**Exhibit 10.02**

 

**VERSANT CORPORATION**

 

**1996 EMPLOYEE STOCK PURCHASE PLAN**

 

As Adopted May 21, 1996 andAs Amended through August 17, 2004

 

**1.****                                      Establishmentof Plan**.  Versant Corporation (the ***“Company”***) proposes to grant optionsfor purchase of the Company’s Common Stock to eligible employees of the Companyand its Subsidiaries (as hereinafter defined) pursuant to this Employee StockPurchase Plan (this ***“Plan”***).  For purposes of this Plan, ***“Parent Corporation”*** and ***“Subsidiary”*** (collectively, ***“Subsidiaries”***) shall have the samemeanings as “parent corporation” and “subsidiary corporation” in Sections424(e) and 424(f), respectively, of the Internal Revenue Code of 1986, asamended (the ***“Code”***).  The Company intends this Plan to qualify asan “employee stock purchase plan” under Section 423 of the Code (includingany amendments to or replacements of such Section), and this Plan shall be soconstrued.  Any term not expresslydefined in this Plan but defined for purposes of Section 423 of the Codeshall have the same definition herein.  Atotal of 1,800,000 shares of the Company’s Common Stock is reserved forissuance under this Plan.  Such numbershall be subject to adjustments effected in accordance with Section 14 ofthis Plan.

 

**2.****                                      Purpose**.  The purpose of this Plan is to provideemployees of the Company and Subsidiaries designated by the Board of Directorsof the Company (the ***“Board”***) as eligible toparticipate in this Plan with a convenient means of acquiring an equityinterest in the Company through payroll deductions, to enhance such employees’sense of participation in the affairs of the Company and Subsidiaries, and toprovide an incentive for continued employment.

 

**3.****                                      Administration**.  This Plan shall be administered by acommittee appointed by the Board (the ***“Committee”***)consisting of at least two (2) members of the Board, each of whom is aDisinterested Person as defined in Rule 16b-3(c) of the Securities Exchange Actof 1934 (the ***“Exchange Act”***).  As used in this Plan, references to the “Committee”shall mean either such committee or the Board if no committee has beenestablished.  After registration of theCompany under the Exchange Act, Board members who are not Disinterested Personsmay not vote on any matters affecting the administration of this Plan, but anysuch member may be counted for determining the existence of a quorum at anymeeting of the Board.  Subject to theprovisions of this Plan and the limitations of Section 423 of the Code orany successor provision in the Code, all questions of interpretation orapplication of this Plan shall be determined by the Board and its decisionsshall be final and binding upon all participants.  Members of the Board shall receive nocompensation for their services in connection with the administration of thisPlan, other than standard fees as established from time to time by the Boardfor services rendered by Board members serving on Board committees.  All expenses incurred in connection with theadministration of this Plan shall be paid by the Company.

 

**4.****                                      Eligibility**.  Any employee of the Company or theSubsidiaries is eligible to participate in an Offering Period (as hereinafterdefined) under this Plan except the following:

 

(a)                                  employeeswho are not employed by the Company or Subsidiaries fifteen days before the beginningof such Offering Period, except that employees who were employed on theeffective date of the registration statement filed by the Company with theSecurities and Exchange Commission (***“SEC”***)under the Securities Act of 1933, as amended (the ***“SecuritiesAct”***) registering the initial public offering of the Company’sCommon Stock is declared effective by the SEC were eligible to participate inthe first Offering Period under the Plan;

 

(b)                                 employeeswho are customarily employed for less than twenty (20) hours per week;

 

(c)                                  employeeswho are customarily employed for less than five (5) months in a calendar year;

 

(d)                                 employeeswho, together with any other person whose stock would be attributed to suchemployee pursuant to Section 424(d) of the Code, own stock or hold optionsto purchase stock possessing five percent (5%) or more of the total combinedvoting power or value of all classes of stock of the Company or any of itsSubsidiaries or who, as a result of being granted an option under this Plan withrespect to such Offering Period, 

 

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would own stock or holdoptions to purchase stock possessing five percent (5%) or more of the totalcombined voting power or value of all classes of stock of the Company or any ofits Subsidiaries.

