ex1085.htm


    
      Exhibit
10.85

    

     

    CHORDIANT
SOFTWARE, INC.

     

    


     

    AMENDED
AND RESTATED 1999 NON-EMPLOYEE

     

    DIRECTORS’
STOCK OPTION PLAN

     

    


     

    Amended
by the Board of Directors:  December 11, 2007

     

    Approved
by Stockholders: February 1, 2008

     

    Amended
by the Board of Directors:  November 19, 2008

     

    


     

    Effective
Date: Date of Initial Public Offering

     

    Termination
Date: None

     

    1. PURPOSES.

     

    (A) Eligible Award
Recipients.  The persons eligible to receive Awards are the
Non-Employee Directors of the Company.

     

    (B) Available
Awards.  The purpose of the Plan is to provide a means by which
Non-Employee Directors may be given an opportunity to benefit from increases in
value of the Common Stock through the granting of Nonstatutory Stock Options,
Restricted Stock Awards, and Restricted Stock Unit Awards.

     

    (C) General
Purpose.  The Company, by means of the Plan, seeks to retain
the services of its Non-Employee Directors, to secure and retain the services of
new Non-Employee Directors and to provide incentives for such persons to exert
maximum efforts for the success of the Company and its Affiliates.

     

    2. DEFINITIONS.

     

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

     

    (B) “Annual
Grant” means an Award granted annually to eligible Non-Employee Directors
pursuant to subsection 6(b) of the Plan.

     

    (C) “Annual
Meeting” means the annual meeting of the stockholders of the
Company.

     

          
(D) “Award”
means an Option, Restricted Stock Award or Restricted Stock Unit
Award.

     

          
(E) “Award
Agreement” means an Option Agreement, a Restricted Stock Award Agreement
or a Restricted Stock Unit Award Agreement.

     

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

     

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

     

    (H) “Common
Stock” means the common stock of the Company.

     

    (I) “Company”
means Chordiant Software, Inc., a Delaware corporation.

     

    (J) “Consultant”
means any person, including an advisor, (i) engaged by the Company or an
Affiliate to render consulting or advisory services and who is compensated for
such services or (ii) who is a member of the Board of Directors of an
Affiliate.  However, the term “Consultant” shall not include either
Directors of the Company who are not compensated by the Company for their
services as Directors or Directors of the Company who are merely paid a
director’s fee by the Company for their services as Directors.

     

    (K) “Continuous
Service” means that the Participant’s service with the Company or an
Affiliate, whether as an Employee, Director or Consultant, is not interrupted or
terminated.  The Participant’s Continuous Service shall not be deemed
to have terminated merely because of a change in the capacity in which he or she
renders service to the Company or an Affiliate as an Employee, Consultant or
Director or a change in the entity for which he or she renders such service,
provided that there is no interruption or termination of the Participant’s
Continuous Service.  For example, a change in status from a
Non-Employee Director of the Company to a Consultant of an Affiliate or an
Employee of the Company will not constitute an interruption of Continuous
Service.  The Board or the chief executive officer of the Company, in
that party’s sole discretion, may determine whether Continuous Service shall be
considered interrupted in the case of any leave of absence approved by that
party, including sick leave, military leave or any other personal
leave.

     

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

     

    (M) “Disability”
means the inability of a person, in the opinion of a qualified physician
acceptable to the Company, to perform the major duties of that person’s position
with the Company or an Affiliate of the Company because of the sickness or
injury of the person.

     

    (N) “Employee”
means any person employed by the Company or an Affiliate.  Mere
service as a Director or payment of a director’s fee by the Company or an
Affiliate shall not be sufficient to constitute “employment” by the Company or
an Affiliate.

     

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

     

    (P) “Fair Market
Value” means, as of any date, the value of the Common Stock determined as
follows:

     

    (i) If
the Common Stock is listed on any established stock exchange or traded on the
Nasdaq National Market or the Nasdaq SmallCap Market, the Fair Market Value of a
share of Common Stock shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or market (or
the exchange or market with the greatest volume of trading in the Common Stock)
on the date of grant, or if the date of grant is not a trading day, then on the
last market trading day prior to the day of grant, as reported in The Wall
Street Journal or such other source as the Board deems reliable.

     

    (ii) In
the absence of such markets for the Common Stock, the Fair Market Value shall be
determined in good faith by the Board.

     

    (Q) “Initial
Grant” means an Award granted to an eligible Non-Employee Director
pursuant to subsection 6(a) of the Plan.

     

    (R) “Non-Employee
Director” means a Director who is not an Employee.

     

    (S) “Nonstatutory
Stock Option” means an Option not intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code and the regulations
promulgated thereunder.

