**Exhibit10.1**

** **

**AMYLIN PHARMACEUTICALS, INC.**

** **

**AMENDED AND RESTATED 2001 EQUITYINCENTIVE PLAN**

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**1.****             PURPOSES AND RELATIONSHIP WITH THECOMPANY’S 2003 NON-EMPLOYEE DIRECTORS’ STOCK OPTION PLAN.**

 

**(a)****           Eligible Stock AwardRecipients.**  The persons eligible toreceive Stock Awards are the Employees, Directors and Consultants of theCompany and its Affiliates.

 

**(b)****           Available Stock Awards.**  The purpose of the Plan is to provide a meansby which eligible recipients of Stock Awards may be given an opportunity tobenefit from increases in value of the Common Stock through the granting of thefollowing Stock Awards:  (i) IncentiveStock Options, (ii) Nonstatutory Stock Options, and (iii) restrictedstock awards.

 

**(c)****           General Purpose.**  The Company, by means of the Plan, seeks toretain the services of the group of persons eligible to receive Stock Awards,to secure and retain the services of new members of this group and to provideincentives for such persons to exert maximum efforts for the success of theCompany and its Affiliates.

 

**(d)****           Relationship with the Company’s 2003 Non-Employee Directors’ Stock OptionPlan.** All Non-EmployeeDirector Options shall be deemed to have been issued under and pursuant to theterms of the Plan and subject to all the terms and conditions of the Planexcept to the extent otherwise provided for in the Non-Employee Directors’Plan.  In the event that any of the termsor conditions of the Plan are inconsistent with or in conflict with any of theterms or conditions of the Non-Employee Directors’ Plan or the Non-EmployeeDirector Options, the terms and conditions of the Non-Employee Directors’ Planor the Non-Employee Director Options shall control.

 

**2.****             DEFINITIONS.**

 

**(a)****           *“Affiliate”***means any parent corporation or subsidiary corporation of the Company, whethernow or hereafter existing, as those terms are defined in Sections 424(e) and(f), respectively, of the Code.

 

**(b)****           *“AnnualMeeting”*** means the annual meeting of the stockholders of theCompany.

 

**(c)****           *“Board”***means the Board of Directors of the Company.

 

**(d)****           *“Code”***means the Internal Revenue Code of 1986, as amended.

 

**(e)****           *“Committee”***means a committee of one or more members of the Board appointed by the Board inaccordance with subsection 3(c).

 

**(f)****            *“CommonStock”*** means the common stock of the Company.

 

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**(g)****           *“Company”***means Amylin Pharmaceuticals, Inc., a Delaware corporation.

 

**(h)****           *“Consultant”***means any person, including an advisor, whether an individual or an entity, (i) engagedby the Company or an Affiliate to render consulting or advisory services andwho is compensated for such services or (ii) who is a member of the Boardof Directors of an Affiliate and who is compensated for such services.  However, the term “Consultant” shall notinclude Directors who are not compensated by the Company for their services asDirectors, and the payment of a director’s fee by the Company for services as aDirector shall not cause a Director to be considered a “Consultant” forpurposes of the Plan.

 

**(i)****            *“ContinuousService”*** means that the Participant’s service with the Companyor an Affiliate, whether as an Employee, Director or Consultant, is notinterrupted or terminated.  A Participant’sContinuous Service shall not be deemed to have terminated by reason of a changein the capacity in which such Participant renders service to the Company or anAffiliate as an Employee, Consultant or Director or a change in the entity forwhich such Participant renders such service, provided that there is otherwiseno interruption or termination of such Participant’s Continuous Service.  For example, a change in status from anEmployee of the Company to a Consultant of an Affiliate or a Director will notconstitute an interruption of Continuous Service.  The Board or the chief executive officer ofthe Company, in that party’s sole discretion, may determine whether ContinuousService shall be considered interrupted in the case of any leave of absenceapproved by that party, including sick leave, military leave or any otherpersonal leave.

 

**(j)****            *“CoveredEmployee”*** means the chief executive officer and the four (4) otherhighest compensated officers of the Company for whom total compensation isrequired to be reported to stockholders under the Exchange Act, as determinedfor purposes of Section 162(m) of the Code.

 

**(k)****           *“Director”***means a member of the Board of Directors of the Company.

 

**(l)****            *“Disability”***means the permanent and total disability of a person within the meaning of Section 22(e)(3) ofthe Code.

 

**(m)****          *“Employee”***means any person employed by the Company or an Affiliate.  A person shall not be deemed an Employee byreason of such person’s service as a Director and/or payments of director’sfees to such person.