 

**5.****                                      OfferingDates.**  As of December 1, 2001, theoffering periods of this Plan (each, an ***“Offering Period”***)shall be of twenty-four (24) months duration commencing on June 1 and December 1of each year and ending on the second May 31 and November 30,respectively, thereafter.  Each OfferingPeriod shall consist of four (4) six-month purchase periods (individually, a ***“Purchase Period”***) during whichpayroll deductions of the participants are accumulated under this Plan.  The first business day of each OfferingPeriod is referred to as the ***“Offering Date”***.  The last business day of each Purchase Periodis referred to as the ***“Purchase Date”***.  The Board shall have the power to change theduration of Offering Periods or Purchase Periods with respect to offeringswithout stockholder approval if such change is announced at least fifteen (15)days prior to the scheduled beginning of the first Offering Period or PurchasePeriod to be affected.  Prior to December 1,2001, the offering periods of this Plan were of twenty-four (24) monthsduration commencing on February 1 and August 1 of each year andending on January 31 and July 31 of each year (the “***Prior Offering Periods***”),provided, however, that notwithstanding the foregoing, the firstPrior Offering Period commenced on the first business day on which pricequotations for the Company’s Common Stock were available on the Nasdaq NationalMarket (the ***“First Offering Date”***).

 

**6.****                                      Participationin this Plan**.  Eligible employees maybecome participants in an Offering Period under this Plan on the first OfferingDate after satisfying the eligibility requirements by delivering a subscriptionagreement to the Company’s Human Resource Department (the ***“HRDepartment”***) not later than the 15th day of the month beforesuch Offering Date unless a later time for filing the subscription agreementauthorizing payroll deductions is set by the Board for all eligible employeeswith respect to a given Offering Period. An eligible employee who does not deliver a subscription agreement tothe HR Department by such date after becoming eligible to participate in suchOffering Period shall not participate in that Offering Period or any subsequentOffering Period unless such employee enrolls in this Plan by filing asubscription agreement with the HR Department not later than the 15th day ofthe month preceding a subsequent Offering Date. Except for any Prior Offering Periods that began before December 1,2001, once an employee becomes a participant in an Offering Period, suchemployee will automatically participate in the Offering Period commencingimmediately following the last day of the previous Offering Period unless theemployee withdraws or is deemed to withdraw from this Plan or terminatesfurther participation in the Offering Period as set forth in Section 11 below.  Such participant is not required to file anyadditional subscription agreement in order to continue participation in thisPlan.  Employees participating in anyPrior Offering Period will not automatically participate in any subsequentOffering Period, and such employee will be required to file a new subscriptionagreement in order to participate in any Offering Periods under this Plan thatbegins on or after December 1, 2001.

 

**7.****                                      Grantof Option on Enrollment**.  Enrollmentby an eligible employee in this Plan with respect to an Offering Period willconstitute the grant (as of the Offering Date) by the Company to such employeeof an option to purchase on the Purchase Date up to that number of shares ofCommon Stock of the Company determined by dividing (a) the amountaccumulated in such employee’s payroll deduction account during such PurchasePeriod by (b) the lower of (i) eighty-five percent (85%) of the fairmarket value of a share of the Company’s Common Stock on the Offering Date, or(ii) eighty-five percent (85%) of the fair market value of a share of theCompany’s Common Stock on the Purchase Date, provided, however,that the number of shares of the Company’s Common Stock subject to any optiongranted pursuant to this Plan shall not exceed the lesser of (a) themaximum number of shares set by the Board pursuant to Section 10(c) belowwith respect to the applicable Offering Period, or (b) the maximum numberof shares which may be purchased pursuant to Section 10(b) below withrespect to the applicable Offering Period. The fair market value of a share of the Company’s Common Stock shall bedetermined as provided in Section 8 hereof.

 

**8.****                                      PurchasePrice**.  The purchase price per shareat which a share of Common Stock will be sold in any Offering Period shall beeighty-five percent (85%) of the lesser of:

 

(a)                                  thefair market value on the Offering Date; or

 

(b)                                 thefair market value on the Purchase Date**.**

 

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Forpurposes of this Plan, the term **“Fair Market Value”**means, as of any date, the value of a share of the Company’s Common Stockdetermined as follows:

 

(a)                                  ifsuch Common Stock is then quoted on the Nasdaq National Market, its closingprice on the Nasdaq National Market on the date of determination as reported inThe Wall Street Journal;

 

(b)                                 ifsuch Common Stock is publicly traded and is then listed on a nationalsecurities exchange, its closing price on the date of determination on theprincipal national securities exchange on which the Common Stock is listed oradmitted to trading as reported in The Wall Street Journal;

 

(c)                                  ifsuch Common Stock is publicly traded but is not quoted on the Nasdaq NationalMarket nor listed or admitted to trading on a national securities exchange, theaverage of the closing bid and asked prices on the date of determination asreported in The Wall Street Journal; or

 

(d)                                 ifnone of the foregoing is applicable, by the Board in good faith.