     

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

     

    (U) “Option”
means a Nonstatutory Stock Option granted pursuant to the Plan.

     

    (V) “Option
Agreement” means a written agreement between the Company and an
Participant evidencing the terms and conditions of an individual Option
grant.  Each Option Agreement shall be subject to the terms and
conditions of the Plan.

     

    (W) “Participant”
means a person to whom an Award is granted pursuant to the Plan.

     

    (X) “Plan”
means this Chordiant Software, Inc. Amended and Restated 1999 Non-Employee
Directors’ Stock Option Plan.

     

          
(Y) “Restricted Stock
Award” means an award of shares of Common Stock which is granted pursuant
to the terms and conditions of the Plan.

     

         
(Z) “Restricted Stock
Award Agreement” means a written agreement between the Company and a
holder of a Restricted Stock Award evidencing the terms and conditions of a
Restricted Stock Award.  Each such Award Agreement shall be subject to
the terms and conditions of the Plan.

     

         
(AA) “Restricted Stock
Unit Award” means
a bookkeeping entry where each unit represents the opportunity to vest in and be
issued one share of Common Stock, which right is granted pursuant to the terms
and conditions of the Plan.

        

         
(BB) “Restricted Stock
Unit Award Agreement” means a written agreement between the Company and a
holder of a Restricted Stock Unit Award evidencing the terms and conditions of a
Restricted Stock Unit Award.  Each such Award Agreement shall be
subject to the terms and conditions of the Plan.

     

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

     

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

     

    (EE) “Unforeseeable
Emergency” means a severe financial hardship to the Participant after the
vesting of the shares under the Award, which hardship results from (1) an
illness or accident of the Participant or his or her  spouse,
registered domestic partner, parent or child; (2) loss of the Participant’s
property due to casualty (including the need to rebuild the Participant’s
primary residence following damage to the home not otherwise covered by
insurance); or (3) other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the
Participant.

     

    3. ADMINISTRATION.

     

    (A) Administration by
Board.  The Board shall administer the Plan.  The
Board may not delegate administration of the Plan to a committee.

     

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

     

    (i) To
determine the provisions of each Award to the extent not specified in the
Plan.

     

    (ii) To
construe and interpret the Plan and Awards granted under it, and to establish,
amend and revoke rules and regulations for its administration.  The
Board, in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan or in any Award Agreement, in a manner and to the
extent it shall deem necessary or expedient to make the Plan fully
effective.

     

    (iii) To
amend the Plan or an Award as provided in Section 12.

     

    (iv) Generally,
to exercise such powers and to perform such acts as the Board deems necessary or
expedient to promote the best interests of the Company that are not in conflict
with the provisions of the Plan.

     

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

     

    4. SHARES
SUBJECT TO THE PLAN.

     

    (A) Share
Reserve.  Subject to the provisions of Section 11 relating to
adjustments upon changes in the Common Stock, the Common Stock that may be
issued pursuant to Awards shall not exceed in the aggregate 463,000 (four
hundred sixty three thousand) shares of Common Stock.

     

    (B) Reversion of Shares to the Share
Reserve.  If any Award shall for any reason expire or otherwise
terminate, in whole or in part, without having been exercised in full, the
shares of Common Stock not acquired under such Award shall revert to and again
become available for issuance under the Plan.  If the Company
repurchases (or reacquires upon a failure to vest) any unvested shares of Common
Stock issued under an Award, such shares of Common Stock shall revert to and
again become available for issuance under the Plan.

     

    (C) Source of
Shares.  The shares of Common Stock subject to the Plan may be
unissued shares or reacquired shares, bought on the market or
otherwise.

     

    5. ELIGIBILITY.

     

    The
Awards as set forth in section 6 automatically shall be granted under the Plan
to all eligible Non-Employee Directors.

     

    6. NON-DISCRETIONARY
GRANTS.

     

    Without
any further action of the Board, each Non-Employee Director shall be granted the
following Awards:

     