 

**(n)****           *“ExchangeAct”*** means the Securities Exchange Act of 1934, as amended.

 

**(o)****           “*Fair MarketValue”*** means, as of any date, the value of the Common Stockdetermined as follows:

 

**(i)****           **If the CommonStock is listed on any established stock exchange or traded on the NasdaqNational Market or the Nasdaq SmallCap Market, the Fair Market Value of a shareof Common Stock shall be the closing sales price for such stock (or the closingbid, if no sales were reported) as quoted on such exchange or market (or theexchange or market with the greatest volume of trading in the Common Stock) onthe day of determination (or if the day of determination is not a markettrading day, the last market trading day prior to the day of 

 

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determination), asreported in *The Wall Street Journal*****orsuch other source as the Board deems reliable.

 

**(ii)****          **In the absence ofsuch markets for the Common Stock, the Fair Market Value shall be determined ingood faith by the Board.

 

**(p)****           *“IncentiveStock Option”*** means an Option intended to qualify as anincentive stock option within the meaning of Section 422 of the Code andthe regulations promulgated thereunder.

 

**(q)****           *“Non-EmployeeDirector”***means a Director who either (i) is not a currentEmployee or Officer of the Company or its parent or a subsidiary, does notreceive compensation (directly or indirectly) from the Company or its parent ora subsidiary for services rendered as a consultant or in any capacity otherthan as a Director (except for an amount as to which disclosure would not berequired under Item 404(a) of Regulation S-K promulgated pursuant to theSecurities Act (“Regulation S-K”)), does not possess an interest in any othertransaction as to which disclosure would be required under Item 404(a) ofRegulation S-K and is not engaged in a business relationship as to whichdisclosure would be required under Item 404(b) of Regulation S-K; or (ii) isotherwise considered a “non-employee director” for purposes of Rule 16b-3.

 

**(r)****           *“Non-Employee DirectorOption”*** means a nonstatutory stock option granted pursuant to theNon-Employee Directors’ Plan.

 

**(s)****           *“Non-Employee Directors’Plan”*** means the Company’s 2003 Non-Employee Directors’ StockOption Plan.

 

**(t)****            *“NonstatutoryStock Option”*** means an Option not intended to qualify as anIncentive Stock Option.

 

**(u)****           *“Officer”***means a person who is an officer of the Company within the meaning of Section 16of the Exchange Act and the rules and regulations promulgated thereunder.

 

**(v)****            *“Option”***means an Incentive Stock Option or a Nonstatutory Stock Option granted pursuantto the Plan or a Non-Employee Director Option.

 

**(w)****           *“OptionAgreement”*** means a written agreement between the Company and anOptionholder evidencing the terms and conditions of an individual Optiongrant.  Each Option Agreement shall besubject to the terms and conditions of the Plan.

 

**(x)****           *“Optionholder”***means a person to whom an Option is granted pursuant to the Plan or, ifapplicable, such other person who holds an outstanding Option.

 

**(y)****           *“OutsideDirector”*** means a Director who either (i) is not a currentemployee of the Company or an “affiliated corporation” (within the meaning ofTreasury Regulations promulgated under Section 162(m) of the Code),is not a former employee of the Company or an “affiliated corporation”receiving compensation for prior services (other than benefits under a taxqualified pension plan), was not an officer of the Company or an “affiliatedcorporation” at any time and is not currently receiving direct or indirectremuneration from the Company or an 

 

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“affiliated corporation”for services in any capacity other than as a Director or (ii) is otherwiseconsidered an “outside director” for purposes of Section 162(m) ofthe Code.

 

**(z)****           *“Participant”***means a person to whom a Stock Award is granted pursuant to the Plan or, ifapplicable, such other person who holds an outstanding Stock Award.

 

**(aa)****         *“Plan”***means this Amylin Pharmaceuticals, Inc. Amended and Restated 2001 EquityIncentive Plan.

 

**(bb)****         *“Rule 16b-3”***means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3,as in effect from time to time.

 

**(cc)****         *“SecuritiesAct”*** means the Securities Act of 1933, as amended.

 

**(dd)****         *“Stock Award”***means any right granted under the Plan, including an Option and a restrictedstock award.

 

**(ee)****         *“Stock AwardAgreement”*** means a written agreement between the Company and aholder of a Stock Award evidencing the terms and conditions of an individualStock Award grant.  Each Stock AwardAgreement shall be subject to the terms and conditions of the Plan.

 

**(ff)****           *“Ten PercentStockholder”*** means a person who owns (or is deemed to ownpursuant to Section 424(d) of the Code) stock possessing more thanten percent (10%) of the total combined voting power of all classes of stock ofthe Company or of any of its Affiliates.

 

**3.****             ADMINISTRATION.**

 

**(a)****           Administration byBoard.**  The Board shall administerthe Plan unless and until the Board delegates administration to a Committee, asprovided in subsection 3(c).

