Unassociated Document

Exhibit
    4.3
    


    1999
      STOCK OPTION PLAN

    of

    I.D.
      SYSTEMS, INC.

    


    As
      Amended and Restated Effective April 20, 2005

    


    1.   Purposes
      of the Plan.
      This
      stock incentive plan (the "Plan") is designed to provide an incentive to key
      employees (including directors and officers who are key employees) and to
      consultants who are not employees of I.D. Systems, Inc., a Delaware corporation
      (the "Company"), and to offer an additional inducement in obtaining the services
      of such persons. The Plan provides for the grant of "incentive stock options"
      ("ISOs") within the meaning of Section 422 of the Internal Revenue Code of
      1986,
      as amended (the "Code"), nonqualified stock options which do not qualify as
      ISOs
      ("NQSOs"), restricted stock awards (“Restricted Stock Awards”) and restricted
      stock unit awards (“Restricted Stock Units” and, together with Restricted Stock
      Awards, “Stock Awards”). The Company makes no representation or warranty,
      express or implied, as to the qualification of any option as an "incentive
      stock
      option" under the Code.

    


    2.   Stock
      Subject to the Plan.
      Subject
      to the provisions of Paragraph 12, the aggregate number of shares of Common
      Stock, $.01 par value per share, of the Company ("Common Stock") for which
      options or Stock Awards may be granted under the Plan shall not exceed 2,812,500
      (taking into account a 1.25 stock split to be effected prior to or
      contemporaneous with the Company's initial public offering). Such shares of
      Common Stock may, in the discretion of the Board of Directors of the Company
      (the "Board of Directors"), consist either in whole or in part of authorized
      but
      unissued shares of Common Stock or shares of Common Stock held in the treasury
      of the Company. Subject to the provisions of Paragraph 13, any shares of Common
      Stock subject to an option or Stock Award which for any reason expires, is
      canceled or is terminated unexercised or which ceases for any reason to be
      exercisable, shall again become available for the granting of options and Stock
      Awards under the Plan. The Company shall at all times during the term of the
      Plan reserve and keep available such number of shares of Common Stock as will
      be
      sufficient to satisfy the requirements of the Plan. 

    


    The
      maximum number of shares with respect to which options may be granted under
      the
      Plan to any individual in any fiscal year shall be 750,000.

    


    3.   Administration
      of the Plan.
      The Plan
      shall be administered by the Board of Directors or a committee of the Board
      of
      Directors (collectively, the "Committee"). A majority of the members of the
      Committee shall constitute a quorum, and the acts of a majority of the members
      present at any meeting at which a quorum is present, and any acts approved
      in
      writing by all members without a meeting, shall be the acts of the Committee.
      

    


                 Subject
      to the express provisions of
      the Plan, the Committee shall have the authority, in its sole discretion, to
      make all determinations relating to the Plan, including, but not limited to,
      the
      right to determine: the key employees and consultants who shall be granted
      options and Stock Awards; the type(s) of options or Stock Awards to be granted
      to a key employee; the times when an option or Stock Award shall be granted;
      the
      number of shares of Common Stock to be subject to each option and Stock Award;
      the term of each option and Stock Award; the date each option shall become
      exercisable; whether an option shall be exercisable in whole, in part or in
      installments and, if in installments, the number of shares of Common Stock
      to be
      subject to each installment, whether the installments shall be cumulative,
      the
      date each installment shall become exercisable and the term of each installment;
      the terms of 