    (A) Initial
Grants.  Each person who is elected or appointed, other than on
the date of an Annual Meeting, for the first time, to be a Non-Employee
Director  automatically shall, upon the date of his or her initial
election or appointment to be a Non-Employee Director by the Board or
stockholders of the Company (such date, the “Initial Grant
Date”), be granted an Initial Grant consisting of a Restricted Stock
Award covering that number of shares of Common Stock equal to (1) the product of
(a) $100,000 and (b) a fraction, the numerator of which is the number of full
months between the Initial Grant Date and first anniversary of the most recent
Annual Meeting prior to the Initial Grant Date (rounding down for any partial
month) (such period, the “Initial
Period”), and the denominator of which is 12, (2) divided by the Fair
Market Value of a share of Common Stock on the Initial Grant
Date.  Subject to the Participant’s Continuous Service, such Award
shall vest in full on the earlier of (a) the first anniversary of the most
recent Annual Meeting prior to the Initial Grant Date and (b) the date of the
first Annual Meeting following the Initial Grant Date.  The Initial
Grant will be subject to the terms of this Plan and the form of Restricted Stock
Award Agreement most recently approved by the Board for use under this
Plan.  The Initial Grant shall be made in consideration for future
services to be rendered to the Company, and no purchase price shall be required
to be paid for the shares of Common Stock issued under the Initial Grant, except
to the extent required by applicable law, in which case, the par value of each
share of Common Stock issued under the Initial Grant shall be deemed to have
been paid through past services actually rendered to the Company or an
Affiliate.

     

    (B) Annual Grants.  On
the day of each Annual Meeting (the “Annual Grant Date”), each
person who, at such Annual Meeting, is elected or appointed to serve (or who
shall otherwise thereafter continue to serve) as a Non-Employee Director
automatically shall be granted an Annual Grant consisting of a Restricted Stock
Award covering that number of shares of Common Stock equal to (1) $100,000
divided by (2) the Fair Market Value of a share of Common Stock on the Annual
Grant Date.  Subject to the Participant’s Continuous Service, such
Award shall vest in full on the date that is the earlier of (a) the first
anniversary of the Annual Grant Date and (b) the date of the first Annual
Meeting following the Annual Grant Date.  The Annual Grant will be
subject to the terms of this Plan and the form of Restricted Stock Award
Agreement most recently approved by the Board for use under this
Plan.  The Annual Grant shall be made in consideration for future
services to be rendered to the Company, and no purchase price shall be required
to be paid for the shares of Common Stock issued under the Annual Grant, except
to the extent required by applicable law, in which case, the par value of each
share of Common Stock issued under the Annual Grant shall be deemed to have been
paid through past services actually rendered to the Company or an
Affiliate.  Notwithstanding anything to the contrary in this Section
6(b), the maximum number of shares of Common Stock that may be granted pursuant
to an Annual Grant of a Restricted Stock Award under this Section 6(b) shall be
15,000 shares. 

     

    (C) Holding
Period.  Each Initial Grant and Annual Grant made on or after
the date of the Company’s Annual Meeting held in 2008 will be subject to a
post-vesting holding period, such that the Participant may not sell or otherwise
transfer (excluding transfers to family trusts for tax planning purposes for
which the Participant is deemed to be the “beneficial owner” of the shares for
purposes of the Exchange Act) any of the shares of Common Stock issued under the
Award until the earliest of (1) the second anniversary of the vesting date of
the Award, (2) the closing of a transaction described in subsection 12(b) below
(other than a merger or consolidation for the purpose of a change in domicile),
(3) the certification by the Board that the Participant has suffered an
Unforeseeable Emergency or (4) the termination of the Participant’s Continuous
Service as a result of death or Disability (such period, the “Holding
Period”).  Shares sold or withheld by the Company to cover
applicable tax withholdings will not be deemed a violation of the Holding
Period.  The shares of Common Stock issued pursuant to the Award shall
be endorsed with appropriate legends as determined by the Company, and the
Participant will enter into such other arrangements as determined reasonably
necessary by the Company (including an escrow arrangement) in order to enforce
the provisions of this subsection 6(c).

     

    7. OPTION
PROVISIONS.

     

    Any
Option granted under this Plan shall be in such form and shall contain such
terms and conditions as required by the Plan.  Each Option shall
contain such additional terms and conditions, not inconsistent with the Plan, as
the Board shall deem appropriate.  Each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:

     

    (A) Term.  No Option
shall be exercisable after the expiration of ten (10) years from the date it was
granted.

     

    (B) Exercise.  Each
Option shall be exercisable only once it has vested.

     

    (C) Exercise Price.  The
exercise price of each Option shall be one hundred percent (100%) of the Fair
Market Value of the stock subject to the Option on the date the Option is
granted.  Notwithstanding the foregoing, an Option may be granted with
an exercise price lower than that set forth in the preceding sentence if such
Option is granted pursuant to an assumption or substitution for another option
in a manner satisfying the provisions of Sections 409A and 424(a) of the
Code.

