**Exhibit 10.14**

**AMENDMENT NO. 1**

**TOTHE**

**KINTERA, INC. AMENDEDAND RESTATED 2004 EQUITYINCENTIVE PLAN (FUNDWARE)**

This Amendment to the Kintera, Inc. Amended and Restated 2004Equity Incentive Plan Fundware (the “Plan”) is effective as of January 14, 2008. 

Section 3.6 is hereby amended byadding the following text to the end of that section: 

Notwithstanding the foregoing, the Committee shall have the authority, withoutfurther action of the stockholders of the Company, to amend outstanding Options and/or SARs to reduce the exercise price thereof, subject to the following conditions: (i) any such reduction in the exercise price shall take place within one yearof the date of stockholder approval of this Amendment; and (ii) the exercise price of outstanding Options and/or SARs shall be reduced to the price that is the greater of (A) the price that is 10% higher than the trailing 30 trading dayaverage closing price of the Stock on the effective date of such reduction in exercise price and (B) the price that is 5% higher than the closing sales price of the Stock on the effective date of such reduction in exercise price;provided, however, that in no event shall the price determined in accordance with the foregoing be less than $2.25. There would be no adjustment to the vesting or other terms of the repriced options. 

IN WITNESS OF THE FOREGOING, the undersigned Secretary of Kintera, Inc., a Delaware corporation (the “Company”), certifies that the foregoingamendment to the Kintera 2003 Amended and Restated Equity Incentive Plan was duly adopted by the Board of Directors of the Company on November 26, 2007 and approved by the stockholders of the Company on January 14, 2008. 

 

 

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**KINTERA, INC.**

**2004 EQUITY INCENTIVE PLAN (FUNDWARE)**

**(Amended and Restated effective July 21, 2005)**

1.***ESTABLISHMENT, PURPOSE AND TERM OF PLAN.***

1.1**Establishment.** Kintera, Inc., a Delaware corporation, hereby establishes the Kintera, Inc. 2004 Equity Incentive Plan (Fundware) (the *“****Plan****”*) effective as of the date the Plan is adopted bythe Board (the *“****Effective Date****”*). On July 21, 2005, the stockholders of the Company ratified an amendment to Section 3.6 of the Plan approved by the Committee on June 17, 2005, to permit theCommittee to effect a repricing of outstanding stock options under the Plan in certain limited circumstances. 

1.2**Purpose.** The purpose of the Planis to advance the interests of the Participating Company Group and its stockholders by providing an incentive to attract, retain and reward Employees of the Participating Company Group and by motivating such persons to contribute to the growth andprofitability of the Participating Company Group. The Plan seeks to achieve this purpose by providing for Awards in the form of Options, Stock Appreciation Rights, Stock Purchase Rights, Stock Bonuses, Stock Units, Performance Shares and PerformanceUnits. 

1.3**Term of Plan.** The Plan shall continue in effect for a term of ten (10) years after the Effective Date or until the earlier of itstermination by the Board or the date on which all of the shares of Stock available for issuance under the Plan have been issued and all restrictions on such shares under the terms of the Plan and the agreements evidencing Awards granted under thePlan have lapsed. 

2.***DEFINITIONS AND CONSTRUCTION.***

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

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

(b) *“****Award****”* means any Option, SAR, Stock Purchase Right, Stock Bonus, Stock Unit, Performance Share or Performance Unit granted under the Plan. 

(c) *“****Award Agreement****”* means a written agreement between the Company and a Participant setting forth the terms,conditions and restrictions of the Award granted to the Participant. An Award Agreement may be an “Option Agreement,” an “SAR Agreement,” a “Stock Purchase Agreement,” a “Stock Bonus Agreement,” a “StockUnit Agreement,” a “Performance Share Agreement” or a “Performance Unit Agreement.” 

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

 

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(e) *“****Code****”* means the Internal Revenue Code of 1986, as amended, andany applicable regulations promulgated thereunder. 

(f) *“****Committee****”* means the Compensation Committeeor other committee of the Board duly appointed to administer the Plan and having such powers as shall be specified by the Board. If no committee of the Board has been appointed to administer the Plan, the Board shall exercise all of the powers ofthe Committee granted herein, and, in any event, the Board may in its discretion exercise any or all of such powers. 

(g)*“****Company****”* means Kintera, Inc., a Delaware corporation, or any successor corporation thereto. 

(h)*“****Consultant****”* means a person engaged to provide consulting or advisory services (other than as an Employee or a member of the Board) to a Participating Company, provided that the identity of such person, thenature of such services or the entity to which such services are provided would not preclude the Company from offering or selling securities to such person pursuant to the Plan in reliance on registration on a Form S-8 Registration Statement underthe Securities Act. 

(i) *“****Director****”* means a member of the Board or of the board of directors of anyother Participating Company. 

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

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

(l) *“****Employee****”* means any person treated as an employee (including an Officer or a memberof the Board who is also treated as an employee) in the records of a Participating Company; provided, however, that neither service as a member of the Board nor payment of a director’s fee shall be sufficient to constitute employment forpurposes of the Plan. 

