Exhibit 4.9


 


NIKU CORPORATION

1998 STOCK PLAN


 


1.                                      PURPOSES
OF THE PLAN.  The purposes of this
1998 Stock Plan are to attract and retain the best available personnel for
positions of substantial responsibility, to provide additional incentive to
Employees and Consultants of the Company and its Subsidiaries and to promote
the success of the Company’s business. Options granted under the Plan may be
Incentive Stock Options (as defined under Section 422 of the Code) or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant of an option and subject to the applicable provisions of Section 422
of the Code, as amended, and the regulations promulgated thereunder. Stock
purchase rights may also be granted under the Plan.


 


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)                                 “BOARD”
means the Board of Directors of the Company.


 


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


 


(d)                                 “COMMITTEE”
means the Committee appointed by the Board of Directors in accordance with Section 4(a) and
(b) of the Plan.


 


(e)                                  “COMMON
STOCK” means the Common Stock of the Company.


 


(f)                                    “COMPANY”
means Niku Corporation, a Delaware corporation.


 


(g)                                 “CONSULTANT”
means any person, including an advisor, who is engaged by the Company or any
Parent or Subsidiary to render services and is compensated for such services,
and any director of the Company whether compensated for such services or not.


 


(h)                                 “CONTINUOUS
STATUS AS AN EMPLOYEE OR CONSULTANT” means the absence of any interruption or
termination of service as an Employee or Consultant. Continuous Status as an
Employee or Consultant shall not be considered interrupted in the case of: (i) sick
leave; (ii) military leave; (iii) any other leave of absence approved
by the Administrator, provided that such leave is for a period of not more than
90 days, unless reemployment upon the expiration of such leave is guaranteed by
contract or statute, or unless provided otherwise pursuant to Company policy
adopted from time to time; or (iv) in the case of transfers between
locations of the Company or between the Company, its Subsidiaries or their
respective successors. For purposes of this Plan, a change in status from an
Employee to a Consultant or from a Consultant to an Employee will not
constitute an interruption of Continuous Status as an Employee or Consultant.


 





















 


(i)                                     “EMPLOYEE”
means any person, including officers and directors, employed by the Company or
any Parent or Subsidiary of the Company, 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. The payment by the Company of a director’s fee to a
director shall not be sufficient to constitute “employment” of such director by
the Company.


 


(j)                                     “EXCHANGE
ACT” means the Securities Exchange Act of 1934, as amended.


 


(k)                                  “FAIR
MARKET VALUE” means, as of any date, the fair market 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 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 system or
exchange, or the exchange with the greatest volume of trading in Common Stock
for the last market trading day prior to the time of determination, as reported
in The Wall Street Journal or such other source as the Administrator deems
reliable;


 


(ii)                                  If
the Common Stock is quoted on the Nasdaq System (but not on the National Market
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 for the last market trading
day prior to the time of determination, as reported in The Wall Street Journal
or such other source as the Administrator deems reliable; or


 


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


 


(l)                                     “INCENTIVE
STOCK OPTION” means an Option intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code, as designated in the
applicable written Option Agreement.


 


(m)                               “NONSTATUTORY
STOCK OPTION” means an Option not intended to qualify as an Incentive Stock
Option, as designated in the applicable written Option Agreement.


 


(n)                                 “OPTION”
means a stock option granted pursuant to the Plan.


 


(o)                                 “OPTION
AGREEMENT” means a written agreement between an Optionee and the Company
reflecting the terms of an Option granted under the Plan and


 





















 


includes any documents
attached to such Option Agreement, including, but not limited to, a notice of
stock option grant and a form of exercise notice.


 


(p)                                 “OPTIONED
STOCK” means the Common Stock subject to an Option or a Stock Purchase Right.


 


(q)                                 “OPTIONEE”
means an Employee or Consultant who receives an Option or a Stock Purchase
Right.


 


(r)                                    “PARENT”
means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of
the Code, or any successor provision.


 


(s)                                  “PLAN”
means this 1998 Stock Plan.