 

**9.****                                      PaymentOf Purchase Price; Changes In Payroll Deductions; Issuance Of Shares.**

 

(a)                                  Thepurchase price of the shares is accumulated by regular payroll deductions madeduring each Offering Period.  Thedeductions are made as a percentage of the participant’s compensation in onepercent (1%) increments not less than two percent (2%), nor greater than tenpercent (10%) or such lower limit set by the Committee; with such amounts beingcalculated in the aggregate by considering all Offering Periods, including anyPrior Offering Periods, in which a participant is participating.  Compensation shall mean all W-2 compensation,including, but not limited to base salary, wages, commissions, overtime, shiftpremiums and bonuses, plus draws against commissions; provided, however,that for purposes of determining a participant’s compensation, any election bysuch participant to reduce his or her regular cash remuneration under Sections125 or 401(k) of the Code shall be treated as if the participant did not makesuch election.  Payroll deductions shallcommence on the first payday following the Offering Date and shall continue tothe end of the Offering Period unless sooner altered or terminated as providedin this Plan.

 

(b)                                 Asof December 1, 2001, a participant may lower or increase the rate ofpayroll deductions during an Offering Period by filing with the HR Department anew authorization for payroll deductions, in which case the new rate shallbecome effective for the next payroll period commencing more than fifteen (15)days after the HR Department’s receipt of the authorization and shall continuefor the remainder of the Offering Period unless changed as describedbelow.  Under any Prior Offering Period,a participant may only lower (but not increase) the rate of payroll deductionsduring such Prior Offering Period by filing with the HR Department a newauthorization for payroll deductions, in which case the new rate shall becomeeffective for the next payroll period commencing more than fifteen (15) daysafter the HR Department’s receipt of the authorization and shall continue forthe remainder of such Prior Offering Period unless changed as describedbelow.  Such change in the rate ofpayroll deductions may be made at any time during an Offering Period or a PriorOffering Period, but not more than one (1) change may be made effective duringany Purchase Period.  A participant mayincrease or decrease the rate of payroll deductions for any subsequent OfferingPeriod by filing with the HR Department a new authorization for payrolldeductions not later than the 15th day of the month before the beginning ofsuch Offering Period.

 

(c)                                  Allpayroll deductions made for a participant are credited to his or her accountunder this Plan and are deposited with the general funds of the Company.  No interest accrues on the payrolldeductions.  All payroll deductionsreceived or held by the Company may be used by the Company for any corporatepurpose, and the Company shall not be obligated to segregate such payrolldeductions.

 

(d)                                 Oneach Purchase Date, so long as this Plan remains in effect and provided thatthe participant has not submitted a signed and completed withdrawal form beforethat date which notifies the Company that the participant wishes to withdrawfrom that Offering Period under this Plan in compliance with Section 11and have all payroll deductions accumulated in the account maintained on behalfof the participant as of that date returned to the participant, the Companyshall apply the funds then in the participant’s account to the purchase ofwhole shares of Common Stock reserved under the option granted to suchparticipant with respect to the Offering Period to the extent that such optionis exercisable on the Purchase Date.  Thepurchase price per share shall be as specified in Section 8 of thisPlan.  Any cash remaining in aparticipant’s account after such purchase of shares shall be refunded to suchparticipant in cash, without interest. In the event that this Plan has been oversubscribed, all funds not usedto 

 

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purchase shares on thePurchase Date shall be returned to the participant, without interest.  No Common Stock shall be purchased on aPurchase Date on behalf of any employee whose participation in this Plan hasterminated prior to such Purchase Date.

 

(e)                                  Aspromptly as practicable after the Purchase Date, the Company shall arrange thedelivery to each participant of a certificate representing the shares purchasedupon exercise of his option.

 

(f)                                    Duringa participant’s lifetime, such participant’s option to purchase shareshereunder is exercisable only by him or her. The participant will have no interest or voting right in shares coveredby his or her option until such option has been exercised.  Shares to be delivered to a participant underthis Plan will be registered in the name of the participant or in the name ofthe participant and his or her spouse.