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

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

(i) If, on such date, the Stock is listed on a national or regional securities exchange or market system, the Fair Market Value of a share of Stock shallbe the closing price of a share of Stock (or the mean of the closing bid and asked prices of a share of Stock if the Stock is so quoted instead) as quoted on the Nasdaq National Market, The Nasdaq SmallCap Market or such other national or regionalsecurities exchange or market system constituting the primary market for the Stock, as reported in *The Wall Street Journal* or such other source as the Company deems reliable. If the relevant date does not fall on a day on which the Stock hastraded on such securities exchange or market system, the date on which the Fair Market Value shall be established shall be the last day on which the Stock was so traded prior to the relevant date, or such other appropriate day as shall be determinedby the Committee, in its discretion. 

 

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

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

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

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

(r)*“****Option****”* means the right to purchase Stock at a stated price for a specified period of time granted to a participant pursuant to Section 6 of the Plan. Options granted under the Plan shall be NonstatutoryStock Options. 

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

(t) *“****Participant****”* means any eligibleperson who has been granted one or more Awards. 

(u) *“****Participating Company****”* means the Company or anyParent Corporation, Subsidiary Corporation or Affiliate. 

(v) *“****Participating Company Group****”* means, atany point in time, all corporations collectively which are then Participating Companies. 

(w) *“****PerformanceAward****”* means an Award of Performance Shares or Performance Units. 

(x) *“****Performance AwardFormula****”* means, for any Performance Award, a formula or table established by the Committee pursuant to Section 10.3 of the Plan which provides the basis for computing the value of a Performance Award at one or more thresholdlevels of attainment of the applicable Performance Goal(s) measured as of the end of the applicable Performance Period. 

(y)*“****Performance Goal****”* means a performance goal established by the Committee pursuant to Section 10.3 of the Plan. 

(z) *“****Performance Period****”* means a period established by the Committee pursuant to Section 10.3 of the Plan at the end of which one or more Performance Goals are to bemeasured. 

(aa) *“****Performance Share****”* means a bookkeeping entry representing a right granted to aParticipant pursuant to Section 10 of the Plan to receive a payment equal to the value of a Performance Share, as determined by the Committee, based on performance. 

(bb) *“****Performance Unit****”* means a bookkeeping entry representing a right granted to a Participant pursuant to Section 10 of the Plan to receive a payment equal to the value ofa Performance Unit, as determined by the Committee, based upon performance. 

(cc) *“****Restriction Period****”*means the period established in accordance with Section 9.5 of the Plan during which shares subject to a Stock Award are subject to Vesting Conditions. 

 

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

(ee) *“****SAR****”* or*“****Stock Appreciation Right****”* means a bookkeeping entry representing, for each share of Stock subject to such SAR, a right granted to a Participant pursuant to Section 8 of the Plan to receive payment of anamount equal to the excess, if any, of the Fair Market Value of a share of Stock on the date of exercise of the SAR over the exercise price. 

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

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

(hh) *“****Stock****”* means the common stock of the Company, as adjusted from time to time inaccordance with Section 4.2 of the Plan. 

(ii) *“****Stock Award****”* means an Award of a Stock Bonus, aStock Purchase Right or a Stock Unit. 

(jj) *“****Stock Bonus****”* means Stock granted to a Participantpursuant to Section 9 of the Plan. 

(kk) *“****Stock Purchase Right****”* means a right to purchase Stockgranted to a Participant pursuant to Section 9 of the Plan. 

(ll) *“****Stock Unit****”* means the right toreceive in cash or Stock the Fair Market Value of a share of Stock granted pursuant to Section 9 of the Plan. 

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

(nn) *“****Vesting Conditions****”* mean those conditions established in accordance with Section 9.5 of the Plan prior tothe satisfaction of which shares subject to a Stock Award remain subject to forfeiture or a repurchase option in favor of the Company. 

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

 

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3.***ADMINISTRATION.***

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

3.2**Authority of Officers.** Any Officer shall have the authority to act onbehalf of the Company with respect to any matter, right, obligation, determination or election which is the responsibility of or which is allocated to the Company herein, provided the Officer has apparent authority with respect to such matter,right, obligation, determination or election. The Board may, in its discretion, delegate to a committee comprised of one or more Officers the authority to grant one or more Options, without further approval of the Board or the Committee, to anyEmployee, other than a person who, at the time of such grant, is an Insider; provided, however, that (i) such Awards shall not be granted for shares in excess of the maximum aggregate number of shares of Stock authorized for issuance pursuantto Section 4.1, (ii) the exercise price per share of each Option shall be not less than the Fair Market Value per share of the Stock on the effective date of grant (or, if the Stock has not traded on such date, on the last day precedingthe effective date of grant on which the Stock was traded), and (iii) each such Award shall be subject to the terms and conditions of the appropriate standard form of Award Agreement approved by the Board or the Committee and shall conform tothe provisions of the Plan and such other guidelines as shall be established from time to time by the Board or the Committee. 