 

**(b)****           Powers of Board.**  The Board shall have the power, subject to,and within the limitations of, the express provisions of the Plan:

 

**(i)****           **To determine fromtime to time which of the persons eligible under the Plan shall be grantedStock Awards; when and how each Stock Award shall be granted; what type orcombination of types of Stock Award shall be granted; the provisions of eachStock Award granted (which need not be identical), including the time or timeswhen a person shall be permitted to receive Common Stock pursuant to a StockAward; and the number of shares of Common Stock with respect to which a StockAward shall be granted to each such person.

 

**(ii)****          **To construe andinterpret the Plan and Stock Awards granted under it, and to establish, amendand revoke rules and regulations for its administration.  The Board, in the exercise of this power, maycorrect any defect, omission or inconsistency in the Plan or in any Stock AwardAgreement, in a manner and to the extent it shall deem necessary or expedientto make the Plan fully effective.

 

**(iii)****        **To amend the Plan ora Stock Award as provided in Section 12.

 

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**(iv)****         **Generally, toexercise such powers and to perform such acts as the Board deems necessary orexpedient to promote the best interests of the Company which are not inconflict with the provisions of the Plan.

 

**(c)****           Delegationto Committee.**

 

**(i)****            General.**  The Board may delegate administration of thePlan to a Committee or Committees of one (1) or more members of the Board,and the term “Committee” shall apply to any person or persons to whom suchauthority has been delegated.  Ifadministration is delegated to a Committee, the Committee shall have, inconnection with the administration of the Plan, the powers theretoforepossessed by the Board, including the power to delegate to a subcommittee anyof the administrative powers the Committee is authorized to exercise (andreferences in this Plan to the Board shall thereafter be to the Committee orsubcommittee), subject, however, to such resolutions, not inconsistent with theprovisions of the Plan, as may be adopted from time to time by the Board.  The Board may abolish the Committee at anytime and revest in the Board the administration of the Plan.

 

**(ii)****           Committee Compositionwhen Common Stock is Publicly Traded.** Notwithstanding any contrary provision of subparagraph 3(c)(i) ofthis Plan, at such time as the Common Stock is publicly traded, in thediscretion of the Board, a Committee may consist solely of two or more OutsideDirectors, in accordance with Section 162(m) of the Code, and/orsolely of two or more Non-Employee Directors, in accordance with Rule 16b-3.  Within the scope of such authority, the Boardor the Committee may (1) delegate to a committee of one or more members ofthe Board who are not Outside Directors the authority to grant Stock Awards toeligible persons who are either (a) not then Covered Employees and are notexpected to be Covered Employees at the time of recognition of income resultingfrom such Stock Award or (b) not persons with respect to whom the Companywishes to comply with Section 162(m) of the Code and/or (2) delegateto a committee of one or more members of the Board who are not Non-EmployeeDirectors the authority to grant Stock Awards to eligible persons who are notthen subject to Section 16 of the Exchange Act.

 

**(d)****           Effect of Board’s Decision.**  All determinations, interpretations andconstructions made by the Board in good faith shall not be subject to review byany person and shall be final, binding and conclusive on all persons.

 

**4.****             SHARES SUBJECT TO THE PLAN.**

 

**(a)****           Share Reserve.**  Subject to the provisions of Section 11relating to adjustments upon changes in Common Stock, an aggregate of twenty-fivemillion (25,000,000) shares of Common Stock shall be authorized for issuancepursuant to Stock Awards; *provided, however*,such aggregate number shall increase automatically without further Board actionor stockholder approval, as and to the extent that options to purchase CommonStock issued under the Company’s 1991 Stock Option Plan (the “1991 Plan”)expire, terminate or otherwise cancel prior to exercise following the date thePlan is approved by the Board, by the number of shares underlying such expired,terminated or canceled options issued under the 1991 Plan, subject to a maximumincrease of five million two hundred seventy-five thousand six hundredeighty-nine (5,275,689) shares. Accordingly, subject to the provisions of Section 11 relating toadjustments 

 

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upon changes in CommonStock, the Common Stock that may be issued pursuant to Stock Awards shall notexceed in the aggregate thirty****million two hundredseventy-five thousand six hundred eighty-nine (30,275,689) shares of CommonStock.  Effective as of April 18,2008, subject to Section 4(b), the number of shares of Common Stockavailable for issuance under the Plan shall be reduced by: (i) one (1) sharefor each share of Common Stock issued pursuant to an Option under the Plan, and(ii) two and twenty-one hundredths (2.21) of a share for each share ofCommon Stock issued pursuant to a restricted stock award under the Plan.

