Exhibit 4.1


STATA
LABORATORIES, INC.


 


2002
STOCK PLAN

(Adopted April 19, 2002)


 


1.                                       Purposes of the Plan.  The purposes of this 2002  Stock
Plan are to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to Employees and
Consultants and to promote the success of the Company’s business.  Options granted under the Plan may be
Incentive Stock Options or Nonstatutory Stock Options, as determined by the
Administrator at the time of grant of an option and subject to the applicable
provisions of Section 422 of the Code and the regulations and interpretations
promulgated thereunder.  Stock purchase
rights may also be granted under the Plan.


 


2.                                       Definitions.  As used herein, the following definitions
shall apply:


 


(a)                                  “Administrator” means the Board or its Committee
appointed pursuant to Section 4 of the Plan.


 


(b)                                 “Affiliate” means an entity other than a Subsidiary
(as defined below) which, together with the Company, is under common control of
a third person or entity.


 


(c)                                  “Applicable Laws” means the legal requirements
relating to the administration of stock option and restricted stock purchase
plans under applicable U.S. state corporate laws, U.S. federal and applicable
state securities laws, the Code, any Stock Exchange rules or regulations and
the applicable laws of any other country or jurisdiction where Options or Stock
Purchase Rights are granted under the Plan, as such laws, rules, regulations
and requirements shall be in place from time to time.


 


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


 


(e)                                  “Cause”
for termination of a Participant’s Continuous Service Status will exist if the
Participant is terminated by the Company for any of the following reasons:  (i) Participant’s failure substantially to
perform his or her duties and responsibilities to the Company; (ii) Participant’s
commission of any act of fraud, embezzlement, dishonesty or any other willful
misconduct that has caused or is reasonably expected to result in material injury
to the Company; (iii) unauthorized use or disclosure by Participant of any
proprietary information or trade secrets of the Company or any other party to
whom the Participant owes an obligation of nondisclosure as a result of his or
her relationship with the Company; or (iv) Participant’s willful breach of any
of his or her obligations under any written agreement or covenant with the
Company.  The determination as to whether
a Participant is being terminated for Cause shall be made in good faith by the Company
and shall be final and binding on the Participant.  The foregoing definition does not in any way
limit the Company’s ability to terminate a Participant’s employment or
consulting relationship at any time as provided in Section 5(d) below, and the
term “Company” will be interpreted to include any Subsidiary, Parent or
Affiliate, as appropriate.


 


(f)                                    “Change of Control” means (A) a sale of all or substantially all of the


 





















 


Company’s assets, (B) a merger
or consolidation of the Company with
or into another person or entity, unless the Company’s stockholders of record
as constituted immediately prior to such merger or consolidation will,
immediately after such merger or consolidation (by virtue of securities issued
as consideration in the merger or consolidation), hold at least 50% of the
voting stock of the surviving or acquiring entity, or (C) a sale of greater
than 50% of the outstanding voting stock of the Company by one or more
stockholders in a single or series of related transactions, excluding sales or
transfers by a stockholder to an affiliate of the stockholder.


 


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


 


(h)                                 “Committee” means one or more committees or
subcommittees of the Board appointed by the Board to administer the Plan in
accordance with Section 4 below.


 


(i)                                     “Common Stock” means the Common Stock of the Company.


 


(j)                                     “Company” means Stata Laboratories, Inc., a Delaware
corporation.


 


(k)                                  “Consultant” means any person, including an advisor,
who is engaged by the Company or any Parent, Subsidiary or Affiliate to render
services and is compensated for such services, and any director of the Company
whether compensated for such services or not.


 


(l)                                     “Continuous Service Status” means the absence of any
interruption or termination of service as an Employee or Consultant.  Continuous Service Status as an Employee or
Consultant shall not be considered interrupted in the case of:  (i) sick leave; (ii) military
leave; (iii) any other leave of absence approved by the Administrator, provided
that such leave is for a period of not more than ninety (90) days, unless
reemployment upon the expiration of such leave is guaranteed by contract or
statute, or unless provided otherwise pursuant to Company policy adopted from
time to time; or (iv) in the case of transfers between locations of the
Company or between the Company, its Parents, Subsidiaries, Affiliates or their
respective successors.  A change in
status from an Employee to a Consultant or from a Consultant to an Employee
will not constitute an interruption of Continuous Service Status.


 


(m)                               “Corporate Transaction” means a sale of all or
substantially all of the Company’s assets, or a merger, consolidation or other
capital reorganization of the Company with or into another corporation, entity
or person, and includes a Change of Control.


 


(n)                                 “Director” means a member of the Board.


