Exhibit 10.15.8 



















PURE Bioscience 





2007 Equity Incentive
Plan 



























TABLE OF CONTENTS 





	 	  	
                                                              Page 







	1.    ESTABLISHMENT, PURPOSE AND TERM OF PLAN  	 1 






	 	   1.1     Establishment	
                                                              1 








	 	   1.2      Purpose	
                                                              1 






	 	   1.3      Term of Plan	
                                                              1 







	2.    DEFINITIONS AND CONSTRUCTION  	 1 







	 	   2.1      Definitions	
                                                              1 






	 	  2.2      Construction	
                                                              7






	3.    ADMINISTRATION  	 7 





	 	  3.1      Administration by the Committee	
                                                              7







	 	  3.2      Authority of Officers	
                                                              7







	 	  3.3      Administration with Respect to Insiders	
                                                              7







	 	  3.4      Committee Complying with Section 162(m)	
                                                              7







	 	  3.5      Powers of the Committee	
                                                              7







	 	  3.6      Indemnification	
                                                              9







	 	  3.7      Arbitration	
                                                              9







	 	  3.8      Repricing Prohibited	
                                                              9







	4.    SHARES SUBJECT TO PLAN  	 9 








	 	  4.1      Maximum Number of Shares Issuable	
                                                              9







	 	  4.2      Adjustments for Changes in Capital Structure	
                                                              10







	5.    ELIGIBILITY AND AWARD LIMITATIONS   	 10 








	 	  5.1      Persons Eligible for Awards	
                                                              10








	 	  5.2      Participation	
                                                              11








	 	  5.3      Incentive Stock Option Limitations	
                                                              11








	 	  5.4      Award Limits	
                                                              11








	6.    TERMS AND CONDITIONS OF OPTIONS  	 12 








	 	   6.1      Exercise Price	
                                                              12 







	 	   6.2      Exercisability and Term of Options	
                                                              12 







	 	   6.3      Payment of Exercise Price	
                                                              13 







	 	   6.4      Effect of Termination of Service	
                                                              14 







	 	   6.5      Transferability of Options	
                                                              14 








i 













TABLE OF CONTENTS
(continued) 






	7.    TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS  	 14 









	 	  7.1      Types of SARs Authorized	
                                                              14










	 	  7.2      Exercise Price	
                                                              15










	 	  7.3      Exercisability and Term of SARs	
                                                              15










	 	  7.4      Deemed Exercise of SARs	
                                                              15










	 	  7.5      Effect of Termination of Service	
                                                              15










	 	  7.6      Nontransferability of SARs	
                                                              15









	8.    TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS  	 15 









	 	  8.1       Types of Restricted Stock Awards Authorized	
                                                              16








	 	  8.2      Purchase Price	
                                                              16







	 	  8.3      Purchase Period	
                                                              16







	 	  8.4      Vesting and Restrictions on Transfer	
                                                              16







	 	  8.5      Voting Rights; Dividends and Distributions	
                                                              16







	 	  8.6       Effect of Termination of Service	
                                                              16







	 	  8.7      Nontransferability of Restricted Stock Award Rights	
                                                              17







	9.    TERMS AND CONDITIONS OF PERFORMANCE AWARDS  	 17 









	 	  9.1    Types of Performance Awards Authorized  	
                                                              17








	 	  9.2    Initial Value of Performance Share and Performance Units  	
                                                              117






	 	  9.3      Establishment of Performance Period, Performance Goals and Performance Award       Formula	
                                                              17







	 	  9.4     Measurement of Performance Goals  	
                                                              18







	 	  9.5     Settlement of Performance Awards 	
                                                              19







	 	  9.6      Voting Rights; Dividend Equivalent Rights and Distributions	
                                                              19







	 	  9.7    Effect of Termination of Service 	
                                                              20







	 	  9.8     Nontransferability of Performance Awards 	
                                                              20







	10.    TERMS AND CONDITIONS OF RESTRICTED STOCK UNIT AWARDS  	 21








	 	  10.1     Grant of Restricted Stock Unit Awards 	
                                                              21








	 	  10.2     Vesting 	
                                                              21








	 	  10.3     Voting Rights, Dividend Equivalent Rights and Distributions	
                                                              21








	 	  10.4     Effect of Termination of Service	
                                                              22







ii 















TABLE OF CONTENTS
(continued) 







	 	  10.5     Settlement of Restricted Stock Unit Awards	
                                                              22








	 	  10.6      Nontransferability of Restricted Stock Unit Awards	
                                                              22








	11.    DEFERRED COMPENSATION AWARDS  	 22








	 	  11.1      Establishment of Deferred Compensation Award Programs	
                                                              22








	 	  11.2     Terms and Conditions of Deferred Compensation Awards	
                                                              23








	12.    OTHER STOCK-BASED AWARDS  	 24








	13.    EFFECT OF CHANGE IN CONTROL ON OPTIONS AND SARS  	 24








	 	  13.1     Accelerated Vesting	
                                                              24







	 	  13.2      Assumption or Substitution	
                                                              24







	 	  13.3     Effect of Change in Control on Restricted Stock and Other Type of Awards	
                                                              25







	14.    COMPLIANCE WITH SECURITIES LAW  	 25 








	15.    TAX WITHHOLDING  	 26








	 	  15.1     Tax Withholding in General	
                                                              26







	 	  15.2     Withholding in Shares	
                                                              26







	16.    AMENDMENT OR TERMINATION OF PLAN  	 26 








	17.    MISCELLANEOUS PROVISIONS  	 26 








	 	  17.1     Repurchase Rights	
                                                              26








	 	  17.2    Provision of Information	
                                                              27








	 	  17.3     Rights as Employee, Consultant or Director	
                                                              27








	 	  17.4     Rights as a Shareholder	
                                                              27








	 	  17.5     Fractional Shares	
                                                              27








	 	  17.6     Severability	
                                                              27








	 	  17.7     Beneficiary Designations	
                                                              27








	 	  17.8     Unfunded Obligation	
                                                              27











	 CALIFORNIA ADDENDUM TO PURE BIOSCIENCE 2007 EQUITY INCENTIVE PLAN 	 29 







iii 














PURE Bioscience
2007
Equity Incentive Plan 



        1.    ESTABLISHMENT,
PURPOSE AND TERM OF PLAN.  




        
      1.1   
Establishment. The PURE Bioscience 2007 Equity Incentive Plan (the “Plan”)
is hereby adopted ___________, 2007 subject to approval by the shareholders of the
Company (the date of such approval, the “Effective Date”).  




        
      1.2   
Purpose. The purpose of the Plan is to advance the interests of the Participating
Company Group and its shareholders by providing an incentive to attract and retain the
best qualified personnel to perform services for the Participating Company Group, by
motivating such persons to contribute to the growth and profitability of the
Participating Company Group, by aligning their interests with interests of the Company’s
shareholders, and by rewarding such persons for their services by tying a significant
portion of their total compensation package to the success of the Company. The Plan seeks
to achieve this purpose by providing for Awards in the form of Options, Stock
Appreciation Rights, Restricted Stock Awards, Performance Shares, Performance Units,
Restricted Stock Units, Deferred Compensation Awards and other Stock-Based Awards as
described below.  




        
      1.3   
Term of Plan. The Plan shall continue in effect until the earlier of its
termination by the Board or the date on which all of the shares of Stock available for
issuance under the Plan have been issued and all restrictions on such shares under the
terms of the Plan and the agreements evidencing Awards granted under the Plan have
lapsed. However, Awards shall not be granted later than ten (10) years from the Effective
Date. The Company intends that the Plan comply with Section 409A of the Code (including
any amendments to or replacements of such section), and the Plan shall be so construed.  




        2.    DEFINITIONS
AND CONSTRUCTION.  




        
      2.1   
Definitions. Whenever used herein, the following terms shall have their respective
meanings set forth below:  




        
            (a)    “Affiliate” means
(i) an entity, other than           a Parent Corporation, that directly, or
indirectly through one or more           intermediary entities, controls the Company or
(ii) an entity, other than a           Subsidiary Corporation, that is controlled by
the Company directly, or           indirectly through one or more intermediary entities.
For this purpose, the term           “control” (including the term “controlled
by”) means the           possession, direct or indirect, of the power to direct or
cause the direction of           the management and policies of the relevant entity,
whether through the           ownership of voting securities, by contract or otherwise;
or shall have such           other meaning assigned such term for the purposes of
registration on           Form S-8 under the Securities Act.  




1 













        
            (b)    “Award” means
any Option, SAR, Restricted Stock           Award, Performance Share, Performance Unit,
Restricted Stock Unit or Deferred           Compensation Award or other Stock-Based Award
granted under the Plan.  




        
            (c)    “Award
Agreement” means a written agreement           between the Company
and a Participant setting forth the terms, conditions and           restrictions of the
Award granted to the Participant.  




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




        
            (e)    “Change
in Control” means, unless such term or an           equivalent term
is otherwise defined with respect to an Award by the           Participant’s Award
Agreement or written contract of employment or service,           the occurrence of any
of the following:  




        
                  (i)              an
Ownership Change Event or a series of related Ownership Change Events
          (collectively, a “Transaction”) in which the
          shareholders of the Company immediately before the Transaction do not retain
          immediately after the Transaction, in substantially the same proportions as
          their ownership of shares of the Company’s voting stock immediately before
          the Transaction, direct or indirect beneficial ownership of more than fifty
          percent (50%) of the total combined voting power of the outstanding voting
          securities of the Company or, in the case of an Ownership Change Event
described           in Section 2.1(y)(iii), the entity to which the assets of the Company
were           transferred (the “Transferee”), as the case
may           be; or  




        
                  (ii)              the
liquidation or dissolution of the Company.  




For purposes of the preceding
sentence, indirect beneficial ownership shall include, without limitation, an interest
resulting from ownership of the voting securities of one or more corporations or other
business entities which own the Company or the Transferee, as the case may be, either
directly or through one or more subsidiary corporations or other business entities. The
Board shall have the right to determine whether multiple sales or exchanges of the voting
securities of the Company or multiple Ownership Change Events are related, and its
determination shall be final, binding and conclusive. 



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




        
            (g)    “Committee” means
the Compensation Committee or           other committee of the Board duly appointed to
administer the Plan and having           such powers as shall be specified by the Board.
If no committee of the Board has           been appointed to administer the Plan, the
Board shall exercise all of the           powers of the Committee granted herein, and, in
any event, the Board may in its           discretion exercise any or all of such powers.
The Committee shall have the           exclusive authority to administer the Plan and
shall have all of the powers           granted herein, including, without limitation, the
power to amend or terminate           the Plan at any time, subject to the terms of the
Plan and any applicable           limitations imposed by law.  