 

**(b)****           Reversion of Shares tothe Share Reserve.**  If any StockAward shall for any reason expire or otherwise terminate, in whole or in part,without having been exercised in full, the shares of Common Stock not acquiredunder such Stock Award shall revert to and again become available for issuanceunder the Plan.  To the extent there isissued a share of Common Stock pursuant to a Stock Award that counted as twoand twenty-one hundredths (2.21) of a share against the number of sharesavailable for issuance under the Plan pursuant to Section 4(a) andsuch share of Common Stock again becomes available for issuance under the Planpursuant to this Section 4(b), then the number of shares of Common Stockavailable for issuance under the Plan shall increase by two and twenty-onehundredths (2.21) of a share.

 

**(c)****           Source of Shares.**  The shares of Common Stock subject to thePlan may be unissued shares or reacquired shares, bought on the market orotherwise.

 

**5.****             ELIGIBILITY.**

 

**(a)****           Eligibility forSpecific Stock Awards.**  IncentiveStock Options may be granted only to Employees. Stock Awards other than Incentive Stock Options may be granted toEmployees, Directors and Consultants.

 

**(b)****           Ten PercentStockholders.**  A Ten PercentStockholder shall not be granted an Incentive Stock Option unless the exerciseprice of such Option is at least one hundred ten percent (110%) of the FairMarket Value of the Common Stock at the date of grant and the Option is notexercisable after the expiration of five (5) years from the date of grant.

 

**(c)****           Section 162(m) Limitation.**  Subject to the provisions of Section 11relating to adjustments upon changes in the shares of Common Stock, no Employeeshall be eligible to be granted Options covering more than one million(1,000,000) shares of Common Stock during any calendar year.

 

**(d)****           Consultants. **A Consultant shall not be eligible forthe grant of a Stock Award if, at the time of grant, a Form S-8Registration Statement under the Securities Act (“Form S-8”) is notavailable to register either the offer or the sale of the Company’s securitiesto such Consultant because of the nature of the services that the Consultant isproviding to the Company, or because the Consultant is not a natural person, oras otherwise provided by the rules governing the use of Form S-8, *unless* the Company determines both (i) that such grant (A) shallbe registered in another manner under the Securities Act (*e.g.,*on a Form S-3 Registration Statement) or (B) does not requireregistration under the Securities Act in order to comply with the requirementsof the Securities Act, if applicable, and (ii) that such grant complieswith the securities laws of all other relevant jurisdictions.

 

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**6.****             OPTION PROVISIONS.**

 

Each Option shall be in such form and shall containsuch terms and conditions as the Board shall deem appropriate.  All Options shall be separately designatedIncentive Stock Options or Nonstatutory Stock Options at the time of grant,and, if certificates are issued, a separate certificate or certificates will beissued for shares of Common Stock purchased on exercise of each type of Option.  The provisions of separate Options need notbe identical, but each Option shall include (through incorporation ofprovisions hereof by reference in the Option or otherwise) the substance ofeach of the following provisions:

 

**(a)****           Term.**  Subject to the provisions of subsection 5(b) regardingthe maximum term of Incentive Stock Options granted to Ten PercentStockholders, no Incentive Stock Option or Nonstatutory Stock Option shall beexercisable after the expiration of seven (7) years from the date it wasgranted.

 

**(b)****           Minimum Exercise Priceof an Option.**  Subject to theprovisions of subsection 5(b) regarding the minimum exercise price ofIncentive Stock Options granted to Ten Percent Stockholders, the exercise priceof each Incentive Stock Option and Nonstatutory Stock Option shall be not lessthan one hundred percent (100%) of the Fair Market Value of the Common Stocksubject to the Option on the date the Option is granted.  Notwithstanding the foregoing, an Option maybe granted with an exercise price lower than that set forth in the precedingsentence if such Option is granted pursuant to an assumption or substitutionfor another option in a manner satisfying the provisions of Section 424(a) ofthe Code.(1)

 

**(c)****           Consideration.**  The purchase price of Common Stock acquiredpursuant to an Option shall be paid, to the extent permitted by applicablestatutes and regulations, either (i) in cash at the time the Option isexercised or (ii) at the discretion of the Board at the time of the grantof the Option (or subsequently in the case of a Nonstatutory Stock Option) (1) bydelivery to the Company of other Common Stock, (2) according to a deferredpayment or other similar arrangement with the Optionholder or (3) in anyother form of legal consideration that may be acceptable to the Board.  Unless otherwise specifically provided in theOption, the purchase price of Common Stock acquired pursuant to an Option thatis paid by delivery to the Company of other Common Stock acquired, directly orindirectly from the Company, shall be paid only by shares of the Common Stockof the Company that have been held for more than six (6) months (or suchlonger or shorter period of time required to avoid a charge to earnings forfinancial accounting purposes).  At anytime that the Company is incorporated in Delaware, payment of the Common Stock’s“par value,” as defined in the Delaware General Corporation Law, shall not bemade by deferred payment.