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    the
      restricted period and other conditions and restrictions applicable to Stock
      Awards; whether to accelerate the date of exercise of any option or to
      accelerate the lapse of any restrictions applicable to a Stock Award or any
      installment thereof; whether shares of Common Stock may be issued upon the
      exercise of an option as partly paid and, if so, the dates when future
      installments of the exercise price shall become due and the amounts of such
      installments; the exercise price of each option; the form of payment of the
      exercise price; whether to require the optionee to enter into a stockholder's
      agreement with the Company as a condition to exercising any option; whether
      to
      restrict the sale or other disposition of the shares of Common Stock acquired
      upon the exercise of an option or Stock Award and, if so, whether and under
      what
      conditions to waive any such restriction; whether and under what conditions
      to
      subject all or a portion of the grant or exercise of an option or the shares
      acquired pursuant to the exercise of an option or a Stock Award to the
      fulfillment of certain restrictions or contingencies as specified in the
      contract referred to in Paragraph 12 hereof (the "Contract"), including without
      limitation, restrictions or contingencies relating to entering into a covenant
      not to compete with the Company, to financial objectives for the Company or
      a
      division of any of the foregoing, a product line or other category, and/or
      to
      the period of continued employment of the participant with the Company, and
      to
      determine whether such restrictions or contingencies have been met; whether
      a
      participant is Disabled (as defined in Paragraph 20); the amount, if any,
      necessary to satisfy the obligation of the Company, to withhold taxes or other
      amounts; the fair market value of a share of Common Stock; to construe the
      respective Contracts and the Plan; with the consent of the participant, to
      cancel or modify an option or Stock Award, provided, that the modified provision
      is permitted to be included in an option granted under the Plan on the date
      of
      the modification, and further, provided, that in the case of a modification
      (within the meaning of Section 424(h) of the Code) of an ISO, such option as
      modified would be permitted to be granted on the date of such modification
      under
      the terms of the Plan; to prescribe, amend and rescind rules and regulations
      relating to the Plan; and to make all other determinations necessary or
      advisable for administering the Plan. Any controversy or claim arising out
      of or
      relating to the Plan, any option or Stock Award granted under the Plan or any
      Contract shall be determined unilaterally by the Committee in its sole
      discretion. The determinations of the Committee on the matters referred to
      in
      this Paragraph 3 shall be conclusive and binding on the parties. No member
      or
      former member of the Committee shall be liable for any action, failure to act
      or
      determination made in good faith with respect to the Plan, any Contract or
      any
      option or Stock Award hereunder. 

    


    4.   Eligibility.
      The
      Committee may from time to time, in its sole discretion, consistent with the
      purposes of the Plan, grant options or Stock Awards to (a) key employees
      (including officers and directors who are key employees) of the Company or
      any
      of its Subsidiaries and (b) consultants to the Company or any of its
      Subsidiaries. An individual to whom an option or a Stock Award has been granted
      is referred to under the Plan as a “participant”.

    


     
      Options and Stock Awards granted hereunder shall cover such number of shares
      of
      Common Stock as the Committee may determine, in its sole discretion, as set
      forth in the applicable Contract; provided, however, that the aggregate market
      value (determined at the time the option is granted in accordance with Paragraph
      5) of the shares of Common Stock for which any eligible employee may be granted
      ISOs under the Plan or any other plan of the Company which are exercisable
      for
      the first time by such optionee during any calendar year shall not exceed
      $100,000; provided further, that the maximum number of shares with respect
      to
      which ISOs may be granted under the Plan to any eligible employee in any fiscal
      year shall be 300,000. Such ISO limitation shall be applied by taking ISOs
      into
      account in the order in which they were granted. Any option granted in excess
      of
      such ISO limitation amount shall be treated as a NQSO to the extent of such
      excess. 


    
      
         

      

      
         

        
          

        

      

      
         

      

    


            5.  
Exercise
      Price.
      The
      exercise price of the shares of Common Stock under each option shall be
      determined by the Committee, in its sole discretion, as set forth in the
      applicable Contract; provided, however, that the exercise price of an ISO shall
      not be less than the fair market value of the Common Stock subject to such
      option on the date of grant; and further, provided, that if, at the time an
      ISO
      is granted, the optionee owns (or is deemed to own under Section 424(d) of
      the
      Code) stock possessing more than 10% of the total combined voting power of
      all
      classes of stock of the Company, the exercise price of such ISO shall not be
      less than 110% of the fair market value of the Common Stock subject to such
      ISO
      on the date of grant.