        
            (h)    “Company” means
PURE Bioscience, a California           corporation, or any Successor.  




2 













        
            (i)    “Consultant” means
a person engaged to provide           consulting or advisory services (other than as an
Employee or a member of the           Board) to a Participating Company.  





        
            (j)    “Deferred
Compensation Award” means an award of           Stock Units granted
to a Participant pursuant to Section 11 of the Plan.  





        
            (k)    “Director” means
a member of the Board or of the           board of directors of any Participating
Company.  





        
            (l)    “Disability” means
the permanent and total           disability of the Participant, within the meaning of
Section 22(e)(3) of           the Code.  





        
            (m)    “Dividend
Equivalent” means a credit, made at the           discretion of the
Committee or as otherwise provided by the Plan, to the account           of a Participant
in an amount equal to the cash dividends paid on one share of           Stock for each
share of Stock represented by an Award held by such Participant.  





        
            (n)    “Employee” means
any person treated as an           employee (including an Officer or a member of the
Board who is also treated as           an employee) in the records of a Participating
Company and, with respect to any           Incentive Stock Option granted to such person,
who is an employee for purposes           of Section 422 of the Code; provided,
however, that neither service as a           member of the Board nor payment of a director’s
fee shall be sufficient to           constitute employment for purposes of the Plan. The
Company shall determine in           good faith and in the exercise of its discretion
whether an individual has           become or has ceased to be an Employee and the
effective date of such           individual’s employment or termination of
employment, as the case may be.           For purposes of an individual’s rights, if
any, under the Plan as of the           time of the Company’s determination, all
such determinations by the Company           shall be final, binding and conclusive,
notwithstanding that the Company or any           court of law or governmental agency
subsequently makes a contrary determination.  





        
            (o)    “Exchange
Act” means the Securities Exchange Act           of 1934, as amended.  





        
            (p)    “Fair
Market Value” means, as of any date, the           value of a share
of Stock or other property as determined by the Committee, in           its discretion,
or by the Company, in its discretion, if such determination is           expressly
allocated to the Company herein, subject to the following:  





        
                  (i)              Except
as otherwise determined by the Committee, if, on such date, the Stock is           listed
on a national or regional securities exchange or market system, the Fair           Market
Value of a share of Stock shall be the closing price of a share of Stock           as
quoted on such national or regional securities exchange or market system
          constituting the primary market for the Stock on the date of determination, as
          reported in The Wall Street Journal or such other source as the Company deems
          reliable.  





3 













        
                  (ii)              Notwithstanding
the foregoing, the Committee may, in its discretion, determine           the Fair Market
Value on the basis of the closing, high, low or average sale           price of a share
of Stock or the actual sale price of a share of Stock received           by a
Participant, on such date, the preceding trading day, the next succeeding
          trading day or an average determined over a period of trading days. The
          Committee may vary its method of determination of the Fair Market Value as
          provided in this Section for different purposes under the Plan.  





        
                  (iii)              If,
on such date, the Stock is not listed on a national or regional securities
          exchange or market system, the Fair Market Value of a share of Stock shall be
as           determined by the Committee in good faith without regard to any restriction
          other than a restriction which, by its terms, will never lapse.  





        
            (q)    “Incentive
Stock Option” means an Option intended           to be (as set forth
in the Award Agreement) and which qualifies as an incentive           stock option within
the meaning of Section 422(b) of the Code.  





        
            (r)    “Insider” means
an Officer, a Director or any           other person whose transactions in Stock are
subject to Section 16 of the           Exchange Act.  





        
            (s)    “Non-Control
Affiliate” means any entity in which           any Participating
Company has an ownership interest and which the Committee           shall designate as a
Non-Control Affiliate.  





        
            (t)              “Nonemployee
Director” means a Director who is           not an Employee.  





        
            (u)    “Nonstatutory
Stock Option” means an Option not           intended to be (as set
forth in the Award Agreement) an incentive stock option           within the meaning of
Section 422(b) of the Code.  





        
            (v)     “Officer” means
any person designated by the           Board as an officer of the Company.  





        
            (w)    “Option” means
the right to purchase Stock at a           stated price for a specified period of time
granted to a Participant pursuant to           Section 6 of the Plan. An Option may
be either an Incentive Stock Option or           a Nonstatutory Stock Option.  





        
            (x)    “Option
Expiration Date” means the date of           expiration of the Option’s
term as set forth in the Award Agreement.  





        
            (y)              An
“Ownership Change Event” shall be deemed to           have
occurred if any of the following occurs with respect to the Company:           (i) the
direct or indirect sale or exchange in a single or series of           related
transactions by the shareholders of the Company of more than fifty           percent
(50%) of the voting stock of the Company; (ii) a merger or           consolidation
in which the Company is a party; or (iii) the sale, exchange,           or transfer
of all or substantially all, as determined by the Board in its           discretion, of
the assets of the Company.  





        
            (z)    “Parent
Corporation” means any present or future           “parent
corporation” of the Company, as defined in Section 424(e)           of the
Code.  





4 













        
            (aa)    “Participant” means
any eligible person who has           been granted one or more Awards.  





        
            (bb)    “Participating
Company” means the Company or any           Parent Corporation,
Subsidiary Corporation or Affiliate.  





        
            (cc)    “Participating
Company Group” means, at any point           in time, all entities
collectively which are then Participating Companies.  





        
            (dd)    “Performance
Award” means an Award of Performance           Shares or Performance
Units.  





        
            (ee)    “Performance
Award Formula” means, for any           Performance Award, a formula
or table established by the Committee pursuant to           Section 9.3 of the Plan
which provides the basis for computing the value of           a Performance Award at one
or more threshold levels of attainment of the           applicable Performance Goal(s)
measured as of the end of the applicable           Performance Period.  





        
            (ff)    “Performance
Goal” means a performance goal           established by the Committee
pursuant to Section 9.3 of the Plan.  





        
            (gg)    “Performance
Period” means a period established           by the Committee
pursuant to Section 9.3 of the Plan at the end of which one or           more Performance
Goals are to be measured.  





        
            (hh)    “Performance
Share” means a bookkeeping entry           representing a right
granted to a Participant pursuant to Section 9 of the           Plan to receive a
payment equal to the value of a Performance Share, as           determined by the
Committee, based on performance.  





        
            (ii)    “Performance
Unit” means a bookkeeping entry           representing a right
granted to a Participant pursuant to Section 9 of the           Plan to receive a
payment equal to the value of a Performance Unit, as           determined by the
Committee, based upon performance.  





        
            (jj)    “Restricted
Stock Award” means an Award of           Restricted Stock.  





        
            (kk)    “Restricted
Stock Unit” or “Stock           Unit” means
a bookkeeping entry representing a right granted           to a Participant pursuant to
Section 10 or Section 11 of the Plan,           respectively, to receive a
share of Stock on a date determined in accordance           with the provisions of Section 10
or Section 11, as applicable, and the           Participant’s Award Agreement.  





        
            (ll)    “Restriction
Period” means the period established           in accordance with
Section 8.4 of the Plan during which shares subject to a           Restricted Stock
Award are subject to Vesting Conditions.  





        
            (mm)    “Rule
16b-3” means Rule 16b-3 under the           Exchange Act, as
amended from time to time, or any successor rule or regulation.  





5 













        
            (nn)    “SAR” or
“Stock Appreciation           Right” means a bookkeeping
entry representing, for each           share of Stock subject to such SAR, a right
granted to a Participant pursuant to           Section 7 of the Plan to receive
payment in any combination of shares of           Stock or cash of an amount equal to the
excess, if any, of the Fair Market Value           of a share of Stock on the date of
exercise of the SAR over the exercise price.  





        
            (oo)    “Section 162(m)” means
Section 162(m)           of the Code.  





        
            (pp)    “Securities
Act” means the Securities Act of           1933, as amended.  





        
            (qq)    “Service” means
a Participant’s employment           or service with the Participating Company
Group, whether in the capacity of an           Employee, a Director or a Consultant.
Unless otherwise provided by the           Committee, a Participant’s Service shall
not be deemed to have terminated           merely because of a change in the capacity in
which the Participant renders such           Service or a change in the Participating
Company for which the Participant           renders such Service, provided that there is
no interruption or termination of           the Participant’s Service. Furthermore,
a Participant’s Service shall           not be deemed to have terminated if the
Participant takes any military leave,           sick leave, or other bona fide leave of
absence approved by the Company.           However, if any such leave taken by a
Participant exceeds ninety (90) days, then           on the ninety-first (91st) day
following the commencement of such leave the           Participant’s Service shall
be deemed to have terminated, unless the           Participant’s right to return to
Service is guaranteed by statute or           contract. Notwithstanding the foregoing,
unless otherwise designated by the           Company or required by law, a leave of
absence shall not be treated as Service           for purposes of determining vesting
under the Participant’s Award           Agreement. A Participant’s Service
shall be deemed to have terminated           either upon an actual termination of Service
or upon the entity for which the           Participant performs Service ceasing to be a
Participating Company. Subject to           the foregoing, the Company, in its
discretion, shall determine whether the           Participant’s Service has
terminated and the effective date of such           termination.  





        
            (rr)    “Stock” means
the common stock of the Company, as           adjusted from time to time in accordance
with Section 4.2 of the Plan.  





        
            (ss)    “Stock-Based
Awards” means any award that is           valued in whole or in part
by reference to, or is otherwise based on, the Stock,           including dividends on
the Stock, but not limited to those Awards described in           Sections 6 through
11 of the Plan.  





        
            (tt)    “Subsidiary
Corporation” means any present or           future “subsidiary
corporation” of the Company, as defined in           Section 424(f) of the
Code.  





        
            (uu)    “Successor” means
a corporation into or with           which the Company is merged or consolidated or which
acquires all or           substantially all of the assets of the Company and which is
designated by the           Board as a Successor for purposes of the Plan.  





        
            (vv)    “Ten
Percent Owner” means a Participant who, at           the time an
Option is granted to the Participant, owns stock possessing more           than ten
percent (10%) of the total combined voting power of all classes of           stock of a
Participating Company (other than an Affiliate) within the meaning of           Section 422(b)(6)
of the Code.  





6 













        
            (ww)    “Vesting
Conditions” means those conditions           established in
accordance with Section 8.4 or Section 10.2 of the Plan           prior to the
satisfaction of which shares subject to a Restricted Stock Award or           Restricted
Stock Unit Award, respectively, remain subject to forfeiture or a           repurchase
option in favor of the Company upon the Participant’s           termination of
Service.  





        2.2   
Construction. Captions and titles contained herein are for convenience only and
shall not affect the meaning or interpretation of any provision of the Plan. Except when
otherwise indicated by the context, the singular shall include the plural and the plural
shall include the singular. Use of the term “or” is not intended to be
exclusive, unless the context clearly requires otherwise.  





