Exhibit
10.9




INTERNAP
NETWORK SERVICES CORPORATION


2002
STOCK COMPENSATION PLAN




Adopted
on September 10, 2002








1. Purpose of the
Plan.    The purposes of this Internap Network
Services Corporation 2002 Stock Compensation Plan (the “Plan”) are to attract
and retain the best available personnel for the Company and its Affiliates, to
provide additional incentive to personnel of the Company and its Affiliates and
to promote the success of the Company’s and its Affiliates’ businesses. Options
granted under the Plan shall be nonstatutory stock options.




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




(a)“Administrator” means the
Board or any of its Committees appointed pursuant to Section 4 of the
Plan.




(b)“Affiliate” means any Person
that directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with the Company, whether now or
hereafter existing.




(c)“Affiliated Group” means the
group consisting of the Company and its Affiliates.




(d)“Applicable Laws” means the
legal requirements relating to the administration of stock compensation plans
under applicable U.S. state corporate laws, U.S. federal and applicable state
securities laws, the Code, any stock exchange rules or regulations and the
applicable laws of any other country or jurisdiction where stock awards are
granted, as such laws, rules, regulations and requirements shall be in place
from time to time.




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




(f)“Code” means the U.S. Internal
Revenue Code of 1986, as amended, and the regulations promulgated
thereunder.




(g)“Committee” means the
committee of one or more members of the Board appointed by the Board in
accordance with paragraph (a) of Section 4 of the Plan.




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




(i) “Company” means Internap
Network Services Corporation, a Delaware corporation.




(j) “Consultant” means any person,
including an advisor, who is engaged by the Company or any Affiliate to render
consulting or advisory services and is compensated
for such services. However, the term “Consultant” shall not include any Officers
and/or Directors. The term “Consultant” shall also include a member of the board
of directors or governing body of any Affiliate.









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




(l) “Disability” means the
inability of an individual, in the opinion of a qualified physician acceptable
to the Company, to perform the major duties of that individual’s position with
the Company or an Affiliate of the Company because of the sickness or injury of
the individual, or as may be otherwise defined under applicable local
laws.




(m)         
“Employee” means any
person (including if appropriate, any Officer or Director) employed by the
Company or an Affiliate, with the status of employment determined based upon
such minimum number of hours or periods worked as shall be determined by the
Administrator in its discretion, subject to any requirements of the Code and
Applicable Law. A Service Provider shall not cease to be an Employee in the case
of (i) any leave of absence approved by the Company or an Affiliate or (ii)
transfers between locations of the Company or an Affiliate, or between the
Company and an Affiliate or any successor. The payment of a director’s fee by
the Company or an Affiliate shall not be sufficient to constitute “employment”
by the Company or an Affiliate.




(n)“Exchange Act” means the U.S.
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.




(o)“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 National Market System of the National
Association of Securities Dealers, Inc. Automated Quotation (“Nasdaq”) System, its Fair
Market Value shall be the closing sales price for such stock (or the closing
bid, if no sales were reported), as quoted on such exchange or system on the day
of determination or, if the stock exchange or national market system on which
the Common Stock trades is not open on the day of determination, the last
business day prior to the day of determination;




(ii)If the Common Stock
is quoted on the Nasdaq System (but not on the National Market System thereof)
or regularly quoted by a recognized securities dealer but selling prices are not
reported, its Fair Market Value shall be the mean between the high bid and low
asked prices for the Common Stock on the day of determination or, if the stock
exchange or national market system on which the Common Stock trades is not open
on the day of determination, the last business day prior to the day of
determination; or





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




(p)“Nonstatutory Stock Option”
means an Option not intended to qualify as an incentive stock option within the
meaning of Section 422 of the Code.




(q)“Officer” means an “officer”
as such term is defined for the purposes of Section 16 of the Exchange Act under
Rule 16a-1(f) promulgated by the Securities and Exchange Commission under the
Exchange Act (or any successor provision thereto).




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




(s)“Optioned Stock” means the
Common Stock subject to an Option.




(t) “Optionee” means the holder of
an outstanding Option.




(u)“Other Plans” means the
SwitchSoft Systems, Inc. Founders 1996 Stock Option Plan, the SwitchSoft
Systems, Inc. 1997 Stock Option Plan, the Internap Network Services Corporation
1998 Stock Option/Stock Issuance Program, the Internap Network Services
Corporation Amended 1999 Equity Incentive Plan, the Internap Network Services
Corporation 1999 Non-Employee Directors’ Stock Option Plan, the Internap Network
Services Corporation 1999 Stock Incentive Plan For Non-Officers (formerly the CO
SPACE, Inc. 1999 Stock Incentive Plan), and the Internap Network Services
Corporation 2000 Non-Officer Equity Incentive Plan.




