminated, the vesting of such Non-Employee Director Options (and, if applicable,
the time during which such Non-Employee Director Options may be exercised) shall be accelerated in
full.



9. Covenants of the Company.




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



     (b) Securities Law Compliance. The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be required to grant
Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards;
provided, however, that this undertaking shall not require the Company to register under the
Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such
regulatory commission or agency the authority which counsel for the Company deems necessary for the
lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any
liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and
until such authority is obtained.



10. Use of Proceeds from Stock.




     Proceeds from the sale of Common Stock pursuant to Stock Awards shall constitute general funds
of the Company.



11. Miscellaneous.




     (a) Acceleration of Exercisability and Vesting. The Board shall have the power to accelerate
the time at which a Stock Award may first be exercised or the time during which a Stock Award or
any part thereof will vest in accordance with the Plan, notwithstanding the



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provisions in the Stock Award stating the time at which it may first be exercised or the time
during which it will vest.




     (b) Stockholder Rights. No Participant shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares of Common Stock subject to such Stock Award
unless and until such Participant has satisfied all requirements for exercise of the Stock Award
pursuant to its terms.



     (c) No Employment or other Service Rights. Nothing in the Plan or any instrument executed or
Stock Award granted pursuant thereto shall confer upon any Participant any right to continue to
serve the Company or an Affiliate in the capacity in effect at the time the Stock Award was granted
or shall affect the right of the Company or an Affiliate to terminate (i) the employment of an
Employee with or without notice and with or without cause, (ii) the service of a Consultant
pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate or (iii) the
service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable
provisions of the corporate law of the state in which the Company or the Affiliate is incorporated,
as the case may be.



     (d) Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market
Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by any Optionholder during any calendar year (under all
plans of the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), the
Options or portions thereof which exceed such limit (according to the order in which they were
granted) shall be treated as Nonstatutory Stock Options.



     (e) Investment Assurances. The Company may require a Participant, as a condition of
exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances
satisfactory to the Company as to the Participant’s knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably satisfactory to the Company
who is knowledgeable and experienced in financial and business matters and that he or she is
capable of evaluating, alone or together with the purchaser representative, the merits and risks of
exercising the Stock Award; and (ii) to give written assurances satisfactory to the Company stating
that the Participant is acquiring Common Stock subject to the Stock Award for the Participant’s own
account and not with any present intention of selling or otherwise distributing the Common Stock.
The foregoing requirements, and any assurances given pursuant to such requirements, shall be
inoperative if (1) the issuance of the shares of Common Stock upon the exercise or acquisition of
Common Stock under the Stock Award has been registered under a then currently effective
registration statement under the Securities Act or (2) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws. The Company may, upon advice of counsel
to the Company, place legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws, including, but not
limited to, legends restricting the transfer of the Common Stock.



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     (f) Withholding Obligations. To the extent provided by the terms of a Stock Award Agreement,
the Participant may satisfy any federal, state or local tax withholding obligation relating to the
exercise or acquisition of Common Stock under a Stock Award by any of the following means (in
addition to the Company’s right to withhold from any compensation paid to the Participant by the
Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the
Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to
the Participant as a result of the exercise or acquisition of Common Stock under the Stock Award;
provided, however, that no shares are withheld with a value exceeding the minimum amount of tax
required to withheld by law; or (iii) delivering to the Company owned and unencumbered shares of
the Common Stock.



     (g) Cancellation and Re-Grant of Options. The Board shall not have the authority, at any
time, without obtaining the approval of a majority of the shares present or represented and
entitled to vote at a duly convened meeting of stockholders, to (1) reduce the exercise price of
any Options under the Plan that are either currently outstanding or will be granted in the future;
(2) cancel any outstanding Options under the Plan and grant in substitution therefor new Options
under the Plan at a lower exercise price (including entering into any “6 month and 1 day”
cancellation and re-grant scheme), regardless of whether or not the cancelled Options revert to and
again become available for issuance under the Plan; (3) replace Options having an exercise price
higher than the then current Fair Market Value with rights to acquire restricted stock and/or stock
bonus awards in an exchange, buy-back or other scheme; or (4) replace any outstanding Options under
the Plan with new Options under the Plan having a lower exercise price or accelerated vesting
schedule in an exchange, buy-back or other scheme. This Section 11(g) may not be amended without
the affirmative vote of the holders of a majority of the shares present or represented and entitled
to vote at a duly convened meeting of the stockholders of the Company.