 


(o)                                 “Employee” means any person employed by the Company
or any Parent, Subsidiary or Affiliate, with the status of employment
determined based upon such factors as are deemed appropriate by the
Administrator in its discretion, subject to any requirements of the Code or the
Applicable Laws.  The payment by the
Company of a director’s fee to a Director shall not be sufficient to constitute
“employment” of such Director by the Company.


 


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


 


(q)                                 “Fair Market Value” means, as of any date, the fair
market value of the


 


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Common Stock, as determined by the Administrator in
good faith on such basis as it deems appropriate and applied consistently with
respect to Participants.  Whenever
possible, the determination of Fair Market Value shall be based upon the closing
price for the Shares as reported in the Wall Street Journal for the
applicable date.


 


(r)                                    “Incentive Stock Option” means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code, as designated in the applicable Option Agreement.


 


(s)                                  “Listed Security” means any security
of the Company that is listed or approved for listing on a national securities
exchange or designated or approved for designation as a national market system
security on an interdealer quotation system by the National Association of
Securities Dealers, Inc.


 


(t)                                    “Named Executive” means any individual who, on the
last day of the Company’s fiscal year, is the chief executive officer of the
Company (or is acting in such capacity) or among the four most highly
compensated officers of the Company (other than the chief executive
officer).  Such officer status shall be
determined pursuant to the executive compensation disclosure rules under the
Exchange Act.


 


(u)                                 “Nonstatutory Stock Option” means an Option not
intended to qualify as an Incentive Stock Option, as designated in the
applicable Option Agreement.


 


(v)                                 “Option” means a stock option granted pursuant to the
Plan.


 


(w)                               “Option Agreement” means a written document, the
form(s) of which shall be approved from time to time by the Administrator,
reflecting the terms of an Option granted under the Plan and includes any
documents attached to or incorporated into such Option Agreement, including,
but not limited to, a notice of stock option grant and a form of exercise
notice.


 


(x)                                   “Option
Exchange Program” means a program approved by the Administrator whereby
outstanding Options are exchanged for Options with a lower exercise price or
are amended to decrease the exercise price as a result of a decline in the Fair
Market Value of the Common Stock.


 


(y)                                 “Optioned Stock” means the Common Stock subject to an
Option.


 


(z)                                   “Optionee” means an Employee or Consultant who
receives an Option.


 


(aa)                            “Parent” means a “parent corporation,” whether now or
hereafter existing, as defined in Section 424(e) of the Code, or any
successor provision.


 


(bb)                          “Participant” means any holder of one or more Options
or Stock Purchase Rights, or the Shares issuable or issued upon exercise of
such awards, under the Plan.


 


(cc)                            “Plan” means this 2002 Stock Plan.


 


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(dd)                          “Reporting Person” means an officer, Director, or
greater than ten percent stockholder of the Company within the meaning of Rule
16a-2 under the Exchange Act, who is required to file reports pursuant to Rule 16a-3
under the Exchange Act.


 


(ee)                            “Restricted Stock” means Shares of Common Stock
acquired pursuant to a grant of a Stock Purchase Right under Section 11
below.


 


(ff)                                “Restricted Stock Purchase Agreement” means a written
document, the form(s) of which shall be approved from time to time by the
Administrator, reflecting the terms of a Stock Purchase Right granted under the
Plan and includes any documents attached to such agreement.


 


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


 


(hh)                          “Share” means a share of the Common Stock, as
adjusted in accordance with Section 14 of the Plan.


 


(ii)                                  “Stock Exchange” means any stock exchange or
consolidated stock price reporting system on which prices for the Common Stock
are quoted at any given time.


 


(jj)                                  “Stock Purchase Right” means the right to purchase
Common Stock pursuant to Section 11 below.


 


(kk)                            “Subsidiary” means a “subsidiary corporation,”
whether now or hereafter existing, as defined in Section 424(f) of the
Code, or any successor provision.


 


(ll)                                  “Ten Percent Holder” means a person who owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary.


 


3.                                       Stock Subject to the Plan.  Subject to the provisions of Section 14 of
the Plan, the maximum aggregate number of Shares that may be sold under the
Plan is 2,800,000 Shares of Common Stock. 
The Shares may be authorized, but unissued, or reacquired Common Stock.  If an award should expire or become
unexercisable for any reason without having been exercised in full, or is
surrendered pursuant to an Option Exchange Program, the unpurchased Shares that
were subject thereto shall, unless the Plan shall have been terminated, become
available for future grant under the Plan. 
In addition, any Shares of Common Stock which are retained by the
Company upon exercise of an award in order to satisfy the exercise or purchase
price for such award or any withholding taxes due with respect to such exercise
or purchase shall be treated as not issued and shall continue to be available
under the Plan.  Shares issued under the
Plan and later repurchased by the Company pursuant to any repurchase right
which the Company may have shall not be available for future grant under the
Plan.


