EXHIBIT
4.1

 

ARBIOS
SYSTEMS, INC.

2001
STOCK OPTION PLAN

(Adopted
by the Board of Directors on March 5, 2001)

(Approved
by the Stockholders on March 5, 2001)





	1.  	
      Purpose.







This 2001
Stock Option Plan is intended to encourage stock ownership in

ARBIOS
SYSTEMS, INC. by the officers, directors, employees, consultants, and advisors
of the Company or its affiliates in order to promote their interest in the
success of the Company and to encourage their continued affiliation. All options
granted under this 2001 Stock Option Plan are intended to be either (a)
Incentive Stock Options or (b) Non-Statutory Stock Options.





	2.  	
      Definitions.







As used
herein the following definitions shall apply:




“Act”
shall mean the Securities Exchange Act of 1934, as amended from time to
time.




“Advisor”
shall mean an individual who provides bona fide services to the Company or
Affiliate pursuant to a written contract.




“Affiliate”
shall mean any corporation defined as a “parent corporation” or a subsidiary
corporation” by Code Section 424(e) and (f) respectively.




“Agreement”
shall mean either a 2001 Incentive Stock Option Agreement or a 2001
Non-Statutory Stock Option Agreement, embodying the terms of the agreement
between the Company and the Optionee with respect to Optionee’s
Option.




“Board”
shall mean the Board of Directors of the Company.




“Code”
shall mean the Internal Revenue Code of 1986, an amended from time to
time.




“Company”
shall mean ARBIOS SYSTEMS, INC., a Nevada corporation.




“Consultant”
shall mean any person who is placed on the Company’s Consultants List by the
Board and who agrees in writing to be included thereon.




“Disability”
or “Disabled” shall mean the condition of being “disabled” within the meaning of
Section 422(c)(6) of the Code or any successor provision.




“Director”
shall mean an individual member of the Board.























 

“Disinterested
Person” means a Non-Employee Director as defined in Rule 16b-3 of the Exchange
Act of 1934, as amended.




“Employee”
shall mean any salaried employee of the Company or its Affiliates, including
those employees who are officers of the Company or its Affiliates.




“Fair
Market Value” of Stock on a given date shall mean an amount per share as
determined by the Board or its delegates by applying any reasonable valuation
method determined without regard to any restriction other than a restriction
that, by its terms, will never lapse. Notwithstanding the preceding, if the
Stock is traded upon an established stock exchange, then the “Fair Market Value”
of Stock on a given date per share shall be deemed to be the average of the
highest and lowest selling price per share of the Stock on the principal stock
exchange on which the Stock is then trading or, if there was no trading of the
Stock on that day, on the next preceding day on which there was such trading; if
the Stock is not traded upon an established stock exchange but is quoted on a
quotation system, the “Fair Market Value” of Stock on a given date shall be
deemed to be the mean between the closing representative “bid” and “ask” prices
per share of the Stock on such date as reported by such quotation system or, if
there was no trading of the Stock on that day, on the next preceding day on
which there was such trading.




“Incentive
Stock Option” shall mean an option granted pursuant to the Plan that is
designated by the Board or its delegates as an “Incentive Stock Option” and
which qualifies as an incentive stock option under Section 422 of the Code or
any successor provision.




“Non-Statutory
Stock Option” shall mean a stock option granted pursuant to the Plan that is not
an Incentive Stock Option.




“Option”
shall refer to either an Incentive Stock Option or Non-Statutory Stock Option,
or both, as the context shall indicate.




“Optionee”
shall mean the recipient of an Incentive Stock Option or a Non-Statutory Stock
Option.




“Option
Price” shall mean the price per share of Stock to be paid by the Optionee upon
exercise of the Option.




“Option
Stock” shall mean the total number of shares of Stock the Optionee shall be
entitled to purchase pursuant too the Agreement.




“Plan”
shall mean this ARBIOS SYSTEMS, INC. 2001 Stock Option Plan, as amended from
time to time.























 

“Reporting
Person” shall mean an Optionee who is required to file statements relating to
his or her beneficial ownership of Stock with the SEC pursuant to Section 16(a)
of the Act.




“Rule
16b-3” shall mean Rule 16b-3 (as amended from time to time promulgated by the
SEC under the Act, and any successor thereto.




“SEC”
shall mean the Securities and Exchange Commission.




“Stock”
shall mean the $0.001 par value Common Stock of the Company.