 

 

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(1) CodeSection 424(a) applies to the substitution of a new option for an oldoption, or an assumption of an old option, by an employer corporation or aparent or subsidiary of such corporation, by reason of a corporate merger,consolidation, acquisition of property or stock, separation, reorganization, orliquidation if (1) the excess of the aggregate fair market value of theshares subject to the option immediately after the substitution or assumptionover the aggregate option price of such shares is not more than the excess ofthe aggregate fair market value of all shares subject to the optionsimmediately before such substitution or assumption over the aggregate optionprice of such shares; and (2) the new option or the assumption of the oldoption does not give the employee additional benefits which he or she did nothave under the old option.

 

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In the case of any deferred payment arrangement,interest shall be compounded at least annually and shall be charged at themarket rate of interest necessary to avoid a charge to earnings for financialaccounting purposes.

 

**(d)****           Transferability of anIncentive Stock Option.**  Pursuant toprovisions of the Code, an Incentive Stock Option shall not be transferableexcept by will or by the laws of descent and distribution and shall beexercisable during the lifetime of the Optionholder only by theOptionholder.  Notwithstanding theforegoing, in the event of the Optionholder’s divorce, upon receipt of proof ofsuch divorce, the Board in its discretion may, but shall have no obligation to,amend the terms of an Incentive Stock Option to provide for either (i) thetransfer of the beneficial ownership of all or a portion of the Incentive StockOption to the Optionholder’s former spouse, or (ii) the transfer of all ora portion of the Incentive Stock Option, provided that the transferred Optionshall be deemed a Nonstatutory Stock Option to the extent required byapplicable law.  In addition to theforegoing, the Optionholder may, by delivering written notice to the Company,in a form satisfactory to the Company, designate a third party who, in theevent of the death of the Optionholder, shall thereafter be entitled toexercise the Option.

 

**(e)****           Transferability of aNonstatutory Stock Option.**  ANonstatutory Stock Option shall be transferable to the extent provided in theOption Agreement.  If the NonstatutoryStock Option does not provide for transferability, then the Nonstatutory StockOption shall not be transferable except by will or by the laws of descent anddistribution and shall be exercisable during the lifetime of the Optionholderonly by the Optionholder.  Notwithstandingthe foregoing, in the event of the Optionholder’s divorce or legal separation, allor a portion of the Nonstatutory Stock Option shall be transferable uponreceipt of proof of such divorce or legal separation and in accordance with theterms of such divorce or legal separation. In addition to the foregoing, the Optionholder may, by deliveringwritten notice to the Company, in a form satisfactory to the Company, designatea third party who, in the event of the death of the Optionholder, shallthereafter be entitled to exercise the Option.

 

**(f)****            Vesting Generally.**  The total number of shares of Common Stocksubject to an Option may, but need not, vest and therefore become exercisablein periodic installments that may, but need not, be equal.  The Option may be subject to such other termsand conditions on the time or times when it may be exercised (which may bebased on performance or other criteria) as the Board may deem appropriate.  The vesting provisions of individual Optionsmay vary.  The provisions of thissubsection 6(f) are subject to any Option provisions governing the minimumnumber of shares of Common Stock as to which an Option may be exercised.

 

**(g)****           Termination ofContinuous Service.**  In the event anOptionholder’s Continuous Service terminates (other than upon the Optionholder’sdeath or Disability), the Optionholder may exercise his or her Option (to theextent that the Optionholder was entitled to exercise such Option as of thedate of termination) but only within such period of time as is determined bythe Board (but in no event later than the expiration of the term of such Optionas set forth in the Option Agreement). In the case of an Incentive Stock Option, to the extent the Boardintends that the Option remain an Incentive Stock Option, such period of timeshall not exceed three (3) months from the date of termination.  If, after termination, the Optionholder doesnot exercise his or her Option within the time specified in the Option Agreement,the Option shall terminate.

 

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**(h)****           Extension ofTermination Date.**  An Optionholder’sOption Agreement may also provide that if the exercise of the Option followingthe termination of the Optionholder’s Continuous Service (other than upon theOptionholder’s death or Disability) would be prohibited at any time solelybecause the issuance of shares of Common Stock would violate the registrationrequirements under the Securities Act, then the Option shall terminate on theearlier of (i) the expiration of the term of the Option set forth in theOption Agreement or (ii) the expiration of a period of three (3) monthsafter the termination of the Optionholder’s Continuous Service during which theexercise of the Option would not be in violation of such registrationrequirements.

 

**(i)****            Disability ofOptionholder.**  In the event that anOptionholder’s Continuous Service terminates as a result of the Optionholder’sDisability, the Optionholder may exercise his or her Option (to the extent thatthe Optionholder was entitled to exercise such Option as of the date oftermination), but only within such period of time ending on the earlier of (i) thedate twelve (12) months following such termination (or such longer or shorterperiod specified in the Option Agreement) or (ii) the expiration of theterm of the Option as set forth in the Option Agreement.  If, after termination, the Optionholder doesnot exercise his or her Option within the time specified herein, the Optionshall terminate.