     

              The
      fair market value of a share of Common Stock on any day shall be (a) if the
      principal market for the Common Stock is a national securities exchange, the
      average of the highest and lowest sales prices per share of Common Stock on
      such
      day as reported by such exchange or on a composite tape reflecting transactions
      on such exchange, (b) if the principal market for the Common Stock is not a
      national securities exchange and the Common Stock is quoted on The Nasdaq Stock
      Market ("Nasdaq"), and (i) if actual sales price information is available
      with respect to the Common Stock, the average of the highest and lowest sales
      prices per share of Common Stock on such day on Nasdaq, or (ii) if such
      information is not available, the average of the highest bid and lowest asked
      prices per share of Common Stock on such day on Nasdaq, or (c) if the
      principal market for the Common Stock is not a national securities exchange
      and
      the Common Stock is not quoted on Nasdaq, the average of the highest bid and
      lowest asked prices per share of Common Stock on such day as reported on the
      OTC
      Bulletin Board Service or by National Quotation Bureau, Incorporated or a
      comparable service; provided, however, that if clauses (a), (b) and (c) of
      this
      Paragraph are all inapplicable, or if no trades have been made or no quotes
      are
      available for such day, the fair market value of the Common Stock shall be
      determined by the Board of Directors or the Committee by any method consistent
      with applicable regulations adopted by the Treasury Department relating to
      stock
      options.

    


    6.    Term.
      The term
      of each option granted pursuant to the Plan shall be such term as is established
      by the Committee, in its sole discretion, as set forth in the applicable
      Contract; provided, however, that the term of each ISO granted pursuant to
      the
      Plan shall be for a period not exceeding 10 years from the date of grant
      thereof; and further, provided, that if, at the time an ISO is granted, the
      optionee owns (or is deemed to own under Section 424(d) of the Code) stock
      possessing more than 10% of the total combined voting power of all classes
      of
      stock of the Company the term of the ISO shall be for a period not exceeding
      five years from the date of grant. Options shall be subject to earlier
      termination as hereinafter provided.

     

            7.   Exercise.
      An
      option (or any part or installment thereof), to the extent then exercisable,
      shall be exercised by giving written notice to the Company at its principal
      office stating which option is being exercised, specifying the number of shares
      of Common Stock as to which such option is being exercised and accompanied
      by
      payment in full of the aggregate exercise price therefor (or the amount due
      on
      exercise if the applicable Contract permits installment payments) (a) in cash
      or
      by certified check or (b) if the applicable Contract permits, with previously
      acquired shares of Common Stock having an aggregate fair market value on the
      date of exercise (determined in accordance with Paragraph 5) equal to the
      aggregate exercise price of all options being exercised, or with any combination
      of cash, certified check or shares of Common Stock having such value. The
      Company shall not be required to issue any shares of Common Stock pursuant
      to
      any such option until all required payments, including any required withholding,
      have been made.

        

                 
A
      person
      entitled to receive Common Stock upon the exercise of an option shall not have
      the rights of a stockholder with respect to such shares of Common Stock until
      the date of issuance of a stock certificate for such shares or in the case
      of
      uncertificated shares, an entry is made on the books of the Company's transfer
      agent representing such shares; provided, however, that until such stock
      certificate is issued or book entry is made, any optionee using previously
      acquired shares of Common Stock in payment of an option exercise price shall
      continue to have the rights of a stockholder with respect to such previously
      acquired shares.


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    In
      no
      case may a fraction of a share of Common Stock be purchased or issued under
      the
      Plan. 

    


    8.      
      Stock
      Awards. 

    


                  (a)  The
      Committee may from time to time cause the Company to grant Restricted Stock
      Awards and/or Restricted Stock Unit Awards under the Plan. A Restricted Stock
      Award is a grant of shares of Common Stock, and a Restricted Stock Unit Award
      is
      the grant of a right to receive shares of Common Stock in the future, with
      such
      shares of Common Stock or right to future delivery of such shares of Common
      Stock subject to a risk of forfeiture or other restrictions that will lapse
      upon
      the achievement of one or more conditions relating to completion of service
      by
      the participant, or achievement of performance goals or such other objectives,
      as established and determined by the Committee. The Committee may designate
      whether any Stock Award is intended to be “performance-based compensation”
within the meaning of Section 162(m) of the Code. Any Stock Award intended
      to be
“performance-based compensation” shall be conditioned on the achievement of one
      or more performance goals established by the Committee in a manner that is
      consistent with Section 162(m) of the Code.