 


(t)                                    “REPORTING
PERSON” means an officer, director, or greater than 10% stockholder of the
Company within the meaning of Rule 16a-2 under the Exchange Act, who
is required to file reports pursuant to Rule 16a-3 under the Exchange
Act.


 


(u)                                 “RESTRICTED
STOCK” means shares of Common Stock acquired pursuant to a grant of a Stock
Purchase Right under Section 10 below.


 


(v)                                 “RESTRICTED
STOCK PURCHASE AGREEMENT” means a written agreement between a holder of a Stock
Purchase Right and the Company reflecting the terms of a Stock Purchase Right
granted under the Plan and includes any documents attached to such agreement.


 


(w)                               “RULE
16b-3” means Rule 16b-3 promulgated under the Exchange Act, as
the same may be amended from time to time, or any successor provision.


 


(x)                                   “SHARE”
means a share of the Common Stock, as adjusted in accordance with Section 12
of the Plan.


 


(y)                                 “STOCK
EXCHANGE” means any stock exchange or consolidated stock price reporting system
on which prices for the Common Stock are quoted at any given time.


 


(z)                                   “STOCK
PURCHASE RIGHT” means the right to purchase Common Stock pursuant to Section 10
below.


 


(aa)                            “SUBSIDIARY”
means a “subsidiary corporation,” whether now or hereafter existing, as defined
in Section 424(f) of the Code, or any successor provision.


 


3.                                      STOCK
SUBJECT TO THE PLAN.  Subject to the
provisions of Section 12 of the Plan, the maximum aggregate number of
Shares that may be optioned


 





















 


and sold under the Plan
is 5,000,000 shares of Common Stock. The Shares may be authorized, but
unissued, or reacquired Common Stock. If an Option should expire or become
unexercisable for any reason without having been exercised in full, the
unpurchased Shares that were subject thereto shall, unless the Plan shall have
been terminated, become available for future grant under the Plan. In addition,
any Shares of Common Stock which are retained by the Company upon exercise of
an Option or Stock Purchase Right in order to satisfy the exercise or purchase
price for such Option or Stock Purchase Right or any withholding taxes due with
respect to such exercise shall be treated as not issued and shall continue to
be available under the Plan. Shares repurchased by the Company pursuant to any
repurchase right which the Company may have shall not be available for future
grant under the Plan.


 


4.                                      ADMINISTRATION
OF THE PLAN.


 


(a)                                  INITIAL
PLAN PROCEDURE. Prior to the date, if any, upon which the Company becomes
subject to the Exchange Act, the Plan shall be administered by the Board or a
Committee appointed by the Board.


 


(b)                                 PLAN
PROCEDURE AFTER THE DATE, IF ANY, UPON WHICH THE COMPANY BECOMES SUBJECT TO THE
EXCHANGE ACT.


 


(i)                                     MULTIPLE
ADMINISTRATIVE BODIES. If permitted by Rule 16b-3, grants under the
Plan may be made by different bodies with respect to directors, non-director
officers and Employees or Consultants who are not Reporting Persons.


 


(ii)                                  ADMINISTRATION
WITH RESPECT TO REPORTING PERSONS. With respect to grants of Options or Stock
Purchase Rights to Employees who are Reporting Persons, such grants shall be
made by (A) the Board if the Board may make grants to Reporting Persons
under the Plan in compliance with Rule 16b-3, or (B) a Committee
designated by the Board to make grants to Reporting Persons under the Plan,
which Committee shall be constituted in such a manner as to permit grants under
the Plan to comply with Rule 16b-3. Once appointed, 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 the Committee
and appoint additional members thereof, remove members (with or without cause)
and appoint new members in substitution therefor, fill vacancies, however
caused, and remove all members of the Committee and thereafter directly make
grants to Reporting Persons under the Plan, all to the extent permitted by Rule 16b-3.