 


4.                                       Administration of the Plan.


 


(a)                                  General.  The Plan shall be administered by the Board
or a Committee, or


 


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a combination thereof, as determined by the
Board.  The Plan may be administered by
different administrative bodies with respect to different classes of
Participants and, if permitted by the Applicable Laws, the Board may authorize
one or more officers to make awards under the Plan.


 


(b)                                 Committee Composition.  If a Committee has been appointed
pursuant to this Section 4, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board.  From time to time the Board may increase the
size of any Committee and appoint additional members thereof, remove members
(with or without cause) and appoint new members in substitution therefor, fill
vacancies (however caused) and remove all members of a Committee and thereafter
directly administer the Plan, all to the extent permitted by the Applicable
Laws and, in the case of a Committee administering the Plan in accordance with
the requirements of Rule 16b-3 or Section 162(m) of the Code, to the extent
permitted or required by such provisions.


 


(c)                                  Powers of the Administrator.  Subject to the provisions of the Plan and in
the case of a Committee, the specific duties delegated by the Board to such
Committee, the Administrator shall have the authority, in its discretion:


 


(i)                                     to
determine the Fair Market Value of the Common Stock, in accordance with Section
2(q) of the Plan, provided that such determination shall be applied
consistently with respect to Participants under the Plan;


 


(ii)                                  to
select the Employees and Consultants to whom Plan awards may from time to time
be granted;


 


(iii)                               to determine whether and
to what extent Plan awards are granted;


 


(iv)                              to
determine the number of Shares of Common Stock to be covered by each award
granted;


 


(v)                                 to
approve the form(s) of agreement(s) used under the Plan;


 


(vi)                              to
determine the terms and conditions, not inconsistent with the terms of the
Plan, of any award granted hereunder, which terms and conditions include but
are not limited to the exercise or purchase price, the time or times when
awards may be exercised (which may be based on performance criteria), any
vesting acceleration or waiver of forfeiture restrictions, any pro rata
adjustments to vesting as a result of a Participant’s transitioning from full-
to part-time service (or vice versa), and any restriction or limitation regarding
any Option, Optioned Stock, Stock Purchase Right or Restricted Stock, based in
each case on such factors as the Administrator, in its sole discretion, shall
determine;


 


(vii)                           to determine whether and
under what circumstances an Option may be settled in cash under Section 10(c)
instead of Common Stock;


 


(viii)                        to implement an Option Exchange
Program on such terms and conditions as the Administrator in its discretion
deems appropriate, provided that no amendment or adjustment to an Option that
would materially and adversely affect the rights of any Optionee


 


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shall be made without the prior written consent of the
Optionee;


 


(ix)                                to
adjust the vesting of an Option held by an Employee or Consultant as a result
of a change in the terms or conditions under which such person is providing
services to the Company;


 


(x)                                   to
construe and interpret the terms of the Plan and awards granted under the Plan,
which constructions, interpretations and decisions shall be final and binding
on all Participants; and


 


(xi)                                in
order to fulfill the purposes of the Plan and without amending the Plan, to
modify grants of Options or Stock Purchase Rights to Participants who are
foreign nationals or employed outside of the United States in order to
recognize differences in local law, tax policies or customs.


 


5.                                       Eligibility.


 


(a)                                  Recipients of Grants.  Nonstatutory Stock Options and Stock Purchase
Rights may be granted to Employees and Consultants.  Incentive Stock Options may be granted only
to Employees, provided that Employees of Affiliates shall not be eligible to
receive Incentive Stock Options.


 


(b)                                 Type of Option.  Each Option shall be designated in the Option
Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.


 


(c)                                  ISO $100,000 Limitation.  Notwithstanding any designation under Section
5(b), to the extent that the aggregate Fair Market Value of Shares with respect
to which Options designated as Incentive Stock Options are exercisable for the
first time by any Optionee during any calendar year (under all plans of the
Company or any Parent or Subsidiary) exceeds $100,000, such excess Options
shall be treated as Nonstatutory Stock Options. 
For purposes of this Section 5(c), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares subject to an Incentive Stock Option shall be determined as
of the date of the grant of such Option.


 


(d)                                 No Employment Rights.  The Plan shall not confer upon any
Participant any right with respect to continuation of an employment or
consulting relationship with the Company, nor shall it interfere in any way
with such Participant’s right or the Company’s right to terminate the
employment or consulting relationship at any time for any reason.


 


6.                                       Term of Plan.  The Plan shall become effective upon its
adoption by the Board of Directors.  It
shall continue in effect for a term of ten (10) years unless sooner terminated
under Section 16 of the Plan.


 


7.                                       Term of Option.  The term of each Option shall be the term
stated in the Option Agreement; provided that the term shall be no more than
ten years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement and provided further that, in the case of an
Incentive Stock Option granted to a person who at the time of such grant is a
Ten


 


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Percent Holder, the term of the Option shall be five
years from the date of grant thereof or such shorter term as may be provided in
the Option Agreement.