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

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

(a) subject toSection 5.1, to determine the persons to whom, and the time or times at which, Awards shall be granted and the number of shares of Stock or units to be subject to each Award; 

(b) to determine the type of Award granted; 

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

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

 

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(e) to determine whether an Award of SARs, Stock Units, Performance Shares or Performance Units will besettled in shares of Stock, cash, or in any combination thereof; 

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

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

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

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

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

3.6**No Repricing.** Without theaffirmative vote of holders of a majority of the shares of Stock cast in person or by proxy at a meeting of the stockholders of the Company at which a quorum representing a majority of all outstanding shares of Stock is present or represented byproxy, the Board shall not approve a program providing for either (a) the cancellation of outstanding Options and/or SARs and the grant in substitution therefore of new Options and/or SARs having a lower exercise price or (b) the amendmentof outstanding Options and/or SARs to reduce the exercise price thereof. This paragraph shall not be construed to apply to “issuing or assuming a stock option in a transaction to which section 424(a) applies,” within the meaning ofSection 424 of the Code. Notwithstanding the foregoing, the Committee shall have the authority, without further action by the stockholders, to effect one or more programs of the types described in the immediately preceding terms of thisSection 3.6 with respect to Options and/or SARs issued and outstanding on or prior to January 1, 2006 and that are not held by executive officers or Directors. 

3.7**Indemnification.** In addition to such other rights of indemnification as they may have as members of the Board or the Committee or as officers or employees of the Participating Company Group, members of theBoard or the Committee and any officers or employees of the Participating Company Group to whom authority to act for the Board, the Committee or the Company is delegated shall be indemnified by the Company against all reasonable expenses, includingattorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failureto act under or in connection with the Plan, or any right granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them insatisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconductin duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same.

 

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

4.1**Maximum Number of Shares Issuable.** Subject to adjustment as provided in Section 4.2, the maximum aggregate number of shares of Stock that may be issued under the Plan shall be Five Hundred Thousand(500,000). Such shares shall consist of authorized but unissued or reacquired shares of Stock or any combination thereof. If any outstanding Award for any reason expires or is terminated or canceled without having been exercised or settled in full,or if shares of Stock acquired pursuant to an Award subject to forfeiture or repurchase are forfeited or repurchased by the Company, the shares of Stock allocable to the terminated portion of such Award, or such forfeited or repurchased shares ofStock shall again be available for issuance under the Plan. Shares of Stock shall not be deemed to have been issued pursuant to the Plan (i) with respect to any portion of an Award that is settled in cash or (ii) to the extent such sharesare withheld in satisfaction of tax withholding obligations pursuant to Section 14.2. Upon payment in shares of Stock pursuant to the exercise of an SAR, the number of shares available for issuance under the Plan shall be reduced only by thenumber of shares actually issued in such payment. If the exercise price of an Option is paid by tender to the Company, or attestation to the ownership, of shares of Stock owned by the Participant, the number of shares available for issuance underthe Plan shall be reduced by the gross number of shares for which the Option is exercised. 

4.2**Adjustments for Changes in Capital Structure.** In theevent of any change in the Stock through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange ofshares or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the stockholders of the Company in a form other than Stock (excepting normal cash dividends) that has a material effect onthe Fair Market Value of shares of Stock, appropriate adjustments shall be made in the number and class of shares subject to the Plan and subject to any outstanding Awards, and to the exercise or purchase price per share under any outstanding Award.Notwithstanding the foregoing, any fractional share resulting from an adjustment pursuant to this Section 4.2 shall be rounded down to the nearest whole number, and in no event may the exercise or purchase price under any Award be decreased toan amount less than the par value, if any, of the stock subject to such Award. The adjustments determined by the Committee pursuant to this Section 4.2 shall be final, binding and conclusive. 

5.***ELIGIBILITY AND AWARD LIMITATIONS.***

5.1**Persons Eligible for Awards.**As an inducement material to the Participant’s entering into service with a Participating Company, Awards may only be granted to Employees (a) who have not previouslybeen an Employee or Director of a Participating Company or (b) following a bonafide period of non-employment or non-service to a Participating Company; provided, however, that no Stock subject to any such Award shall vest, become exercisable orbe issued prior to the date on which such person commences Service as an Employee. 

5.2**Participation.** Awards are granted solely at the discretionof the Committee. Eligible persons may be granted more than one (1) Award. However, eligibility in accordance with this Section shall not entitle any person to be granted an Award, or, having been granted an Award, to be granted an additionalAward. 

6.***TERMS AND CONDITIONS OF OPTIONS.***

Options shall be evidenced by Award Agreements specifying the number of shares of Stock covered thereby, in such form as the Committee shall from time to time establish. No Option or purported Option shall be a validand binding obligation of the Company unless evidenced by a fully executed Award 

 

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Agreement. Award Agreements evidencing Options may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to thefollowing terms and conditions: 

6.1**Exercise Price.** The exercise price for each Option shall be established in the discretion of the Committee;provided, however, that the exercise price per share shall be not less than the Fair Market Value of a share of Stock on the effective date of grant of the Option. Notwithstanding the foregoing, an Option may be granted with an exercise price lowerthan the minimum exercise price set forth above if such Option is granted pursuant to an assumption or substitution for another option in a manner qualifying under the provisions of Section 424(a) of the Code. 