 


(iii)                               ADMINISTRATION WITH
RESPECT TO CONSULTANTS AND OTHER EMPLOYEES. With respect to grants of Options
or Stock Purchase Rights to Employees or Consultants who are not Reporting
Persons, the Plan shall be administered by (A) the Board or (B) a
Committee designated by the  Board, which
Committee shall be constituted in such a manner as to satisfy the legal requirements
relating to the administration of Incentive Stock Option plans, if any, of


 





















 


applicable corporate and
securities laws, of the Code and of any applicable Stock Exchange (the “Applicable
Laws”). Once appointed, 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 the Committee and appoint additional members
thereof, remove members (with or without cause) and appoint new members in
substitution therefor, fill vacancies, however caused, and remove all members
of the Committee and thereafter directly administer the Plan, all to the extent
permitted by the Applicable Laws.


 


(c)                                  POWERS
OF THE ADMINISTRATOR. Subject to the provisions of the Plan and in the case of
a Committee, the specific duties delegated by the Board to such Committee, and
subject to the approval of any relevant authorities, including the approval, if
required, of any Stock Exchange, 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(k)
of the Plan;


 


(ii)                                  to
select the Consultants and Employees to whom Options and Stock Purchase Rights
or any combination thereof may from time to time be granted hereunder;


 


(iii)                               to determine whether and
to what extent Options and Stock Purchase Rights or any combination thereof are
granted hereunder;


 


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


 


(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 reduce the exercise price of
any Option to the then current Fair Market Value if the Fair Market Value of
the Common Stock covered by such Option shall have declined since the date the
Option was granted;


 


(ix)                                to
determine the terms and restrictions applicable to Stock Purchase Rights and
the Restricted Stock purchased by exercising such Stock Purchase Rights; and


 


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


 





















 


(xi)                                in
order to fulfill the purposes of the Plan and without amending the Plan, to
modify grants of Options or Stock Purchase Rights to participants who are
foreign nationals or employed outside of the United States in order to
recognize differences in local law, tax policies or customs.


 


(d)                                 EFFECT
OF ADMINISTRATOR’S DECISION. All decisions, determinations and interpretations
of the Administrator shall be final and binding on all holders of Options or
Stock Purchase Rights.


 


5.                                      ELIGIBILITY.


 


(a)                                  RECIPIENTS
OF GRANTS. Nonstatutory Stock Options and Stock Purchase Rights may be granted
to Employees and Consultants. Incentive Stock Options may be granted only to
Employees. An Employee or Consultant who has been granted an Option or Stock
Purchase Right may, if he or she is otherwise eligible, be granted additional
Options or Stock Purchase Rights.


 


(b)                                 TYPE
OF OPTION. Each Option shall be designated in the Option Agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option.  However, notwithstanding such designations,
to the extent that the aggregate Fair Market Value of Shares with respect to
which Options designated as Incentive Stock Options are exercisable for the first
time by any Optionee during any calendar year (under all plans of the Company
or any Parent or Subsidiary) exceeds $100,000, such excess Options shall be
treated as Nonstatutory Stock Options.  For
purposes of this Section 5(b), Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of the
Shares subject to an Incentive Stock Option shall be determined as of the date
of the grant of such Option.


 


(c)                                  The
Plan shall not confer upon the holder of any Option or Stock Purchase Right any
right with respect to continuation of employment or consulting relationship
with the Company, nor shall it interfere in any way with such holder’s right or
the Company’s right to terminate his or her employment or consulting
relationship at any time, with or without cause.


 


6.                                      TERM
OF PLAN.  The Plan shall become
effective upon the earlier to occur of its adoption by the Board of Directors
or its approval by the stockholders of the Company as described in Section 19
of the Plan. It shall continue in effect for a term of ten years unless sooner
terminated under Section 15 of the Plan.


 


7.                                      TERM
OF OPTION.  The term of each Option
shall be the term stated in the Option Agreement; provided, however, that the
term shall be no more than ten years from the date of grant thereof or such
shorter term as may be provided in the Option Agreement and provided further
that, in the case of an Incentive Stock Option granted to an Optionee who, at
the time the Option is granted, owns stock representing more than 10% of the
total combined voting power of all classes of stock of the Company or any


 





















 


Parent or Subsidiary, the
term of the Option shall be five years from the date of grant thereof or such
shorter term as may be 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 shall be such price as is determined by the Board and set forth in the
applicable agreement, but shall be subject to the following:


 


(i)                                     In
the case of an Incentive Stock Option that is:


 


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


 


(B)                                granted
to any other Employee, the per Share exercise price shall be no less than 100%
of the Fair Market Value per Share on the date of grant.