 

**10.****                               Limitationson Shares to be Purchased.**

 

(a)                                  Noemployee shall be entitled to purchase stock under this Plan at a rate which,when aggregated with his or her rights to purchase stock under all otheremployee stock purchase plans of the Company or any Subsidiary, exceeds $25,000in fair market value, determined as of the Offering Date (or such other limitas may be imposed by the Code) for each calendar year in which the employee participatesin this Plan.

 

(b)                                 Nomore than two hundred percent (200%) of the number of shares determined byusing eighty-five percent (85%) of the fair market value of a share of theCompany’s Common Stock on the Offering Date as the denominator may be purchasedby a participant on any single Purchase Date.

 

(c)                                  Noemployee shall be entitled to purchase more than the Maximum Share Amount (asdefined below) on any single Purchase Date. Not less than thirty (30) days prior to the commencement of any OfferingPeriod, the Board may, in its sole discretion, set a maximum number of shareswhich may be purchased by any employee at any single Purchase Date (hereinafterthe ***“Maximum Share Amount”***).  In no event shall the Maximum Share Amountexceed the amounts permitted under Section 10(b) above.  If a new Maximum Share Amount is set, thenall participants must be notified of such Maximum Share Amount not less thanfifteen (15) days prior to the commencement of the next Offering Period.  Once the Maximum Share Amount is set, itshall continue to apply with respect to all succeeding Purchase Dates andOffering Periods unless revised by the Board as set forth above.

 

(d)                                 Ifthe number of shares to be purchased on a Purchase Date by all employeesparticipating in this Plan exceeds the number of shares then available forissuance under this Plan, then the Company will make a pro rata allocation ofthe remaining shares in as uniform a manner as shall be reasonably practicableand as the Board shall determine to be equitable.  In such event, the Company shall give writtennotice of such reduction of the number of shares to be purchased under aparticipant’s option to each participant affected thereby.

 

(e)                                  Anypayroll deductions accumulated in a participant’s account which are not used topurchase stock due to the limitations in this Section 10 shall be returnedto the participant as soon as practicable after the end of the applicablePurchase Period, without interest.

 

**11.****                               Withdrawal.**

 

(a)                                  Eachparticipant may withdraw from an Offering Period under this Plan by signing anddelivering to the HR Department a written notice to that effect on a formprovided for such purpose.  Suchwithdrawal may be elected at any time at least five (5) business days prior tothe end of an Offering Period.

 

(b)                                 Uponwithdrawal from this Plan, the accumulated payroll deductions shall be returnedto the withdrawn participant, without interest, and his or her interest in thisPlan shall terminate.  In the event aparticipant voluntarily elects to withdraw from this Plan, he or she may notresume his or her participation in this Plan during the same Offering Period,but he or she may participate in any Offering Period under this Plan whichcommences on a date subsequent to such withdrawal by filing a new authorizationfor payroll deductions in the same manner as set forth above for initialparticipation in this Plan.

 

(c)                                  Exceptfor any Prior Offering Period that began before December 1, 2001, if thepurchase price on the first day of any current Offering Period in which aparticipant is enrolled is higher than the purchase price on the first day ofany subsequent Offering Period, the Company will automatically enroll suchparticipant in 

 

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the subsequent OfferingPeriod.  A participant does not need tofile any forms with the Company to automatically be enrolled in the subsequentOffering Period.  A participant in anyPrior Offering Period that began before December 1, 2001 must enroll in asubsequent Offering Period to participate in any Offering Periods other thansuch Prior Offering Period that began before December 1, 2001.

 

**12.****                               Terminationof Employment.**  Termination of aparticipant’s employment for any reason, including retirement, death or thefailure of a participant to remain an eligible employee, immediately terminateshis or her participation in this Plan. In such event, the payroll deductions credited to the participant’saccount will be returned to him or her or, in the case of his or her death, tohis or her legal representative, without interest.  For purposes of this Section 12, anemployee will not be deemed to have terminated employment or failed to remainin the continuous employ of the Company in the case of sick leave, militaryleave, or any other leave of absence approved by the Board; providedthat such leave is for a period of not more than ninety (90) days orreemployment upon the expiration of such leave is guaranteed by contract orstatute.