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




(w)         
“Person” means an
individual, a corporation, a limited liability company, a partnership, an
association, a joint-stock company, a trust, any unincorporated organization, or
a government or political subdivision thereof.




(x)“Plan” means this Internap
Network Services Corporation 2002 Stock Compensation Plan.




(y)“Securities Act” means the
U.S. Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.




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




(aa)        
“Share” means a share
of the Common Stock, as adjusted in accordance with Section 13
below.





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




3. Shares Subject to the
Plan.    Subject to the provisions of Section 13 of
the Plan, prior to obtaining the approval for this Plan from the Company’s
Series A preferred stockholders, the maximum aggregate number of Shares that may
be issued under the Plan is thirty-two million (32,000,000) less the number of
Shares subject to options and other equity awards under the Other Plans.
Subsequent to obtaining approval for this Plan from the Company’s Series A
preferred stockholders, the maximum aggregate number of Shares that may be
issued under the Plan is fifty million (50,000,000) less the number of Shares
subject to options and other equity awards under the Other Plans. The maximum
number of Shares with respect to which Options may be granted to any Participant
in any fiscal year shall be 10,000,000. The Shares subject to the Plan may be
authorized but unissued, or reaquired shares of Common Stock.




If an
Option should expire or become unexercisable for any reason without having been
exercised in full, the unpurchased Shares which were subject thereto shall
become available for future grant under the Plan (unless the Plan shall have
been terminated). Notwithstanding any other provision of the Plan, shares issued
under the Plan and later repurchased by the Company shall not become available
for future grant or sale under the Plan; provided, however, that any Shares
subject to unvested stock bonuses which expire or terminate shall revert to and
again become available for issuance under the Plan.




4. Administration of the
Plan.




(a)General.    The
Plan shall be administered by the Board or one or more Committees, or a
combination thereof, as determined by the Board. The Plan may be administered by
different administrative bodies with respect to different classes of
Participants and, if permitted by Applicable Laws, the Board may authorize one
or more Employees (who may (but need not) be Officers) to grant Options to
Service Providers. A Committee may delegate some or all of its authority to a
Person or group of more than one Person to the extent not prohibited by
Applicable Laws. Any delegation of authority, whether by the Board or a
Committee thereof, may be revoked at any time by the delegating
party.




(b)Committee
Composition.    If a Committee has been appointed
pursuant to this Section 4, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board. From time to time the
Board may increase the size of any Committee and appoint additional members
thereof, remove members (for any reason or no reason, with or without cause, and
with or without notice) and appoint new members in substitution therefor, fill
vacancies (however caused) and remove all members of a Committee and thereafter
directly administer the Plan, all to the extent permitted by Applicable
Laws.





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(c)Powers of the
Administrator.    Subject to the provisions of the
Plan and in the case of a Committee, other Person or group of Persons the
specific duties delegated by the Board or Committee to such Committee, Person,
or group of Persons, the Administrator shall have the authority, in its
discretion:




(i) to determine
the Fair Market Value of the Common Stock, in accordance with Section 2(o) of
the Plan;




(ii)to select the
Service Providers to whom Stock Awards may from time to time be granted
hereunder;




(iii)         
to determine whether and to what extent Stock Awards are granted
hereunder;




(iv)    
    to determine the number of shares of Common Stock to be
covered by each Stock Award granted hereunder;




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




(vi)        
to determine the terms and conditions, not inconsistent with the terms of the
Plan, of any Option granted hereunder, which terms and conditions include, but
are not limited to, the exercise or purchase price, the time or times when
Options 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, Optioned Stock or other Stock Award, based
in each case on such factors as the Administrator, in its sole discretion, shall
determine;




(vii)       
to determine whether and under what circumstances an Option may be settled in
cash under Section 9(f) instead of Common Stock;




(viii)      
to modify or amend each Stock Award;




(ix)         
to adopt rules, procedures, and sub-plans to the Plan relating to the operation
and administration of the Plan to accommodate the specific requirements of local
laws and procedures in foreign jurisdictions, but unless otherwise superseded by
the terms of such rules, procedures or sub-plans, the provisions of this Plan
shall govern the operation of such rules, procedures or sub-plans;
and




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




(d)Effect of Administrator’s
Decision.    All decisions, determinations and
interpretations of the Administrator shall be final and binding on all
Participants and their successor in interest.