     

         
      (b)  At
      the
      time a grant of a Stock Award is made, the Committee shall establish a period
      of
      time (the "Restricted Period") applicable to the shares of Common Stock that
      are
      the subject of such Stock Award (“Restricted Shares”). Each grant of Restricted
      Shares may be subject to a different Restricted Period. The Committee may,
      in
      its sole discretion, at the time a grant is made, prescribe restrictions in
      addition to or other than the expiration of the Restricted Period, including
      the
      satisfaction of corporate or individual performance objectives, which shall
      be
      applicable to all or any portion of the Restricted Shares. The Committee may
      also, in its sole discretion, shorten or terminate the Restricted Period or
      waive any other restrictions applicable to all or a portion of such Restricted
      Shares. None of the Restricted Shares may be sold, transferred, assigned,
      pledged or otherwise encumbered or disposed of during the Restricted Period
      or
      prior to the satisfaction of any other restrictions prescribed by the Committee
      with respect to such Restricted Shares.

     

         
      (c)  The
      Company shall issue, in the name of each participant to whom Restricted Shares
      under a Restricted Stock Award have been granted, stock certificates
      representing the total number of Restricted Shares granted to such person,
      as
      soon as reasonably practicable after the grant. Stock certificates with respect
      to the Restricted Shares under a Restricted Stock Unit Award shall be issued
      when such shares are no longer subject to forfeiture. The Company, at the
      direction of the Committee, shall hold such certificates, properly endorsed
      for
      transfer, for the participant's benefit until such time as the Restricted Shares
      are forfeited to the Company, or the restrictions lapse.

     

        
      (d)  Unless
      otherwise provided by the Committee, holders of Restricted Shares shall have
      the
      right to vote such shares and have the right to receive any cash dividends
      with
      respect to such shares. All distributions, if any, received by a participant
      with respect to Restricted Shares as a result of any stock split, stock
      distribution, a combination of shares, or other similar transaction shall be
      subject to the restrictions of this Paragraph 8. A participant shall not have
      any rights of a shareholder with respect to Restricted Shares that are the
      subject of a Restricted Stock Unit Award until such Shares are issued by the
      Company.


    
      
         

      

      
         

        
          

        

      

      
         

      

    


        
      (e)  Except
      as
      may otherwise be expressly provided by the Committee in the applicable Contract,
      if a participant’s relationship as an employee of, or consultant to, the
      Company, terminates for any reason (including death or Disability), all
      Restricted Shares for which the restrictions have not previously lapsed shall
      thereupon immediately be forfeited to the Company.

     

        
      (f)  Upon
      the
      expiration or termination of the Restricted Period and the satisfaction of
      any
      other conditions prescribed by the Committee, the restrictions applicable to
      the
      Restricted Shares shall lapse and a stock certificate for the number of
      Restricted Shares with respect to which the restrictions have lapsed shall
      be
      delivered, free of all such restrictions, to the participant or his beneficiary
      or estate, as the case may be.

    


    9.    
      Termination
      of Relationship - Effect on Options.
      Except
      as may otherwise be expressly provided in the applicable Contract, an optionee
      whose relationship with the Company, as an employee or a consultant has
      terminated for any reason (other than as a result of the death or Disability
      of
      the optionee) may exercise his options, to the extent exercisable on the date
      of
      such termination, at any time within three months after the date of termination,
      but not thereafter and in no event after the date the option would otherwise
      have expired; provided,
      however,
      that if
      such relationship is terminated either (a) for Cause (as defined in Paragraph
      19), or (b) without the consent of the Company, such option shall terminate
      immediately. Except as may otherwise be expressly provided in the applicable
      Contract, options granted under the Plan to an employee or consultant shall
      not
      be affected by any change in the status of the optionee so long as the optionee
      continues to be an employee of, or a consultant to, the Company.