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

6.3**Payment of Exercise Price.**

(a)***Forms ofConsideration Authorized.*** Except as otherwise provided below, payment of the exercise price for the number of shares of Stock being purchased pursuant to any Option shall be made (i) in cash, by check or cash equivalent, (ii) bytender to the Company, or attestation to the ownership, of shares of Stock owned by the Participant having a Fair Market Value not less than the exercise price, (iii) by delivery of a properly executed notice of exercise together withirrevocable instructions to a broker providing for the assignment to the Company of the proceeds of a sale with respect to some or all of the shares being acquired upon the exercise of the Option (a *“****CashlessExercise****”*), (iv) by such other consideration as may be approved by the Committee from time to time to the extent permitted by applicable law, or (v) by any combination thereof. The Committee may at any time or from timeto time grant Options which do not permit all of the foregoing forms of consideration to be used in payment of the exercise price or which otherwise restrict one or more forms of consideration. 

(b)***Limitations on Forms of Consideration.***

(i)**Tender of Stock.** Notwithstanding the foregoing, an Option may not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock to the extent such tender or attestation wouldconstitute a violation of the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock. Unless otherwise provided by the Committee, an Option may not be exercised by tender to the Company, or attestationto the ownership, of shares of Stock unless such shares either have been owned by the Participant for more than six (6) months (and not used for another Option exercise by attestation during such period) or were not acquired, directly orindirectly, from the Company. 

(ii)**Cashless Exercise.** The Company reserves, at any and all times, the right, in the Company’ssole and absolute discretion, to establish, decline to approve or terminate any program or procedures for the exercise of Options by means of a Cashless Exercise. 

 

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6.4**Effect of Termination of Service.** An Option shall be exercisable after a Participant’s termination ofService to such extent and during such period as determined by the Committee, in its discretion, and set forth in the Award Agreement evidencing such Option. 

6.5**Transferability of Options.** During the lifetime of the Participant, an Option shall be exercisable only by the Participant or the Participant’s guardian or legal representative. No Option shall be assignable or transferableby the Participant, except by will or by the laws of descent and distribution. Notwithstanding the foregoing, to the extent permitted by the Committee, in its discretion, and set forth in the Award Agreement evidencing such Option, an Option shallbe assignable or transferable subject to the applicable limitations, if any, described in the General Instructions to Form S-8 Registration Statement under the Securities Act. 

7.***[Reserved]***

8.***TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS.***

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

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

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

8.3**Exercisability and Term of SARs.**

(a)***Tandem SARs.*** Tandem SARs shall be exercisable only at the time and to the extent that the related Option is exercisable, subject to such provisions as the Committee may specify where the Tandem SAR is granted with respect to less than thefull number of shares of Stock subject to the related Option. The Committee may, in its discretion, provide in any Award Agreement evidencing a Tandem SAR that such SAR may not be exercised without the advance approval of the Company and, if suchapproval is not given, then the Option shall nevertheless remain exercisable in accordance with its terms. A Tandem SAR shall terminate and cease to be exercisable no later than the date on which the related Option expires or is terminated orcanceled. Upon the exercise of a Tandem SAR with respect to some or all of the shares subject to such SAR, the related Option shall be canceled automatically as to the number of shares with respect to which the Tandem SAR was exercised. Upon theexercise of an Option related to a Tandem SAR as to some or all of the shares subject to such Option, the related Tandem SAR shall be canceled automatically as to the number of shares with respect to which the related Option was exercised.

 

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

8.4**Exercise of SARs.** Upon theexercise (or deemed exercise pursuant to Section 8.5) of a SAR, the Participant (or the Participant’s legal representative or other person who acquired the right to exercise the SAR by reason of the Participant’s death) shall beentitled to receive payment of an amount for each share with respect to which the SAR is exercised equal to the excess, if any, of the Fair Market Value of a share of Stock on the date of exercise of the SAR over the exercise price. Payment of suchamount shall be made in cash, shares of Stock, or any combination thereof as determined by the Committee. Unless otherwise provided in the Award Agreement evidencing such SAR, payment shall be made in a lump sum as soon as practicable following thedate of exercise of the SAR. The Award Agreement evidencing any SAR may provide for deferred payment in a lump sum or in installments. When payment is to be made in shares of Stock, the number of shares to be issued shall be determined on the basisof the Fair Market Value of a share of Stock on the date of exercise of the SAR. For purposes of Section 8, an SAR shall be deemed exercised on the date on which the Company receives notice of exercise from the Participant. 

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

8.6**Effect of Termination of Service.** An SAR shall be exercisable after a Participant’s termination of Service to such extentand during such period as determined by the Committee, in its discretion, and set forth in the Award Agreement evidencing such SAR. 

8.7**Nontransferability of SARs.** SARs may not be assigned or transferred in any manner except by will or the laws of descent and distribution, and, during the lifetime of the Participant, shall be exercisable only by the Participant or theParticipant’s guardian or legal representative. 