 


8.                                       [Reserved.]


 


9.                                       Option Exercise Price and Consideration.


 


(a)                                  Exercise Price.  The per Share exercise price for the Shares
to be issued pursuant to exercise of an Option shall be such price as is determined
by the Administrator and set forth in the Option Agreement, but shall be
subject to the following:


 


(i)                                     In
the case of an Incentive Stock Option


 


(A)                              granted
to an Employee who at the time of grant is a Ten Percent Holder, the per Share
exercise price shall be no less than 110% of the Fair Market Value per Share on
the date of grant; or


 


(B)                                granted
to any other Employee, the per Share exercise price shall be no less than 100%
of the Fair Market Value per Share on the date of grant.


 


(ii)                                  In
the case of a Nonstatutory Stock Option


 


(A)                              granted
on any date on which the Common Stock is not a Listed Security to a person who
is at the time of grant is a Ten Percent Holder, the per Share exercise price
shall be no less than 110% of the Fair Market Value per Share on the date of
grant if required by the Applicable Laws and, if not so required, shall be such
price as is determined by the Administrator;


 


(B)                                granted
on any date on which the Common Stock is not a Listed Security to any other
eligible person, the per Share exercise price shall be no less than 85% of the
Fair Market Value per Share on the date of grant if required by the Applicable
Laws and, if not so required, shall be such price as is determined by the
Administrator; or


 


(C)                                granted
on any date on which the Common Stock is a Listed Security to any eligible
person, the per share Exercise Price shall be such price as determined by the
Administrator provided that if such eligible person is, at the time of the
grant of such Option, a Named Executive of the Company, the per share Exercise
Price shall be no less than 100% of the Fair Market Value on the date of grant
if such Option is intended to qualify as performance-based compensation under
Section 162(m) of the Code.


 


(iii)                               Notwithstanding the foregoing,
Options may be granted with a per Share exercise price other than as required
above pursuant to a merger or other corporate transaction.


 


(b)                                 Permissible Consideration.  The consideration to be paid for the
Shares to be issued upon exercise of an Option, including the method of
payment, shall be determined by the Administrator (and, in the case of an
Incentive Stock Option, shall be determined at the


 


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time of grant) and may consist entirely of (1) cash;
(2) check; (3) delivery of Optionee’s promissory note bearing a
commercial rate of interest at the time of exercise and  having
such recourse,  interest, security and redemption
provisions as the Administrator determines to be appropriate (subject to the
provisions of Section 153 of the Delaware General Corporation Law);
(4) cancellation of indebtedness; (5) other Shares that have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which the Option is exercised, provided that in the case of Shares
acquired, directly or indirectly, from the Company, such Shares must have been
owned by the Optionee for more than six months on the date of surrender (or
such other period as may be required to avoid the Company’s incurring an
adverse accounting charge); (6) delivery of a properly executed exercise
notice together with such other documentation as the Administrator and a
securities broker approved by the Company shall require to effect exercise of
the Option and prompt delivery to the Company of the sale or loan proceeds
required to pay the exercise price and any applicable withholding taxes; or (7)
any combination of the foregoing methods of payment.  In making its determination as to the type of
consideration to accept, the Administrator shall consider if acceptance of such
consideration may be reasonably expected to benefit the Company and the
Administrator may, in its sole discretion, refuse to accept a particular form
of consideration at the time of any Option exercise.


 


10.                                 Exercise of Option.


 


(a)                                  General.


 


(i)                                     Exercisability.  Any Option granted hereunder shall be
exercisable at such times and under such conditions as determined by the
Administrator, consistent with the term of the Plan and reflected in the Option
Agreement, including vesting requirements and/or performance criteria with
respect to the Company and/or the Optionee; provided however that, if required
by the Applicable Laws, any Option granted on a date on which the Common Stock
is not a Listed Security shall become exercisable at the rate of at least 20%
per year over five years from the date the Option is granted.  In the event that any of the Shares issued
upon exercise of an Option (which exercise occurs on a date on which the Common
Stock is not a Listed Security) should be subject to a right of repurchase in
the Company’s favor, such repurchase right shall, if required by the Applicable
Laws, lapse at the rate of at least 20% per year over five years from the date
the Option is granted.  Notwithstanding
the above, in the case of an Option granted to an officer, Director or
Consultant of the Company or any Parent, Subsidiary or Affiliate of the
Company, the Option may become fully exercisable, or a repurchase right, if
any, in favor of the Company shall lapse, at any time or during any period
established by the Administrator.