        3.   
ADMINISTRATION.  





        3.1  
Administration by the Committee. The Plan shall be administered by the Committee.
All questions of interpretation of the Plan or of any Award shall be determined by the
Committee, and such determinations shall be final and binding upon all persons having an
interest in the Plan or such Award.  





        3.2  
Authority of Officers. Any Officer shall have the authority to act on behalf of
the Company with respect to any matter, right, obligation, determination or election
which is the responsibility of or which is allocated to the Company herein, provided the
Officer has apparent authority with respect to such matter, right, obligation,
determination or election.  





        3.3  
Administration with Respect to Insiders. With respect to participation by Insiders
in the Plan, at any time that any class of equity security of the Company is registered
pursuant to Section 12 of the Exchange Act, the Plan shall be administered in
compliance with the requirements, if any, of Rule 16b-3.  





        3.4  
Committee Complying with Section 162(m). While the Company is a “publicly
held corporation”within the meaning of Section 162(m), the Board may establish
a Committee of “outside directors” within the meaning of Section 162(m) to
approve the grant of any Award which might reasonably be anticipated to result in the
payment of employee remuneration that would otherwise exceed the limit on employee
remuneration deductible for income tax purposes pursuant to Section 162(m).  





        3.5  
Powers of the Committee. In addition to any other powers set forth in the Plan and
subject to the provisions of the Plan, the Committee shall have the full and final power
and authority, in its discretion:  





        
      (a)              to
determine the persons to whom, and the time or times at which, Awards shall           be
granted and the number of shares of Stock or units to be subject to each           Award;  





        
      (b)              to
determine the type of Award granted and to designate Options as Incentive           Stock
Options or Nonstatutory Stock Options;  





        
      (c)              to
determine the Fair Market Value of shares of Stock or other property;  





7 













        
      (d)              to
determine the terms, conditions and restrictions applicable to each Award
          (which need not be identical) and any shares acquired pursuant thereto,
          including, without limitation, (i) the exercise or purchase price of
shares           purchased pursuant to any Award, (ii) the method of payment for
shares           purchased pursuant to any Award, (iii) the method for satisfaction
of any           tax withholding obligation arising in connection with Award, including
by the           withholding or delivery of shares of Stock, (iv) the timing, terms
and           conditions of the exercisability or vesting of any Award or any shares
acquired           pursuant thereto, (v) the Performance Award Formula and
Performance Goals           applicable to any Award and the extent to which such
Performance Goals have been           attained, (vi) the time of the expiration of
any Award, (vii) the           effect of the Participant’s termination of
Service on any of the foregoing,           and (viii) all other terms, conditions
and restrictions applicable to any           Award or shares acquired pursuant thereto
not inconsistent with the terms of the           Plan;  





        
      (e)              to
determine whether an Award will be settled in shares of Stock, cash, or in           any
combination thereof;  





        
      (f)              to
approve one or more forms of Award Agreement;  





        
      (g)              to
amend, modify, extend, cancel or renew any Award or to waive any restrictions
          or conditions applicable to any Award or any shares acquired pursuant thereto;  





        
      (h)              to
accelerate, continue, extend or defer the exercisability or vesting of any
          Award or any shares acquired pursuant thereto, including with respect to the
          period following a Participant’s termination of Service;  





        
      (i)              without
the consent of the affected Participant and notwithstanding the           provisions of
any Award Agreement to the contrary, to unilaterally substitute at           any time a
Stock Appreciation Right providing for settlement solely in shares of           Stock in
place of any outstanding Option, provided that such Stock Appreciation           Right
covers the same number of shares of Stock and provides for the same           exercise
price (subject in each case to adjustment in accordance with           Section 4.2)
as the replaced Option and otherwise provides substantially           equivalent terms
and conditions as the replaced Option, as determined by the           Committee;  





        
      (j)              to
prescribe, amend or rescind rules, guidelines and policies relating to the
          Plan, or to adopt sub-plans or supplements to, or alternative versions of, the
          Plan, including, without limitation, as the Committee deems necessary or
          desirable to comply with the laws or regulations of or to accommodate the tax
          policy, accounting principles or custom of, foreign jurisdictions whose
citizens           may be granted Awards;  





        
      (k)              to
correct any defect, supply any omission or reconcile any inconsistency in the
          Plan or any Award Agreement and to make all other determinations and take such
          other actions with respect to the Plan or any Award as the Committee may deem
          advisable to the extent not inconsistent with the provisions of the Plan or
          applicable law; and  





        
      (l)              to
delegate to any proper Officer the authority to grant one or more Awards,
          without further approval of the Committee, to any person eligible pursuant to
          Section 5, other than a person who, at the time of such grant, is an
          Insider; provided, however, that (i) the exercise price per share of each
          such Option shall be equal to the Fair Market Value per share of the Stock on
          the effective date of grant, and (ii) each such Award shall be subject to
          the terms and conditions of the appropriate standard form of Award Agreement
          approved by the Committee and shall conform to the provisions of the Plan and
          such other guidelines as shall be established from time to time by the
          Committee.  





8 













        3.6   
Indemnification. In addition to such other rights of indemnification as they may
have as members of the Board or the Committee or as officers or employees of the
Participating Company Group, members of the Board or the Committee and any officers or
employees of the Participating Company Group to whom authority to act for the Board, the
Committee or the Company is delegated shall be indemnified by the Company against all
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 right granted hereunder,
and 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 relation to
matters as to which it shall be adjudged in such action, suit or proceeding that such
person is liable for gross negligence, bad faith or intentional misconduct in duties;
provided, however, that within sixty (60) days after the institution of such action, suit
or proceeding, such person shall offer to the Company, in writing, the opportunity at its
own expense to handle and defend the same.  





        3.7   
Arbitration. Any dispute or claim concerning any Awards granted (or not granted)
pursuant to this Plan and any other disputes or claims relating to or arising out of the
Plan shall be fully, finally and exclusively resolved by binding arbitration conducted
pursuant to the Commercial Arbitration Rules of the American Arbitration Association. By
accepting an Award, Participants and the Company waive their respective rights to have
any such disputes or claims tried by a judge or jury.  





        3.8   
Repricing Prohibited. Without the affirmative vote of holders of a majority of the
shares of Stock cast in person or by proxy at a meeting of the shareholders of the
Company at which a quorum representing a majority of all outstanding shares of Stock is
present or represented by proxy, the Committee shall not approve a program providing for
either (a) the cancellation of outstanding Options or SARs and the grant in substitution
therefore of new Awards having a lower exercise price or (b) the amendment of outstanding
Options or SARs to reduce the exercise price thereof. This paragraph shall not be
construed to apply to the issuance or assumption of an Award in a transaction to which
Code section 424(a) applies, within the meaning of Section 424 of the Code.  





    4.    SHARES
SUBJECT TO PLAN.  





        4.1   
Maximum Number of Shares Issuable. Subject to adjustment as provided in Section 4.2,
the maximum aggregate number of shares of Stock that may be issued under the Plan shall
be [five million (5,000,000)] and shall consist of authorized but unissued or
reacquired shares of Stock or any combination thereof. If an outstanding Award for any
reason expires or is terminated or canceled without having been exercised or settled in
full, or if shares of Stock acquired pursuant to an Award subject to forfeiture or
repurchase are forfeited or repurchased by the Company, the shares of Stock allocable to
the terminated portion of such Award or such forfeited or repurchased shares of Stock
shall again be available for issuance under the Plan. When a SAR settled in shares of
Stock is exercised, the total number of shares subject to the SAR Agreement with respect
to which the exercise occurs shall count against the limit, regardless of the number of
shares actually issued in settlement of the SAR. Shares used to pay the exercise price of
an option shall not again become available for future grant or issuance under the Plan.
Shares used to satisfy tax withholding obligations shall not become available for future
grant or issuance under the Plan. To the extent an Award is settled in cash rather than
shares of Stock, such cash payment shall not reduce the number of shares available for
issuance under the Plan.  





9 














        4.2   
Adjustments for Changes in Capital Structure. Subject to any required action by
the shareholders of the Company, in the event of any change in the Stock effected without
receipt of consideration by the Company, whether through merger, consolidation,
reorganization, reincorporation, recapitalization, reclassification, stock dividend,
stock split, reverse stock split, split-up, split-off, spin-off, combination of shares,
exchange of shares, or similar change in the capital structure of the Company, or in the
event of payment of a dividend or distribution to the shareholders of the Company in a
form other than Stock (excepting normal cash dividends) that has a material effect on the
Fair Market Value of shares of Stock, appropriate adjustments shall be made in the number
and kind of shares subject to the Plan and to any outstanding Awards, in the Award limits
set forth in Section 5.4, and in the exercise or purchase price per share under any
outstanding Award in order to prevent dilution or enlargement of Participants’ rights
under the Plan. For purposes of the foregoing, conversion of any convertible securities
of the Company shall not be treated as “effected without receipt of consideration by
the Company.” If a majority of the shares which are of the same class as the shares
that are subject to outstanding Awards are exchanged for, converted into, or otherwise
become (whether or not pursuant to an Ownership Change Event) shares of another
corporation (the “New Shares”), the Committee may
unilaterally amend the outstanding Options to provide that such Options are exercisable
for New Shares. In the event of any such amendment, the number of shares subject to, and
the exercise price per share of, the outstanding Awards shall be adjusted in a fair and
equitable manner as determined by the Board, in its discretion. Any fractional share
resulting from an adjustment pursuant to this Section 4.2 shall be rounded down to
the nearest whole number. The Committee in its sole discretion, may also make such
adjustments in the terms of any Award to reflect, or related to, such changes in the
capital structure of the Company or distributions as it deems appropriate, including
modification of Performance Goals, Performance Award Formulas and Performance Periods.
The adjustments determined by the Committee pursuant to this Section 4.2 shall be
final, binding and conclusive.  





    5.    ELIGIBILITY
AND AWARD LIMITATIONS.  





        5.1   
Persons Eligible for Awards. Awards may be granted only to Employees, Consultants
and Directors. For purposes of the foregoing sentence, “Employees,” “Consultants”and
“Directors” shall include prospective Employees, prospective Consultants and
prospective Directors to whom Awards are offered to be granted in connection with written
offers of an employment or other service relationship with the Participating Company
Group; provided, however, that no Stock subject to any such Award shall vest, become
exercisable or be issued prior to the date on which such person commences Service.  





10 













        
      5.2   
Participation. Awards other than Nonemployee Director Awards are granted solely at
the discretion of the Committee. Eligible persons may be granted more than one Award.
However, eligibility in accordance with this Section shall not entitle any person to be
granted an Award, or, having been granted an Award, to be granted an additional Award.  