     

                 
For
      the
      purposes of the Plan, an employment relationship shall be deemed to exist
      between an individual and the Company if at the time of the determination,
      the
      individual was an employee of such corporation for purposes of Section 422(a)
      of
      the Code. As a result, an individual on military, sick leave or other bona
      fide
      leave of absence shall continue to be considered an employee for purposes of
      the
      Plan during such leave if the period of the leave does not exceed 90 days,
      or,
      if longer, so long as the individual's right to reemployment with the Company,
      is guaranteed either by statute or by contract. If the period of leave exceeds
      90 days and the individual's right to reemployment is not guaranteed by statute
      or by contract, the employment relationship shall be deemed to have terminated
      on the 91st day of such leave.

    


    10.   Death
      or Disability of an Optionee.
      Except
      as may otherwise be expressly provided in the applicable Contract, if an
      optionee dies (a) while he is an employee of, or consultant to, the Company,
      (b)
      within three months after the termination of such relationship (unless such
      termination was for Cause or without the consent of the Company) or (c) within
      one year following the termination of such relationship by reason of his
      Disability, the options that were granted to him as an employee or consultant
      may be exercised, to the extent exercisable on the date of his death, by his
      Legal Representative (as defined in Paragraph 20) at any time within one year
      after death, but not thereafter and in no event after the date the option would
      otherwise have expired. 

     

                  
Except
      as may otherwise be expressly provided in the applicable Contract, any optionee
      whose relationship as an employee of, or consultant to, the Company, has
      terminated by reason of such optionee's Disability may exercise the options
      that
      were granted to him as an employee or consultant, to the extent exercisable
      upon
      the effective date of such termination, at any time within one year after such
      date, but not thereafter and in no event after the date the option would
      otherwise have expired.


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

            11.  
Compliance
      with Securities Laws.
      The
      Committee may require, in its sole discretion, as a condition to the exercise
      of
      any option or Stock Award that either (a) a Registration Statement under the
      Securities Act of 1933, as amended (the "Securities Act"), with respect to
      the
      shares of Common Stock to be issued upon such exercise or as a result of such
      Stock Award shall be effective and current at the time of exercise or grant,
      or
      (b) there is an exemption from registration under the Securities Act for the
      issuance of the shares of Common Stock that are subject to such option or Stock
      Award. Nothing herein shall be construed as requiring the Company to register
      shares subject to any option or Stock Award under the Securities Act or to
      keep
      any Registration Statement effective or current.

    


    The
      Committee may require, in its sole discretion, as a condition to the receipt
      of
      an option or Stock Award or the exercise of any option that the optionee execute
      and deliver to the Company his representations and warranties, in form,
      substance and scope satisfactory to the Committee, which the Committee
      determines are necessary or convenient to facilitate the perfection of an
      exemption from the registration requirements of the Securities Act, applicable
      state securities laws or other legal requirement, including without limitation
      that (a) the shares of Common Stock to be issued upon the exercise of the option
      or grant or lapse of restrictions with respect to a Stock Award are being
      acquired by the participant for his own account, for investment only and not
      with a view to the resale or distribution thereof, and (b) any subsequent resale
      or distribution of shares of Common Stock by such participant will be made
      only
      pursuant to (i) a Registration Statement under the Securities Act which is
      effective and current with respect to the shares of Common Stock subject to
      such
      option or Stock Award, or (ii) a specific exemption from the registration
      requirements of the Securities Act, but in claiming such exemption, the
      participant shall prior to any offer of sale or sale of such shares of Common
      Stock provide the Company with a favorable written opinion of counsel
      satisfactory to the Company, in form, substance and scope satisfactory to the
      Company, as to the applicability of such exemption to the proposed sale or
      distribution. 

    


    In
      addition, if at any time the Committee shall determine, in its sole discretion,
      that the listing or qualification of the shares of Common Stock subject to
      any
      option or Stock Award on any securities exchange, Nasdaq or under any applicable
      law, or the consent or approval of any governmental agency or regulatory body,
      is necessary or desirable as a condition to, or in connection with, the granting
      of an option or Stock Award or the issuing of shares of Common Stock thereunder,
      such option or Stock Award may not be granted and such option may not be
      exercised in whole or in part unless such listing, qualification, consent or
      approval shall have been effected or obtained free of any conditions not
      acceptable to the Committee. 