 


(ii)                                  In
the case of a Nonstatutory Stock Option that is:


 


(A)                              granted
to a person who, at the time of the grant of such Option, owns stock
representing more than 10% of the total combined voting power of all classes of
stock of the Company or any Parent or Subsidiary, the per Share exercise price
shall be no less than 110% of the Fair Market Value per Share on the date of
the grant.


 


(B)                                granted
to any person, the per Share exercise price shall be no less than 85% of the
Fair Market Value per Share on the date of grant.


 


(b)                                 The
consideration to be paid for the Shares to be issued upon exercise of an
Option, including the method of payment, shall be determined by the
Administrator (and, in the case of an Incentive Stock Option, shall be determined
at the time of grant) and may consist entirely of (1) cash, (2) check,
(3) promissory note (subject to the provisions of Section 153 of the Delaware
General Corporation Law), (4) other Shares that (x) in the case of Shares
acquired upon exercise of an Option, have been owned by the Optionee for more
than six months on the date of surrender or such other period as may be required
to avoid a charge to the Company’s earnings, and (y) have a Fair Market Value
on the date of surrender equal to the aggregate exercise price of the Shares as
to which such Option shall be exercised, (5) authorization for 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 loan proceeds required to pay the exercise price and any
applicable income or employment taxes, (7) delivery of an irrevocable subscription
agreement for the Shares that irrevocably obligates the option holder 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, or (9) such other consideration and method of payment for the
issuance of Shares to the extent permitted under the Applicable Laws. In making
its determination as to the type of consideration to accept, the Administrator
shall consider if acceptance of such consideration may be reasonably expected
to benefit the Company.


 


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 and reflected in the Option Agreement, which may include vesting
requirements and/or performance criteria with respect to the Company and/or the
Optionee; provided, however, that such Option shall become exercisable at the rate
of at least 20% per year over five years from the date the Option is granted.
In the event that any of the Shares issued upon exercise of an Option should be
subject to a right of repurchase in the Company’s favor, such repurchase right
shall lapse at the rate of at least 20% per year over five years from the date
the Option is granted. Notwithstanding the above, in the case of an Option
granted to an officer, director or Consultant of the Company or any Parent or
Subsidiary of the Company, the Option may become fully exercisable, and a
repurchase right, if any, in favor of the Company shall lapse, at any time or
during any period established by the Administrator.


 


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


 


An Option shall be deemed to be exercised when written
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 the
Company has received full payment for the Shares with respect to which the
Option is exercised. Full payment may, as authorized by the Board, consist of
any consideration and method of payment allowable under Section 8(b) of
the Plan.


 


Until the issuance (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company) of the stock certificate evidencing such Shares, no right to vote or
receive dividends or any other rights as a stockholder shall exist with respect
to the Optioned Stock, not withstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such stock certificate 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, except as provided in Section 12 of the Plan.


 





















 


Exercise of an Option in any manner shall result in a
decrease in the number of Shares that 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 OR CONSULTING RELATIONSHIP. Subject to Section 9(c) below,
in the event of termination of an Optionee’s Continuous Status as an Employee
or Consultant with the Company, such Optionee may, but only within three months
(or such other period of time not less than 30 days as is determined by the
Administrator, with such determination in the case of an Incentive Stock Option
being made at the time of grant of the Option and not exceeding three months)
after the date of such termination (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 the Optionee was entitled to exercise it
at the date of such termination. To the extent that the Optionee was not
entitled to exercise the Option at the date of such termination, or if the
Optionee does not exercise such Option to the extent so entitled within the
time specified herein, the Option shall terminate. No termination shall be
deemed to occur and this Section 9(b) shall not apply if (i) the
Optionee is a Consultant who becomes an Employee, or (ii) the Optionee is
an Employee who becomes a Consultant.