        
      5.3   
Incentive Stock Option Limitations.  





        
      
      (a)    Persons
Eligible. An Incentive Stock Option may be granted           only to a
person who, on the effective date of grant, is an Employee of the           Company, a
Parent Corporation or a Subsidiary Corporation (each being an “ISO-Qualifying
Corporation”). Any person who is           not an Employee of an
ISO-Qualifying Corporation on the effective date of the           grant of an Option to
such person may be granted only a Nonstatutory Stock           Option. An Incentive Stock
Option granted to a prospective Employee upon the           condition that such person
become an Employee of an ISO-Qualifying Corporation           shall be deemed granted
effective on the date such person commences Service with           an ISO-Qualifying
Corporation, with an exercise price determined as of such date           in accordance
with Section 6.1.  





        
      
      (b)    Fair
Market Value Limitation. To the extent that options           designated
as Incentive Stock Options (granted under all stock option plans of           the
Participating Company Group, including the Plan) become exercisable by a
          Participant for the first time during any calendar year for stock having a Fair
          Market Value greater than One Hundred Thousand Dollars ($100,000), the portion
          of such options which exceeds such amount shall be treated as Nonstatutory
Stock           Options. For purposes of this Section, options designated as Incentive
Stock           Options shall be taken into account in the order in which they were
granted, and           the Fair Market Value of stock shall be determined as of the time
the option           with respect to such stock is granted. If the Code is amended to
provide for a           limitation different from that set forth in this Section, such
different           limitation shall be deemed incorporated herein effective as of the
date and with           respect to such Options as required or permitted by such
amendment to the Code.           If an Option is treated as an Incentive Stock Option in
part and as a           Nonstatutory Stock Option in part by reason of the limitation set
forth in this           Section, the Participant may designate which portion of such
Option the           Participant is exercising. In the absence of such designation, the
Participant           shall be deemed to have exercised the Incentive Stock Option
portion of the           Option first. Upon exercise, shares issued pursuant to each such
portion shall           be separately identified.  





        
      5.4   
Award Limits.  





        
      
      (a)    Maximum
Number of Shares Issuable Pursuant to Incentive Stock           Options.
Subject to adjustment as provided in Section 4.2,           the maximum aggregate
number of shares of Stock that may be issued under the           Plan pursuant to the
exercise of Incentive Stock Options shall not exceed [five million (5,000,000)] shares.
The maximum aggregate number of shares           of Stock that may be issued under the
Plan pursuant to all Awards other than           Incentive Stock Options shall be the
number of shares determined in accordance           with Section 4.1, subject to
adjustment as provided in Section 4.2.  





        
      
      (b)    Section
162(m) Award Limits. The following limits shall           apply to the
grant of any Award if, at the time of grant, the Company is a           “publicly
held corporation” within the meaning of Section 162(m).  





11 













        
      
            (i)    Options
and SARs. Subject to adjustment as provided in Section 4.2,           no
Employee shall be granted within any fiscal year of the Company one or more
          Options or Freestanding SARs which in the aggregate are for more than [five
          hundred thousand (500,000)] shares of Stock reserved for issuance under the
          Plan.  





        
      
      
      (ii)    Restricted
Stock, Restricted Stock Unit Awards and Performance Shares.           Subject to
adjustment as provided in Section 4.2, no Employee shall be           granted within
any fiscal year of the Company one or more Restricted Stock           Awards or
Restricted Stock Unit Awards, subject to Vesting Conditions based on           the
attainment of Performance Goals, or Performance Shares, for more than [two hundred
fifty thousand (250,000)] shares of Stock in the aggregate           under the Plan.  





        
      
      
      (iii)    Performance
Units. Subject to adjustment as provided in Section 4.2,           no Employee
shall be granted Performance Units which could result in such           Employee
receiving more than [five million dollars ($5,000,000)] for each           full
fiscal year of the Company contained in the Performance Period for such           Award.
No Participant may be granted more than one Performance Award for the           same
Performance Period.  





        6.    TERMS
AND CONDITIONS OF OPTIONS.  





        Options
shall be evidenced by Award Agreements specifying the number of shares of Stock covered
thereby, in such form as the Committee shall from time to time establish. No Option or
purported Option shall be a valid and binding obligation of the Company unless evidenced
by a fully executed Award Agreement. Award Agreements evidencing Options may incorporate
all or any of the terms of the Plan by reference and shall comply with and be subject to
the following terms and conditions:  





        
      6.1   
Exercise Price. The exercise price for each Option shall be established in the
discretion of the Committee; provided, however, that (a) the exercise price per share
shall be not less than the Fair Market Value of a share of Stock on the effective date of
grant of the Option and (b) no Incentive Stock Option granted to a Ten Percent Owner
shall have an exercise price per share less than one hundred ten percent (110%) of the
Fair Market Value of a share of Stock on the effective date of grant of the Option.
Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or a
Nonstatutory Stock Option) may be granted with an exercise price lower than the minimum
exercise price set forth above if such Option is granted pursuant to an assumption or
substitution for another option in a manner qualifying under the provisions of Section 424(a)
of the Code.  





        
      6.2   
Exercisability and Term of Options.  





        
      
      (a)    Option
Vesting and Exercisability. Options shall be           exercisable at such
time or times, or upon such event or events, and subject to           such terms,
conditions, performance criteria and restrictions as shall be           determined by the
Committee and set forth in the Award Agreement evidencing such           Option;
provided, however, that (a) no Option shall be exercisable after           the
expiration of ten (10) years after the effective date of grant of such           Option,
(b) no Incentive Stock Option granted to a Ten Percent Owner shall           be
exercisable after the expiration of five (5) years after the effective date           of
grant of such Option, and (c) no Option offered or granted to a
          prospective Employee, prospective Consultant or prospective Director may become
          exercisable prior to the date on which such person commences Service. Subject
to           the foregoing, unless otherwise specified by the Committee in the grant of
an           Option, any Option granted hereunder shall terminate ten (10) years after
the           effective date of grant of the Option, unless earlier terminated in
accordance           with its provisions, or the terms of the Plan.  





12 













        
      
      (b)    Participant
Responsibility for Exercise of Option. Each           Participant is
responsible for taking any and all actions as may be required to           exercise any
Option in a timely manner, and for properly executing any documents           as may be
required for the exercise of an Option in accordance with such rules           and
procedures as may be established from time to time. By signing an Option
          Agreement each Participant acknowledges that information regarding the
          procedures and requirements for the exercise of any Option is available upon
          such Participant’s request. The Company shall have no duty or obligation
to           notify any Participant of the expiration date of any Option.  





     6.3  
Payment of Exercise Price.  





        
      
      (a)    Forms
          of Consideration Authorized. Except as otherwise provided below,
          payment of the exercise price for the number of shares of Stock being purchased
          pursuant to any Option shall be made (i) in cash, by check or in cash
          equivalent, (ii) by tender to the Company, or attestation to the
ownership,           of shares of Stock owned by the Participant having a Fair Market
Value not less           than the exercise price, (iii) by such other consideration
as may be           approved by the Committee from time to time to the extent permitted
by           applicable law, or (iv) by any combination thereof. The Committee may
at           any time or from time to time grant Options which do not permit all of the
          foregoing forms of consideration to be used in payment of the exercise price or
          which otherwise restrict one or more forms of consideration.  





        
      
      (b)    Limitations
on Forms of Consideration.  





        
      
      
      (i)    Tender
of Stock. Notwithstanding the foregoing, an Option may not be           exercised by
tender to the Company, or attestation to the ownership, of shares           of Stock to
the extent such tender or attestation would constitute a violation           of the
provisions of any law, regulation or agreement restricting the redemption           of
the Company’s stock.  





        
      
      
      (ii)    Payment
by Promissory Note. No promissory note shall be permitted if the           exercise
of an Option using a promissory note would be a violation of any law.           Any
permitted promissory note shall be on such terms as the Committee shall
          determine. The Committee shall have the authority to permit or require the
          Participant to secure any promissory note used to exercise an Option with the
          shares of Stock acquired upon the exercise of the Option or with other
          collateral acceptable to the Company. Unless otherwise provided by the
          Committee, if the Company at any time is subject to the regulations promulgated
          by the Board of Governors of the Federal Reserve System or any other
          governmental entity affecting the extension of credit in connection with the
          Company’s securities, any promissory note shall comply with such
applicable           regulations, and the Participant shall pay the unpaid principal and
accrued           interest, if any, to the extent necessary to comply with such
applicable           regulations.  





13 













        
      6.4    Effect of
Termination of Service. 



        
      
      
      (a)    Option
Exercisability. Subject to earlier termination of           the Option as
otherwise provided herein and unless otherwise provided by the           Committee, an
Option shall be exercisable after a Participant’s termination           of Service
only during the applicable time periods provided in the Award           Agreement.  





        
      
      
      (b)    Extension
if Exercise Prevented by Law. Notwithstanding the           foregoing,
unless the Committee provides otherwise in the Award Agreement, if           the exercise
of an Option within the applicable time periods is prevented by the           provisions
of Section 14 below, the Option shall remain exercisable until           three (3)
months (or such longer period of time as determined by the Committee,           in its
discretion) after the date the Participant is notified by the Company           that the
Option is exercisable, but in any event no later than the Option           Expiration
Date.  





        
      
      
      (c)    Extension
if Participant Subject to Section 16(b).           Notwithstanding
the foregoing, if a sale within the applicable time periods of           shares acquired
upon the exercise of the Option would subject the Participant to           suit under
Section 16(b) of the Exchange Act, the Option shall remain           exercisable
until the earliest to occur of (i) the tenth (10th) day           following the date
on which a sale of such shares by the Participant would no           longer be subject to
such suit, (ii) the one hundred and ninetieth (190th)           day after the
Participant’s termination of Service, or (iii) the           Option Expiration
Date.  





        
      6.5   
Transferability of Options. During the lifetime of the Participant, an Option
shall be exercisable only by the Participant or the Participant’s guardian or legal
representative. Prior to the issuance of shares of Stock upon the exercise of an Option,
the Option shall not be subject in any manner to anticipation, alienation, sale,
exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the
Participant or the Participant’s beneficiary, except transfer by will or by the laws
of descent and distribution. Notwithstanding the foregoing, to the extent permitted by
the Committee, in its discretion, and set forth in the Award Agreement evidencing such
Option, a Nonstatutory Stock Option shall be assignable or transferable subject to the
applicable limitations, if any, described in the General Instructions to Form S-8
Registration Statement under the Securities Act.  