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5. Eligibility.




(a)Recipients of
Grants.    Stock Awards may be granted to Service
Providers. A Service Provider who has been granted a Stock Award under the Plan
may, if he or she is otherwise eligible, be granted additional Stock
Awards.




(b)Type of
Option.    Each Option granted under the Plan shall
be designated in the written option agreement as a Nonstatutory Stock
Option.




(c)Restrictions on
Eligibility.    Notwithstanding the foregoing, the
aggregate number of Shares issued pursuant to Stock Awards granted under the
Plan to Officers and Directors cannot exceed fifty percent (50%) of the number
of Shares reserved for issuance under the Plan as determined at the time of each
such issuance to an Officer or Director, except that there shall be excluded
from this calculation Shares issued to Officers not previously employed by the
Company pursuant to Stock Awards granted as an inducement essential to such
individuals entering into employment contracts with the Company. In addition,
during the periods commencing on August 14, 2002 and ending on (i) August 14,
2005 and (ii) and on each August 14 thereafter for the remaining Term of the
Plan (as described in Section 6 hereof), less than fifty percent (50%) of the
Shares subject to Stock Awards granted in such periods may be granted to
Officers and Directors, except that there shall be excluded from this
calculation Shares subject to Stock Awards granted to Officers not previously
employed by the Company pursuant to Stock Awards granted as an inducement
essential to such individuals entering into employment contracts with the
Company.




(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; and (iii) the services are
not in connection with the offer or sale of securities in a capital-raising
transaction, and do not directly or indirectly promote or maintain a market for
the issuer’s securities.




(e)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 at any
time, for any reason or no reason, 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.




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6. Term of
Plan.    The Plan (as amended and restated hereby)
became effective as of August 14, 2002 and shall continue in effect until
terminated under Section 15 of the Plan.




7. Term of
Option.    The term of each Option shall be the term
stated in the written option agreement; provided, however, that the term shall
be no more than ten (10) years from the date of grant thereof, unless otherwise
provided in the option agreement.




8. Option Exercise Price and
Consideration.




(a)The per Share
exercise price for the Shares to be issued pursuant to exercise of an Option
granted under the Plan shall be determined by the Administrator. Options may be
granted with a per Share exercise price which is either above or below the Fair
Market Value per Share on the date of grant, at the discretion of the
Administrator.




(b)    The
consideration to be paid by the Optionee (or permitted transferee as provided
for in Section 10) for the Shares to be issued upon exercise of an Option by the
Optionee (or permitted transferee), including the method of payment, shall be
determined by the Administrator and may consist entirely of (1) cash, (2) check,
(3) promissory note, (4) other Shares which (x) in the case of Shares acquired
upon exercise of an Option either have been owned by the Optionee for more than
six months on the date of surrender or were not acquired, directly or
indirectly, from the Company, and (y) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised, (5) authorization from the Company to retain from the
total number of Shares as to which the Option is exercised that number of Shares
having a Fair Market Value on the date of exercise equal to the exercise price
for the total number of Shares as to which the Option is exercised, (6) delivery
of a properly executed exercise notice together with such other documentation as
the Administrator and the broker, if applicable, shall require to effect an
exercise of the Option and delivery to the Company of the sale or broker loan
proceeds required to pay the exercise price, (7) by delivering an irrevocable
subscription agreement for the Shares which irrevocably obligates the Optionee
to take and pay for the Shares not more than twelve months after the date of
delivery of the subscription agreement, (8) any combination of the foregoing
methods of payment, (9) or such other consideration and method of payment for
the issuance of Shares to the extent permitted under Applicable Laws. In making
its determination as to the type of consideration to accept, the Administrator
shall consider whether acceptance of such consideration may be reasonably
expected to benefit the Company. At any time that the Company is incorporated in
Delaware, if the Optionee (or permitted transferee as provided for in Section
10) is permitted by the Company to pay the exercise price for the issuance of
the applicable Shares by deferred payment or promissory note, then the Optionee
(or permitted transferee) must pay an amount at least equal to the Common
Stock’s “par value,” as defined in the Delaware General Corporation Law in cash
or cash equivalents rather than by deferred payment or promissory
note.