     

    (D) Consideration.  The
purchase price of stock acquired pursuant to an Option may be paid, to the
extent permitted by applicable statutes and regulations and the form of Option
Agreement, in any combination of (i) cash or check, (ii) delivery to the Company
of other Common Stock, (iii) pursuant to a program developed under Regulation T
as promulgated by the Federal Reserve Board that, prior to the issuance of the
stock subject to the Option, results in either the receipt of cash (or check) by
the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds, (iv) by a “net exercise”
arrangement pursuant to which the Company will reduce the number of shares of
Common Stock issuable upon exercise by the largest whole number of shares with a
Fair Market Value that does not exceed the aggregate exercise price; provided, however, that the
Company shall accept a cash or other permitted payment from the Participant to
the extent of any remaining balance of the aggregate exercise price not
satisfied by such reduction in the number of whole shares to be issued; provided, further, that
shares of Common Stock will no longer be outstanding under an Option and will
not be exercisable thereafter to the extent that (A) shares are used to pay the
exercise price pursuant to the “net exercise,” (B) shares are delivered to the
Participant as a result of such exercise, and (C) shares are withheld to satisfy
tax withholding obligations, or (v) any other form of legal consideration that
may be acceptable to the Board.  The purchase price of Common Stock
acquired pursuant to an Option that is paid by delivery to the Company of other
Common Stock acquired, directly or indirectly from the Company, shall be paid
only by shares of the Common Stock of the Company that have been held for more
than six (6) months (or such longer or shorter period of time required to avoid
a charge to earnings for financial accounting purposes).  At any time
that the Company is incorporated in Delaware, payment of the Common Stock’s “par
value,” as defined in the Delaware General Corporation Law, shall not be made by
deferred payment.

     

    (E) Transferability.  An
Option shall not be transferable except (i) by will or by the laws of descent
and distribution and (ii) to the further extent permitted under the rules for a
Form S-8 registration statement under the Securities Act.  The Option
shall be exercisable during the lifetime of the Participant only by the
Participant or a permitted transferee.  Notwithstanding the foregoing,
the Participant may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event of the
death of the Participant, shall thereafter be entitled to exercise the
Option.

     

    (F) Vesting
Generally.  The Board may impose such restrictions or
conditions to the vesting of the Award as it, in its sole discretion, deems
appropriate and as set forth in Section 6 above or as otherwise set forth in the
applicable Award Agreement.

     

    (G) Termination of Continuous
Service.  In the event an Participant’s Continuous Service
terminates (other than upon the Participant’s death or Disability), the
Participant may exercise his or her Option (to the extent that the Participant
was entitled to exercise it as of the date of termination) but only within such
period of time ending on the earlier of (i) the date three (3) months following
the termination of the Participant’s Continuous Service, or (ii) the expiration
of the term of the Option as set forth in the Option Agreement.  If,
after termination, the Participant does not exercise his or her Option within
the time specified in the Option Agreement, the Option shall
terminate.

     

    (H) Extension of Termination
Date.  If the exercise of the Option following the termination
of the Participant’s Continuous Service (other than upon the Participant’s death
or Disability) would be prohibited at any time solely because the issuance of
shares would violate the registration requirements under the Securities Act,
then the Option shall terminate on the earlier of (i) the expiration of the term
of the Option set forth in subsection 7(a) or (ii) the expiration of a period of
three (3) months after the termination of the Participant’s Continuous Service
during which the exercise of the Option would not be in violation of such
registration requirements.

     

    (I) Disability of
Participant.  In the event an Participant’s Continuous Service
terminates as a result of the Participant’s Disability, the Participant may
exercise his or her Option (to the extent that the Participant was entitled to
exercise it as of the date of termination), but only within such period of time
ending on the earlier of (i) the date twelve (12) months following such
termination or (ii) the expiration of the term of the Option as set forth in the
Option Agreement.  If, after termination, the Participant does not
exercise his or her Option within the time specified herein, the Option shall
terminate.

     

    (J) Death of
Participant.  In the event (i) an Participant’s Continuous
Service terminates as a result of the Participant’s death or (ii) the
Participant dies within the three-month period after the termination of the
Participant’s Continuous Service for a reason other than death, then the Option
may be exercised (to the extent the Participant was entitled to exercise the
Option as of the date of death) by the Participant’s estate, by a person who
acquired the right to exercise the Option by bequest or inheritance or by a
person designated to exercise the Option upon the Participant’s death, but only
within the period ending on the earlier of (1) the date eighteen (18) months
following the date of death or (2) the expiration of the term of such Option as
set forth in the Option Agreement.  If, after death, the Option is not
exercised within the time specified herein, the Option shall
terminate.

