Exhibit 10.2**PEPLIN, INC. 2007 INCENTIVE AWARD PLAN**     Peplin, Inc., a Delaware corporation (the “Company”), by resolution of its Board ofDirectors, hereby adopts the Peplin, Inc. 2007 Incentive Award Plan (the “Plan”).     The purpose of the Plan is to promote the success and enhance the value of the Company bylinking the personal interests of the members of the Board, Employees, and Consultants to those ofthe Company’s stockholders and by providing such individuals with an incentive for outstandingperformance to generate superior returns to the Company’s stockholders. The Plan is furtherintended to provide flexibility to the Company in its ability to motivate, attract, and retain theservices of members of the Board, Employees, and Consultants upon whose judgment, interest, andspecial effort the successful conduct of the Company’s operation is largely dependent.**ARTICLE I.****DEFINITIONS**          Wherever the following terms are used in the Plan they shall have the meanings specifiedbelow, unless the context clearly indicates otherwise. The singular pronoun shall include theplural where the context so indicates.          1.1. “Administrator” shall mean the entity that conducts the general administration ofthe Plan as provided in Article X. With reference to the administration of the Plan with respectto Awards granted to Non-Employee Directors, the term “Administrator” shall refer to the Board.With reference to the administration of the Plan with respect to any other Award, the term“Administrator” shall refer to the Committee unless the Board has assumed the authority foradministration of the Plan generally as provided in Section 10.2. With reference to the duties ofthe Committee under the Plan which have been delegated to one or more persons pursuant to Section10.5, the term “Administrator” shall refer to such person(s) unless the Committee or the Board hasrevoked such delegation.          1.2. “ASX Listing Rules” shall mean the listing rules of the Australian SecuritiesExchange, as amended from time to time.          1.3. “Award” shall mean an Option, a Restricted Stock Award, a Restricted Stock UnitAward, a Performance Award, a Dividend Equivalents Award, a Deferred Stock Award, a Stock PaymentAward or a Stock Appreciation Right, which may be awarded or granted under the Plan (collectively,“Awards”).          1.4. “Award Agreement” shall mean a written agreement executed by an authorizedofficer of the Company and the Holder which shall contain such terms and conditions with respect toan Award as the Administrator shall determine; *provided*, that such terms and conditions shall notbe inconsistent with the terms and conditions of the Plan.          1.5. “Award Limit” shall mean three hundred thousand (300,000) shares of Common Stock,as adjusted pursuant to Section 11.3. Solely with respect to cash-based Performance Awards grantedpursuant to Section 8.2(b), “Award Limit” shall mean $500,000.
 

 
          1.6. “Board” shall mean the Board of Directors of the Company.          1.7. “Change in Control” shall mean the occurrence of any of the followingtransactions or events occurring on or after the Effective Date:               (a) the acquisition, directly or indirectly, by any “person” or “group” (as those terms aredefined in Sections 3(a)(9), 13(d), and 14(d) of the Exchange Act and the rules thereunder) of“beneficial ownership” (as determined pursuant to Rule 13d-3 under the Exchange Act) of securitiesentitled to vote generally in the election of directors (“voting securities”) of theCompany that represent 50% or more of the combined voting power of the Company’s then outstandingvoting securities, other than               (i) an acquisition by a trustee or other fiduciary holding securities under anyemployee benefit plan (or related trust) sponsored or maintained by the Company orany person controlled by the Company or by any employee benefit plan (or relatedtrust) sponsored or maintained by the Company or any person controlled by theCompany, or               (ii) an acquisition of voting securities by the Company or a corporation owned,directly or indirectly, by the stockholders of the Company in substantially the sameproportions as their ownership of the stock of the Company, or               (iii) an acquisition of voting securities pursuant to a transaction describedin clause (c) below that would not be a Change in Control under clause (c);          Notwithstanding the foregoing, an acquisition of the Company’s securities by the Companywhich, either alone or in combination only with the other event, causes the Company’s votingsecurities beneficially owned by a person or group to represent 50% or more of the combined votingpower of the Company’s then outstanding voting securities shall not constitute an “acquisition” byany person or group for purposes of this clause (a); provided, however, that