    


    12.    Contracts.
      Each
      option and Stock Award shall be evidenced by an appropriate Contract which
      shall
      be duly executed by the Company and the optionee, and shall contain such terms,
      provisions and conditions not inconsistent herewith as may be determined by
      the
      Committee. The terms of each option, Stock Award and Contract need not be
      identical. 

    


    13.    Adjustments
      Upon Changes in Common Stock.
      Notwithstanding any other provisions of the Plan:

    


    (a)    a
      stock
      dividend, recapitalization, merger or consolidation in which the Company is
      the
      surviving corporation, or a spin-off, split-up, combination or exchange of
      shares or the like which results in a change in the number or kind of shares
      of
      Common Stock which is outstanding immediately prior to such event, the Committee
      shall appropriately adjust the aggregate number and kind of shares subject
      to
      the Plan, the aggregate number and kind of shares subject to each outstanding
      option and the exercise price thereof and the aggregate number and kind of
      shares subject to each Stock Award. Such adjustments shall be conclusive and
      binding on all
      parties and may provide for the elimination of fractional shares which might
      otherwise be subject to options without payment therefor.



    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    (b)    in
      the event
      of the liquidation or dissolution of the Company, or a merger to which the
      Company is a party whether or not it is the surviving corporation or a
      consolidation or a sale by the Company of all or substantially all of its
      assets, then, except as set forth below, (i) the options granted hereunder
      which
      are outstanding or unvested as of the date of such event, shall continue to
      be
      outstanding and the optionee shall be entitled to receive an option in the
      surviving corporation for the same number of shares as he would have been
      entitled to receive if he had exercised the options granted hereunder
      immediately prior to the transaction and actually owned the shares of common
      stock subject to such option, and (ii) all restrictions and conditions with
      respect to Restricted Shares shall lapse. The exercise price of the option
      in
      the surviving corporation shall be such that the aggregate consideration for
      the
      shares of stock subject to the option in the surviving corporation shall be
      equal to the aggregate consideration payable with respect to the option granted
      under the Plan.

    


    Notwithstanding
      the foregoing, the Company shall have the right, by written notice, provided
      to
      an optionee sent no later than 15 days prior to the proposed liquidation,
      dissolution, merger or other transaction, to advise the optionee that upon
      consummation of the transaction all options granted to any optionee under the
      Plan shall terminate and be void, in which event, the optionee shall have the
      right to exercise all options then currently exercisable in accordance with
      the
      terms of the applicable option Contract within 10 days after the date of the
      notice from the Company. 

    


    Upon
      a
      Change of Control of the Company (as defined below), each option shall become
      immediately exercisable with respect to all shares of Common Stock subject
      thereto and all restrictions and conditions with respect to Restricted Shares
      shall lapse, unless the provisions of Paragraphs 13(a) or (b) are operative.
      For
      purposes hereof, a "Change in Control" shall be deemed to have occurred if:
      (i)
      any "person" or "group" (as such terms are used in Sections 3(a)(9) and 13(d)(3)
      of the Securities Exchange Act of 1934, as amended (the "Act")), except if
      an
      employee stock ownership trust (or any of the trustees thereof) or any of the
      executive officers as of the date of stockholder approval of the Plan become
      a
      "beneficial owner" (as such term is used in Rule 13d-3 promulgated under the
      Act), after the date hereof, directly or indirectly, of securities of the
      Company representing 20% or more of the combined voting power of the Company's
      then outstanding securities; (ii) a change in "control" of the Company (as
      the
      term "control" is defined in Rule 12b-2 or any successor rule promulgated under
      the Act) shall have occurred; (iii) individuals who, as of the date this Plan
      was first adopted by the Board of Directors (the “Effective Date”), constitute
      the Board of Directors (the “Incumbent Board”) cease for any reason to
      constitute a majority of the members of the Board of Directors, provided,
      however,
      that
      any person becoming a director subsequent to the Effective Date whose election
      or nomination for election was approved by a vote of at least two-thirds of
      the
      directors constituting the Incumbent Board shall be considered a member of
      the
      Incumbent Board, provided,
      further,
      however,
      that no
      individual initially elected or nominated as a director of the Board of
      Directors as a result of an actual or threatened election contest with respect
      to directors or any other actual or threatened solicitation of proxies or
      consents by or on behalf of any person other than the Board of Directors shall
      be deemed to be a member of the Incumbent Board; (iv) the stockholders of the
      Company approve a plan of complete liquidation of the Company or an agreement
      for the sale or disposition by the Company of all or substantially all of the
      Company's assets; or (v) the stockholders of the Company approve a merger or
      consolidation of the Company with any other company, other than a merger or
      consolidation which would result in the combined voting power of the Company's
      voting securities outstanding immediately prior thereto continuing to represent
      (either by remaining outstanding or by being converted into voting securities
      of
      the surviving entity)
      more than 70% of the combined voting power of the voting securities of the
      Company or such surviving entity outstanding immediately after such merger
      or
      consolidation. 