        
      7.   TERMS
AND CONDITIONS OF STOCK APPRECIATION RIGHTS.  





        Stock
Appreciation Rights shall be evidenced by Award Agreements specifying the number of
shares of Stock subject to the Award, in such form as the Committee shall from time to
time establish. No SAR or purported SAR shall be a valid and binding obligation of the
Company unless evidenced by a fully executed Award Agreement. Award Agreements evidencing
SARs may incorporate all or any of the terms of the Plan by reference and shall comply
with and be subject to the following terms and conditions:  





        
      7.1   
Types of SARs Authorized. SARs may be granted in tandem with all or any portion of
a related Option (a “Tandem SAR”) or may be granted
independently of any Option (a “Freestanding SAR”). A
Tandem SAR may be granted either concurrently with the grant of the related Option or at
any time thereafter prior to the complete exercise, termination, expiration or
cancellation of such related Option.  





14 













        
      7.2   
Exercise Price. The exercise price for each SAR shall be established in the
discretion of the Committee; provided, however, that (a) the exercise price per
share subject to a Tandem SAR shall be the exercise price per share under the related
Option and (b) the exercise price per share subject to a Freestanding SAR shall be
not less than the Fair Market Value of a share of Stock on the effective date of grant of
the SAR.  





        
      7.3   
Exercisability and Term of SARs.  





        
      
      
      (a)    Tandem
SARs. Tandem SARs shall be exercisable only at the           time and to
the extent, and only to the extent, that the related Option is           exercisable,
subject to such provisions as the Committee may specify where the           Tandem SAR is
granted with respect to less than the full number of shares of           Stock subject to
the related Option.  





        
      
      
      (b)    Freestanding
SARs. Freestanding SARs shall be exercisable           at such time or
times, or upon such event or events, and subject to such terms,           conditions,
performance criteria and restrictions as shall be determined by the           Committee
and set forth in the Award Agreement evidencing such SAR; provided,           however,
that no Freestanding SAR shall be exercisable after the expiration of           ten (10)
years after the effective date of grant of such SAR.  





        
      7.4   
Deemed Exercise of SARs. If, on the date on which an SAR would otherwise terminate
or expire, the SAR by its terms remains exercisable immediately prior to such termination
or expiration and, if so exercised, would result in a payment to the holder of such SAR,
then any portion of such SAR which has not previously been exercised shall automatically
be deemed to be exercised as of such date with respect to such portion.  





        
      7.5   
Effect of Termination of Service. Subject to earlier termination of the SAR as
otherwise provided herein and unless otherwise provided by the Committee in the grant of
an SAR and set forth in the Award Agreement, an SAR shall be exercisable after a
Participant’s termination of Service only as provided in the Award Agreement.  





        
      7.6   
Nontransferability of SARs. During the lifetime of the Participant, an SAR shall
be exercisable only by the Participant or the Participant’s guardian or legal
representative. Prior to the exercise of an SAR, the SAR shall not be subject in any
manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge,
encumbrance, or garnishment by creditors of the Participant or the Participant’s
beneficiary, except transfer by will or by the laws of descent and distribution.  





        
      8.    TERMS
AND CONDITIONS OF RESTRICTED STOCK AWARDS.  





        Restricted
Stock Awards shall be evidenced by Award Agreements specifying the number of shares of
Stock subject to the Award, in such form as the Committee shall from time to time
establish. No Restricted Stock Award or purported Restricted Stock Award shall be a valid
and binding obligation of the Company unless evidenced by a fully executed Award
Agreement. Award Agreements evidencing Restricted Stock Awards may incorporate all or any
of the terms of the Plan by reference and shall comply with and be subject to the
following terms and conditions:  





15 













        
      8.1  
Types of Restricted Stock Awards Authorized. Restricted Stock Awards may or may
not require the payment of cash compensation for the stock. Restricted Stock Awards may
be granted upon such conditions as the Committee shall determine, including, without
limitation, upon the attainment of one or more Performance Goals described in Section 9.4.
If either the grant of a Restricted Stock Award or the lapsing of the Restriction Period
is to be contingent upon the attainment of one or more Performance Goals, the Committee
shall follow procedures substantially equivalent to those set forth in Sections 9.3
through 9.5(a).  





        
      8.2  
Purchase Price. The purchase price, if any, for shares of Stock issuable under
each Restricted Stock Award and the means of payment shall be established by the
Committee in its discretion.  





        
      8.3  
Purchase Period. A Restricted Stock Award requiring the payment of cash
consideration shall be exercisable within a period established by the Committee;
provided, however, that no Restricted Stock Award granted to a prospective Employee,
prospective Consultant or prospective Director may become exercisable prior to the date
on which such person commences Service.  





        
      8.4  
Vesting and Restrictions on Transfer. Shares issued pursuant to any Restricted
Stock Award may or may not be made subject to Vesting Conditions based upon the
satisfaction of such Service requirements, conditions, restrictions or performance
criteria, including, without limitation, Performance Goals as described in Section 9.4,
as shall be established by the Committee and set forth in the Award Agreement evidencing
such Award. During any Restriction Period in which shares acquired pursuant to a
Restricted Stock Award remain subject to Vesting Conditions, such shares may not be sold,
exchanged, transferred, pledged, assigned or otherwise disposed of other than as provided
in the Award Agreement or as provided in Section 8.7. Upon request by the Company,
each Participant shall execute any agreement evidencing such transfer restrictions prior
to the receipt of shares of Stock hereunder.  





        
      8.5  
Voting Rights; Dividends and Distributions. Except as provided in this Section,
Section 8.4 and any Award Agreement, during the Restriction Period applicable to
shares subject to a Restricted Stock Award, the Participant shall have all of the rights
of a shareholder of the Company holding shares of Stock, including the right to vote such
shares and to receive all dividends and other distributions paid with respect to such
shares. However, in the event of a dividend or distribution paid in shares of Stock or
any other adjustment made upon a change in the capital structure of the Company as
described in Section 4.2, any and all new, substituted or additional securities or
other property (other than normal cash dividends) to which the Participant is entitled by
reason of the Participant’s Restricted Stock Award shall be immediately subject to
the same Vesting Conditions as the shares subject to the Restricted Stock Award with
respect to which such dividends or distributions were paid or adjustments were made.  





        
      8.6  
Effect of Termination of Service. Unless otherwise provided by the Committee in
the grant of a Restricted Stock Award and set forth in the Award Agreement, if a
Participant’s Service terminates for any reason, whether voluntary or involuntary
(including the Participant’s death or disability), then the Participant shall
forfeit to the Company any shares acquired by the Participant pursuant to a Restricted
Stock Award which remain subject to Vesting Conditions as of the date of the Participant’s
termination of Service in exchange for the payment of the purchase price, if any, paid by
the Participant. The Company shall have the right to assign at any time any repurchase
right it may have, whether or not such right is then exercisable, to one or more persons
as may be selected by the Company.  





16 













        
      8.7  
Nontransferability of Restricted Stock Award Rights. Prior to the issuance of
shares of Stock pursuant to a Restricted Stock Award, rights to acquire such shares shall
not be subject in any manner to anticipation, alienation, sale, exchange, transfer,
assignment, pledge, encumbrance or garnishment by creditors of the Participant or the
Participant’s beneficiary, except transfer by will or the laws of descent and
distribution. All rights with respect to a Restricted Stock Award granted to a
Participant hereunder shall be exercisable during his or her lifetime only by such
Participant or the Participant’s guardian or legal representative.  





        
      9.   TERMS
AND CONDITIONS OF PERFORMANCE AWARDS.  





        Performance
Awards shall be evidenced by Award Agreements in such form as the Committee shall from
time to time establish. No Performance Award or purported Performance Award shall be a
valid and binding obligation of the Company unless evidenced by a fully executed Award
Agreement. Award Agreements evidencing Performance Awards may incorporate all or any of
the terms of the Plan by reference and shall comply with and be subject to the following
terms and conditions:  





        
      9.1  
Types of Performance Awards Authorized. Performance Awards may be in the form of
either Performance Shares or Performance Units. Each Award Agreement evidencing a
Performance Award shall specify the number of Performance Shares or Performance Units
subject thereto, the Performance Award Formula, the Performance Goal(s) and Performance
Period applicable to the Award, and the other terms, conditions and restrictions of the
Award.  





        
      9.2  
Initial Value of Performance Shares and Performance Units. Unless otherwise
provided by the Committee in granting a Performance Award, each Performance Share shall
have an initial value equal to the Fair Market Value of one (1) share of Stock, subject
to adjustment as provided in Section 4.2, on the effective date of grant of the
Performance Share. Each Performance Unit shall have an initial value determined by the
Committee. The final value payable to the Participant in settlement of a Performance
Award determined on the basis of the applicable Performance Award Formula will depend on
the extent to which Performance Goals established by the Committee are attained within
the applicable Performance Period established by the Committee.  





        
      9.3  
Establishment of Performance Period, Performance Goals and Performance Award Formula.
In granting each Performance Award, the Committee shall establish in writing the
applicable Performance Period, Performance Award Formula and one or more Performance
Goals which, when measured at the end of the Performance Period, shall determine on the
basis of the Performance Award Formula the final value of the Performance Award to be
paid to the Participant. To the extent compliance with the requirements under Section 162(m)
with respect to “performance-based compensation” is desired, the Committee
shall establish the Performance Goal(s) and Performance Award Formula applicable to each
Performance Award no later than the earlier of (a) the date ninety (90) days after the
commencement of the applicable Performance Period or (b) the date on which 25% of the
Performance Period has elapsed, and, in any event, at a time when the outcome of the
Performance Goals remains substantially uncertain. Once established, the Performance
Goals and Performance Award Formula shall not be changed during the Performance Period.
The Company shall notify each Participant granted a Performance Award of the terms of
such Award, including the Performance Period, Performance Goal(s) and Performance Award
Formula.  