if a person or groupshall become the beneficial owner of 50% or more of the combined voting power of the Company’s thenoutstanding voting securities by reason of share acquisitions by the Company as described above andshall, after such share acquisitions by the Company, become the beneficial owner of any additionalvoting securities of the Company, then such acquisition shall constitute a Change in Control;               (b) individuals who, as of the date hereof, constitute the Board (the “IncumbentBoard”) cease for any reason to constitute at least a majority of the Board; provided, however,that any individual becoming a director subsequent to the date hereof whose election, or nominationfor election by the Company’s stockholders, was approved by a vote of at least a majority of thedirectors then comprising the Incumbent Board shall be considered as though such individual were amember of the Incumbent Board, but excluding, for this purpose, any such individual whose initialassumption of office occurs as a result of an actual or threatened election contest with respect tothe election or removal of directors or other actual or threatened solicitation of proxies orconsents by or on behalf of a person other than the Board;
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               (c) the consummation by the Company (whether directly involving the Company or indirectlyinvolving the Company through one or more intermediaries) of (x) a merger, consolidation,reorganization, or business combination or (y) a sale or other disposition of all or substantiallyall of the Company’s assets or (z) the acquisition of assets or stock of another entity, in eachcase, other than a transaction               (i) which results in the Company’s voting securities outstanding immediatelybefore the transaction continuing to represent (either by remaining outstanding orby being converted into voting securities of the Company or the person that, as aresult of the transaction, controls, directly or indirectly, the Company or owns,directly or indirectly, all or substantially all of the Company’s assets orotherwise succeeds to the business of the Company (the Company or such person, the“Successor Entity”)) directly or indirectly, at least 50% of the combinedvoting power of the Successor Entity’s outstanding voting securities immediatelyafter the transaction, and               (ii) after which more than 50% of the members of the board of directors of theSuccessor Entity were members of the Incumbent Board at the time of the Board’sapproval of the agreement providing for the transaction or other action of the Boardapproving the transaction, and               (iii) after which no person or group beneficially owns voting securitiesrepresenting 50% or more of the combined voting power of the Successor Entity;*provided, however,*that no person or group shall be treated for purposes of thisclause (C) as beneficially owning 50% or more of combined voting power of theSuccessor Entity solely as a result of the voting power held in the Company prior tothe consummation of the transaction; or               (d) stockholder approval of a liquidation or dissolution of the Company.          For purposes of clause (a) above, the calculation of voting power shall be made as if the dateof the acquisition were a record date for a vote of the Company’s stockholders, and for purposes ofclause (c) above, the calculation of voting power shall be made as if the date of the consummationof the transaction were a record date for a vote of the Company’s stockholders.          1.8. “Code” shall mean the Internal Revenue Code of 1986, as amended from time totime.          1.9. “Committee” shall mean the Compensation Committee of the Board, or anothercommittee or subcommittee of the Board, appointed as provided in Article X.          1.10. “Common Stock” shall mean the common stock of the Company, par value $0.001 pershare.          1.11. “Company” shall mean Peplin, Inc.*,*a Delaware corporation.
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          1.12. “Consultant” shall mean any consultant or adviser if: (a) the consultant oradviser is a natural person, (b) the consultant or adviser renders bona fide services to theCompany or any Subsidiary; and (c) the services rendered by the consultant or adviser are not inconnection with the offer or sale of securities in a capital-raising transaction and do notdirectly or indirectly promote or maintain a market for the Company’s securities.          1.13. “Covered Employee” shall mean any Employee who is, or could be, a “coveredemployee” within the meaning of Section 162(m) of the Code.          1.14. “Deferred Stock” shall mean a right to receive Common Stock awarded underSection 8.5 of the Plan.          1.15. “Director” shall mean a member of the Board.          