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In the
case of any promissory note, such promissory note will be a full recourse
promissory note, shall provide for interest to be compounded at least annually
and to be charged at the market rate of interest necessary to avoid a charge to
earnings for financial accounting purposes, and shall be on such further terms
as the Board shall determine. No promissory note shall be permitted if the
exercise of an Option using a promissory note would be a violation of any
Applicable Law.




9. Exercise of
Option.




(a)Procedure for Exercise; Rights as a
Stockholder.    Any Option granted hereunder shall be
exercisable at such times and under such conditions as determined by the
Administrator, consistent with the terms of the Plan, and reflected in the
written option agreement, including vesting requirements and/or performance
criteria with respect to the Company and/or the Optionee. With respect to
Options granted under the Plan, the Administrator shall have the discretion to
determine whether and to what extent the vesting of such Options shall be tolled
during any unpaid leave of absence or transfer from one member of the Affiliated
Group to another member of the Affiliated Group; provided however that in the
absence of such determination, vesting of such Options shall be tolled during
any such leave, to the extent permitted by Applicable Laws.




An Option
may not be exercised for a fraction of a Share.




An Option
shall be deemed to be exercised when written or electronic notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company or its authorized agent. Full payment may, as authorized by the
Administrator, consist of any consideration and method of payment allowable
under Section 8(b) of the Plan and as set forth in the written option agreement.
Until the Company or its duly authorized agent has issued the stock certificate
evidencing such Shares (or transmitted such Shares via electronic delivery to
the Optionee’s brokerage account), no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate or electronic Share delivery promptly upon
exercise of the Option. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the stock certificate is issued
or the date the Shares are





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electronically
delivered to the Optionee’s brokerage account, as applicable, except as provided
in Section 13 of the Plan.




Exercise
of an Option in any manner shall result in a decrease in the number of Shares
which thereafter may be 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
Employment.    With respect to Options granted under
the Plan, in the event of termination of an Optionee’s service with the Company
and its Affiliates, such Optionee may, but only within such period of time as
determined by the Board or the Committee and set forth in the option agreement
(but in no event later than the expiration date of the term of such Option as
set forth in the option agreement), exercise his or her Option to the extent
that Optionee was entitled to exercise it at the date of such termination;
unless such Option is amended while it remains outstanding. To the extent that
Optionee was not entitled to exercise the Option at the date of such
termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate. With
respect to Options granted under the Plan, the Board (or its delegee), in its
sole discretion, shall determine whether a termination shall be deemed to occur
and this Section 9(b) shall apply if (i) the Optionee is a Consultant or
non-employee Director at the time of grant and subsequently becomes an Employee,
(ii) the Optionee is an Employee at the time of grant and subsequently becomes a
Consultant or non-employee Director or (iii) the Optionee transfers from one
member of the Affiliated Group to another member of the Affiliated
Group.




(c)Disability of
Optionee.    Notwithstanding the provisions of
Section 9(b) above, with respect to Options granted under the Plan, in the event
of termination of an Optionee’s service with the Company and its Affiliates as a
result of his or her Disability, such Optionee may, but only within twelve (12)
months from the date of such termination or as otherwise determined by the Board
or the Committee and set forth in the option agreement (but in no event later
than the expiration date of the term of such Option as set forth in the option
agreement), exercise the Option to the extent otherwise entitled to exercise it
at the date of such termination. To the extent that Optionee was not entitled to
exercise the Option at the date of termination, or if Optionee does not exercise
such Option to the extent so entitled within the time specified herein, the
Option shall terminate. With respect to Options granted under the Plan, the
Board (or its delegee), in its sole discretion, shall determine whether a
termination shall be deemed to occur and this Section 9(c) shall apply if (i)
the Optionee is a Consultant or non-employee Director at the time of grant and
subsequently becomes an Employee, (ii) the Optionee is an Employee at the time
of grant and subsequently becomes a Consultant or non-employee Director or (iii)
the Optionee transfers from one member of the Affiliated Group to another member
of the Affiliated Group.




(d)Death of
Optionee.    In the event of Optionee’s death while a
Service Provider, with respect to Options granted under the Plan, his or her
Option may be exercised, at any time within twelve (12) months following the
date of death or as otherwise
determined by the Board or the Committee and set forth in the option agreement
(but in no event later than the expiration date of the term of such Option as
set forth in the option agreement), by the Optionee’s estate, by a person who
acquired the right to exercise the Option by bequest or inheritance or by the
laws of descent and distribution or by a beneficiary designated to exercise the
Option upon the Optionee’s death pursuant to Section 10, but only to the extent
the Optionee was entitled to exercise the Option at the date of death. To the
extent that Optionee was not entitled to exercise the Option at the date of
death, or if Optionee’s estate, the person who acquired the right to exercise
the Option by bequest or inheritance or by the laws of descent and distribution
or the beneficiary designated to exercise the Option upon the Optionee’s death
pursuant to Section 10 does not exercise such Option to the extent so entitled
within the time specified herein, the Option shall terminate.