     

    8. Provisions
of Stock Awards other than Options.

     

    (A) Restricted Stock
Awards.  Each Restricted Stock Award Agreement shall be in such
form and shall contain such terms and conditions as required by the Plan and
such additional terms and conditions, not inconsistent with the Plan, as the
Board shall deem appropriate.  To the extent consistent with the
Company’s Bylaws, at the Board’s election, shares of Common Stock may be (i)
held in book entry form subject to the Company’s instructions until any
restrictions relating to the Restricted Stock Award lapse; or
(ii) evidenced by a certificate, which certificate shall be held in such
form and manner as determined by the Board.  The terms and conditions
of Restricted Stock Award Agreements shall conform to (through incorporation of
the provisions hereof by reference in the agreement or otherwise) the substance
of each of the following provisions:

     

    (i) Purchase Price.  The
Board will determine the price to be paid, if any, by the Participant for each
share of Common Stock subject to the Award.  To the extent required by
applicable law, the price to be paid by the Participant for each share of the
Award will not be less than the par value of a share of Common
Stock.

     

    (ii) Consideration.  A
Restricted Stock Award may be awarded in consideration for (A) cash, check, bank
draft or money order payable to the Company; (B) past or future services
actually or to be rendered to the Company or an Affiliate; or (C) any other form
of legal consideration that may be acceptable to the Board in its sole
discretion and permissible under applicable law.

     

    (iii) Vesting.  The Board
may impose such restrictions or conditions to the vesting of the Award as it, in
its sole discretion, deems appropriate and as set forth in Section 6 above or as
otherwise set forth in the applicable Award Agreement.

     

    (iv) Termination of Participant’s
Continuous Service.  In the event that a Participant’s
Continuous Service terminates, the Company shall have the right, but not the
obligation, to repurchase or otherwise reacquire, any or all of the shares of
Common Stock held by the Participant that have not vested under the Award as of
the date of termination under the terms of the Award Agreement.  At
the Board’s election, the price paid for all shares of Common Stock so
repurchased or reacquired by the Company may be at the lesser of: (A) the Fair
Market Value on the relevant date, or (B) the Participant’s original cost for
such shares.  The Company shall not be required to exercise its
repurchase or reacquisition option until at least six (6) months (or such longer
or shorter period of time necessary to avoid a charge to earnings for financial
accounting purposes) have elapsed following the Participant’s purchase of the
shares of Common Stock acquired pursuant to the Award unless otherwise
determined by the Board or provided in the Award Agreement.

     

    (v) Transferability.  Rights
to acquire shares of Common Stock under the Restricted Stock Award Agreement
shall be transferable by the Participant only upon such terms and conditions as
are set forth in the Restricted Stock Award Agreement, as the Board shall
determine in its sole discretion, so long as Common Stock awarded under the
Restricted Stock Award remains subject to the terms of the Restricted Stock
Award Agreement.

     

    (B) Restricted Stock Unit
Awards.  Each Restricted Stock Unit Award Agreement shall be in
such form and shall contain such terms and conditions as required by the Plan
and such additional terms and conditions, not inconsistent with the Plan, as the
Board shall deem appropriate.  The terms and conditions of Restricted
Stock Unit Award Agreements shall conform to (through incorporation of the
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:

     

    (i) Consideration.  The
Board will determine the consideration, if any, to be paid by the Participant
upon delivery of each share of Common Stock subject to the Restricted Stock Unit
Award.  The consideration to be paid (if any) by the Participant for
each share of Common Stock subject to a Restricted Stock Unit Award may be paid
in any form of legal consideration that may be acceptable to the Board in its
sole discretion and permissible under applicable law.

     

    (ii) Vesting.  The Board
may impose such restrictions or conditions to the vesting of the Award as it, in
its sole discretion, deems appropriate and as set forth in Section 6 above or as
otherwise set forth in the applicable Award Agreement.

     

    (iii) Payment.  A
Restricted Stock Unit Award may be settled by the delivery of shares of Common
Stock, their cash equivalent, any combination thereof or in any other form of
consideration, as determined by the Board and contained in the Restricted Stock
Unit Award Agreement.

     

    (iv) Additional
Restrictions.  At the time of the grant of a Restricted Stock
Unit Award, the Board, as it deems appropriate, may impose such restrictions or
conditions that delay the delivery of the shares of Common Stock (or their cash
equivalent) subject to a Restricted Stock Unit Award to a time after the vesting
of such Restricted Stock Unit Award.

     

    (v) Dividend
Equivalents.  Dividend equivalents may be credited in respect
of shares of Common Stock covered by a Restricted Stock Unit Award, as
determined by the Board and contained in the Restricted Stock Unit Award
Agreement.  At the sole discretion of the Board, such dividend
equivalents may be converted into additional shares of Common Stock covered by
the Restricted Stock Unit Award in such manner as determined by the
Board.  Any additional shares covered by the Restricted Stock Unit
Award credited by reason of such dividend equivalents will be subject to all the
terms and conditions of the underlying Restricted Stock Unit Award Agreement to
which they relate.