 


(c)                                  DISABILITY
OF OPTIONEE.


 


(i)                                     Notwithstanding
Section 9(b) above, in the event of termination of an Optionee’s
Continuous Status as an Employee or Consultant as a result of his or her total
and permanent disability (within the meaning of Section 22(e)(3) of
the Code), such Optionee may, but only within twelve months from the date of
such termination (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 the Optionee was not entitled to exercise the Option at the
date of termination, or if the Optionee does not exercise such Option to the
extent so entitled within the time specified herein, the Option shall
terminate.


 


(ii)                                  In
the event of termination of an Optionee’s Continuous Status as an Employee or
Consultant as a result of a disability which does not fall within the meaning
of total and permanent disability (as set forth in Section 22(e)(3) of
the Code), such Optionee may, but only within six months from the date of such
termination (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. However, to
the extent that such Optionee fails to exercise an Option which is an Incentive
Stock Option (“ISO”) (within the meaning of Section 422 of the Code)
within three months of the date of such termination, the Option will not
qualify for ISO treatment under the Code. To the extent that the Optionee was
not entitled to exercise the Option at the date of termination, or if the
Optionee does not exercise such


 





















 


Option to the extent so
entitled within six months from the date of termination, the Option shall
terminate.


 


(d)                                 DEATH
OF OPTIONEE. In the event of the death of an Optionee during the period of
Continuous Status as an Employee or Consultant since the date of grant of the
Option, or within 30 days following termination of the Optionee’s Continuous
Status as an Employee or Consultant, the Option may be exercised, at any time
within six months following the date of death (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), by such Optionee’s estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent of the
right to exercise that had accrued at the date of death or, if earlier, the
date of termination of the Optionee’s Continuous Status as an Employee or Consultant.
To the extent that the Optionee was not entitled to exercise the Option at the
date of death or termination, as the case may be, or if the Optionee does not
exercise such Option to the extent so entitled within the time specified
herein, the Option shall terminate.


 


(i)                                     RULE
16b-3. Options granted to Reporting Persons shall comply with Rule 16b-3
and shall contain such additional conditions or restrictions as may be required
thereunder to qualify for the maximum exemption for Plan transactions.


 


10.                               STOCK
PURCHASE RIGHTS.


 


(a)                                  RIGHTS
TO PURCHASE. Stock Purchase Rights may be issued either alone, in addition to,
or in tandem with other awards granted under the Plan and/or cash awards made
outside of the Plan. After the Administrator determines that it will offer
Stock Purchase Rights under the Plan, it shall advise the offeree in writing of
the terms, conditions and restrictions related to the offer, including the
number of Shares that such person shall be entitled to purchase, the price to
be paid (which price shall not be less than 85% of the Fair Market Value of the
Shares as of the date of the offer, or, in the case of a person owning stock
representing more than 10% of the total combined voting power of all classes of
stock of the Company or any Parent or Subsidiary, the price shall not be less
than 100% of the Fair Market Value of the Shares as of the date of the offer),
and the time within which such person must accept such offer, which shall in no
event exceed 30 days from the date upon which the Administrator made the
determination to grant the Stock Purchase Right. The offer shall be accepted by
execution of a Restricted Stock Purchase Agreement in the form determined by
the Administrator.


 


(b)                                 REPURCHASE
OPTION. Unless the Administrator determines otherwise, the Restricted Stock
Purchase Agreement shall grant the Company a repurchase option exercisable upon
the voluntary or involuntary termination of the purchaser’s employment with the
Company for any reason (including death or disability). The purchase price for
Shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be
the original purchase price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The
repurchase option


 





















 


shall lapse at such rate
as the Administrator may determine; provided, however, that with respect to an
Optionee who is not an officer, director or Consultant of the Company or of any
Parent or Subsidiary of the Company, it shall lapse at a minimum rate of 20%
per year.


 


(c)                                  OTHER
PROVISIONS. The Restricted Stock Purchase Agreement shall contain such other
terms, provisions and conditions not inconsistent with the Plan as may be
determined by the Administrator in its sole discretion. In addition, the
provisions of Restricted Stock Purchase Agreements need not be the same with
respect to each purchaser.