17 













        
      9.4  
Measurement of Performance Goals. Performance Goals shall be established by the
Committee on the basis of targets to be attained (“Performance Targets”)
with respect to one or more measures of business or financial performance (each, a “Performance
Measure”), subject to the following:  





        
      
      
      (a)
    Performance Measures. Performance Measures
shall have the           same meanings as used in the Company’s financial
statements, or, if such           terms are not used in the Company’s financial
statements, they shall have           the meaning applied pursuant to generally accepted
accounting principles, or as           used generally in the Company’s industry.
Performance Measures shall be           calculated with respect to the Company and each
Subsidiary Corporation           consolidated therewith for financial reporting purposes
or such division or           other business unit as may be selected by the Committee.
For purposes of the           Plan, the Performance Measures applicable to a Performance
Award shall be           calculated in accordance with generally accepted accounting
principles, but           prior to the accrual or payment of any Performance Award for
the same           Performance Period and excluding the effect (whether positive or
negative) of           any change in accounting standards or any extraordinary, unusual
or nonrecurring           item, as determined by the Committee, occurring after the
establishment of the           Performance Goals applicable to the Performance Award.
Each such adjustment, if           any, shall be made solely for the purpose of providing
a consistent basis from           period to period for the calculation of Performance
Measures in order to prevent           the dilution or enlargement of the Participant’s
rights with respect to a           Performance Award. Performance Measures may be one or
more of the following, as           determined by the Committee: [(i) sales
revenue; (ii) gross margin;           (iii) operating margin; (iv) operating
income; (v) pre-tax           profit; (vi) earnings before stock-based
compensation expense, interest,           taxes and depreciation and amortization; (vii) earnings
before interest,           taxes and depreciation and amortization; (viii) earnings
before interest           and taxes; (ix) net income; (x) expenses; (xi) the
market price           of the Stock; (xii) stock price; (xiii) earnings per
share;           (xiv) return on shareholder equity; (xv) return on capital;
          (xvi) return on net assets; (xvii) economic value added;
          (xviii) market share; (xix) customer service; (xx) customer
          satisfaction; (xxi) safety; (xxii) total shareholder return;
          (xxiii) free cash flow; (xxiv) net operating income;           (xxv) operating
cash flow; (xxvi) return on investment; (xxvii)           employee satisfaction;
(xxviii) employee retention; (xxix) balance of cash,           cash equivalents and
marketable securities; (xxx) product development;           (xxxi) research and
development expenses; (xxxii) completion of an identified           special project;
(xxxiii) completion of a joint venture or other corporate           transaction;]
or (xxxiv) such other measures as determined by the           Committee
consistent with this Section 9.4(a).  





18 













        
      
      
      (b)    Performance
Targets. Performance Targets may include a           minimum, maximum,
target level and intermediate levels of performance, with the           final value of a
Performance Award determined under the applicable Performance           Award Formula by
the level attained during the applicable Performance Period. A           Performance
Target may be stated as an absolute value or as a value determined           relative to
a standard selected by the Committee.  





        
      9.5  
Settlement of Performance Awards.  





        
      
      
      (a)    Determination
of Final Value. As soon as practicable           following the completion
of the Performance Period applicable to a Performance           Award, the Committee
shall certify in writing the extent to which the applicable           Performance Goals
have been attained and the resulting final value of the Award           earned by the
Participant and to be paid upon its settlement in accordance with           the
applicable Performance Award Formula.  





        
      
      
      (b)    Discretionary
Adjustment of Award Formula. In its           discretion, the Committee
may, either at the time it grants a Performance Award           or at any time
thereafter, provide for the positive or negative adjustment of           the Performance
Award Formula applicable to a Performance Award that is not           intended to
constitute “qualified performance based compensation” to a           “covered
employee” within the meaning of Section 162(m) (a “Covered Employee”)
to reflect such           Participant’s individual performance in his or her
position with the           Company or such other factors as the Committee may determine.
With respect to a           Performance Award intended to constitute qualified
performance-based           compensation to a Covered Employee, the Committee shall have
the discretion to           reduce some or all of the value of the Performance Award that
would otherwise be           paid to the Covered Employee upon its settlement
notwithstanding the attainment           of any Performance Goal and the resulting value
of the Performance Award           determined in accordance with the Performance Award
Formula.  





        
      
      
      (c)    Payment
in Settlement of Performance Awards. As soon as           practicable
following the Committee’s determination and certification in           accordance
with Sections 9.5(a) and (b), payment shall be made to each           eligible
Participant (or such Participant’s legal representative or other           person
who acquired the right to receive such payment by reason of the           Participant’s
death) of the final value of the Participant’s           Performance Award. Payment
of such amount shall be made in cash in a lump sum or           in installments, shares
of Stock (either fully vested or subject to vesting), or           a combination thereof,
as determined by the Committee.  





        
      9.6  
Voting Rights; Dividend Equivalent Rights and Distributions. Participants shall
have no voting rights with respect to shares of Stock represented by Performance Share
Awards until the date of the issuance of such shares, if any (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer agent of
the Company). However, the Committee, in its discretion, may provide in the Award
Agreement evidencing any Performance Share Award that the Participant shall be entitled
to receive Dividend Equivalents with respect to the payment of cash dividends on Stock
having a record date prior to the date on which the Performance Shares are settled or
forfeited. Such Dividend Equivalents, if any, shall be credited to the Participant in the
form of additional whole Performance Shares as of the date of payment of such cash
dividends on Stock. The number of additional Performance Shares (rounded to the nearest
whole number) to be so credited shall be determined by dividing (a) the amount of
cash dividends paid on such date with respect to the number of shares of Stock
represented by the Performance Shares previously credited to the Participant by (b) the
Fair Market Value per share of Stock on such date. Dividend Equivalents may be paid
currently or may be accumulated and paid to the extent that Performance Shares become
nonforfeitable, as determined by the Committee. Settlement of Dividend Equivalents may be
made in cash, shares of Stock, or a combination thereof as determined by the Committee,
and may be paid on the same basis as settlement of the related Performance Share as
provided in Section 9.5. Dividend Equivalents shall not be paid with respect to
Performance Units. In the event of a dividend or distribution paid in shares of Stock or
any other adjustment made upon a change in the capital structure of the Company as
described in Section 4.2, appropriate adjustments shall be made in the Participant’s
Performance Share Award so that it represents the right to receive upon settlement any
and all new, substituted or additional securities or other property (other than normal
cash dividends) to which the Participant would entitled by reason of the shares of Stock
issuable upon settlement of the Performance Share Award, and all such new, substituted or
additional securities or other property shall be immediately subject to the same
Performance Goals as are applicable to the Award.  





19 













        
      9.7  
Effect of Termination of Service. Unless otherwise provided by the Committee in
the grant of a Performance Award and set forth in the Award Agreement, the effect of a
Participant’s termination of Service on the Performance Award shall be as follows:  





        
      
      
      (a)    Death
or Disability. If the Participant’s Service           terminates
because of the death or Disability of the Participant before the           completion of
the Performance Period applicable to the Performance Award, the           final value of
the Participant’s Performance Award shall be determined by           the extent to
which the applicable Performance Goals have been attained with           respect to the
entire Performance Period and shall be prorated based on the           number of months
of the Participant’s Service during the Performance           Period. Payment shall
be made following the end of the Performance Period in any           manner permitted by
Section 9.5.  





        
      
      
      (b)    Other
Termination of Service. If the Participant’s           Service
terminates for any reason except death or Disability before the           completion of
the Performance Period applicable to the Performance Award, such           Award shall be
forfeited in its entirety; provided, however, that in the event           of an
involuntary termination of the Participant’s Service, the Committee,           in
its sole discretion, may waive the automatic forfeiture of all or any portion
          of any such Award.  





        
      9.8  
Nontransferability of Performance Awards. Prior to settlement in accordance with
the provisions of the Plan, no Performance Award shall be subject in any manner to
anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or
garnishment by creditors of the Participant or the Participant’s beneficiary, except
transfer by will or by the laws of descent and distribution. All rights with respect to a
Performance Award granted to a Participant hereunder shall be exercisable during his or
her lifetime only by such Participant or the Participant’s guardian or legal
representative.  





20 















        
      10.    TERMS
AND CONDITIONS OF RESTRICTED STOCK UNIT AWARDS.  





        Restricted
Stock Unit Awards shall be evidenced by Award Agreements specifying the number of
Restricted Stock Units subject to the Award, in such form as the Committee shall from time
to time establish. No Restricted Stock Unit Award or purported Restricted Stock Unit Award
shall be a valid and binding obligation of the Company unless evidenced by a fully
executed Award Agreement. Award Agreements evidencing Restricted Stock Units may
incorporate all or any of the terms of the Plan by reference and shall comply with and be
subject to the following terms and conditions: 



        
      10.1  
Grant of Restricted Stock Unit Awards. Restricted Stock Unit Awards may be granted
upon such conditions as the Committee shall determine, including, without limitation,
upon the attainment of one or more Performance Goals described in Section 9.4. If
either the grant of a Restricted Stock Unit Award or the Vesting Conditions with respect
to such Award is to be contingent upon the attainment of one or more Performance Goals,
the Committee shall follow procedures substantially equivalent to those set forth in
Sections 9.3 through 9.5(a).  





        
      10.2  
Vesting. Restricted Stock Units may or may not be made subject to Vesting
Conditions based upon the satisfaction of such Service requirements, conditions,
restrictions or performance criteria, including, without limitation, Performance Goals as
described in Section 9.4, as shall be established by the Committee and set forth in
the Award Agreement evidencing such Award.  





        
      10.3  
Voting Rights, Dividend Equivalent Rights and Distributions. Participants shall
have no voting rights with respect to shares of Stock represented by Restricted Stock
Units until the date of the issuance of such shares (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the Company).
However, the Committee, in its discretion, may provide in the Award Agreement evidencing
any Restricted Stock Unit Award that the Participant shall be entitled to receive
Dividend Equivalents with respect to the payment of cash dividends on Stock having a
record date prior to the date on which Restricted Stock Units held by such Participant
are settled. Such Dividend Equivalents, if any, shall be paid by crediting the
Participant with additional whole Restricted Stock Units as of the date of payment of
such cash dividends on Stock. The number of additional Restricted Stock Units (rounded to
the nearest whole number) to be so credited shall be determined by dividing (a) the
amount of cash dividends paid on such date with respect to the number of shares of Stock
represented by the Restricted Stock Units previously credited to the Participant by (b)
the Fair Market Value per share of Stock on such date. Such additional Restricted Stock
Units shall be subject to the same terms and conditions and shall be settled in the same
manner and at the same time (or as soon thereafter as practicable) as the Restricted
Stock Units originally subject to the Restricted Stock Unit Award. In the event of a
dividend or distribution paid in shares of Stock or any other adjustment made upon a
change in the capital structure of the Company as described in Section 4.2,
appropriate adjustments shall be made in the Participant’s Restricted Stock Unit
Award so that it represents the right to receive upon settlement any and all new,
substituted or additional securities or other property (other than normal cash dividends)
to which the Participant would entitled by reason of the shares of Stock issuable upon
settlement of the Award, and all such new, substituted or additional securities or other
property shall be immediately subject to the same Vesting Conditions as are applicable to
the Award.  





21 













        
      10.4  
Effect of Termination of Service. Unless otherwise provided by the Committee in
the grant of a Restricted Stock Unit Award and set forth in the Award Agreement, if a
Participant’s Service terminates for any reason, whether voluntary or involuntary
(including the Participant’s death or disability), then the Participant shall
forfeit to the Company any Restricted Stock Units pursuant to the Award which remain
subject to Vesting Conditions as of the date of the Participant’s termination of
Service.  