 

**(j)****            Death of Optionholder.**  In the event (i) an Optionholder’sContinuous Service terminates as a result of the Optionholder’s death or (ii) theOptionholder dies within the period (if any) specified in the Option Agreementafter the termination of the Optionholder’s Continuous Service for a reasonother than death, then the Option may be exercised (to the extent theOptionholder was entitled to exercise such Option as of the date of death) bythe Optionholder’s estate, by a person who acquired the right to exercise theOption by bequest or inheritance or by a person designated to exercise theOption upon the Optionholder’s death pursuant to subsection 6(d) or 6(e),but only within the period ending on the earlier of (1) the date twelve(12) months following the date of death (or such longer or shorter periodspecified in the Option Agreement) or (2) the expiration of the term ofsuch Option as set forth in the Option Agreement.  If, after death, the Option is not exercisedwithin the time specified herein, the Option shall terminate.

 

**(k)****           Early Exercise.**  The Option may, but need not, include aprovision whereby the Optionholder may elect at any time before theOptionholder’s Continuous Service terminates to exercise the Option as to anypart or all of the shares of Common Stock subject to the Option prior to thefull vesting of the Option.  Any unvestedshares of Common Stock so purchased may be subject to a repurchase option infavor of the Company or to any other restriction the Board determines to beappropriate.

 

**7.****             PROVISIONS OF RESTRICTED STOCK AWARDS.**

 

Each restricted stock awardagreement shall be in such form and shall contain such terms and conditions asthe Board shall deem appropriate.  Theterms and conditions of the restricted stock award agreements may change fromtime to time, and the terms and conditions of separate restricted stock awardagreements need not be identical, but each restricted stock award agreementshall include (through incorporation of provisions hereof by reference in theagreement or otherwise) the substance of each of the following provisions:

 

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**(a)****           Consideration.**  A restricted stock award may be granted inconsideration for past or future services rendered to the Company or anAffiliate for its benefit.

 

**(b)****           Vesting.**  Shares of Common Stock acquired under therestricted stock award agreement may, but need not, be subject to a sharereacquisition option in favor of the Company in accordance with a vestingschedule to be determined by the Board.

 

**(c)****           Termination ofParticipant’s Continuous Service.**  Inthe event a Participant’s Continuous Service terminates, the Company mayreacquire any or all of the shares of Common Stock held by the Participantwhich have not vested as of the date of termination under the terms of therestricted stock award agreement.

 

**(d)****           Transferability.**  Shares of Common Stock issued pursuant to therestricted stock award shall be transferable by the Participant only upon suchterms and conditions as are set forth in the restricted stock award agreement,as the Board shall determine in its discretion, so long as Common Stock awardedunder the restricted stock award agreement remains subject to the Company’sreacquisition right under the terms of the restricted stock award agreement.

 

**8.****             COVENANTS OF THE COMPANY.**

 

**(a)****           Availability of Shares.**  During the terms of the Stock Awards, theCompany shall keep available at all times the number of shares of Common Stockrequired to satisfy such Stock Awards.

 

**(b)****           Securities LawCompliance.**  The Company shall seekto obtain from each regulatory commission or agency having jurisdiction overthe Plan such authority as may be required to grant Stock Awards and to issueand sell shares of Common Stock upon exercise of the Stock Awards; provided,however, that this undertaking shall not require the Company to register underthe Securities Act the Plan, the Non-Employee Directors’ Plan, any Stock Awardor any Common Stock issued or issuable pursuant to any such Stock Award.  If, after reasonable efforts, the Company isunable to obtain from any such regulatory commission or agency the authoritywhich counsel for the Company deems necessary for the lawful issuance and saleof Common Stock under the Plan, the Company shall be relieved from anyliability for failure to issue and sell Common Stock upon exercise of suchStock Awards unless and until such authority is obtained.

 

**(c)****           Cancellation and Re-Grant of Options.** The Board shall not have theauthority to effect, at any time, without stockholder approval, either (1) therepricing of any outstanding Options under the Plan and/or (2) thecancellation of any outstanding Options under the Plan and the grant insubstitution therefor of new Options under the Plan covering the same ordifferent numbers of shares of Common Stock.

 

**9.****             USE OF PROCEEDS FROM STOCK.**

 

Proceeds from the sale of Common Stock pursuant toStock Awards shall constitute general funds of the Company.

 

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**10.****          MISCELLANEOUS.**

 

**(a)****           Acceleration ofExercisability and Vesting.**  TheBoard shall have the power to accelerate the time at which a Stock Award mayfirst be exercised or the time during which a Stock Award or any part thereofwill vest in accordance with the Plan, notwithstanding the provisions in theStock Award stating the time at which it may first be exercised or the timeduring which it will vest.