 


(d)                                 RIGHTS
AS A STOCKHOLDER. Once the Stock Purchase Right is exercised, the purchaser
shall have the rights equivalent to those of a stockholder, and shall be a
stockholder when his or her purchase is entered upon the records of the duly
authorized transfer agent of the Company. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
Stock Purchase Right is exercised, except as provided in Section 12 of the
Plan.


 


11.                               STOCK
WITHHOLDING TO SATISFY WITHHOLDING TAX OBLIGATIONS. At the discretion of
the Administrator, Optionees may satisfy withholding obligations as provided in
this paragraph. When an Optionee incurs tax liability in connection with an
Option or Stock Purchase Right, which tax liability is subject to tax
withholding under applicable tax laws, and the Optionee is obligated to pay the
Company an amount required to be withheld under applicable tax laws, the
Optionee may satisfy the withholding tax obligation by one or some combination
of the following methods: (a) by cash or check payment, or (b) out of
the Optionee’s current compensation, (c) if permitted by the
Administrator, in its discretion, by surrendering to the Company Shares that (i) in
the case of Shares previously acquired from the Company, have been owned by the
Optionee for more than six months on the date of surrender, and (ii) have
a fair market value on the date of surrender equal to or less than the Optionee’s
marginal tax rate times the ordinary income recognized, or (d) by electing
to have the Company withhold from the Shares to be issued upon exercise of the
Option, or the Shares to be issued in connection with the Stock Purchase Right,
if any, that number of Shares having a fair market value equal to the amount
required to be withheld.  For this
purpose, 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 (the “Tax
Date”).


 


Any surrender by a Reporting Person of previously
owned Shares to satisfy tax withholding obligations arising upon exercise of
this Option must comply with the applicable provisions of Rule 16b-3.


 


All elections by an Optionee to have Shares withheld
to satisfy tax withholding obligations shall be made in writing in a form
acceptable to the Administrator and shall be subject to the following
restrictions:


 


(a)                                  the
election must be made on or prior to the applicable Tax Date;


 





















 


(b)                                 once
made, the election shall be irrevocable as to the particular Shares of the
Option or Stock Purchase Right as to which the election is made; and


 


(c)                                  all
elections shall be subject to the consent or disapproval of the Administrator.


 


In the event the 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 Optionee shall receive the full number of Shares with respect to which the
Option or Stock Purchase Right is exercised but such Optionee shall be
unconditionally obligated to tender back to the Company the proper number of
Shares on the Tax Date.


 


12.                               ADJUSTMENTS
UPON CHANGES IN CAPITALIZATION, MERGER OR CERTAIN OTHER TRANSACTIONS.


 


(a)                                  CHANGES
IN CAPITALIZATION. Subject to any required action by the stockholders of the
Company, the number of shares of Common Stock covered by each outstanding
Option or Stock Purchase Right, and the number of shares of Common Stock that
have been authorized for issuance under the Plan but as to which no Options or
Stock Purchase Rights have yet been granted or that have been returned to the
Plan upon cancellation or expiration of an Option or Stock Purchase Right, as
well as the price per share of Common Stock covered by each such outstanding
Option or Stock Purchase Right, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination,
recapitalization or reclassification of the Common Stock, or any other increase
or decrease in the number 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
or Stock Purchase Right.


 


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


 


(c)                                  MERGER
OR SALE OF ASSETS. In the event of a proposed sale of all or substantially all
of the Company’s assets or a merger of the Company with or into another
corporation where the successor corporation issues its securities to the
Company’s stockholders, each outstanding Option or Stock Purchase Right shall
be


 





















 


assumed or an equivalent
option or right 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 Stock Purchase Right or to substitute an
equivalent option or right, in which case such Option or Stock Purchase Right
shall terminate upon the consummation of the merger or sale of assets. For
purposes of this Section 12(c), an Option or a Stock Purchase Right shall
be considered assumed, without limitation, if, at the time of issuance of the
stock or other consideration upon such merger or sale of assets, each holder of
an Option or a Stock Purchase Right would be entitled to receive upon exercise
of the Option or Stock Purchase Right the same number and kind of shares of
stock or the same amount of property, cash or securities as such holder would
have been entitled to receive upon the occurrence of such transaction if the
holder had been, immediately prior to such transaction, the holder of the
number of Shares of Common Stock covered by the Option or the Stock Purchase
Right at such time (after giving effect to any adjustments in the number of
Shares covered by the Option or Stock Purchase Right as provided for in this Section 12).