        
      10.5  
Settlement of Restricted Stock Unit Awards. The Company shall issue to a
Participant on the date on which Restricted Stock Units subject to the Participant’s
Restricted Stock Unit Award vest or on such other date determined by the Committee, in
its discretion, and set forth in the Award Agreement one (1) share of Stock (and/or any
other new, substituted or additional securities or other property pursuant to an
adjustment described in Section 10.3) for each Restricted Stock Unit then becoming
vested or otherwise to be settled on such date, subject to the withholding of applicable
taxes. Notwithstanding the foregoing, if permitted by the Committee and set forth in the
Award Agreement, the Participant may elect in accordance with terms specified in the
Award Agreement to defer receipt of all or any portion of the shares of Stock or other
property otherwise issuable to the Participant pursuant to this Section.  





        
      10.6  
Nontransferability of Restricted Stock Unit Awards. Prior to the issuance of
shares of Stock in settlement of a Restricted Stock Unit Award, the Award shall not be
subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment,
pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s
beneficiary, except transfer by will or by the laws of descent and distribution. All
rights with respect to a Restricted Stock Unit Award granted to a Participant hereunder
shall be exercisable during his or her lifetime only by such Participant or the
Participant’s guardian or legal representative.  





        
   11.    DEFERRED
COMPENSATION AWARDS.  





        
      11.1  
Establishment of Deferred Compensation Award Programs. This Section 11 shall
not be effective unless and until the Committee determines to establish a program
pursuant to this Section. The Committee, in its discretion and upon such terms and
conditions as it may determine, may establish one or more programs pursuant to the Plan
under which:  





        
      
      
      (a)              Participants
designated by the Committee who are Insiders or otherwise among a           select group
of highly compensated Employees may irrevocably elect, prior to a           date
specified by the Committee, to reduce such Participant’s compensation
          otherwise payable in cash (subject to any minimum or maximum reductions imposed
          by the Committee) and to be granted automatically at such time or times as
          specified by the Committee one or more Awards of Stock Units with respect to
          such numbers of shares of Stock as determined in accordance with the rules of
          the program established by the Committee and having such other terms and
          conditions as established by the Committee.  





22 













        
      
      (b)              Participants
designated by the Committee who are Insiders or otherwise among a           select group
of highly compensated Employees may irrevocably elect, prior to a           date
specified by the Committee, to be granted automatically an Award of Stock           Units
with respect to such number of shares of Stock and upon such other terms           and
conditions as established by the Committee in lieu of:  





        
      
      
      (i)              shares
of Stock otherwise issuable to such Participant upon the exercise of an           Option;  





        
      
      
      (ii)              cash
or shares of Stock otherwise issuable to such Participant upon the exercise           of
an SAR; or  





        
      
      
      (iii)              cash
or shares of Stock otherwise issuable to such Participant upon the           settlement
of a Performance Award or Performance Unit.  





        
      11.2  
Terms and Conditions of Deferred Compensation Awards. Deferred Compensation Awards
granted pursuant to this Section 11 shall be evidenced by Award Agreements in such
form as the Committee shall from time to time establish. No such Deferred Compensation
Award or purported Deferred Compensation Award shall be a valid and binding obligation of
the Company unless evidenced by a fully executed Award Agreement. Award Agreements
evidencing Deferred Compensation Awards may incorporate all or any of the terms of the
Plan by reference and shall comply with and be subject to the following terms and
conditions:  





        
      
      (a)    Vesting
Conditions. Deferred Compensation Awards shall not           be subject to
any vesting conditions.  





        
      
      (b)    Terms
and Conditions of Stock Units.  





        
      
      
      (i)    Voting
Rights; Dividend Equivalent Rights and Distributions. Participants           shall
have no voting rights with respect to shares of Stock represented by Stock
          Units until the date of the issuance of such shares (as evidenced by the
          appropriate entry on the books of the Company or of a duly authorized transfer
          agent of the Company). However, a Participant shall be entitled to receive
          Dividend Equivalents with respect to the payment of cash dividends on Stock
          having a record date prior to date on which Stock Units held by such
Participant           are settled. Such Dividend Equivalents shall be paid by crediting
the           Participant with additional whole and/or fractional Stock Units as of the
date           of payment of such cash dividends on Stock. The method of determining the
number           of additional Stock Units to be so credited shall be specified by the
Committee           and set forth in the Award Agreement. Such additional Stock Units
shall be           subject to the same terms and conditions and shall be settled in the
same manner           and at the same time (or as soon thereafter as practicable) as the
Stock Units           originally subject to the Stock Unit Award. In the event of a
dividend or           distribution paid in shares of Stock or any other adjustment made
upon a change           in the capital structure of the Company as described in Section 4.2,
          appropriate adjustments shall be made in the Participant’s Stock Unit
Award           so that it represent the right to receive upon settlement any and all
new,           substituted or additional securities or other property (other than normal
cash           dividends) to which the Participant would be entitled by reason of the
shares of           Stock issuable upon settlement of the Award.  





23 













        
      
      
      (ii)    Settlement
of Stock Unit Awards. A Participant electing to receive an           Award of Stock
Units pursuant to this Section 11 shall specify at the time           of such
election a settlement date with respect to such Award. The Company shall           issue
to the Participant as soon as practicable following the earlier of the
          settlement date elected by the Participant or the date of termination of the
          Participant’s Service, a number of whole shares of Stock equal to the
          number of whole Stock Units subject to the Stock Unit Award. Such shares of
          Stock shall be fully vested, and the Participant shall not be required to pay
          any additional consideration (other than applicable tax withholding) to acquire
          such shares. Any fractional Stock Unit subject to the Stock Unit Award shall be
          settled by the Company by payment in cash of an amount equal to the Fair Market
          Value as of the payment date of such fractional share.  





        
      
      
      (iii)    Nontransferability
of Stock Unit Awards. Prior to their settlement in           accordance with the
provision of the Plan, no Stock Unit Award shall be subject           in any manner to
anticipation, alienation, sale, exchange, transfer, assignment,           pledge,
encumbrance, or garnishment by creditors of the Participant or the           Participant’s
beneficiary, except transfer by will or by the laws of           descent and
distribution. All rights with respect to a Stock Unit Award granted           to a
Participant hereunder shall be exercisable during his or her lifetime only           by
such Participant or the Participant’s guardian or legal representative.  





     12.    OTHER
STOCK-BASED AWARDS.  





        In
addition to the Awards set forth in Sections 6 through 11 above, the Committee, in its
sole discretion, may carry out the purpose of this Plan by awarding Stock-Based Awards as
it determines to be in the best interests of the Company and subject to such other terms
and conditions as it deems necessary and appropriate.  





     13.    EFFECT
OF CHANGE IN CONTROL ON OPTIONS AND SARS.  





        
      13.1  
Accelerated Vesting. The Committee, in its sole discretion, may provide in any
Award Agreement or, in the event of a Change in Control, may take such actions as it
deems appropriate to provide for the acceleration of the exercisability and vesting in
connection with such Change in Control of any or all outstanding Options and SARs and
shares acquired upon the exercise of such Options and SARs upon such conditions and to
such extent as the Committee shall determine.  





        
      13.2  
Assumption or Substitution. In the event of a Change in Control, the surviving,
continuing, successor, or purchasing corporation or other business entity or parent
thereof, as the case may be (the “Acquiring Corporation”),
may, without the consent of the Participant, either assume the Company’s rights and
obligations under outstanding Options and SARs or substitute for outstanding Options and
SARs substantially equivalent options or stock appreciation rights for the Acquiring
Corporation’s stock. Any Options or SARs which are neither assumed or substituted
for by the Acquiring Corporation in connection with the Change in Control nor exercised
as of the date of the Change in Control shall terminate and cease to be outstanding
effective as of the date of the Change in Control. Notwithstanding the foregoing, shares
acquired upon exercise of an Option or SAR prior to the Change in Control and any
consideration received pursuant to the Change in Control with respect to such shares
shall continue to be subject to all applicable provisions of the Award Agreement
evidencing such Award except as otherwise provided in such Award Agreement. Furthermore,
notwithstanding the foregoing, if the corporation the stock of which is subject to the
outstanding Options or SARs immediately prior to an Ownership Change Event described in
Section 2.1(y)(i) constituting a Change in Control is the surviving or continuing
corporation and immediately after such Ownership Change Event less than fifty percent
(50%) of the total combined voting power of its voting stock is held by another
corporation or by other corporations that are members of an affiliated group within the
meaning of Section 1504(a) of the Code without regard to the provisions of Section 1504(b)
of the Code, the outstanding Options and SARs shall not terminate unless the Board
otherwise provides in its discretion.  





24 













        
      13.3  
Effect of Change in Control on Restricted Stock and Other Type of Awards. The
Committee may, in its discretion, provide in any Award Agreement evidencing a Restricted
Stock or Other Type of Award that, in the event of a Change in Control, the lapsing of
any applicable Vesting Condition, Restriction Period or Performance Goal applicable to
the shares subject to such Award held by a Participant whose Service has not terminated
prior to the Change in Control shall be accelerated and/or waived effective immediately
prior to the consummation of the Change in Control to such extent as specified in such
Award Agreement; provided, however, that such acceleration or waiver shall not occur to
the extent an Award is assumed or substituted with a substantially equivalent Award in
connection with the Change in Control. Any acceleration, waiver or the lapsing of any
restriction that was permissible solely by reason of this Section 13.3 and the
provisions of such Award Agreement shall be conditioned upon the consummation of the
Change in Control.  





     14.    COMPLIANCE
WITH SECURITIES LAW.  





        The
grant of Awards and the issuance of shares of Stock pursuant to any Award shall be
subject to compliance with all applicable requirements of federal, state and foreign law
with respect to such securities and the requirements of any stock exchange or market
system upon which the Stock may then be listed. In addition, no Award may be exercised or
shares issued pursuant to an Award unless (a) a registration statement under the
Securities Act shall at the time of such exercise or issuance be in effect with respect
to the shares issuable pursuant to the Award or (b) in the opinion of legal counsel
to the Company, the shares issuable pursuant to the Award may be issued in accordance
with the terms of an applicable exemption from the registration requirements of the
Securities Act. The inability of the Company to obtain from any regulatory body having
jurisdiction the authority, if any, deemed by the Company’s legal 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. As a condition to issuance
of any Stock, the Company may require the Participant to satisfy any qualifications that
may be necessary or appropriate, to evidence compliance with any applicable law or
regulation and to make any representation or warranty with respect thereto as may be
requested by the Company.  