9.***TERMS AND CONDITIONS OF STOCK AWARDS.***

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

9.1**Types of Stock Awards Authorized.** Stock Awards may be in the form of either a Stock Bonus, a Stock Purchase Right or a Stock Unit. Stock Awards may be granted upon such conditions as the Committee shalldetermine, including, without limitation, upon the attainment of one or more Performance Goals described in Section 10.4. If either the grant of a Stock Award or the lapsing of the Restriction Period is to be contingent upon the attainment ofone or more Performance Goals, the Committee shall follow procedures substantially equivalent to those set forth in Sections 10.3 through 10.5(a). 

 

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9.2**Purchase Price.** The purchase price for shares of Stock issuable under each Stock Purchase Right shall beestablished by the Committee in its discretion. No monetary payment (other than applicable tax withholding) shall be required as a condition of receiving shares of Stock pursuant to a Stock Bonus or a Stock Unit, the consideration for which shall beservices actually rendered to a Participating Company or for its benefit. Notwithstanding the foregoing, the Participant shall furnish consideration in the form of cash or past services rendered to a Participating Company or for its benefit having avalue not less than the par value of the shares of Stock subject to such Stock Award. 

9.3**Purchase Period.** A Stock Purchase Right shall beexercisable within a period established by the Committee, which shall in no event exceed thirty (30) days from the effective date of the grant of the Stock Purchase Right; provided, however, that no Stock Purchase Right granted to a prospectiveEmployee may become exercisable prior to the date on which such person commences Service. 

9.4**Payment of Purchase Price.** Except as otherwiseprovided below, payment of the purchase price for the number of shares of Stock being purchased pursuant to any Stock Purchase Right shall be made (i) in cash, by check, or cash equivalent, (ii) by such other consideration as may beapproved by the Committee from time to time to the extent permitted by applicable law, or (iii) by any combination thereof. The Committee may at any time or from time to time grant Stock Purchase Rights which do not permit all of the foregoingforms of consideration to be used in payment of the purchase price or which otherwise restrict one or more forms of consideration. Stock Bonuses and Stock Units shall be issued in consideration for past services actually rendered to a ParticipatingCompany or for its benefit. 

9.5**Vesting and Restrictions on Transfer.** Shares issued pursuant to any Stock Award may or may not be made subject tovesting conditioned upon the satisfaction of such Service requirements, conditions, restrictions or performance criteria, including, without limitation, Performance Goals as described in Section 10.4 (the *“****VestingConditions****”*), as shall be established by the Committee and set forth in the Award Agreement evidencing such Award. During any period (the *“****Restriction Period****”*) in which shares acquiredpursuant to a Stock Award remain subject to Vesting Conditions, such shares may not be sold, exchanged, transferred, pledged, assigned or otherwise disposed of other than pursuant to an Ownership Change Event, as defined in Section 12.1, or asprovided in Section 9.8. Upon request by the Company, each Participant shall execute any agreement evidencing such transfer restrictions prior to the receipt of shares of Stock hereunder and shall promptly present to the Company any and allcertificates representing shares of Stock acquired hereunder for the placement on such certificates of appropriate legends evidencing any such transfer restrictions. 

9.6**Voting Rights; Dividends and Distributions.** Except as provided in this Section, Section 9.5 and any Award Agreement, during the Restriction Period applicable to shares subject to a Stock Purchase Rightand Stock Bonuses, the Participant shall have all of the rights of a stockholder of the Company holding shares of Stock, including the right to vote such shares and to receive all dividends and other distributions paid with respect to such shares.Participants who have been granted Stock Units shall possess no incidents of ownership with respect to shares of Stock underlying such Stock Units; provided, however, that a Stock Unit Agreement may provide for payments in lieu of dividends in amanner identical to that specified in Section 10.6 of the Plan. However, in the event of a dividend or distribution paid in shares of Stock or any other adjustment made upon a change in the capital structure of the Company as described inSection 4.2, then any and all new, substituted or additional securities or other property (other than normal cash dividends) to which the Participant is entitled by reason of the Participant’s Stock Award shall be immediately subject tothe same Vesting Conditions as the shares subject to the Stock Award with respect to which such dividends or distributions were paid or adjustments were made. 

 

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9.7**Effect of Termination of Service.** Unless otherwise provided by the Committee in the grant of a Stock Award andset forth in the Award Agreement, if a Participant’s Service terminates for any reason, whether voluntary or involuntary (including the Participant’s death or Disability), then (i) the Company shall have the option to repurchase forthe purchase price paid by the Participant any shares acquired by the Participant pursuant to a Stock Purchase Right which remain subject to Vesting Conditions as of the date of the Participant’s termination of Service and (ii) theParticipant shall forfeit to the Company any shares acquired by the Participant pursuant to a Stock Bonus or a Stock Unit which remain subject to Vesting Conditions as of the date of the Participant’s termination of Service. The Company shallhave the right to assign at any time any repurchase right it may have, whether or not such right is then exercisable, to one or more persons as may be selected by the Company. 