 


(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 or Stock
Purchase Right to reflect the effect of such distribution.


 


13.                               NON-TRANSFERABILITY
OF OPTIONS AND STOCK PURCHASE RIGHTS. Options and Stock Purchase Rights may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in
any manner other than by will or by the laws of descent or distribution and may
be exercised or purchased during the lifetime of the Optionee or Stock Purchase
Rights Holder only by the Optionee or Stock Purchase Rights Holder.


 


14.                               TIME
OF GRANTING OPTIONS AND STOCK  PURCHASE
RIGHTS. The date of grant of an Option or Stock Purchase Right shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option or Stock Purchase Right, or such other date as is
determined by the Board; provided, however, that in the case of any Incentive
Stock Option, the grant date shall be the later of the date on which the
Administrator makes the determination granting such Incentive Stock Option or
the date of commencement of the Optionee’s employment relationship with the
Company. Notice of the determination shall be given to each Employee or
Consultant to whom an Option or Stock Purchase Right is so granted within a
reasonable time after the date of such grant.


 


15.                               AMENDMENT
AND TERMINATION OF THE PLAN.


 


(a)                                  AUTHORITY
TO AMEND OR TERMINATE. The Board may at any time amend, alter, suspend or
discontinue the Plan, but no amendment, alteration,


 





















 


suspension or
discontinuation shall be made that would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Rule 16b-3 or with
Section 422 of the Code (or any other applicable law or regulation,
including the requirements of any Stock Exchange), the Company shall obtain
stockholder approval of any Plan amendment in such a manner and to such a
degree as required.


 


(b)                                 EFFECT
OF AMENDMENT OR TERMINATION. No amendment or termination of the Plan shall
adversely affect Options already granted, 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.                               CONDITIONS
UPON ISSUANCE OF SHARES. Shares shall not be issued pursuant to the
exercise of an Option or Stock Purchase Right unless the exercise of such
Option or Stock Purchase Right and the issuance and delivery of such Shares
pursuant thereto shall comply with all relevant provisions of law, 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.


 


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 law.


 


17.                               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. 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.


 


18.                               AGREEMENTS.
Options and Stock Purchase Rights shall be evidenced by written Option
Agreements and Restricted Stock Purchase Agreements, respectively, in such
form(s) as the Administrator shall approve from time to time.


 


19.                               STOCKHOLDER
APPROVAL. Continuance of the Plan shall be subject to approval by the
stockholders of the Company within twelve months before or after the date the
Plan is adopted. Such stockholder approval shall be obtained in the degree and
manner required under applicable state and federal law and the rules of
any Stock Exchange upon which the Common Stock is listed. All Options and Stock
Purchase Rights issued under the Plan shall become void in the event such approval
is not obtained.


 





















 


20.                               INFORMATION
AND DOCUMENTS TO OPTIONEES AND PURCHASERS. The Company shall provide
financial statements at least annually to each Optionee and to each individual
who acquired Shares Pursuant to the Plan, during the period such Optionee or
purchaser has one or more Options or Stock Purchase Rights outstanding, and in
the case of an individual who acquired Shares pursuant to the Plan, during the
period such individual owns such Shares. The Company shall not be required to
provide such information if the issuance of Options or Stock Purchase Rights
under the Plan is limited to key employees whose duties in connection with the
Company assure their access to equivalent information. In addition, at the time
of issuance of any securities under the Plan, the Company shall provide to the
Optionee or the Purchaser a copy of the Plan and any agreement(s) pursuant to
which securities granted under the Plan are issued.