1.16. “Dividend Equivalent” shall mean a right to receive the equivalent value (incash or Common Stock) of dividends paid on Common Stock, awarded under Section 8.3 of the Plan.          1.17. “DRO” shall mean a domestic relations order as defined by the Code or Title I ofthe Employee Retirement Income Security Act of 1974, as amended from time to time, or the rulesthereunder.          1.18. “Effective Date” shall mean the date the Plan is adopted by the Board.          1.19. “Employee” shall mean any officer or other employee (as defined in accordancewith Section 3401(c) of the Code) of the Company, or of any Subsidiary.          1.20. “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended fromtime to time.          1.21. “Fair Market Value” means, as of any date, the value of a share of Common Stockdetermined as follows:               (a) If the Common Stock is listed on any established stock exchange (such as the New YorkStock Exchange, the NASDAQ Global Market and the NASDAQ Global Select Market) or any nationalmarket system, including without limitation any market system of The NASDAQ Stock Market, the valueof a share of Common Stock shall be the closing sales price for a share of Common Stock as quotedon such exchange or system for such date, or if there is no closing sales price for a share ofCommon Stock on the date in question, the closing sales price for a share of Common Stock on thelast preceding date for which such quotation exists, as reported in *The Wall Street Journal*or suchother source as the Administrator deems reliable;               (b) If the Common Stock is regularly quoted by a recognized securities dealer but closingsales prices are not reported, the value of a share of Common Stock shall be the mean of the highbid and low asked prices for such date or, if there are no high bid and low asked prices for ashare of Common Stock on the date in question, the high bid and low asked prices for a share ofCommon Stock on the last preceding date for which such information exists,
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as reported in *The Wall Street Journal*or such other source as the Administrator deemsreliable; or               (c) If the Common Stock is neither listed on an established stock exchange or a nationalmarket system nor regularly quoted by a recognized securities dealer, the value of a share ofCommon Stock shall be established by the Administrator in good faith.          1.22. “Fiscal Year” means the fiscal year of the Company.          1.23. “Holder” shall mean a person who has been granted an Award.          1.24. “Incentive Stock Option” shall mean an option which conforms to the applicableprovisions of Section 422 of the Code and which is designated as an Incentive Stock Option by theAdministrator.          1.25. “Non-Employee Director” shall mean a Director who is not an Employee.          1.26. “Non-Qualified Stock Option” shall mean an Option which is not designated as anIncentive Stock Option by the Administrator.          1.27. “Option” shall mean a stock option granted under Article IV of the Plan. AnOption granted under the Plan shall be either a Non-Qualified Stock Option or an Incentive StockOption, as determined by the Administrator; *provided, however*, that Options granted to Non-EmployeeDirectors and Consultants shall be Non-Qualified Stock Options.          1.28. “Peplin Limited” shall mean Peplin Limited ACN 090 819 275.          1.29. “Peplin Restructuring” shall mean the reorganization of Peplin Limited and itssubsidiaries pursuant to a restructure implementation agreement.          1.30. “Performance Award” shall mean a cash bonus, stock bonus or other performance orincentive award that is paid in cash, Common Stock or a combination of both, awarded under Section8.2 of the Plan.          1.31. “Performance Criteria” means the criteria (and adjustments) that the Committeeselects for an Award for purposes of establishing the Performance Goal or Performance Goals for aPerformance Period, determined as follows:          (a) The Performance Criteria that shall be used to establish Performance Goals are limited tothe following: (i) net earnings (either before or after (A) interest, (B) taxes, (C) depreciationand (D) amortization), (ii) gross or net sales or revenue, (iii) net income (either before or aftertaxes), (iv) operating profit, (v) cash flow (including, but not limited to, operating cash flowand free cash flow), (vi) return on assets, (vii) return on capital, (viii) return on stockholders’equity, (ix) return on sales, (x) gross or net profit or operating margin, (xi) costs, (xii) fundsfrom operations, (xiii) expenses, (xiv) working capital, (xv) earnings per share, and (xvi) priceper share of Common Stock, and (xvii) market share, any of which may be measured either in absoluteterms or as compared to any incremental increase or decrease or as compared to results of a peergroup.