9.8**Nontransferability of Stock Award Rights.** Rights to acquire shares of Stock pursuant to a Stock Award may not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment,pledge, encumbrance or garnishment by creditors of the Participant or the Participant’s beneficiary, except by will or the laws of descent and distribution, and, during the lifetime of the Participant, shall be exercisable only by theParticipant or the Participant’s guardian or legal representative. 

10.***TERMS AND CONDITIONS OF PERFORMANCE AWARDS.***

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

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

10.2**Initial Value of Performance Shares and PerformanceUnits.** Unless otherwise provided by the Committee in granting a Performance Award, each Performance Share shall have an initial value equal to the Fair Market Value of one (1) share of Stock, subject to adjustment as provided inSection 4.2, on the effective date of grant of the Performance Share, and each Performance Unit shall have an initial value of one hundred dollars ($100). The final value payable to the Participant in settlement of a Performance Awarddetermined on the basis of the applicable Performance Award Formula will depend on the extent to which Performance Goals established by the Committee are attained within the applicable Performance Period established by the Committee. 

10.3**Establishment of Performance Period, Performance Goals and Performance Award Formula.** In granting each Performance Award, the Committee shall establish inwriting the applicable Performance Period, Performance Award Formula and one or more Performance Goals which, when measured at the end of the Performance Period, shall determine on the basis of the 

 

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Performance Award Formula the final value of the Performance Award to be paid to the Participant. Once established, the Performance Goals and PerformanceAward Formula shall not be changed during the Performance Period. The Company shall notify each Participant granted a Performance Award of the terms of such Award, including the Performance Period, Performance Goal(s) and Performance Award Formula.

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

(a)***Performance Measures.*** Performance Measures shall have the same meanings as used in the Company’s financial statements, or, if suchterms are not used in the Company’s financial statements, they shall have the meaning applied pursuant to generally accepted accounting principles, or as used generally in the Company’s industry. Performance Measures shall be calculatedwith respect to the Company and each Subsidiary Corporation consolidated therewith for financial reporting purposes or such division or other business unit as may be selected by the Committee. For purposes of the Plan, the Performance Measuresapplicable to a Performance Award shall be calculated in accordance with generally accepted accounting principles, but prior to the accrual or payment of any Performance Award for the same Performance Period and excluding the effect (whetherpositive or negative) of any change in accounting standards or any extraordinary, unusual or nonrecurring item, as determined by the Committee, occurring after the establishment of the Performance Goals applicable to the Performance Award.Performance Measures may be one or more of the following, as determined by the Committee: 

(i) growth in revenue; 

(ii) growth in the market price of the Stock; 

(iii) operating margin; 

(iv) gross margin; 

(v) operating income; 

(vi) pre-tax profit; 

(vii) earnings before interest, taxes and depreciation; 

(viii) net income; 

(ix) total return on shares of Stock relative to the increase in an appropriate index asmay be selected by the Committee; 

(x) earnings per share; 

(xi) return on stockholder equity; 

(xii) return on net assets; 

(xiii) expenses; 

 

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(xiv) return on capital; 

(xv) economic value added; 

(xvi) market share; and 

(xvii) cash flow, as indicated by book earnings before interest, taxes, depreciation and amortization. 

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

10.5**Settlement of Performance Awards.**

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

(b)***Discretionary Adjustment of Award Formula.*** In its discretion, the Committee may,either at the time it grants a Performance Award or at any time thereafter, provide for the positive or negative adjustment of the Performance Award Formula applicable to a Performance Award granted to any Participant to reflect suchParticipant’s individual performance in his or her position with the Company or such other factors as the Committee may determine. 

(c)***Effect of Leaves of Absence.*** Unless otherwise required by law, payment of the final value, if any, of a Performance Award held by a Participant who has taken in excess of thirty (30) days of leaves of absence during aPerformance Period shall be prorated on the basis of the number of days of the Participant’s Service during the Performance Period during which the Participant was not on a leave of absence. 

(d)***Notice to Participants.*** As soon as practicable following the Committee’s determination and certification in accordance withSections 10.5(a) and (b), the Company shall notify each Participant of the determination of the Committee. 

(e)***Payment in Settlementof Performance Awards.*** As soon as practicable following the Committee’s determination and certification in accordance with Sections 10.5(a) and (b), payment shall be made to each eligible Participant (or such Participant’s legalrepresentative or other person who acquired the right to receive such payment by reason of the Participant’s death) of the final value of the Participant’s Performance Award. Payment of such amount shall be made in cash, shares of Stock,or a combination thereof as determined by the Committee. Unless otherwise provided in the Award Agreement evidencing a Performance Award, payment shall be made in a lump sum. An Award Agreement may provide for deferred payment in a lump sum or ininstallments. If any payment is to be made on a deferred basis, the Committee may, but shall not be obligated to, provide for the payment during the deferral period of Dividend Equivalents or interest. 