12. Adjustments upon Changes in Stock.




     (a) Capitalization Adjustments. If any change is made in the Common Stock subject to the
Plan, or subject to any Stock Award, without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend
in property other than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan will be appropriately adjusted in the class(es) and maximum
number of securities subject to the Plan pursuant to subsection 4(a) and the maximum number of
securities subject to award to any person pursuant to subsection 5(c), and the outstanding Stock
Awards will be appropriately adjusted in the class(es) and number of securities and price per share
of Common Stock subject to such outstanding Stock Awards. The Board shall make such adjustments,
and its determination shall be final, binding and conclusive. (The conversion of any convertible
securities of the Company shall not be treated as a transaction “without receipt of consideration”
by the Company.)



     (b) Dissolution or Liquidation. In the event of a dissolution or liquidation of the Company,
then, with respect to Stock Awards held by Participants whose Continuous Service has not
terminated, the vesting of such Stock Awards (and, if applicable, the time during which



15









 




such Stock Awards may be exercised) shall be accelerated in full, and the Stock Awards shall
terminate if not exercised (if applicable) at or prior to such event, except to the extent that
such Stock Awards are assumed or substituted by a surviving or acquiring corporation pursuant to
subsection 12(c). With respect to any other Stock Awards outstanding under the Plan, such Stock
Awards shall terminate if not exercised (if applicable) prior to such event.




     (c) Asset Sale, Merger, Consolidation or Reverse Merger. In the event of (i) a sale, lease or
other disposition of all or substantially all of the assets of the Company, (ii) a merger or
consolidation in which the Company is not the surviving corporation or (iii) a reverse merger in
which the Company is the surviving corporation but the shares of Common Stock outstanding
immediately preceding the merger are converted by virtue of the merger into other property, whether
in the form of securities, cash or otherwise, then any surviving corporation or acquiring
corporation may assume or continue any Stock Awards outstanding under the Plan or may substitute
similar stock awards (including an award to acquire the same consideration paid to the stockholders
in the transaction described in this subsection 12(c)) for those outstanding under the Plan. In
the event any surviving corporation or acquiring corporation does not assume or continue such Stock
Awards or substitute similar stock awards for those outstanding under the Plan, then, with respect
to Stock Awards held by Participants whose Continuous Service has not terminated, the vesting of
such Stock Awards (and, if applicable, the time during which such Stock Awards may be exercised)
shall be accelerated in full, and the Stock Awards shall terminate if not exercised (if applicable)
at or prior to such event. With respect to any other Stock Awards outstanding under the Plan, such
Stock Awards shall terminate if not exercised (if applicable) prior to such event.



     (d) Change in Control—Securities Acquisition. In the event of an acquisition by any person,
entity or group within the meaning of Section 13(d) or 14(d) of the Exchange Act, or any comparable
successor provisions (excluding any employee benefit plan, or related trust, sponsored or
maintained by the Company or an Affiliate) of the beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act, or comparable successor rule) of securities of the
Company representing at least fifty percent (50%) of the combined voting power entitled to vote in
the election of Directors, then with respect to Stock Awards held by Participants whose Continuous
Service has not terminated, the vesting of such Stock Awards (and, if applicable, the time during
which such Stock Awards may be exercised) shall be accelerated in full; provided, however, that
this subsection 12(d) shall not apply if the securities acquisition described in this subsection
12(d) is the result of or also constitutes a transaction described in subsection 12(c) above, in
which case the provisions of subsection 12(c) shall apply.