     

    (vi) Termination of Participant’s
Continuous Service.  Except as otherwise provided in the
applicable Restricted Stock Unit Award Agreement, such portion of the Restricted
Stock Unit Award that has not vested will be forfeited without consideration
upon the Participant’s termination of Continuous Service.

     

    9. COVENANTS
OF THE COMPANY.

     

    (A) Availability of
Shares.  During the terms of the Awards, the Company shall keep
available at all times the number of shares of Common Stock required to satisfy
such Awards.

     

    (B) Securities Law
Compliance.  The Company shall seek to obtain from each
regulatory commission or agency having jurisdiction over the Plan such authority
as may be required to grant Awards and to issue and sell shares of Common Stock
upon exercise of the Awards; provided, however, that this undertaking shall not
require the Company to register under the Securities Act the Plan, any Award or
any stock issued or issuable pursuant to any such Award.  If, after
reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority which counsel for the Company deems necessary
for the lawful issuance and sale of stock under the Plan, the Company shall be
relieved from any liability for failure to issue and sell stock upon exercise of
such Awards unless and until such authority is obtained.

     

    10. USE
OF PROCEEDS FROM STOCK.

     

    Proceeds
from the sale of stock pursuant to Awards shall constitute general funds of the
Company.

     

    11. MISCELLANEOUS.

     

    (A) Stockholder
Rights.  No Participant shall be deemed to be the holder of, or
to have any of the rights of a holder with respect to, any shares subject to
such Award unless and until such Particpant has satisfied all requirements for
exercise of the Award pursuant to its terms.

     

    (B) No Service
Rights.  Nothing in the Plan or any instrument executed or
Award granted pursuant thereto shall confer upon any Participant any right to
continue to serve the Company as a Non-Employee Director or shall affect the
right of the Company or an Affiliate to terminate (i) the employment of an
Employee with or without notice and with or without cause, (ii) the service of a
Consultant pursuant to the terms of such Consultant’s agreement with the Company
or an Affiliate or (iii) the service of a Director pursuant to the Bylaws of the
Company or an Affiliate, and any applicable provisions of the corporate law of
the state in which the Company or the Affiliate is incorporated, as the case may
be.

     

    (C) Investment
Assurances.  The Company may require an Participant, as a
condition of exercising or acquiring stock under any Award, (i) to give written
assurances satisfactory to the Company as to the Participant’s knowledge and
experience in financial and business matters and/or to employ a purchaser
representative reasonably satisfactory to the Company who is knowledgeable and
experienced in financial and business matters and that he or she is capable of
evaluating, alone or together with the purchaser representative, the merits and
risks of exercising the Award; and (ii) to give written assurances satisfactory
to the Company stating that the Participant is acquiring the stock subject to
the Award for the Participant’s own account and not with any present intention
of selling or otherwise distributing the stock.  The foregoing
requirements, and any assurances given pursuant to such requirements, shall be
inoperative if (iii) the issuance of the shares upon the exercise or acquisition
of stock under the Award has been registered under a then currently effective
registration statement under the Securities Act or (iv) as to any particular
requirement, a determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then applicable
securities laws.  The Company may, upon advice of counsel to the
Company, place legends on stock certificates issued under the Plan as such
counsel deems necessary or appropriate in order to comply with applicable
securities laws, including, but not limited to, legends restricting the transfer
of the stock.

     

    (D) Withholding
Obligations.  The Participant may satisfy any federal, state or
local tax withholding obligation relating to the exercise or acquisition of
stock under an Award by any of the following means (in addition to the Company’s
right to withhold from any compensation paid to the Participant by the Company)
or by a combination of such means: (i) tendering a cash payment; (ii)
authorizing the Company to withhold shares from the shares of the Common Stock
otherwise issuable to the Participant as a result of the exercise or acquisition
of stock under the Award, provided, however, that no shares of Common Stock are
withheld with a value exceeding the minimum amount of tax required to be
withheld by law; or (iii) delivering to the Company owned and unencumbered
shares of the Common Stock.

     

    (E) Electronic
Delivery.  Any reference herein to a “written” agreement or
document shall include any agreement or document delivered electronically or
posted on the Company’s intranet.