	3.  	
      Administration.







The Plan
shall be administered by the Board; provided, however, that the Board may
delegate all or any part of its authority to administer the Plan in its entirety
or, with respect to any group or groups of persons eligible to receive Options
hereunder, to such committee as the Board shall in its sole discretion
determine. Such committee shall be composed of not fewer than two members (the
“Committee”), all of the members of which Committee shall be Disinterested
Persons, if required. Any Disinterested Person shall comply with the
requirements of Rule 16b-3. The Board or its Committee may adopt, amend and
rescind such rules and regulations for carrying out the Plan and implementing
agreements and take such actions as it deems proper. The interpretation,
construction and application by the Board or its Committee of any of the
provisions of the Plan or any Option granted thereunder shall be final and
binding on the Company, all Optionees, their legal representatives, and any
person who may acquire an Option directly from an Optionee by permitted
transfer,, bequest or inheritance. Reference to administrative acts by the Board
in the Plan shall also refer to acts by its Committee, unless the context
otherwise indicates. Whether or not the Board has delegated administrative
authority, the Board has the final power to determine all questions of policy or
expediency that may arise in administration of the Plan.





	4.  	
      Eligibility.







Only
Employees are eligible to receive Incentive Stock Options under the Plan.
Employees, Officers, Directors, Consultants and Advisors of the Company or its
Affiliates are eligible to receive Non-statutory Stock Options under the
Plan.




No person
shall be eligible to receive an Option for a larger number of shares than is
recommended for him or her by the Board. Any Optionee may hold more than one
Option (whether Incentive Stock Options, Non-Statutory Stock Options, or both,
but only on the terms and conditions and subject to the restrictions set forth
herein.




Incentive
Stock Options granted to an Employee who owns stock at the time the Incentive
Stock Option is granted, representing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company and its Affiliates,
shall be granted at an Option Price at least one hundred ten percent (110%) of
the Fair Market Value of the Stock at the time the Incentive Stock Option is
granted. In determining ownership of Stock by an Employee, the attribution
standards set forth in Code Section 424(d) shall be applicable.

 


 
























 


	5.  	
      Stock
      Subject to the Plan.







Options
granted under the Plan shall be for shares of the Company’s authorized but
unissued or re-acquired Stock. The aggregate number of shares of Stock which may
be subject to Options pursuant to the Plan shall not exceed one million
(1,000,000) shares, unless adjusted by the Board pursuant to Paragraph 6(1).
Stock issued under other stock option plans of the Company shall not be counted
against the maximum number of shares that can be issued under the
Plan.




In the
event that any outstanding Option expires or is terminated for any reason, the
shares of Stock allocable to the unexercised portion of such Option may again be
subject to an Option under the Plan.




If an
Optionee pays all or part of any Option Price with shares of Stock, the number
of shares deemed to be issued to the Optionee (and counted against the maximum
number of shares that can be issued under the Plan) shall be the number of
shares transferred to the Optionee by the Company, less the number of shares
transferred by the Optionee to the Company as payment. Stock issued on the
exercise of an Option which is forfeited in accordance with the conditions
contained in the grant by the Optionee after issuance shall be deemed to have
never been issued under the Plan and, accordingly, shall not be counted against
the maximum number of shares that can be issued under the Plan. Notwithstanding
the terms of the previous two sentences, the maximum number of shares for which
Incentive Stock Options may be issued under the Plan shall be one million
(1,000,000) shares, subject to adjustments by the Board as provided under
Paragraph 6(1), regardless of the fact that under the terms of the preceding
sentences, a lesser number of shares is deemed to be issued pursuant to the
exercise of Incentive Stock Options.





	6.  	
      Terms
      and Conditions of Options.







The Board
or its delegates shall authorize the granting of all Options under the Plan with
such Options to be evidenced by Incentive Stock Option Agreements or
Non-Statutory Stock Option Agreements, as the case may be. Each Agreement shall
be in such form as the Board may approve from time to time. Each Agreement shall
comply with and be subject to the following terms and conditions:







		(a)	Type
      of Option; Number of Shares.
      Each particular Option Agreement shall state the type of Options to be
      granted (whether Incentive Stock
      Options or Non-Statutory Stock Options) and the number of shares to which
      the Option pertains. Under no circumstances shall the aggregate Fair
      Market Value of the Stock (determined as of the time the Option is
      granted) with respect to which Incentive Stock Options are exercisable for
      the first time by an Employee during any calendar year (under all
      incentive stock option plans of the Company and its Affiliates) exceed
      $100,000.