 


(ii)                                  Leave of Absence.  The Administrator shall have the
discretion to determine whether and to what extent the vesting of Options shall
be tolled during any unpaid leave of absence; provided, however, that in the
absence of such determination, vesting of Options shall be tolled during any
such unpaid leave (unless otherwise required by the Applicable Laws).  In the event of military leave, vesting shall
toll during any unpaid portion of such leave, provided that, upon a Participant’s
returning from military leave (under conditions that would entitle him or her
to protection upon such return under the Uniform Services Employment and
Reemployment Rights Act), he or she shall be given vesting credit with respect
to Options to the same extent as would have applied had the Participant
continued to provide


 


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services to the Company throughout the leave on the
same terms as he or she was providing services immediately prior to such leave.


 


(iii)                               Minimum
Exercise Requirements.  An
Option may not be exercised for a fraction of a Share.  The Administrator may require that an Option
be exercised as to a minimum number of Shares, provided that such requirement
shall not prevent an Optionee from exercising the full number of Shares as to
which the Option is then exercisable.


 


(iv)                              Procedures for and Results of Exercise.  An Option shall be deemed exercised when
written notice of such exercise has been given to the Company in accordance
with the terms of the Option by the person entitled to exercise the Option and
the Company has received full payment for the Shares with respect to which the
Option is exercised.  Full payment may,
as authorized by the Administrator, consist of any consideration and method of
payment allowable under Section 9(b) of the Plan, provided that the
Administrator may, in its sole discretion, refuse to accept any form of
consideration at the time of any Option exercise.


 


Exercise of an Option in any manner shall result in a
decrease in the number of Shares that thereafter may be available, both for
purposes of the Plan and for sale under the Option, by the number of Shares as
to which the Option is exercised.


 


(v)                                 Rights as Stockholder.  Until the issuance of the Shares (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option.  No adjustment will be made for a dividend or
other right for which the record date is prior to the date the stock
certificate is issued, except as provided in Section 14 of the Plan.


 


(b)                                 Termination of Employment or Consulting
Relationship.  Except as
otherwise set forth in this Section 10(b), the Administrator shall establish
and set forth in the applicable Option Agreement the terms and conditions upon
which an Option shall remain exercisable, if at all, following termination of
an Optionee’s Continuous Service Status, which provisions may be waived or
modified by the Administrator at any time. 
Unless the Administrator otherwise provides in the Option Agreement, to
the extent that the Optionee is not vested in Optioned Stock at the date of
termination of his or her Continuous Service Status, or if the Optionee (or
other person entitled to exercise the Option) does not exercise the Option to
the extent so entitled within the time specified in the Option Agreement or
below (as applicable), the Option shall terminate and the Optioned Stock
underlying the unexercised portion of the Option shall revert to the Plan.  In no event may any Option be exercised after
the expiration of the Option term as set forth in the Option Agreement (and
subject to Section 7).


 


The following provisions (1) shall apply to the extent
an Option Agreement does not specify the terms and conditions upon which an
Option shall terminate upon termination of an Optionee’s Continuous Service
Status, and (2) establish the minimum post-termination exercise periods that
may be set forth in an Option Agreement:


 


(i)                                     Termination other than Upon Disability or Death.  In the event


 


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of termination of an Optionee’s Continuous Service
Status, such Optionee may exercise an Option for 30 days following such
termination to the extent the Optionee was vested in the Optioned Stock as of
the date of such termination.  No termination
shall be deemed to occur and this Section 10(b)(i) shall not apply if (i) the
Optionee is a Consultant who becomes an Employee, or (ii) the Optionee is an
Employee who becomes a Consultant.


 


(ii)                                  Disability of Optionee.  In the event of termination of an
Optionee’s Continuous Service Status as a result of his or her disability
(including a disability within the meaning of Section 22(e)(3) of the Code),
such Optionee may exercise an Option at any time within six months following
such termination to the extent the Optionee was vested in the Optioned Stock as
of the date of such termination.


 


(iii)                               Death of
Optionee.  In the event of
the death of an Optionee during the period of Continuous Service Status since
the date of grant of the Option, or within thirty days following termination of
Optionee’s Continuous Service Status, the Option may be exercised by Optionee’s
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance at any time within twelve months following the date of death,
but only to the extent the Optionee was vested in the Optioned Stock as of the
date of death or, if earlier, the date the Optionee’s Continuous Service Status
terminated.


 


(c)                                  Buyout Provisions.  The Administrator may at any time offer to
buy out for a payment in cash or Shares an Option previously granted under the
Plan based on such terms and conditions as the Administrator shall establish
and communicate to the Optionee at the time that such offer is made.