     

    (F) Deferrals.  To the
extent permitted by applicable law, the Board, in its sole discretion, may
determine that the delivery of Common Stock or the payment of cash, upon the
exercise, vesting or settlement of all or a portion of any Award may be deferred
and may establish programs and procedures for deferral elections to be made by
Participants.  Deferrals by Participants will be made in accordance
with Section 409A of the Code. Consistent with Section 409A of the Code, the
Board may provide for distributions while a Participant is still an
employee.  The Board is authorized to make deferrals of Awards and
determine when, and in what annual percentages, Participants may receive
payments, including lump sum payments, following the Participant’s termination
of employment or retirement, and implement such other terms and conditions
consistent with the provisions of the Plan and in accordance with applicable
law.

     

    (G) Compliance with Section
409A.  To the extent that the Board determines that any Award
granted under the Plan is, or may reasonably be, subject to Section 409A of the
Code (together, with any state law of similar effect, “Section
409A”), the Award Agreement evidencing such Award shall incorporate the
terms and conditions necessary to avoid the consequences described in Section
409A(a)(1) of the Code (or any similar provision).  To the extent
applicable and permitted by law, the Plan and Award Agreements shall be
interpreted in accordance with Section 409A and Department of Treasury
regulations and other interpretive guidance issued thereunder, including without
limitation any such regulations or other guidance that may be issued or amended
after the Effective Date.

     

    Notwithstanding
any provision of the Plan to the contrary, in the event that following the
Effective Date the Board determines that any Award is, or may reasonably be,
subject to Section 409A and related Department of Treasury guidance (including
such Department of Treasury guidance as may be issued after the Effective Date),
the Board may adopt such amendments to the Plan and the applicable Award
Agreement or adopt other policies and procedures (including amendments, policies
and procedures with retroactive effect), or take any other actions, that the
Board determines are necessary or appropriate to (A) exempt the Award from
Section 409A and/or preserve the intended tax treatment of the benefits provided
with respect to the Award, or (B) comply with the requirements of Section 409A
and related Department of Treasury guidance.

     

    In
addition, and except as otherwise set forth in the applicable Award Agreement,
if the Company determines that any Award granted under this Plan constitutes, or
may reasonably constitute, “deferred compensation” under Section 409A and the
Participant is a “specified employee” of the Company at the relevant date, as
such term is defined in Section 409A(a)(2)(B)(i) (a “Specified
Employee”), then, solely to the extent necessary to avoid the incurrence
of the adverse personal tax consequences under Section 409A, the time at which
cash payments shall be paid, or shares of Common Stock issued, to such
Participant shall be automatically delayed as follows:  on the earlier
to occur of (A) the date that is six months and one day after the date of
termination of the Participant’s Continuous Service or (B) the date of the
Participant’s death (such earlier date, the “Delayed Initial
Payment Date”), the Company shall (I) pay to the Participant a lump sum
amount equal to the sum of the cash payments, and issue to the Participant that
number of shares of Common Stock, that the Participant would otherwise have
received through the Delayed Initial Payment Date if such issuance or payment
had not been delayed pursuant to this Section 11(g), in each case, without
liability to the Participant for interest during such period of delay, and (II)
commence paying or issuing the balance of the amounts due under the Award in
accordance with the applicable schedules set forth in the Award
Agreement.

     

    Notwithstanding
anything to the contrary contained herein, neither the Company nor any of its
Affiliates shall be responsible for, or required to reimburse or otherwise make
any participant whole for, any tax or penalty imposed on, or losses incurred by,
any Participant that arises in connection with the potential or actual
application of Section 409A to any Award granted hereunder.

     

    12. ADJUSTMENTS
UPON CHANGES IN STOCK.

     

    (A) Capitalization
Adjustments.  If any change is made in the shares of Common
Stock subject to the Plan, or subject to any Award (through merger,
consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by the
Company), the Plan will be appropriately adjusted in the class(es) and maximum
number of securities subject both to the Plan pursuant to subsection 4(a) and to
the nondiscretionary Awards specified in Section 6, and the outstanding Awards
will be appropriately adjusted in the class(es) and number of securities and
price per share of Common Stock subject to such outstanding
Awards.  The Board shall make such adjustments, and its determination
shall be final, binding and conclusive.  (The conversion of any
convertible securities of the Company shall not be treated as a transaction
“without receipt of consideration” by the Company.)