 

 























 


		(b)	Option
      Price.
      Each particular Option Agreement shall state the Option Price. The Option
      Price for an Incentive Stock Option shall not be less than one hundred
      percent (100%) of the Fair Market Value per share of Stock on the date the
      Incentive Stock Option is granted. The Option Price for a Non-Statutory
      Stock Option shall be the price per share of Stock set by the Board or its
      delegates.




 


		(c)	Certificate
      Legends.
      Certificates for shares of Stock issued and delivered to Reporting Persons
      may be legended, as the Board deems appropriate, if required by the
      provisions of any applicable rule or regulation.







		(d)	Medium
      and Time of Payment.
      The aggregate Option Price shall be payable upon the exercise of the
      Option and shall be paid in any combination of:







		(i)	United
      States cash currency;







		(ii)	a
      cashier’s or certified check to the order of the
Company;







		(iii)	a
      personal check acceptable to the Company







		(iv)	to
      the extent permitted by the Board, shares of Stock of the Company
      (including previously owned Stock or Stock issuable in connection with the
      Option exercise), properly endorsed to the Company, whose Fair Market
      Value on the date of exercise equals the aggregate Option Price of the
      Option being exercised; or 







		(v)	to
      the extent permitted by the Board, the Optionee’s entering into an
      agreement with the Company, whereby a portion of the Optionee’s Options
      are terminated and where the “built-in gain” on any Options which are
      terminated as part of such agreement equals the aggregate Option Price of
      the Option being exercised. The Company may establish, from time to time,
      procedures for a “cashless exercise” of options. “Built-in gain” means the
      excess of the aggregate Fair Market Value of any Stock otherwise issuable
      on exercise of a terminated Option, over the aggregate Option Price
      otherwise due the Company on such exercise.

























 

The Board
may permit deemed or constructive transfer of shares in lieu of actual transfer
and physical delivery of certificates. Except to the extent prohibited by
applicable low, the Board may take any necessary or appropriate steps in order
to facilitate the payment of any such Option Price. Without limiting the
foregoing, the Board may cause the Company to loan the Option Price to the
Optionee or to guarantee that any Stock to be issued will be delivered to a
broker or lender in order to allow the Optionee to borrow the Option Price. The
Board, in its sole and exclusive discretion, may require satisfaction of any
rules or conditions in connection with payment of the Option Price at any
particular time, in any particular form, or with the Company’s assistance. If
Stock used to pay any Option Price is subject to any prior restrictions imposed
in connection with any plan of the Company (including this Plan), an equal
number of the shares of Stock acquired on exercise shall be made subject to such
prior restrictions in addition to any further restrictions imposed on such Stock
by the terms of the Optionee’s Agreement or by the Plan.




(e)    Vesting. The
total number of shares of Stock subject to an Option may, but
need not be allotted in periodic installments (which may, but need not, be
equal). The Option Agreement may provide that from time to time during each of
such installment periods, the Option may become exercisable (“vest”) with
respect to some or all of the shares allotted to that period and may be
exercised with respect to some or all of the shares allotted to such period
and/or any prior period as to which the Option became vested but was not fully
exercised. During the remainder of the term of the Option (if its term extends
beyond the end of the installment periods), any unexercised Option Stock may be
exercised from time to time.




(f)    Duration
of Options. Each
particular Option Agreement shall state the term of
the Option; provided, however, that all Incentive Stock Options granted under
this Plan shall expire and not be exercisable after the expiration of ten (10)
years from the date granted; provided, further, that any Incentive Stock Option
granted to an Employee who owns stock at the time the Incentive Stock Option is
granted representing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company and its Affiliates shall expire and
not be exercisable after the expiration of five (5) years from the date granted.
Non-Statutory Stock Options shall expire and not be exercisable after the date
set by the Board or its delegates in the particular Option Agreement, or on any
later date subsequently approved by the Board or its delegates.





		(g)	Exercise
      of Options.






(i)    Each
particular Option Agreement shall state when the Optionee’s
right to purchase Stock pursuant to the terms of an Option are exercisable in
whole or in part, provided, however, that Incentive Stock Options shall not be
exercisable by an Employee more than 90 days after the date that the employment
of such Employee is voluntarily or involuntarily terminated. Subject to the
earlier termination of the right to exercise the Options as provided under this
Plan. Options shall be exercisable in whole or in part as the Board, in its sole
and exclusive discretion, may provide in the particular Option Agreement, as
amended. The Board may at any time increase the percentage of an Option that is
otherwise exercisable under the terms of a particular Option Agreement. The
Board, in its sole and exclusive discretion, may permit the issuance of Stock
underlying an Option prior to the date the Option is otherwise exercisable,
provided such Stock is subject to repurchase rights which expire pro rata as the
Option would otherwise have become exercisable.