25 













     15.   
TAX WITHHOLDING.  





        
      15.1  
Tax Withholding in General. The Company shall have the right to deduct from any
and all payments made under the Plan, or to require the Participant, through payroll
withholding, cash payment or otherwise, including by means of a Cashless Exercise or Net
Exercise of an Option, to make adequate provision for, the federal, state, local and
foreign taxes, if any, required by law to be withheld by the Participating Company Group
with respect to an Award or the shares acquired pursuant thereto. The Company shall have
no obligation to deliver shares of Stock, to release shares of Stock from an escrow
established pursuant to an Award Agreement, or to make any payment in cash under the Plan
until the Participating Company Group’s tax withholding obligations have been
satisfied by the Participant.  





        
      15.2  
Withholding in Shares. The Company shall have the right, but not the obligation,
to deduct from the shares of Stock issuable to a Participant upon the exercise or
settlement of an Award, or to accept from the Participant the tender of, a number of
whole shares of Stock having a Fair Market Value, as determined by the Company, equal to
all or any part of the tax withholding obligations of the Participating Company Group.
The Fair Market Value of any shares of Stock withheld or tendered to satisfy any such tax
withholding obligations shall not exceed the amount determined by the applicable minimum
statutory withholding rates.  





     16.  AMENDMENT
OR TERMINATION OF PLAN.  





        The
Board or the Committee may amend, suspend or terminate the Plan at any time. However,
without the approval of the Company’s shareholders, there shall be (a) no
increase in the maximum aggregate number of shares of Stock that may be issued under the
Plan (except by operation of the provisions of Section 4.2), (b) no change in the
class of persons eligible to receive Incentive Stock Options, and (c) no other
amendment of the Plan that would require approval of the Company’s shareholders
under any applicable law, regulation or rule. No amendment, suspension or termination of
the Plan shall affect any then outstanding Award unless expressly provided by the Board
or the Committee. In any event, no amendment, suspension or termination of the Plan may
adversely affect any then outstanding Award without the consent of the Participant unless
necessary to comply with any applicable law, regulation or rule.  





     17.  MISCELLANEOUS
PROVISIONS.  





        
      17.1  
Repurchase Rights. Shares issued under the Plan may be subject to one or more
repurchase options, or other conditions and restrictions as determined by the Committee
in its discretion at the time the Award is granted. The Company shall have the right to
assign at any time any repurchase right it may have, whether or not such right is then
exercisable, to one or more persons as may be selected by the Company. Upon request by
the Company, each Participant shall execute any agreement evidencing such transfer
restrictions prior to the receipt of shares of Stock hereunder and shall promptly present
to the Company any and all certificates representing shares of Stock acquired hereunder
for the placement on such certificates of appropriate legends evidencing any such
transfer restrictions.  





26 













        
      17.2  
Provision of Information. Each Participant shall be given access to information
concerning the Company equivalent to that information generally made available to the
Company’s common shareholders.  





        
      17.3  
Rights as Employee, Consultant or Director. No person, even though eligible
pursuant to Section 5, shall have a right to be selected as a Participant, or,
having been so selected, to be selected again as a Participant. Nothing in the Plan or
any Award granted under the Plan shall confer on any Participant a right to remain an
Employee, Consultant or Director or interfere with or limit in any way any right of a
Participating Company to terminate the Participant’s Service at any time. To the
extent that an Employee of a Participating Company other than the Company receives an
Award under the Plan, that Award shall in no event be understood or interpreted to mean
that the Company is the Employee’s employer or that the Employee has an employment
relationship with the Company.  





        
      17.4  
Rights as a Shareholder. A Participant shall have no rights as a shareholder with
respect to any shares covered by an Award until the date of the issuance of such shares
(as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company). No adjustment shall be made for dividends,
distributions or other rights for which the record date is prior to the date such shares
are issued, except as provided in Section 4.2 or another provision of the Plan.  





        
      17.5  
Fractional Shares. The Company shall not be required to issue fractional shares
upon the exercise or settlement of any Award.  





        
      17.6  
Severability. If any one or more of the provisions (or any part thereof) of this
Plan shall be held invalid, illegal or unenforceable in any respect, such provision shall
be modified so as to make it valid, legal and enforceable, and the validity, legality and
enforceability of the remaining provisions (or any part thereof) of the Plan shall not in
any way be affected or impaired thereby.  





        
      17.7  
Beneficiary Designation. Subject to local laws and procedures, each Participant
may file with the Company a written designation of a beneficiary who is to receive any
benefit under the Plan to which the Participant is entitled in the event of such
Participant’s death before he or she receives any or all of such benefit. Each
designation will revoke all prior designations by the same Participant, shall be in a
form prescribed by the Company, and will be effective only when filed by the Participant
in writing with the Company during the Participant’s lifetime. If a married
Participant designates a beneficiary other than the Participant’s spouse, the
effectiveness of such designation may be subject to the consent of the Participant’s
spouse. If a Participant dies without an effective designation of a beneficiary who is
living at the time of the Participant’s death, the Company will pay any remaining
unpaid benefits to the Participant’s legal representative.  





        
      17.8  
Unfunded Obligation. Participants shall have the status of general unsecured
creditors of the Company. Any amounts payable to Participants pursuant to the Plan shall
be unfunded and unsecured obligations for all purposes, including, without limitation,
Title I of the Employee Retirement Income Security Act of 1974. No Participating
Company shall be required to segregate any monies from its general funds, or to create
any trusts, or establish any special accounts with respect to such obligations.  





27 













The Company shall retain at all times
beneficial ownership of any investments, including trust investments, which the Company
may make to fulfill its payment obligations hereunder. Any investments or the creation or
maintenance of any trust or any Participant account shall not create or constitute a trust
or fiduciary relationship between the Committee or any Participating Company and a
Participant, or otherwise create any vested or beneficial interest in any Participant or
the Participant’s creditors in any assets of any Participating Company. The
Participants shall have no claim against any Participating Company for any changes in the
value of any assets which may be invested or reinvested by the Company with respect to the
Plan. Each Participating Company shall be responsible for making benefit payments pursuant
to the Plan on behalf of its Participants or for reimbursing the Company for the cost of
such payments, as determined by the Company in its sole discretion. In the event the
respective Participating Company fails to make such payment or reimbursement, a
Participant’s (or other individual’s) sole recourse shall be against the
respective Participating Company, and not against the Company. A Participant’s
acceptance of an Award pursuant to the Plan shall constitute agreement with this
provision. 










28 













CALIFORNIA ADDENDUM
TO  



PURE BIOSCIENCE
2007 EQUITY INCENTIVE PLAN  



        This
Addendum to the PURE Bioscience 2007 Equity Incentive Plan (the “Plan”) is
intended to apply to all Awards granted under the Plan. Capitalized terms contained herein
shall have the same meanings given to them in the Plan, unless otherwise provided in this
Addendum. Notwithstanding any provision contained in the Plan to contrary and to the
extent required by applicable law, the Plan is hereby amended as follows: 



         1.       
          Exercise Price. To the extent required by applicable securities law of
          California (“Applicable California Law”), the exercise price per share
          for an Award shall be not less than eighty five percent (85%) of the Fair Market
          Value of a share of Stock on the effective date of grant of the Award.
          Notwithstanding the above, to the extent required by Applicable California Law,
          the exercise price per share for an Award shall be not less than one hundred ten
          percent (110%) of the Fair Market Value of a share of Stock on the effective
          date of grant of the Award if the recipient possesses more than 10% of the total
          combined voting power of the Company as described by Applicable California Law. 



         2.       
          Exercisability of stock options. To the extent required by Applicable California
          Law, with the exception of an Option granted to an officer, a director or a
          consultant of the Company, no Option shall become exercisable at a rate less
          than twenty percent (20%) per year over a period of five (5) years from the
          effective date of grant of such Option, subject to the Participant’s
          continued Service. 



         3.       
          Effect of Termination of Service. Subject to earlier termination of the Option
          as otherwise provided by the Plan or Option Agreement and unless a longer
          exercise period is provided by the Committee in the grant of an Option and set
          forth in the Option Agreement, an Option shall terminate immediately upon the
          Participant’s termination of Service to the extent that it is then
          unvested. To the extent required by Applicable California Law, the Option shall
          be exercisable after the Participant’s termination of Service to the extent
          it is then vested only during the applicable time period determined in
          accordance with this section (or such longer period specified in the Option
          Agreement and thereafter shall terminate: 



          		    A.       
               Death or Disability. If the Participant’s Service terminates because
               of the death or Disability of the Participant, the Option, to the extent
               unexercised and exercisable on the date on which the Participant’s Service
               terminated, may be exercised by the Participant (or the Participant’s
               guardian, legal representative, or other person who acquired the right to
               exercise the Option by reason of the Participant’s death, as applicable) at
               any time prior to the expiration of six (6) months after the date on which the
               Participant’s Service terminated, but in any event no later than the date
               of expiration of the Option (the “Option Expiration Date”). 



               



          		    B.       
               Other Termination of Service. If the Participant’s Service
               terminates for any reason, except for Disability or death, the Option, to the
               extent unexercised and exercisable by the Participant on the date on which the
               Participant’s Service terminated, may be exercised by the Participant at
               any time prior to the expiration of three (3) months after the date on which the
               Participant’s Service terminated, but in any event no later than the Option
               Expiration Date. 



               



29 













         4.       
          Repurchase Provisions. Unless otherwise provided by the Committee in the grant
          of a Restricted Stock Award or RSU and set forth in the Agreement memorializing
          the Award, if a Participant’s Service terminates for any reason, whether
          voluntary or involuntary (including the Participant’s death or Disability),
          then the Company shall have the option to repurchase for the cash purchase price
          paid by the Participant any shares acquired by the Participant which remain
          subject to restrictions as of the date of the Participant’s termination of
          Service; provided, however, that with the exception of shares acquired by an
          officer, a director or a consultant of the Company, the Company’s
          repurchase option must lapse, to the extent required by Applicable California
          Law, at the rate of at least twenty percent (20%) of the shares per year over
          the period of five (5) years from the effective date of grant of the Award and
          the repurchase option must be exercised, if at all, for cash or cancellation of
          purchase money indebtedness for the shares within ninety (90) days following the
          Participant’s termination of Service. The Company shall have the right to
          assign at any time any repurchase right it may have, whether or not such right
          is then exercisable, to one or more persons as may be selected by the Company. 



         5.       
          Information. To the extent required by Applicable California Law, at least
          annually, copies of the Company’s balance sheet and income statement for
          the just completed fiscal year shall be made available to each Participant. The
          Company shall not be required to provide such information to key employees whose
          duties in connection with the Company assure them access to equivalent
          information. 










30 















PLAN HISTORY AND
NOTES TO COMPANY  



	_______, 2007 	Board
adopts Plan with a reserve of five million (5,000,000) shares. 






	March 1, 2007	
                        Shareholders approve Plan. 

















i