 

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(f)***Provisions Applicable to Payment in Shares.*** If payment is to be made in shares ofStock, the number of such shares shall be determined by dividing the final value of the Performance Award by the value of a share of Stock determined by the method specified in the Award Agreement. Such methods may include, without limitation, theclosing market price on a specified date (such as the settlement date) or an average of market prices over a series of trading days. Shares of Stock issued in payment of any Performance Award may be fully vested and freely transferable shares or maybe shares of Stock subject to Vesting Conditions as provided in Section 9.5. Any shares subject to Vesting Conditions shall be evidenced by an appropriate Award Agreement and shall be subject to the provisions of Sections 9.5 through 9.8 above.

10.6**Dividend Equivalents.** In its discretion, the Committee may provide in the Award Agreement evidencing any Performance Share Award that theParticipant shall be entitled to receive Dividend Equivalents with respect to the payment of cash dividends on Stock having a record date prior to the date on which the Performance Shares are settled or forfeited. Dividend Equivalents may be paidcurrently or may be accumulated and paid to the extent that Performance Shares become nonforfeitable, as determined by the Committee. Settlement of Dividend Equivalents may be made in cash, shares of Stock, or a combination thereof as determined bythe Committee, and may be paid on the same basis as settlement of the related Performance Share as provided in Section 10.5. Dividend Equivalents shall not be paid with respect to Performance Units. 

10.7**Effect of Termination of Service.** The effect of a Participant’s termination of Service on the Participant’s Performance Award shall be asdetermined by the Committee, in its discretion, and set forth in the Award Agreement evidencing such Performance Award. 

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

11.***STANDARD FORMS OF AWARD AGREEMENT.***

11.1**Award Agreements.** Each Award shall comply with and be subject to the terms and conditions set forth in the appropriate form of Award Agreementapproved by the Committee and as amended from time to time. Any Award Agreement may consist of an appropriate form of Notice of Grant and a form of Agreement incorporated therein by reference, or such other form or forms as the Committee may approvefrom time to time. 

11.2**Authority to Vary Terms.** The Committee shall have the authority from time to time to vary the terms of any standard form ofAward Agreement either in connection with the grant or amendment of an individual Award or in connection with the authorization of a new standard form or forms; provided, however, that the terms and conditions of any such new, revised or amendedstandard form or forms of Award Agreement are not inconsistent with the terms of the Plan. 

 

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12.***CHANGE IN CONTROL.***

12.1**Definitions.**

(a) An *“****Ownership Change Event****”* shall bedeemed to have occurred if any of the following occurs with respect to the Company: (i) the direct or indirect sale or exchange by the stockholders of the Company of all or substantially all of the voting stock of the Company; (ii) amerger or consolidation in which the Company is a party; (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company (other than a sale, exchange or transfer to one or more subsidiaries of the Company); or(iv) a liquidation or dissolution of the Company. 

(b) A *“****Change in Control****”* shall mean anOwnership Change Event or series of related Ownership Change Events (collectively, a *“****Transaction****”*) in which the stockholders of the Company immediately before the Transaction do not retain immediately after theTransaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding voting securities of the Company or, in the case of an Ownership Change Event described inSection 12.1(a)(iii), the entity to which the assets of the Company were transferred. 

12.2**Effect of Change in Control on Options.** In theevent of a Change in Control, the Acquiring Corporation may, without the consent of any Participant, either assume the Company’s rights and obligations under outstanding Options or substitute for outstanding Options substantially equivalentoptions for the Acquiring Corporation’s stock. In the event that the Acquiring Corporation elects to assume or substitute the outstanding Options, and the Change of Control is consummated, then the vesting of the unvested shares underlying allOptions shall be accelerated by one year as set forth in the Option Agreement. In the event the Acquiring Corporation elects not to assume or substitute for outstanding Options in connection with a Change in Control, the vesting of each suchoutstanding Option and any shares acquired upon the exercise thereof held by a Participant whose Service has not terminated prior to such date shall be fully accelerated, effective as of the date ten (10) days prior to the date of the Change inControl, to such extent, if any, as shall have been determined by the Board, in its discretion, and set forth in the Option Agreement evidencing such Option. The vesting of any Option thereof that was permissible solely by reason of thisSection 12.2 and the provisions of such Option Agreement shall be conditioned upon the consummation of the Change in Control. Any Options which are neither assumed or substituted for by the Acquiring Corporation in connection with the Change inControl nor exercised as of the date of the Change in Control shall terminate and cease to be outstanding effective as of the date of the Change in Control. Notwithstanding the foregoing, shares acquired upon exercise of an Option prior to theChange in Control and any consideration received pursuant to the Change in Control with respect to such shares shall continue to be subject to all applicable provisions of the Option Agreement evidencing such Option except as otherwise provided insuch Option Agreement. Furthermore, notwithstanding the foregoing, if the corporation the stock of which is subject to the outstanding Options immediately prior to an Ownership Change Event described in Section 12.1(a)(i) constituting a Changein Control is the surviving or continuing corporation and immediately after such Ownership Change Event less than fifty percent (50%) of the total combined voting power of its voting stock is held by another corporation or by other corporationsthat are members of an affiliated group within the meaning of Section 1504(a) of the Code without regard to the provisions of Section 1504(b) of the Code, the outstanding Options shall not terminate unless the Board otherwise provides inits discretion. 