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          (b) The Committee may, in its discretion, at the time of grant, specify in the Award that oneor more objectively determinable adjustments shall be made to one or more of the Performance Goals.Such adjustments may include one or more of the following: (i) items related to a change inaccounting principle; (ii) items relating to financing activities; (iii) expenses for restructuringor productivity initiatives; (iv) other non-operating items; (v) items related to acquisitions,including product acquisitions; (vi) items attributable to the business operations of any entityacquired by the Company during the Performance Period; (vii) items related to the disposal of abusiness or segment of a business; or (viii) items related to discontinued operations that do notqualify as a segment of a business under United States generally accepted accounting principles(“GAAP”).          1.32. “Performance Goals” means, for a Performance Period, one or more goalsestablished in writing by the Committee for the Performance Period based upon one or morePerformance Criteria. Depending on the Performance Criteria used to establish such PerformanceGoals, the Performance Goals may be expressed in terms of overall Company performance or theperformance of a division, business unit, or individual. The achievement of each Performance Goalshall be determined in accordance with GAAP to the extent applicable.          1.33. “Performance Period” means one or more periods of time, which may be of varyingand overlapping durations, as the Committee may select, over which the attainment of one or morePerformance Goals will be measured for the purpose of determining a Holder’s right to, and thepayment of, a Performance Award.          1.34. “Plan” shall mean this Peplin, Inc. 2007 Incentive Award Plan, as amended fromtime to time.          1.35. “Prior Award” shall mean an option to acquire ordinary shares in the capital ofPeplin Limited that is granted by Peplin Limited on or before the consummation of the initialPeplin Restructuring.          1.36. “Restricted Stock” shall mean Common Stock awarded under Article VII of the Planthat is subject to repurchase or forfeiture.          1.37. “Restricted Stock Units” shall mean rights to receive Common Stock awarded underSection 8.6.          1.38. “Rule 16b-3” shall mean Rule 16b-3 promulgated under the Exchange Act, as suchRule may be amended from time to time.          1.39. “Securities Act” shall mean the Securities Act of 1933, as amended from time totime.          1.40. “Stock Appreciation Right” shall mean a stock appreciation right granted underArticle IX of the Plan.          1.41. “Stock Payment” shall mean: (a) a payment in the form of shares of CommonStock, or (b) an option or other right to purchase shares of Common Stock, as part of a deferredcompensation arrangement or otherwise, made in lieu of all or any portion of the
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compensation, including without limitation, salary, bonuses, commissions and directors’ fees,that would otherwise be payable to an Employee, Consultant or Non-Employee Director in cash,awarded under Section 8.4 of the Plan.          1.42. “Subsidiary” means any entity (other than the Company), whether domestic orforeign, in an unbroken chain of entities beginning with the Company if each of the entities otherthan the last entity in the unbroken chain beneficially owns, at the time of the determination,securities or interests representing more than fifty percent (50%) of the total combined votingpower of all classes of securities or interests in one of the other entities in such chain.          1.43. “Subsidiary Corporation” shall mean any corporation in an unbroken chain ofcorporations beginning with the Company if each of the corporations other than the last corporationin the unbroken chain then owns stock possessing fifty percent (50%) or more of the total combinedvoting power of all classes of stock in one of the other corporations in such chain.          1.44. “Substitute Award” shall mean an Option granted under this Plan upon theassumption of, or in substitution for or replacement of, outstanding equity awards previouslygranted by a company or other entity (including, without limitation, Peplin Limited) in connectionwith a corporate transaction, such as a merger, combination, consolidation, reorganization oracquisition of property or stock; *provided, however*, that in no event shall the term “SubstituteAward” be construed to refer to an award made in connection with the cancellation and repricing ofan Option.          1.45. “Termination of Consultancy” shall mean the time when the engagement of a Holderas a Consultant to the Company or a Subsidiary is terminated for any reason, with or without cause,including, without limitation, by resignation, discharge, death or retirement, but excludingterminations where there is a simultaneous commencement of employment or service with the Companyor any Subsidiary. The Administrator, in its discretion, shall determine the effect of all mattersand questions relating to Termination of Consultancy, including, without limitation, the questionof whether a Termination of Consultancy resulted from a discharge for cause. Notwithstanding anyother provision of the Plan, the Company or any Subsidiary has an absolute and unrestricted rightto terminate a Consultant’s service at any time for any reason whatsoever, with or without cause,except to the extent expressly provided otherwise in writing. For purposes of the Plan, theengagement of a Holder as a Consultant to a Subsidiary shall be deemed to be terminated in theevent that the Subsidiary engaging such Holder ceases to remain a Subsidiary following any merger,sale of stock or other corporate transaction or event (including, without limitation, a spin-off).          