 




















 


(ii)    If the
Optionee does not exercise in any one (1) year period the full
number of shares to which he or she is then entitled to exercise, the Optionee
may exercise those shares in any subsequent year during the term of the
Option.






		(h)	Transfer
      of Options. An
      Option shall not be transferable except by will or by the laws of decent
      and distribution, and shall be exercisable during the lifetime of the
      person to whom the Option is granted only by such person, except as
      specifically provided for by the Board. An attempted non-permitted
      transfer of an Option shall be void.






(i)    Disability
of Optionee. In the
event an Optionee’s Continuous Status as an
Employee, Director or Consultant terminates as a result of the Optionee’s
Disability, the Optionee may exercise his or her Option, but only within twelve
(12) months from the date of such termination (or such shorter period specified
in the Option Agreement), and only to the extent that the Optionee was entitled
to exercise it at the date of such termination (but in no event later than the
expiration of the term of such Option as set forth in the Option Agreement). If,
at the date of termination, the Optionee is not entitled to exercise his or her
entire Option, the shares covered by the unexercisable portion of the Option
shall revert to the Plan. If, after termination, the shares covered by the
unexercisable portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the shares covered by such
Option shall revert to the Plan.




(j)    Death
of Optionee. In the
event of the death of an Optionee, the Option may be
exercised, at any time within sixteen (16) months following the date of death
(or such other period specified in the Option Agreement but in no event later
than the expiration of the term of such Option as set forth in the Option
Agreement), by the Optionee’s estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent the
Optionee was entitled to exercise the Option at the date of death. If, at the
time of death, the Optionee was not entitled to exercise his or her entire
Option, the shares covered by the unexercisable portion of the Option shall
revert to the Plan. If, after death, the Optionee’s estate or a person who
acquired the right to exercise the Option by bequest or inheritance does not
exercise the Option within the specified herein, the Option shall terminate, and
the shares covered by such Option shall revert to the Plan.

 




















 

(k)    Termination
of Employment or Relationship as an Officer, Director, Consultant
or Advisor. In the
event that an Optionee who is an Employee, Officer, Director, Consultant or
Advisor of the Company or its Affiliates shall cease to be employed by or
perform services for the Company or its Affiliates prior to the Option’s
expiration date (other than upon the Optionee’s death or Disability), the
exercise of Options held by such Optionee shall be subject to such limitations
on the periods of time during which such Options, except for Incentive Stock
Options limitations under section 6(g)(i) herein, may be exercised as may be
specified in the particular Option Agreement, as amended, between the Optionee
and the Company. Whether authorized leave of absence or absence for military or
governmental service shall constitute termination of employment for purposes of
the Plan shall be determined by the Board in their sole and exclusive
discretion. No provisions of the Plan shall be construed so as to grant any
individual the right to remain in the employ or service of the Company for any
period of specific duration.




(l)    Recapitalization.




(i)    The
number of shares issuable under the Plan and the number and
amount of the Option Stock and the Option Price of outstanding Options may be
proportionately adjusted by the Board, in its sole and exclusive discretion, for
any increase or decrease in the number of issued shares of Stock resulting from
a subdivision or consolidation of shares, or for the payment of a stock
dividend, or any other increase or decrease in the number of such shares
effected without receipt of consideration by the Company in order to preclude
the dilution or enlargement of benefits under the Plan.




(ii)    The
Board, in its sole and exclusive discretion, may make such equitable
adjustments to the Plan and outstanding Options as it deems appropriate in order
to preclude the dilution or enlargement of benefits under the Plan, upon
exchange of all of the outstanding stock of the Company for a different class or
series of capital stock or the separation of assets of the Company, including a
spin-off or other distribution of stock or property by the Company.