 

**13.****                               Returnof Payroll Deductions**.  In the eventa participant’s interest in this Plan is terminated by withdrawal, terminationof employment or otherwise, or in the event this Plan is terminated by theBoard, the Company shall promptly deliver to the participant all payrolldeductions credited to such participant’s account.  No interest shall accrue on the payrolldeductions of a participant in this Plan.

 

**14.****                               CapitalChanges**.  Subject to any requiredaction by the stockholders of the Company, the number of shares of Common Stockcovered by each option under this Plan which has not yet been exercised and thenumber of shares of Common Stock which have been authorized for issuance underthis Plan but have not yet been placed under option (collectively, the ***“Reserves”***), as well as the priceper share of Common Stock covered by each option under this Plan which has notyet been exercised, shall be proportionately adjusted for any increase ordecrease in the number of issued and outstanding shares of Common Stock of theCompany resulting from a stock split or the payment of a stock dividend (butonly on the Common Stock) or any other increase or decrease in the number ofissued and outstanding shares of Common Stock effected without receipt of anyconsideration by the Company; provided, however, that conversionof any convertible securities of the Company shall not be deemed to have been “effectedwithout receipt of consideration”.  Suchadjustment shall be made by the Board**,** whosedetermination shall be final, binding and conclusive.  Except as expressly provided herein, no issueby the Company of shares of stock of any class, or securities convertible intoshares of stock of any class, shall affect, and no adjustment by reason thereofshall be made with respect to, the number or price of shares of Common Stocksubject to an option.

 

In theevent of the proposed dissolution or liquidation of the Company, the OfferingPeriod will terminate immediately prior to the consummation of such proposedaction, unless otherwise provided by the Board. The Board may, in the exercise of its sole discretion in such instances,declare that the options under this Plan shall terminate as of a date fixed bythe Board and give each participant the right to exercise his or her option asto all of the optioned stock, including shares which would not otherwise beexercisable.  In the event of a proposedsale of all or substantially all of the assets of the Company, or the merger orconsolidation of the Company with or into another corporation, each optionunder this Plan shall be assumed or an equivalent option shall be substitutedby such successor corporation or a parent or subsidiary of such successorcorporation, unless the Board determines, in the exercise of its solediscretion and in lieu of such assumption or substitution, that the participantshall have the right to exercise the option as to all of the optionedstock.  If the Board makes an optionexercisable in lieu of assumption or substitution in the event of a merger,consolidation or sale of assets, the Board shall notify the participant thatthe option shall be fully exercisable for a period of twenty (20) days from thedate of such notice, and the option will terminate upon the expiration of suchperiod.

 

TheBoard may, if it so determines in the exercise of its sole discretion, alsomake provision for adjusting the Reserves, as well as the price per share ofCommon Stock covered by each outstanding option, in the event that the Companyeffects one or more reorganizations, recapitalizations, rights offerings orother increases or reductions of shares of its outstanding Common Stock, or inthe event of the Company being consolidated with or merged into any othercorporation.

 

**15.****                               Nonassignability**.  Neither payroll deductions credited to aparticipant’s account nor any rights with regard to the exercise of an optionor to receive shares under this Plan may be assigned, transferred, pledged orotherwise disposed of in any way (other than by will, the laws of descent anddistribution or as provided in Section 22

 

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hereof) by theparticipant.  Any such attempt atassignment, transfer, pledge or other disposition shall be void and withouteffect.

 

**16.****                               Reports**.  Individual accounts will be maintained foreach participant in this Plan.  Eachparticipant shall receive promptly after the end of each Purchase Period areport of his or her account setting forth the total payroll deductionsaccumulated, the number of shares purchased, the per share price thereof andthe remaining cash balance, if any, carried forward to the next Purchase Periodor Offering Period, as the case may be.

 

**17.****                               Noticeof Disposition**.  Each participantshall notify the Company if the participant disposes of any of the sharespurchased in any Offering Period pursuant to this Plan if such dispositionoccurs within two (2) years from the Offering Date or within one (1) year fromthe Purchase Date on which such shares were purchased (the ***“Notice Period”***).  Unless such participant is disposing of anyof such shares during the Notice Period, such participant shall keep thecertificates representing such shares in his or her name (and not in the nameof a nominee) during the Notice Period. The Company may, at any time during the Notice Period, place a legend orlegends on any certificate representing shares acquired pursuant to this Planrequesting the Company’s transfer agent to notify the Company of any transferof the shares.  The obligation of theparticipant to provide such notice shall continue notwithstanding the placementof any such legend on the certificates.