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(e)Extension of Exercise
Period.    The Administrator shall have full power
and authority to extend the period of time for which an Option is to remain
exercisable following termination of an Optionee’s status as a Service Provider
from the periods set forth in Sections 9(b), 9(c) and 9(d) above or in the
option agreement to such greater time as the Administrator shall deem
appropriate, provided that in no event shall such Option be exercisable later
than the date of expiration of the term of such Option as set forth in the
option agreement.




(f)Buyout
Provisions.    The Administrator may at any time
offer to buy out for a payment in cash or Shares, an Option previously granted,
based on such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made.




10.Non-Transferability of
Options.    Unless otherwise provided by the
Administrator, Options are not transferable in any manner otherwise 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. Notwithstanding the foregoing,
the Optionee may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a beneficiary who, in the event of the
death of the Optionee, shall thereafter be entitled to exercise the Option. The
Administrator may in its discretion grant transferable Nonstatutory Stock
Options pursuant to option agreements specifying (i) the manner in which such
Nonstatutory Stock Options are transferable and (ii) that any such transfer
shall be subject to Applicable Laws.




11.Taxes.




(a)As a condition of
the exercise of an Option granted under the Plan, the Optionee (or in the case
of the Optionee’s death, the person exercising the Option) shall make such
arrangements as the Administrator may require for the satisfaction of any
applicable federal, state, local or foreign withholding tax obligations and/or
social charges (“Tax-Related Items”) that may arise in connection with the
grant, vesting or exercise of the Option and the issuance of Shares (“Taxable
Event”). The Company shall not be required to issue any Shares under the Plan
until such obligations are satisfied.





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(b)In the case of an
Optionee who is an Employee and in the absence of any other arrangement, the
Employee shall be deemed to have directed the Company to withhold or collect
from his or her compensation an amount sufficient to satisfy such obligations
regarding Tax-Related Items from the next payroll payment otherwise payable
after the date of a Taxable Event.




(c)In the case of an
Optionee other than an Employee (or in the case of an Employee where the next
payroll payment is not sufficient to satisfy such obligations regarding
Tax-Related Items, with respect to any remaining tax obligations), in the
absence of any other arrangement and to the extent permitted under the
Applicable Laws, the Optionee shall be deemed to have elected to have the
Company withhold from the Shares to be issued upon exercise of the Option that
number of Shares having a Fair Market Value determined as of the applicable Tax
Date (as defined below) equal to the minimum statutory withholding rates for
U.S. federal, state and foreign tax purposes, including payroll taxes,
applicable to the Taxable Event. For purposes of this Section 11, the Fair
Market Value of the Shares to be withheld shall be determined on the date that
the amount of tax to be withheld is to be determined under the Applicable Laws
(the “Tax Date”).




(d)If permitted by the
Administrator, in its discretion, an Optionee may satisfy his or her obligations
regarding Tax-Related Items by surrendering to the Company Shares that have a
Fair Market Value determined as of the applicable Tax Date equal to the minimum
statutory withholding rates for U.S. federal, state and foreign tax purposes,
including payroll taxes, applicable to the Taxable Event.




(e)Any election or
deemed election by an Optionee to have Shares withheld to satisfy obligations
regarding Tax-Related Items under Section 11(c) or (d) above shall be
irrevocable as to the particular Shares as to which the election is made and
shall be subject to the consent or disapproval of the Administrator. Any
election by an Optionee under Section 11(d) above must be made on or prior to
the applicable Tax Date.




(f) In the event
an election to have Shares withheld is made by an Optionee and the Tax Date is
deferred under Section 83 of the Code because no election is filed under Section
83(b) of the Code, the Company shall have the authority to establish an escrow
to hold the shares until the latest applicable Tax Date.




12.Provisions of Stock Awards Other
Than Options.




(a)Restricted Stock Bonus
Awards.    Each restricted 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 restricted stock bonus
agreements may change from time to time, and the terms and conditions of
separate restricted stock bonus agreements need not be identical, but each
restricted 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:





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




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




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




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




(b)Restricted Stock Purchase
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.