     (e) Change in Control—Change in Incumbent Board. In the event that the individuals who, as
of the date of the adoption of this Plan, are members of the Board (the “Incumbent Board”), cease
for any reason to constitute at least fifty percent (50%) of the Board, then with respect to Stock
Awards held by persons whose Continuous Service has not terminated, the vesting of such Stock
Awards (and, if applicable, the time during which such Stock Awards may be exercised) shall be
accelerated in full; provided, however, that this subsection 12(e) shall not apply if the change in
the Incumbent Board described in this subsection 12(e) occurs solely as a result of and/or
following a transaction described in



16









 




subsection 12(c), in which case the provisions of subsection 12(c) shall apply. If the
election, or nomination for election, by the Company’s stockholders of any new Director was
approved by a vote of at least fifty percent (50%) of the Incumbent Board, such new Director shall
be considered as a member of the Incumbent Board.




     (f) Individual Agreements—Asset Sale, Merger, Consolidation, Reverse Merger or Change in
Control. Notwithstanding the foregoing or any other provision of this Plan, the provisions of this
Section 12 shall not apply to Stock Awards if otherwise provided in a written agreement between the
Company or any Affiliate and the holder of the Stock Award. A Stock Award may be subject to
additional acceleration of vesting and exercisability as may be provided in the Stock Award
Agreement or as may be provided in any other written agreement between the Company or any Affiliate
and the Participant.



13. Amendment of the Plan and Stock Awards.




     (a) Amendment of Plan. The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 12 relating to adjustments upon changes in Common Stock, no
amendment shall be effective unless approved by the stockholders of the Company to the extent
stockholder approval is necessary pursuant to the terms of the Plan or necessary to satisfy the
requirements of Section 422 of the Code, Rule 16b-3 or any Nasdaq or securities exchange listing
requirements.



     (b) Stockholder Approval. The Board may, in its sole discretion, submit any other amendment
to the Plan for stockholder approval, including, but not limited to, amendments to the Plan
intended to satisfy the requirements of Section 162(m) of the Code and the regulations thereunder
regarding the exclusion of performance-based compensation from the limit on corporate deductibility
of compensation paid to certain executive officers.



     (c) Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan
in any respect the Board deems necessary or advisable to provide eligible Employees with the
maximum benefits provided or to be provided under the provisions of the Code and the regulations
promulgated thereunder relating to Incentive Stock Options and/or to bring the Plan and/or
Incentive Stock Options granted under it into compliance therewith.



     (d) No Impairment of Rights. Rights under any Stock Award granted before amendment of the
Plan shall not be impaired by any amendment of the Plan unless (i) the Company requests the consent
of the Participant and (ii) the Participant consents in writing.



     (e) Amendment of Stock Awards. Subject to Section 6(c), 7(b)(i) and 11(g), the Board at any
time, and from time to time, may amend the terms of any one or more Stock Awards; provided,
however, that the rights under any Stock Award shall not be impaired by any such amendment unless
(i) the Company requests the consent of the Participant and (ii) the Participant consents in
writing. Notwithstanding the foregoing, subject to Section 6(c), 7(b)(i) and 11(g), any action by
the Board to (A) reduce the exercise price of outstanding Options previously granted, (B) cancel
outstanding Options and replace them with Options with a lower exercise price, or (C) effect an
exchange of outstanding Options for new Options with a lower



17









 




exercise price, shall be effective only if approved by the Company’s stockholders, unless
taken pursuant to subsection 12(a), in connection a transaction described in subsection 12(c) or
otherwise in a manner that would satisfy the provisions of Section 424(a) of the Code or
regulations promulgated thereunder.




14. Termination or Suspension of the Plan.




     (a) Plan Term. The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate on the day before the tenth (10th) anniversary of the date the
Plan is adopted by the Board or approved by the stockholders of the Company, whichever is earlier.
No Stock Awards may be granted under the Plan while the Plan is suspended or after it is
terminated.



     (b) No Impairment of Rights. Suspension or termination of the Plan shall not impair rights
and obligations under any Stock Award granted while the Plan is in effect, except with the written
consent of the Participant.



15. Effective Date of Plan.




     The Plan shall become effective on the date the Plan is approved by the stockholders, which
approval shall be within twelve (12) months before or after the date the Plan is adopted by the
Board.



16. Choice of Law.




     The law of the State of California shall govern all questions concerning the construction,
validity and interpretation of this Plan, without regard to such state’s conflict of laws rules.




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