 

**18.****                               NoRights to Continued Employment**. Neither this Plan nor the grant of any option hereunder shall confer anyright on any employee to remain in the employ of the Company or any Subsidiary,or restrict the right of the Company or any Subsidiary to terminate suchemployee’s employment.

 

**19.****                               EqualRights And Privileges**.  All eligibleemployees shall have equal rights and privileges with respect to this Plan sothat this Plan qualifies as an “employee stock purchase plan” within themeaning of Section 423 or any successor provision of the Code and therelated regulations.  Any provision ofthis Plan which is inconsistent with Section 423 or any successorprovision of the Code shall, without further act or amendment by the Company orthe Board, be reformed to comply with the requirements of Section 423.  This Section 19 shall take precedenceover all other provisions in this Plan.

 

**20.****                               Notices**.  All notices or other communications by aparticipant to the Company under or in connection with this Plan shall bedeemed to have been duly given when received in the form specified by theCompany at the location, or by the person, designated by the Company for thereceipt thereof.

 

**21.****                               Term;Stockholder Approval.**  After thisPlan is adopted by the Board, this Plan will become effective on the date thatis the First Offering Date (as defined above). This Plan shall be approved by the stockholders of the Company, in anymanner permitted by applicable corporate law, within twelve (12) months beforeor after the date this Plan is adopted by the Board.  No purchase of shares pursuant to this Planshall occur prior to such stockholder approval. This Plan shall continue until the earlier to occur of (a) terminationof this Plan by the Board (which termination may be effected by the Board atany time), (b) issuance of all of the shares of Common Stock reserved forissuance under this Plan, or (c) ten (10) years from the adoption of this Planby the Board.

 

**22.****                               Designationof Beneficiary**.

 

(a)                                  Aparticipant may file a written designation of a beneficiary who is to receiveany shares and cash, if any, from the participant’s account under this Plan inthe event of such participant’s death subsequent to the end of an PurchasePeriod but prior to delivery to him of such shares and cash.  In addition, a participant may file a writtendesignation of a beneficiary who is to receive any cash from the participant’saccount under this Plan in the event of such participant’s death prior to aPurchase Date.

 

(b)                                 Suchdesignation of beneficiary may be changed by the participant at any time bywritten notice.  In the event of thedeath of a participant and in the absence of a beneficiary validly designatedunder this Plan who is living at the time of such participant’s death, theCompany shall deliver such shares or cash to the executor or administrator ofthe estate of the participant, or if no such executor or administrator has beenappointed (to the knowledge of the Company), the Company, in its discretion,may deliver such shares or cash to the spouse or to any one or more dependentsor relatives of the participant, or if no spouse, dependent or relative isknown to the Company, then to such other person as the Company may designate.

 

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**23.****                               ConditionsUpon Issuance of Shares; Limitation on Sale of Shares**.  Shares shall not be issued with respect to anoption unless the exercise of such option and the issuance and delivery of suchshares pursuant thereto shall comply with all applicable provisions of law,domestic or foreign, including, without limitation, the Securities Act of 1933,as amended, the Exchange Act, the rules and regulations promulgated thereunder,and the requirements of any stock exchange or automated quotation system uponwhich the shares may then be listed, and shall be further subject to theapproval of counsel for the Company with respect to such compliance.

 

**24.****                               Financial Statements**.  The Company will provide financial statementsto each participant prior to such participant’s purchase of shares under thisPlan, provided, however, the Company will not be required toprovide such financial statements to participants whose services in connectionwith the Company assure them access to equivalent information.

 

**25.****                               ApplicableLaw**.  The Plan shall be governed bythe substantive laws (excluding the conflict of laws rules) of the State ofCalifornia.

 

**26.****                               Amendmentor Termination of this Plan**.  TheBoard may at any time amend, terminate or extend the term of this Plan, exceptthat any such termination cannot affect options previously granted under thisPlan, nor may any amendment make any change in an option previously grantedwhich would adversely affect the right of any participant, nor may anyamendment be made without approval of the stockholders of the Company obtainedin accordance with Section 21 hereof within twelve (12) months of theadoption of such amendment (or earlier if required by Section 21) if suchamendment would:

 

(a)                                  increasethe number of shares that may be issued under this Plan; or

 

(b)                                 changethe designation of the employees (or class of employees) eligible forparticipation in this Plan.

 

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