(iii)    If the
Company shall be the surviving corporation in any merger or
consolidation, each outstanding Option shall pertain to and apply to the
securities to which a holder of the number of shares of Option Stock would have
been entitled. A dissolution or liquidation of the Company, a merger (other than
a merger the principal purpose of which is to change the state of the Company’s
incorporation) or consolidation in which the Company is not the surviving
corporation, a reverse merger in which the Company is the surviving corporation
but the Company’s Common Stock outstanding immediately preceding the merger is
converted by virtue of the merger into other property, or other capital
reorganization in which more than fifty percent (50%) of the Company’s Common
stock is exchanged (unless the dissolution or liquidation plan, merger or
consolidation agreement or capital reorganization corporate documents expressly
provide to the contrary) shall cause each outstanding Option to terminate,
provided, that each Optionee shall, immediately prior to such event, have the
right to exercise his or her Option in whole or in part unless the Option in
connection with such event is either to be assumed by the successor corporation
or parent thereof, or to be replaced with a comparable option to purchase shares
of the capital stock of the successor corporation or parent thereof, or the
Option is to be replaced by a comparable cash incentive program of the successor
corporation based on the value of the Option on the date of such event.
Notwithstanding the preceding, if within one (1) year from the date of such
event, an Employee’s employment is involuntarily terminated, then the Employee’s
outstanding Options, if any, shall become immediately exercisable.

 

 
























 


(iv)    All
adjustments required by the preceding paragraphs shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive, provided that adjustments shall not be made in a manner that causes
an Incentive Stock Option to fail to continue to qualify as an “incentive stock
option” within the meaning of Code Section 422.





(v)    Except as
expressly provided in this Paragraph 6(1), an Optionee
shall have no rights by reason of any subdivision or consolidation of shares of
stock of any class, or the payment of any stock dividend, or any other increase
in the number of shares of stock of any class by reason of any dissolution,
liquidation, merger, consolidation, reorganization, or separation of assets, and
any issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or amount
of the Option Stock or the Option Price of outstanding Options.




(vi)    The grant
or existence of an Option shall not affect in any way the right
or power of the Company to make adjustments, reclassifications, reorganizations
or changes in it capital or business structure, or to merge, consolidate,
dissolve, liquidate or sell, or transfer all or any part of its business or
assets.





		(m)	Rights
      as a Shareholder. An
      Optionee shall not have rights as a shareholder with respect to any shares
      until the date of the issuance of a stock certificate to him or her for
      such shares. No adjustment shall be made for dividends (ordinary or
      extraordinary, whether in cash, securities or other property) or
      distributions or other rights for which the record date is prior to the
      date of issuance of such stock certificate, except as provided in
      Paragraph 6(1) above.







 

 




















 



		(n)	Modification,
      Extension and Renewal of Options.
      Subject to the terms and conditions of the Plan, the Board may modify
      (including lowering the Option Price or changing Incentive Stock Options
      into Non-Statutory Stock Options) extend or renew outstanding Options
      granted under the Plan, or accept the surrender of outstanding Options
      under this Plan and/or other stock option plans of the Company (to the
      extend not previously exercised) and authorize the granting of new Options
      in substitution therefor. Notwithstanding the foregoing, no modification
      of an Option shall, without the consent of the Optionee, alter or impair
      any rights or obligations under any Option previously granted under the
      Plan.





	 	 	 


		(o)	Securities
      Compliance.
      The Company may require any Optionee, or any person to whom an Option is
      transferred under subsection 6(d), as a condition of exercising any such
      Option, (1) to give written assurances satisfactory to the Company as to
      the Optionee’s knowledge and experience in financial and business matters
      and/or to employ a purchaser representative reasonably satisfactory to the
      Company who is knowledgeable and experienced in financial and business
      matters, and that he or she is capable of evaluating, alone or together
      with the purchaser representative, the merits and risks of exercising the
      Option; and (2) to give written assurances satisfactory to the Company
      stating that such person is acquiring the stock subject to the Option for
      such person’s own account and not with any present intention of selling or
      otherwise distributing the stock. These requirements and any assurances
      given pursuant to such requirements, shall be inoperative if (i) the
      issuance of the shares upon the exercise of the Option has been registered
      under a then currently effective registration statement under the
      Securities Act of 1933, as amended (the “Securities Act”), or (ii) as to
      any particular requirement, a determination is made by counsel for the
      Company that such requirement need not be met in the circumstances under
      the then applicable securities laws. Unless an Optionee could otherwise
      exercise a Stock Option or dispose of Stock delivered upon exercise of a
      Stock Option granted under the Plan without incurring liability under
      Section 16(b) of the Exchange Act, at lease six months shall elapse from
      the date of acquisition of the Stock Option to the date of disposition of
      its underlying Stock.