 

**(b)****           Stockholder Rights.**  No Participant shall be deemed to be theholder of, or to have any of the rights of a holder with respect to, any sharesof Common Stock subject to such Stock Award unless and until such Participanthas satisfied all requirements for exercise of the Stock Award pursuant to itsterms.

 

**(c)****           No Employment or otherService Rights.**  Nothing in the Planor any instrument executed or Stock Award granted pursuant thereto shall conferupon any Participant any right to continue to serve the Company or an Affiliatein the capacity in effect at the time the Stock Award was granted or shallaffect the right of the Company or an Affiliate to terminate (i) theemployment of an Employee with or without notice and with or without cause, (ii) theservice of a Consultant pursuant to the terms of such Consultant’s agreementwith the Company or an Affiliate or (iii) the service of a Directorpursuant to the Bylaws of the Company or an Affiliate, and any applicableprovisions of the corporate law of the state in which the Company or theAffiliate is incorporated, as the case may be.

 

**(d)****           Incentive Stock Option$100,000 Limitation.**  To the extentthat the aggregate Fair Market Value (determined at the time of grant) ofCommon Stock with respect to which Incentive Stock Options are exercisable forthe first time by any Optionholder during any calendar year (under all plans ofthe Company and its Affiliates) exceeds one hundred thousand dollars($100,000), the Options or portions thereof which exceed such limit (accordingto the order in which they were granted) shall be treated as Nonstatutory StockOptions.

 

**(e)****           Investment Assurances.**  The Company may require a Participant, as acondition of exercising or acquiring Common Stock under any Stock Award, (i) togive written assurances satisfactory to the Company as to the Participant’sknowledge and experience in financial and business matters and/or to employ apurchaser representative reasonably satisfactory to the Company who isknowledgeable and experienced in financial and business matters and that he orshe is capable of evaluating, alone or together with the purchaserrepresentative, the merits and risks of exercising the Stock Award; and (ii) togive written assurances satisfactory to the Company stating that theParticipant is acquiring Common Stock subject to the Stock Award for theParticipant’s own account and not with any present intention of selling orotherwise distributing the Common Stock. The foregoing requirements, and any assurances given pursuant to suchrequirements, shall be inoperative if (1) the issuance of the shares ofCommon Stock upon the exercise or acquisition of Common Stock under the StockAward has been registered under a then currently effective registrationstatement under the Securities Act or (2) as to any particularrequirement, a determination is made by counsel for the Company that suchrequirement need not be met in the circumstances under the then applicablesecurities laws.  The Company may, uponadvice of counsel to the Company, place legends on stock certificates issuedunder the Plan as such counsel deems necessary or appropriate in order tocomply with 

 

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applicable securitieslaws, including, but not limited to, legends restricting the transfer of theCommon Stock.

 

**(f)****            WithholdingObligations.**  To the extent providedby the terms of a Stock Award Agreement, the Participant may satisfy anyfederal, state or local tax withholding obligation relating to the exercise oracquisition of Common Stock under a Stock Award by any of the following means(in addition to the Company’s right to withhold from any compensation paid tothe Participant by the Company) or by a combination of such means:  (i) tendering a cash payment; (ii) authorizingthe Company to withhold shares of Common Stock from the shares of Common Stockotherwise issuable to the Participant as a result of the exercise oracquisition of Common Stock under the Stock Award, provided, however, that noshares of Common Stock are withheld with a value exceeding the minimum amountof tax required to be withheld by law; or (iii) delivering to the Companyowned and unencumbered shares of Common Stock.

 

**(g)****           Transferability of StockAwards for Value or Consideration**. Notwithstanding anything to the contrary set forth herein, Participantsmay not transfer Stock Awards for value or consideration pursuant to theprovisions of subsections 6(d), 6(e) or 7(d) of the Plan without theprior approval of the Company’s stockholders.

 

**11.****          ADJUSTMENTS UPON CHANGES IN STOCK.**

 

**(a)****           CapitalizationAdjustments.**  If any change is madein the Common Stock subject to the Plan, or subject to any Stock Award, withoutthe receipt of consideration by the Company (through merger, consolidation,reorganization, recapitalization, reincorporation, stock dividend, dividend inproperty other than cash, stock split, liquidating dividend, combination ofshares, exchange of shares, change in corporate structure or other transactionnot involving the receipt of consideration by the Company), the Plan will beappropriately adjusted in the class(es) and maximum number of securitiessubject to the Plan pursuant to subsection 4(a) and the maximum number ofsecurities subject to Option grants to any Employee pursuant to subsection 5(c),and the outstanding Stock Awards will be appropriately adjusted in theclass(es) and number of securities and price per share of Common Stock subjectto such outstanding Stock Awards.  TheBoard shall make such adjustments, and its determination shall be final,binding and conclusive.  (The conversionof any convertible securities of the Company shall not be treated as atransaction “without receipt of consideration” by the Company.)