 


11.                                 Stock Purchase Rights.


 


(a)                                  Rights to Purchase.  When the Administrator determines that it
will offer Stock Purchase Rights under the Plan, it shall advise the offeree in
writing of the terms, conditions and restrictions related to the offer,
including the number of Shares that such person shall be entitled to purchase,
the price to be paid, and the time within which such person must accept such
offer.  In the case of a Stock Purchase
Right granted prior to the date, if any, on which the Common Stock becomes a
Listed Security and if required by the Applicable Laws at that time, the
purchase price of Shares subject to such Stock Purchase Rights shall not be
less than 85% of the Fair Market Value of the Shares as of the date of the
offer, or, in the case of a Ten Percent Holder, the price shall not be less
than 100% of the Fair Market Value of the Shares as of the date of the
offer.  If the Applicable Laws do not
impose the requirements set forth in the preceding sentence and with respect to
any Stock Purchase Rights granted after the date, if any, on which the Common
Stock becomes a Listed Security, the purchase price of Shares subject to Stock
Purchase Rights shall be as determined by the Administrator.  The offer to purchase Shares subject to Stock
Purchase Rights shall be accepted by execution of a Restricted Stock Purchase
Agreement in the form determined by the Administrator.


 


(b)                                 Repurchase Option.


 


(i)                                     General. Unless the Administrator
determines otherwise, the


 


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Restricted Stock Purchase Agreement shall grant the
Company a repurchase option exercisable upon the voluntary or involuntary
termination of the purchaser’s employment with the Company for any reason
(including death or disability).  The
purchase price for Shares repurchased pursuant to the Restricted Stock Purchase
Agreement shall be the original purchase price paid by the purchaser and may be
paid by cancellation of any indebtedness of the purchaser to the Company. The
repurchase option shall lapse at such rate as the Administrator may determine,
provided that with respect to a Stock Purchase Right granted prior to the date,
if any, on which the Common Stock becomes a Listed Security to a purchaser who
is not an officer, Director or Consultant of the Company or of any Parent or
Subsidiary of the Company, it shall lapse at a minimum rate of 20% per year if
required by the Applicable Laws.


 


(ii)                                  Leave of Absence.  The Administrator shall have the discretion to
determine whether and to what extent the lapsing of Company repurchase rights
shall be tolled during any unpaid leave of absence; provided, however, that in
the absence of such determination, such lapsing shall be tolled during any such
unpaid leave (unless otherwise required by the Applicable Laws).  In the event of military leave, the lapsing
of Company repurchase rights shall toll during any unpaid portion of such
leave, provided that, upon a Participant’s returning from military leave (under
conditions that would entitle him or her to protection upon such return under
the Uniform Services Employment and Reemployment Rights Act), he or she shall
be given “vesting” credit with respect to Shares purchased pursuant to the
Restricted Stock Purchase Agreement to the same extent as would have applied
had the Participant continued to provide services to the Company throughout the
leave on the same terms as he or she was providing services immediately prior
to such leave.


 


(c)                                  Other Provisions.  The Restricted Stock Purchase Agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.  In addition, the provisions of Restricted
Stock Purchase Agreements need not be the same with respect to each purchaser.


 


(d)                                 Rights as a Stockholder.  Once the Stock Purchase Right is exercised,
the purchaser shall have the rights equivalent to those of a stockholder, and
shall be a stockholder when his or her purchase is entered upon the records of
the duly authorized transfer agent of the Company.  No adjustment will be made for a dividend or
other right for which the record date is prior to the date the Stock Purchase
Right is exercised, except as provided in Section 14 of the Plan.


 


12.                                 Taxes.


 


(a)                                  As
a condition of the exercise of an Option or Stock Purchase Right granted under
the Plan, the Participant (or in the case of the Participant’s death, the
person exercising the Option or Stock Purchase Right) shall make such
arrangements as the Administrator may require for the satisfaction of any
applicable federal, state, local or foreign withholding tax obligations that
may arise in connection with the exercise of the Option or Stock Purchase Right
and the issuance of Shares.  The Company
shall not be required to issue any Shares under the Plan until such obligations
are satisfied.  If the Administrator
allows the withholding or surrender of Shares to satisfy a Participant’s tax
withholding obligations under


 


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this Section 12 (whether pursuant to Section 12(c),
(d) or (e), or otherwise), the Administrator shall not allow Shares to be
withheld in an amount that exceeds the minimum statutory withholding rates for
federal and state tax purposes, including payroll taxes.


 


(b)                                 In
the case of an Employee and in the absence of any other arrangement, the
Employee shall be deemed to have directed the Company to withhold or collect
from his or her compensation an amount sufficient to satisfy such tax
obligations from the next payroll payment otherwise payable after the date of
an exercise of the Option or Stock Purchase Right.