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    14.    Amendments
      and Termination of the Plan.
      The Plan
      was adopted by the Board of Directors on May 14, 1999. No ISO may be granted
      under the Plan after May 13, 2009. The Board of Directors, without further
      approval of the Company's stockholders, may at any time suspend or terminate
      the
      Plan, in whole or in part, or amend it from time to time in such respects as
      it
      may deem advisable, including, without limitation, in order that ISOs granted
      hereunder meet the requirements for "incentive stock options" under the Code,
      to
      comply with any change in applicable law, regulations, rulings or
      interpretations of any administrative agency; provided,
      however,
      that no
      amendment shall be effective without the requisite prior or subsequent
      stockholder approval which would (a) except as contemplated in Paragraph 13,
      increase the maximum number of shares of Common Stock for which options or
      Stock
      Awards may be granted under the Plan, (b) change the eligibility requirements
      to
      receive options or Stock Awards hereunder or (c) make any other change for
      which
      applicable law requires stockholder approval. No termination, suspension or
      amendment of the Plan shall, without the consent of the participant, adversely
      affect his rights under any option or Stock Award granted under the Plan. The
      power of the Committee to construe and administer any option or Stock Award
      granted under the Plan prior to the termination or suspension of the Plan
      nevertheless shall continue after such termination or during such
      suspension.

    


    15.    Non-Transferability.
      No
      option or Stock Award granted under the Plan shall be transferable otherwise
      than by will or the laws of descent and distribution, and options may be
      exercised, during the lifetime of the optionee, only by the optionee or his
      Legal Representatives. Except to the extent provided above, options, Stock
      Awards, and the shares of Common Stock subject thereto may not be assigned,
      transferred, pledged, hypothecated or disposed of in any way (whether by
      operation of law or otherwise) and shall not be subject to execution, attachment
      or similar process, and any such attempted assignment, transfer, pledge,
      hypothecation or disposition shall be null and void ab initio
      and of
      no force or effect. 

    


    16.    Withholding
      Taxes.
      The
      Company, may withhold (a) cash, (b) shares of Common Stock to be issued upon
      exercise of an option or with respect to which forfeiture restrictions lapse
      having an aggregate fair market value on the relevant date (determined in
      accordance with Paragraph 5), or (c) any combination thereof, in an amount
      equal
      to the amount which the Committee determines is necessary to satisfy the
      obligation of the Company, to withhold Federal, state and local income taxes
      or
      other amounts incurred by reason of the grant, vesting, exercise or disposition
      of an option or Stock Award, as applicable, or the disposition of the underlying
      shares of Common Stock. Alternatively, the Company may require the holder to
      pay
      to the Company such amount, in cash, promptly upon demand. 