(ii)Consideration.    The
purchase price of Shares 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.




(iii)Vesting.    Shares awarded 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.





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(iv)         
Termination of Participant’s
Service.    In the event a Participant’s service
terminates, the Company may repurchase or otherwise reacquire any or all of the
Shares held by the Participant which have not vested as of the date of
termination under the terms of 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 Shares awarded under the restricted stock bonus
agreement remain subject to the terms of the restricted stock purchase
agreement.




13.Adjustments Upon Changes in
Capitalization, Dissolution or Liquidation, or Merger or AssetSale.




(a)Changes in
Capitalization.    Subject to any required action by
the stockholders of the Company, the number of Shares covered by each
outstanding Option and the number of shares of Common Stock which have been
authorized for issuance under the Plan but as to which no Options have yet been
granted or which have been returned to the Plan upon cancellation or expiration
of an Option, as well as the price per share of Common Stock covered by each
such outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number, or other changes in the price or other characteristics,
of issued shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, spinoff combination or reclassification of the Common
Stock, or any other increase or decrease in the number, or other change in the
price or characteristic, of issued shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been
“effected without receipt of consideration.” Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an
Option.




(b)Dissolution or
Liquidation.    In the event of the proposed
dissolution or liquidation of the Company, the Board shall notify the Optionee
at least fifteen (15) days prior to such proposed action. To the extent it has
not been previously exercised, the Option will terminate immediately prior to
the consummation of such proposed action.




(c)Merger orSaleof
Assets.    In the event of a proposed merger or
consolidation of the Company with or into another corporation or a sale,
exchange, lease or similar transfer of all or substantially all of the Company’s
assets, each outstanding Option shall be assumed or an equivalent option shall
be substituted by such successor corporation
or a parent or subsidiary of such successor corporation, unless the successor
corporation does not agree to assume the Option or to substitute an equivalent
option, in which case such Option shall terminate upon the consummation of the
merger or sale of assets.




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(d)Certain
Distributions.    In the event of any distribution to
the Company’s stockholders of securities of any other entity or other assets
(other than dividends payable in cash or stock of the Company) without receipt
of consideration by the Company, the Administrator may, in its discretion,
appropriately adjust the price per share of Common Stock covered by each
outstanding Option to reflect the effect of such distribution.




14.Time of Granting Stock
Awards.    The date of grant of a Stock Award shall,
for all purposes, be the date on which the Administrator makes the determination
granting such Stock Award, or such other date as is determined by the Board.
Notice of the determination shall be given to each Service Provider to whom a
Stock Award is so granted within a reasonable time after the date of such
grant.




15.Amendment and Termination of the
Plan.




(a)Amendment and
Termination.    Except to the extent prohibited by
Applicable Laws and unless otherwise expressly provided in a Stock Award
agreement or in the Plan, the Board may at any time amend, alter, suspend or
discontinue the Plan, but no amendment, alteration, suspension or discontinuance
or termination (other than an adjustment made pursuant to Section 13 above)
shall be made which would impair the rights of any Participant under any grant
theretofore made, without his or her consent.




(b)Effect of Amendment or
Termination.    Any such amendment or termination of
the Plan shall not affect Options already granted and such Options shall remain
in full force and effect as if this Plan had not been amended or terminated,
unless mutually agreed otherwise between the Optionee and the Board, which
agreement must be in writing and signed by the Optionee and the
Company.




16.Amendment of Stock
Awards.    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 affected Participant’s rights under any Stock Award shall not be
materially impaired and his or her obligations under any Stock Award shall not
be materially increased, by any such amendments unless (i) the Company requests
the consent of the Participant and (ii) the Participant consents in
writing.




17.Conditions Upon Issuance of
Shares.    Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares pursuant thereto shall comply with all relevant
provisions of Applicable Laws, including, without limitation, the Securities Act
of 1933, the Exchange Act, and the requirements of any stock exchange upon which
the Shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance. 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, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been
obtained.




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As a
condition to the exercise of an Option, the Company may require the person
exercising such Option 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 by any of the aforementioned
relevant provisions of law.




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




19.Agreements.    Options
shall be evidenced by written agreements in such form as the Board shall approve
from time to time.




20.Code
References.    All references to any federal statute,
rule, regulation or form are to the federal statute, rule, regulation or form in
effect at the time or to any successor to such federal statute, rule, regulation
or form.




21.Choice of
Law.    The law of the State of Delaware 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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