 

**(b)****           Dissolution orLiquidation.**  In the event of adissolution or liquidation of the Company, then all outstanding Stock Awardsshall terminate immediately prior to such event.

 

**(c)****           Asset Sale, Merger,Consolidation or Reverse Merger.**  Inthe event of (i) a sale, lease or other disposition of all orsubstantially all of the assets of the Company, (ii) a merger orconsolidation in which the Company is not the surviving corporation or (iii) areverse merger in which the Company is the surviving corporation but the sharesof Common Stock outstanding immediately preceding the merger are converted byvirtue of the merger into other property, whether in the form of securities,cash or otherwise (individually, a “Corporate Transaction”), then any survivingcorporation or acquiring corporation shall assume any Stock Awards outstandingunder the Plan or shall substitute similar stock awards (including an award toacquire the same consideration paid to the stockholders in the CorporateTransaction for those 

 

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outstanding under thePlan).  In the event any survivingcorporation or acquiring corporation refuses to assume such Stock Awards or tosubstitute similar stock awards for those outstanding under the Plan, then withrespect to Stock Awards held by Participants whose Continuous Service has notterminated, the vesting of such Stock Awards (and, if applicable, the time duringwhich such Stock Awards may be exercised) shall be accelerated in full, and theStock Awards shall terminate if not exercised (if applicable) at or prior tothe Corporate Transaction.  With respectto any other Stock Awards outstanding under the Plan, such Stock Awards shallterminate if not exercised (if applicable) prior to the Corporate Transaction.

 

**12.****          AMENDMENT OF THE PLAN AND STOCK AWARDS.**

 

**(a)****           Amendment of Plan.**  The Board at any time, and from time to time,may amend the Plan.  However, except asprovided in Section 11 relating to adjustments upon changes in CommonStock, no amendment shall be effective unless approved by the stockholders ofthe Company to the extent stockholder approval is necessary to satisfy therequirements of Section 422 of the Code, Rule 16b-3 or any Nasdaq orsecurities exchange listing requirements.

 

**(b)****           Stockholder Approval.**  The Board may, in its sole discretion, submitany other amendment to the Plan for stockholder approval, including, but notlimited to, amendments to the Plan intended to satisfy the requirements of Section 162(m) ofthe Code and the regulations thereunder regarding the exclusion ofperformance-based compensation from the limit on corporate deductibility ofcompensation paid to certain executive officers.

 

**(c)****           ContemplatedAmendments.**  It is expresslycontemplated that the Board may amend the Plan in any respect the Board deemsnecessary or advisable to provide eligible Employees with the maximum benefitsprovided or to be provided under the provisions of the Code and the regulationspromulgated thereunder relating to Incentive Stock Options and/or to bring thePlan and/or Incentive Stock Options granted under it into compliance therewith.

 

**(d)****           No Impairment ofRights.**  Rights under any Stock Awardgranted before amendment of the Plan shall not be impaired by any amendment ofthe Plan unless (i) the Company requests the consent of the Participantand (ii) the Participant consents in writing.

 

**(e)****           Amendment of StockAwards.**  Subject to the restrictionsof subsection 8(c), the Board at any time, and from time to time, may amend theterms of any one or more Stock Awards; provided, however, that the rights underany Stock Award shall not be impaired by any such amendment unless (i) theCompany requests the consent of the Participant and (ii) the Participantconsents in writing.

 

**13.****          TERMINATION OR SUSPENSION OF THE PLAN.**

 

**(a)****           Plan Term.**  The Board may suspend or terminate the Planat any time.  Unless sooner terminated,the Plan shall terminate on the day before the tenth (10th) anniversary of thedate the Plan is adopted by the Board or approved by the stockholders of theCompany, whichever is earlier.  No StockAwards may be granted under the Plan while the Plan is suspended or after it isterminated.

 

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**(b)****           No Impairment ofRights.**  Suspension or termination ofthe Plan shall not impair rights and obligations under any Stock Award grantedwhile the Plan is in effect except with the written consent of the Participant.

 

**14.****          EFFECTIVE DATE OF PLAN.**

 

The Plan shall become effective as determined by theBoard, but no Stock Award shall be exercised (or, in the case of a restrictedstock award, shall be granted) unless and until the Plan has been approved bythe stockholders of the Company, which approval shall be within twelve (12)months before or after the date the Plan is adopted by the Board.

 

**15.****          CHOICE OF LAW.**

 

The law of the State of California shall govern allquestions concerning the construction, validity and interpretation of thisPlan, without regard to such state’s conflict of laws rules.

 

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