 


(c)                                  This
Section 12(c) shall apply only after the date, if any, upon which the Common
Stock becomes a Listed Security.  In the
case of Participant other than an Employee (or in the case of an Employee where
the next payroll payment is not sufficient to satisfy such tax obligations,
with respect to any remaining tax obligations), in the absence of any other
arrangement and to the extent permitted under the Applicable Laws, the Participant
shall be deemed to have elected to have the Company withhold from the Shares to
be issued upon exercise of the Option or Stock Purchase Right that number of
Shares having a Fair Market Value determined as of the applicable Tax Date (as
defined below) equal to the amount required to be withheld.  For purposes of this Section 12, the Fair
Market Value of the Shares to be withheld shall be determined on the date that
the amount of tax to be withheld is to be determined under the Applicable Laws
(the “Tax Date”).


 


(d)                                 If
permitted by the Administrator, in its discretion, a Participant may satisfy
his or her tax withholding obligations upon exercise of an Option or Stock
Purchase Right by surrendering to the Company Shares that have a Fair Market
Value determined as of the applicable Tax Date equal to the amount required to
be withheld.  In the case of shares
previously acquired from the Company that are surrendered under this Section
12(d), such Shares must have been owned by the Participant for more than six (6)
months on the date of surrender (or such other period of time as is required
for the Company to avoid adverse accounting charges).


 


(e)                                  Any
election or deemed election by a Participant to have Shares withheld to satisfy
tax withholding obligations under Section 12(c) or (d) above shall be
irrevocable as to the particular Shares as to which the election is made and
shall be subject to the consent or disapproval of the Administrator.  Any election by a Participant under Section
12(d) above must be made on or prior to the applicable Tax Date.


 


(f)                                    In
the event an election to have Shares withheld is made by a Participant and the
Tax Date is deferred under Section 83 of the Code because no election is filed
under Section 83(b) of the Code, the Participant shall receive the full number
of Shares with respect to which the Option or Stock Purchase Right is exercised
but such Participant shall be unconditionally obligated to tender back to the
Company the proper number of Shares on the Tax Date.


 


13.                                 Non-Transferability of Options and Stock Purchase
Rights.


 


(a)                                  General.  Except as set forth in this Section 13,
Options and Stock Purchase Rights may not be sold, pledged, assigned,
hypothecated, transferred or disposed of in


 


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any manner other than by will or by the laws of
descent or distribution.  The designation
of a beneficiary by an Optionee will not constitute a transfer.  An Option or Stock Purchase Right may be
exercised, during the lifetime of the holder of an Option or Stock Purchase
Right, only by such holder or a transferee permitted by this Section 13.


 


(b)                                 Limited Transferability Rights.  Notwithstanding anything else in this
Section 13, prior to the date, if any, on which the Common Stock becomes a
Listed Security, the Administrator may in its discretion grant Nonstatutory
Stock Options that may be transferred by instrument to an inter vivos or
testamentary trust in which the Options are to be passed to beneficiaries upon
the death of the trustor (settlor) or by gift to “Immediate Family” (as defined
below), on such terms and conditions as the Administrator deems
appropriate.  Following the date, if any,
on which the Common Stock becomes a Listed Security, the Administrator may in
its discretion grant transferable Nonstatutory Stock Options pursuant to Option
Agreements specifying the manner in which such Nonstatutory Stock Options are
transferable.  “Immediate Family”
means any child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, and shall include adoptive relationships.


 


14.                                 Adjustments Upon Changes in Capitalization, Merger
or Certain Other Transactions.


 


(a)                                  Changes in Capitalization.  Subject to any action required under
Applicable Laws by the stockholders of the Company, the number of Shares of
Common Stock covered by each outstanding award and the number of Shares of
Common Stock that have been authorized for issuance under the Plan but as to
which no awards have yet been granted or that have been returned to the Plan
upon cancellation or expiration of an award, as well as the price per Share of
Common Stock covered by each such outstanding award, shall be proportionately
adjusted for any increase or decrease in the number of issued Shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination, recapitalization or reclassification of the Common Stock, or any
other increase or decrease in the number of issued Shares of Common Stock
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be
deemed to have been “effected without receipt of consideration.”  Such adjustment shall be made by the
Administrator, whose determination in that respect shall be final, binding and
conclusive.  Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of Shares of Common Stock subject to an award.


 


(b)                                 Dissolution or Liquidation.  In the event of the dissolution or
liquidation of the Company, each Option and Stock Purchase Right will terminate
immediately prior to the consummation of such action, unless otherwise
determined by the Administrator.


 


(c)                                  Corporate Transaction.  In the event of a Corporate Transaction, each
outstanding Option or Stock Purchase Right shall be assumed or an equivalent
option or right shall be substituted by such successor corporation or a parent
or subsidiary of such successor


 


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corporation (the “Successor Corporation”),
unless the Successor Corporation does not agree to assume the award or to
substitute an equivalent option or right, in which case such Option or Stock
Purchase Right shall terminate upon the consummation of the transaction.