     

    (B) Change in
Control.  In the event of a: (1) a dissolution, liquidation or
sale of all or substantially all of the assets of the Company; (2) a merger or
consolidation in which the Company is not the surviving corporation; (3) a
reverse merger in which the Company is the surviving corporation but the shares
of the Common Stock outstanding immediately preceding the merger are converted
by virtue of the merger into other property, whether in the form of securities,
cash or otherwise; or (4) the acquisition by any person, entity or group within
the meaning of Section 13(d) or 14(d) of the Exchange Act, or any comparable
successor provisions (excluding any employee benefit plan, or related trust,
sponsored or maintained by the Company or any Affiliate of the Company) of the
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act, or comparable successor rule) of securities of the Company
representing at least fifty percent (50%) of the combined voting power entitled
to vote in the election of directors, then: (i) any surviving corporation or
acquiring corporation shall assume any Awards outstanding under the Plan or
shall substitute similar awards (including an option to acquire the same
consideration paid to the stockholders in the transaction described in this
subsection 12(b)) for those outstanding under the Plan, or (ii) in the event any
surviving corporation or acquiring corporation refuses to assume such Awards or
to substitute similar awards for those outstanding under the Plan, (A) with
respect to Awards held by persons then performing services as Employees,
Directors or Consultants, the vesting of such Awards (and, if applicable, the
time during which such Awards may be exercised) shall be accelerated prior to
such event and the Awards terminated if not exercised after such acceleration
and at or prior to such event, and (B) with respect to any other Awards
outstanding under the Plan, such Awards shall be terminated if not exercised (if
applicable) prior to such event.

     

    (C) Acceleration
of Vesting.

     

    (i) Awards Granted Prior to the Annual
Meeting in 2008.  In the event of any transaction described in
subsection 12(b) (other than a merger or consolidation for the purpose of a
change in domicile) and subject to any limitation set forth in an Award, with
respect to Awards granted under this Plan prior to the Annual Meeting held in
2008, which Awards are held by persons then performing Continuous Service, the
vesting of such Awards shall be automatically accelerated immediately prior to
such transaction such that each such Award shall be exercisable for such number
of vested shares that would have been vested in the ordinary course as of the
date one year following the date of the transaction.  In the event the
Award Agreement covering such an Award make different provisions for
acceleration of vesting due to a transaction described in subsection 12(b) or a
similar transaction, the acceleration provisions of this subsection 12(c)(i)
shall not be applicable to such Award.

     

    (ii) Awards Granted At or After the Annual
Meeting in 2008.  In the event of any transaction described in
subsection 12(b) (other than a merger or consolidation for the purpose of a
change in domicile) and subject to any limitation set forth in an Award, with
respect to Awards granted under this Plan at or after the Annual Meeting held in
2008, which Awards are held by persons then performing Continuous Service, the
vesting of such Awards shall be automatically accelerated in full as of
immediately prior to such transaction.  In the event the Award
Agreement covering such an Award make different provisions for acceleration of
vesting due to a transaction described in subsection 12(b) or a similar
transaction, the acceleration provisions of this subsection 12(c)(ii) shall not
be applicable to such Award.

     

    13. AMENDMENT
OF THE PLAN AND AWARDS.

     

    (A) Amendment of
Plan.  The Board at any time, and from time to time, may amend
the Plan.  However, except as provided in Section 12 relating to
adjustments upon changes in stock, no amendment shall be effective unless
approved by the stockholders of the Company to the extent stockholder approval
is necessary to satisfy the requirements of Rule 16b-3 or any Nasdaq or
securities exchange listing requirements.

     

    (B) Stockholder
Approval.  The Board may, in its sole discretion, submit any
other amendment to the Plan for stockholder approval.

     

    (C) No Impairment of
Rights.  Rights under any Award granted before amendment of the
Plan shall not be impaired by any amendment of the Plan unless (i) the Company
requests the consent of the Participant and (ii) the Participant consents in
writing.

     

    (D) Amendment of
Awards.  The Board at any time, and from time to time, may
amend the terms of any one or more Awards; provided, however, that the rights
under any Award shall not be impaired by any such amendment unless (i) the
Company requests the consent of the Participant and (ii) the Participant
consents in writing.

     

    14. TERMINATION
OR SUSPENSION OF THE PLAN.

     

    (A) Plan Term.  The
Board may suspend or terminate the Plan at any time.  No Awards may be
granted under the Plan while the Plan is suspended or after it is
terminated.

     

    (B) No Impairment of
Rights.  Suspension or termination of the Plan shall not impair
rights and obligations under any Award granted while the Plan is in effect
except with the written consent of the Participant.

     

    15. EFFECTIVE
DATE OF PLAN.

     

    The
Plan became effective on February 14, 2000, the effective date of the initial
public offering of the Common Stock.

     

    16. CHOICE
OF LAW.

     

    All
questions concerning the construction, validity and interpretation of this Plan
shall be governed by the law of the State of Delaware, without regard to such
state’s conflict of laws rules.