1.46. “Termination of Directorship” shall mean the time when a Holder who is aNon-Employee Director ceases to be a Director for any reason, including, without limitation, atermination by resignation, failure to be elected, death or retirement. The Board, in itsdiscretion, shall determine the effect of all matters and questions relating to Termination ofDirectorship with respect to Non-Employee Directors.          1.47. “Termination of Employment” shall mean the time when the employee-employerrelationship between a Holder and the Company or any Subsidiary is terminated for
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any reason, with or without cause, including, without limitation, a termination byresignation, discharge, death, disability or retirement, but excluding: (a) terminations wherethere is a simultaneous reemployment or continuing employment of a Holder by the Company or anySubsidiary, and (b) terminations which are followed by the simultaneous establishment of aconsulting relationship by the Company or a Subsidiary with the former employee. TheAdministrator, in its discretion, shall determine the effect of all matters and questions relatingto Termination of Employment, including, without limitation, the question of whether a Terminationof Employment resulted from a discharge for cause; *provided, however*, that, with respect toIncentive Stock Options, unless the Administrator otherwise provides in the terms of the AwardAgreement or otherwise, a leave of absence, change in status from an employee to an independentcontractor or other change in the employee-employer relationship shall constitute a Termination ofEmployment if, and to the extent that, such leave of absence, change in status or other changeinterrupts employment for the purposes of Section 422(a)(2) of the Code and the then applicableregulations and revenue rulings under said Section. For purposes of the Plan, a Holder’semployee-employer relationship shall be deemed to be terminated in the event that the Subsidiaryemploying such Holder ceases to remain a Subsidiary following any merger, sale of stock or othercorporate transaction or event (including, without limitation, a spin-off).**ARTICLE II.****SHARES SUBJECT TO PLAN**          2.1. Shares Subject to Plan.               (a) Subject to Section 11.3 and Section 2.1(b), the aggregate number of shares of Common Stockthat may be issued or transferred pursuant to Awards under the Plan initially shall be equal to1,000,000 shares (the “Initial Authorized Shares”). In addition, in the event of anycancellation, termination, expiration or forfeiture of any Prior Award during the term of the Plan(including, without limitation, any cancellation of any Prior Award in connection with the PeplinRestructuring), the number of shares of Common Stock that may be issued or transferred pursuant toAwards under the Plan shall be automatically increased by one share for every twenty shares subjectto such Prior Award that is so cancelled, terminated, expired, forfeited or repurchased(collectively, the “Cancelled Prior Award Shares”). In no event, however, shall theaggregate number of Initial Authorized Shares and Cancelled Prior Award Shares made available forissuance under the Plan exceed 1,500,000.               (b) To the extent that an Award terminates, expires, lapses or is forfeited for any reason,any shares of Common Stock then subject to such Award shall again be available for the grant of anAward pursuant to the Plan. To the extent permitted by applicable law or any exchange rule, sharesof Common Stock issued in assumption of, or in substitution for, any outstanding awards of anyentity acquired in any form of combination by the Company or any Subsidiary shall not be countedagainst shares of Common Stock available for grant pursuant to this Plan. If any shares ofRestricted Stock are surrendered by the Holder or repurchased by the Company pursuant to Section7.4 or 7.5 hereof, such shares may again be granted or awarded hereunder, subject to thelimitations of Section 2.1(a). To the extent exercised, the full number of shares subject to anOption or Stock Appreciation Right shall be counted for purposes of calculating the aggregatenumber of shares of Common Stock available
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for issuance under the Plan as set forth in Section 2.1(a) and for purposes of calculating theshare limitation set forth in Section 2.3, regardless of the actual number of shares issued ortransferred upon any net exercise of an Option (in which Common Stock is withheld to satisfy theexercise price or taxes) or upon exercise of any Stock Appreciation Right for Common Stock or cash.The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards shall notbe counted against the shares available for issuance under the Plan. Notwithstanding theprovisions of this Section 2.1(b), no shares of Common Stock may again be optioned, granted orawarded if such action would cause an Incentive Stock Option to fail to qualify as an incentivestock option under Section 422 of the Code.          2.2. Stock Distributed. Any Common Stock distributed pursuant to an Award shallconsist, in whole or in part, of authorized and unissued Common Stock, shares of Common Stock heldin treasury or shares of Common Stock purchased on the open market.          