	 	 


		(p)	Transfer
      and Exercise of Options. To
      the extent required by Code Section 422, each Incentive Stock Option shall
      state that it is not transferable or assignable by Optionee otherwise than
      by will or the laws of descent and distribution, and that during an
      Optionee’s lifetime, such Incentive Stock Option shall be exercisable only
      by the Optionee.




	 	 


		(q)	Other
      Provisions.
      Each Option Agreement may contain such other provisions including without
      limitation, restrictions upon the exercise or transferability of the
      Option, as the Board may deem advisable. Any Incentive Stock Option
      Agreement shall contain such limitations and restrictions upon the
      exercise of the Incentive Stock Option as shall be necessary in order that
      such Incentive Stock Option shall be an “incentive stock option” as
      defined in Code Section 422, or to conform to any change in the
    law.



 

 




















 


		(r)	Withholding
      Taxes.
      When the Company becomes required to collect federal and state income and
      employment taxes in connection with the exercise of an Option
      (“withholding taxes”), the Optionee shall promptly pay to the Company the
      amount of such taxes in cash, unless the Board permits or requires payment
      in another form. Subject to such conditions as it may require, the Board,
      in its sole discretion, may allow an Optionee to reimburse the Company for
      payment of withholding taxes with shares of Stock. If an Optionee is a
      Reporting Person at the time of exercise and is given an election to pay
      any withholding taxes with Stock, the Board shall have sole discretion to
      approve or disapprove such election.







		7.	Term
      of Plan.



The Board
may suspend or terminate the Plan at any time. Unless sooner terminated, the
Plan shall not extend beyond a date ten (10) years from the date of adoption
hereof by the Board. No Incentive Stock Options or Non-statutory Stock Options
may be granted under the Plan while the Plan is suspended or after it is
terminated. Rights and obligations under any Option granted while the Plan is in
effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom the Option was
granted.





		8.	Amendment
      of Plan.



With
respect to any shares at the time not subject to Options, the Board may from
time to time, insofar as permitted by law, suspend or discontinue the Plan or
revise or amend the Plan in any respect whatsoever, except that, without
approval of the stockholders, no such revision or amendment shall change the
number of shares for which Options may be granted under the Plan, except as
provided in Section 6(1), change the designation of the class of persons
eligible to receive Options under the Plan, materially increase the benefits
accruing to Optionees under the Plan, or decrease the price at which Incentive
Stock Options may be granted. Furthermore, without the approval of the
stockholders, the Plan may not be amended in any manner that will cause
Incentive Stock Options issued under it to fail to meet the requirements of
“incentive stock options” as defined in Code Section 422. The Board may amend
the Plan from time to time to the extent necessary to comply with any applicable
law, rule or other regulatory requirement.





		9.	Application
      of Funds.



The
proceeds received by the Company from the sale of Stock pursuant to the exercise
of an Option will be used for general corporate purposes.





		10.	No
      Obligation to Exercise Option.



The
granting of an Option shall impose no obligation upon the Optionee to exercise
such Option.

 

 
























 



		11.	Indemnification.




In
addition to such other rights of indemnification as they may have as Directors,
Employees or agents of the Company, the Directors, or any individuals who are
delegated authority by the Board to administer the Plan, shall be indemnified by
the Company against: (i) their reasonable expenses, including attorneys’ fees
actually and necessarily incurred in connection with the defense of any action,
suit or proceeding, or in connection with any appeal therein, to which they or
any of them may be a party by reason of any action taken or failure to act under
or in connection with the Plan or any Option granted thereunder; and (ii)
against all amounts paid by them in settlement thereof (provided such settlement
is approved by independent legal counsel selected by the Company), or paid by
them in satisfaction of a judgment in any such action, suit or proceeding,
except in actions to matters as to which it shall be adjudged in such action,
suit or proceeding that such Director or individual is liable for negligence or
misconduct in the performance of his duties; this indemnification is expressly
conditioned upon the indemnified party, within ninety (90) days after
institution of any such action, suit or proceeding, offering the Company in
writing the opportunity, at its own expense, to handle and defend the
same.





		12.	Approval
      of Stockholders.



The
portions of the Plan dealing with Incentive Stock Options shall not take effect
unless approved by the stockholders of the Company’s preferred (if any) and
Common Stock, which approval must occur within a period commencing twelve (12)
months before and ending twelve (12) months after the date of the Plan is
adopted by the Board. Nothing in the Plan shall be construed to limit the
authority of the Company to exercise its corporate rights and powers, including
the right of the Company to grant Non-Statutory Options for proper corporate
purposes.