 


For purposes of this Section 14(c), an Option or a
Stock Purchase Right shall be considered assumed, without limitation, if, at
the time of issuance of the stock or other consideration upon a Corporate
Transaction, each holder of an Option or Stock Purchase Right would be entitled
to receive upon exercise of the award the same number and kind of shares of
stock or the same amount of property, cash or securities as such holder would
have been entitled to receive upon the occurrence of the transaction if the
holder had been, immediately prior to such transaction, the holder of the
number of Shares of Common Stock covered by the award at such time (after
giving effect to any adjustments in the number of Shares covered by the Option
or Stock Purchase Right as provided for in this Section 14); provided that
if such consideration received in the transaction is not solely common stock of
the Successor Corporation, the Administrator may, with the consent of the
Successor Corporation, provide for the consideration to be received upon
exercise of the award to be solely common stock of the Successor Corporation
equal to the Fair Market Value of the per Share consideration received by
holders of Common Stock in the transaction.


 


(d)                                 Certain Distributions.  In the event of any distribution to the
Company’s stockholders of securities of any other entity or other assets (other
than dividends payable in cash or stock of the Company) without receipt of
consideration by the Company, the Administrator may, in its discretion,
appropriately adjust the price per Share of Common Stock covered by each
outstanding Option or Stock Purchase Right to reflect the effect of such
distribution.


 


15.                                 Time of Granting Options and Stock Purchase Rights.  The date of grant of an Option or Stock
Purchase Right shall, for all purposes, be the date on which the Administrator
makes the determination granting such Option or Stock Purchase Right, or such
other date as is determined by the Administrator, provided that in the case of
any Incentive Stock Option, the grant date shall be the later of the date on
which the Administrator makes the determination granting such Incentive Stock
Option or the date of commencement of the Optionee’s employment relationship
with the Company.  Notice of the
determination shall be given to each Employee or Consultant to whom an Option
or Stock Purchase Right is so granted within a reasonable time after the date
of such grant.


 


16.                                 Amendment and Termination of the Plan.


 


(a)                                  Authority to Amend or Terminate.  The Board may at any time amend, alter,
suspend or discontinue the Plan, but no amendment, alteration, suspension or
discontinuation (other than an adjustment pursuant to Section 14 above) shall
be made that would materially and adversely affect the rights of any Optionee
or holder of Stock Purchase Rights under any outstanding grant, without his or
her consent.  In addition, to the extent
necessary and desirable to comply with the Applicable Laws, the Company shall
obtain stockholder approval of any Plan amendment in such a manner and to such
a degree as required.


 


(b)                                 Effect of Amendment or Termination.  Except as to amendments which


 


14





















 


the Administrator has the authority under the Plan to
make unilaterally, no amendment or termination of the Plan shall materially and
adversely affect Options or Stock Purchase Rights already granted, unless
mutually agreed otherwise between the Optionee or holder of the Stock Purchase
Rights and the Administrator, which agreement must be in writing and signed by
the Optionee or holder and the Company.


 


17.                                 Conditions Upon Issuance of Shares.  Notwithstanding any other provision of the
Plan or any agreement entered into by the Company pursuant to the Plan, the
Company shall not be obligated, and shall have no liability for failure, to
issue or deliver any Shares under the Plan unless such issuance or delivery
would comply with the Applicable Laws, with such compliance determined by the
Company in consultation with its legal counsel. 
As a condition to the exercise of an Option or Stock Purchase Right, the
Company may require the person exercising the award to represent and warrant at
the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is
required by law.


 


18.                                 Reservation of Shares.  The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.


 


19.                                 Agreements.  Options and Stock Purchase Rights shall be
evidenced by Option Agreements and Restricted Stock Purchase Agreements,
respectively, in such form(s) as the Administrator shall from time to time
approve.


 


20.                                 Stockholder Approval.  If required by the Applicable Laws,
continuance of the Plan shall be subject to approval by the stockholders of the
Company within twelve (12) months before or after the date the Plan is adopted.  Such stockholder approval shall be obtained
in the manner and to the degree required under the Applicable Laws.


 


21.                                 Information and Documents to Optionees and
Purchasers. Prior to the date, if any, upon which the Common
Stock becomes a Listed Security and if required by the Applicable Laws, the
Company shall provide financial statements at least annually to each Optionee
and to each individual who acquired Shares pursuant to the Plan, during the
period such Optionee or purchaser has one or more Options or Stock Purchase
Rights outstanding, and in the case of an individual who acquired Shares
pursuant to the Plan, during the period such individual owns such Shares.  The Company shall not be required to provide
such information if the issuance of Options or Stock Purchase Rights under the
Plan is limited to key employees whose duties in connection with the Company
assure their access to equivalent information.


 


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