    


    17.    Legends;
      Payment of Expenses.
      The
      Company may endorse such legend or legends upon the certificates for shares
      of
      Common Stock issued under the Plan and may issue such "stop transfer"
      instructions to its transfer agent in respect of such shares as it determines,
      in its discretion, to be necessary or appropriate to (a) prevent a violation
      of,
      or to perfect an exemption from, the registration requirements of the Securities
      Act and any applicable state securities laws, (b) implement the provisions
      of
      the Plan or any agreement between the Company and the optionee with respect
      to
      such shares of Common Stock, including any stockholder's agreement, or (c)
      permit the Company to determine the occurrence of a "disqualifying disposition,"
      as described in Section 421(b) of the Code, of the shares of Common Stock issued
      or transferred upon the exercise of an ISO granted under the Plan. Each
      participant may, in the Committee's discretion, be
      required to execute a stockholders' agreement as a condition to receiving a
      grant of options or a Stock Award hereunder.


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    The
      Company shall pay all issuance taxes with respect to the issuance of shares
      of
      Common Stock under the Plan, as well as all fees and expenses incurred by the
      Company in connection with such issuance.

    


    18.    Use
      of Proceeds.
      The cash
      proceeds received upon the exercise of an option under the Plan shall be added
      to the general funds of the Company and used for such corporate purposes as
      the
      Board of Directors may determine.

    


    19.    Substitutions
      and Assumptions of Options of Certain Constituent
      Corporations.
      Anything
      in this Plan to the contrary notwithstanding, the Board of Directors may,
      without further approval by the stockholders, substitute new options for prior
      options of a Constituent Corporation (as defined in Paragraph 20) or assume
      the
      prior options of such Constituent Corporation. 

    


    20.    Definitions.
      For
      purposes of the Plan, the following terms shall be defined as set forth
      below:

    


    (a)    "Cause"
      shall mean (i) in the case of an employee or consultant, if there is a written
      employment or consulting agreement between the optionee and the Company, any
      of
      its Subsidiaries or a Parent which defines termination of such relationship
      for
      cause, cause as defined in such agreement, and (ii) in all other cases, cause
      as
      defined by applicable state law. 

    


    (b)    "Constituent
      Corporation" shall mean any corporation which engages with the Company, any
      of
      its Subsidiaries or a Parent in a transaction to which Section 424(a) of the
      Code applies (or would apply if the option assumed or substituted were an ISO),
      or any Parent or any Subsidiary of such corporation. 

    


    (c)    "Disability"
      shall mean a permanent and total disability within the meaning of Section
      22(e)(3) of the Code.

    


    (d)    "Legal
      Representative" shall mean the executor, administrator or other person who
      at
      the time is entitled by law to exercise the rights of a deceased or
      incapacitated optionee with respect to an option granted under the
      Plan.

    


    (e)    "Parent"
      shall have the same definition as "parent corporation" in Section 424(e) of
      the
      Code. 

    


    (f)    "Subsidiary"
      shall have the same definition as "subsidiary corporation" in Section 424(f)
      of
      the Code. 

    


    21.    Governing
      Law; Construction.
      The
      Plan, the options and Contracts hereunder and all related matters shall be
      governed by, and construed in accordance with, the laws of the State of
      Delaware, without regard to conflict of law provisions. Neither the Plan nor
      any
      Contract shall be construed or interpreted with any presumption against the
      Company by reason of the Company causing the Plan or Contract to be drafted.
      Whenever from the context it appears appropriate, any term stated in either
      the
      singular or plural shall include the singular and plural, and any term stated
      in
      the masculine, feminine or neuter gender shall include the masculine, feminine
      and neuter.


    
      
         

      

      
         

        
          

        

      

      
         

      

    


            22.    No
      Right to Continued Employment or Service. Nothing
      in the Plan or in any option or Stock Award granted under the Plan shall confer
      on any participant any right to continue in the employ of, or as a consultant
      to, the Company or as a director of the Company, or interfere in any way with
      any right of the Company to terminate the participant's relationship at any
      time
      for any reason whatsoever without liability to the Company. 

    


            23.    Partial
      Invalidity.
      The
      invalidity, illegality or unenforceability of any provision in the Plan, any
      option or Contract shall not affect the validity, legality or enforceability
      of
      any other provision, all of which shall be valid, legal and enforceable to
      the
      fullest extent permitted by applicable law.

    


            24.    Stockholder
      Approval.
      The Plan
      shall be subject to approval by the Company's stockholders.