2.3. Limitation on Number of Shares Subject to Awards. Notwithstanding any provisionin the Plan to the contrary, and subject to Article XI, the maximum number of shares of CommonStock with respect to one or more Awards that may be granted to any one Employee, Consultant orNon-Employee Director during any Fiscal Year shall not exceed the Award Limit. To the extentrequired by Section 162(m) of the Code, shares subject to Awards which are canceled shall continueto be counted against the Award Limit.**ARTICLE III.****GRANTING OF AWARDS**          3.1. Award Agreement. Each Award shall be evidenced by an Award Agreement. AwardAgreements evidencing Awards intended to qualify as performance-based compensation (as described inSection 162(m)(4)(C) of the Code) shall contain such terms and conditions as may be necessary tomeet the applicable provisions of Section 162(m) of the Code. Award Agreements evidencingIncentive Stock Options shall contain such terms and conditions as may be necessary to meet theapplicable provisions of Section 422 of the Code.          3.2. Provisions Applicable to Covered Employees.               (a) The Committee, in its discretion, may determine whether an Award is to qualify asperformance-based compensation (as described in Section 162(m)(4)(C) of the Code).               (b) Notwithstanding anything in the Plan to the contrary, the Committee may grant any Award toa Covered Employee, including Restricted Stock the restrictions with respect to which lapse uponthe attainment of specified Performance Goals and any performance or incentive award described inArticle VIII that vests or becomes exercisable or payable upon the attainment of one or morespecified Performance Goals.               (c) To the extent necessary to comply with the performance-based compensation requirements ofSection 162(m)(4)(C) of the Code, with respect to any Award granted under Articles VII and VIIIwhich may be granted to one or more Covered Employees, no later than ninety (90) days following thecommencement of any Fiscal Year in question or any
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other designated fiscal period or period of service (or such earlier time as may be requiredunder Section 162(m) of the Code), the Committee shall, in writing, (i) designate one or moreCovered Employees, (ii) select the Performance Criteria applicable to the Fiscal Year or otherdesignated fiscal period or period of service (including any applicable adjustments), (iii)establish the various performance targets, in terms of an objective formula or standard, andamounts of such Awards, as applicable, which may be earned for such Fiscal Year or other designatedfiscal period or period of service, and (iv) specify the relationship between Performance Criteriaand the performance targets and the amounts of such Awards, as applicable, to be earned by eachCovered Employee for such Fiscal Year or other designated fiscal period or period of service.Following the completion of each Fiscal Year or other designated fiscal period or period ofservice, the Committee shall certify in writing whether the applicable performance targets havebeen achieved for such Fiscal Year or other designated fiscal period or period of service. Indetermining the amount earned by a Covered Employee, the Committee shall have the right to reduce(but not increase) the amount payable at a given level of performance to take into accountadditional factors that the Committee may deem relevant to the assessment of individual orcorporate performance for the Fiscal Year or other designated fiscal period or period of service.               (d) Furthermore, notwithstanding any other provision of the Plan, any Award which is grantedto a Covered Employee and is intended to qualify as performance-based compensation (as described inSection 162(m)(4)(C) of the Code) shall be subject to any additional limitations set forth inSection 162(m) of the Code (including any amendment to Section 162(m) of the Code) or anyregulations or rulings issued thereunder that are requirements for qualification asperformance-based compensation (as described in Section 162(m)(4)(C) of the Code), and the Planshall be deemed amended to the extent necessary to conform to such requirements.          3.3. Limitations Applicable to Section 16 Persons. Notwithstanding any otherprovision of the Plan, the Plan, and any Award granted or awarded to any individual who is thensubject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forthin any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment toRule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule.To the extent permitted by applicable law, the Plan and Awards granted or awarded hereunder shallbe deemed amended to the extent necessary to conform to such applicable exemptive rule.          3.4. At-Will Employment. Nothing in the Plan or in any Award Agreement hereundershall confer upon any Holder any right to continue in the employ of, or as a Consultant for, theCompany or any Subsidiary, or as a Director of the Company, or shall interfere with or restrict inany way the rights of the Company and any Subsidiary, which rights are hereby expressly reserved,to discharge any Holder at any time for any reason whatsoever, with or without cause, except to theextent expressly provided otherwise in a written employment agreement between the Holder and theCompany and any Subsidiary.
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**ARTICLE IV.****GRANTING OF OPTIONS TO EMPLOYEES,**