12.3**Effect of Change in Control on SARs.** In the event of a Change in Control, the Acquiring Corporation may, without the consentof any Participant, either assume the Company’s rights and obligations under outstanding SARs or substitute for outstanding SARs substantially equivalent SARs for the Acquiring Corporation’s stock. In the event the Acquiring Corporationelects not to assume or 

 

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substitute for outstanding SARs in connection with a Change in Control, the Committee shall provide that any unexercised and/or unvested portions ofoutstanding SARs shall be immediately exercisable and vested in full as of the date thirty (30) days prior to the date of the Change in Control. The exercise and/or vesting of any SAR that was permissible solely by reason of this paragraph 12.3shall be conditioned upon the consummation of the Change in Control. Any SARs which are not assumed by the Acquiring Corporation in connection with the Change in Control nor exercised as of the time of consummation of the Change in Control shallterminate and cease to be outstanding effective as of the time of consummation of the Change in Control. 

12.4**Effect of Change in Control on StockAwards.** The Committee may, in its discretion, provide in any Award Agreement evidencing a Stock Award that, in the event of a Change in Control, the lapsing of the Restriction Period applicable to the shares subject to the Stock Award held by aParticipant whose Service has not terminated prior to such date shall be accelerated effective as of the date of the Change in Control to such extent as specified in such Award Agreement. Any acceleration of the lapsing of the Restriction Periodthat was permissible solely by reason of this Section 12.4 and the provisions of such Award Agreement shall be conditioned upon the consummation of the Change in Control. 

12.5**Effect of Change in Control on Performance Awards.** The Committee may, in its discretion, provide in any Award Agreement evidencing a Performance Award that, in the event of a Change in Control, thePerformance Award held by a Participant whose Service has not terminated prior to such date shall become payable effective as of the date of the Change in Control to such extent as specified in such Award Agreement. 

13.***COMPLIANCE WITH SECURITIES LAW.***

The grant of Awards andthe issuance of shares of Stock pursuant to any Award shall be subject to compliance with all applicable requirements of federal, state and foreign law with respect to such securities and the requirements of any stock exchange or market system uponwhich the Stock may then be listed. In addition, no Award may be exercised or shares issued pursuant to an Award unless (i) a registration statement under the Securities Act shall at the time of such exercise or issuance be in effect withrespect to the shares issuable pursuant to the Award or (ii) in the opinion of legal counsel to the Company, the shares issuable pursuant to the Award may be issued in accordance with the terms of an applicable exemption from the registrationrequirements of the Securities Act. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shareshereunder shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to issuance of any Stock, the Company may require theParticipant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

14.***TAX WITHHOLDING.***

14.1**Tax Withholdingin General.** The Company shall have the right to deduct from any and all payments made under the Plan, or to require the Participant, through payroll withholding, cash payment or otherwise, including by means of a Cashless Exercise of an Option,to make adequate provision for, the federal, state, local and foreign taxes, if any, required by law to be withheld by the Participating Company Group with respect to an Award or the shares acquired pursuant thereto. The Company shall have noobligation to deliver shares of Stock, to release shares of Stock from an escrow established pursuant to an Award Agreement, or to make any payment in cash under the Plan until the Participating Company Group’s tax withholding obligations havebeen satisfied by the Participant. 

 

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

15.***TERMINATION OR AMENDMENT OF PLAN.***

The Committee may terminate or amend the Plan at any time. No termination or amendment of the Plan shall affect any then outstanding Award unless expressly provided by the Committee. In any event, no termination oramendment of the Plan may adversely affect any then outstanding Award without the consent of the Participant, unless such termination or amendment is necessary to comply with any applicable law, regulation or rule. 

16.***MISCELLANEOUS PROVISIONS.***

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

16.2**Provision of Information.** Each Participant shall be given access to information concerning theCompany equivalent to that information generally made available to the Company’s common stockholders. 

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

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

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

 

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

16.7**Unfunded Obligation.** Participants shall have the status of general unsecured creditors of the Company. Any amounts payable to Participants pursuant to the Plan shall be unfunded and unsecured obligations for all purposes,including, without limitation, Title I of the Employee Retirement Income Security Act of 1974. No Participating Company shall be required to segregate any monies from its general funds, or to create any trusts, or establish any special accounts withrespect to such obligations. The Company shall retain at all times beneficial ownership of any investments, including trust investments, which the Company may make to fulfill its payment obligations hereunder. Any investments or the creation ormaintenance of any trust or any Participant account shall not create or constitute a trust or fiduciary relationship between the Committee or any Participating Company and a Participant, or otherwise create any vested or beneficial interest in anyParticipant or the Participant’s creditors in any assets of any Participating Company. The Participants shall have no claim against any Participating Company for any changes in the value of any assets which may be invested or reinvested by theCompany with respect to the Plan. 

 

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**KINTERA, INC.**

**2004 EQUITY INCENTIVE PLAN (FUNDWARE)**

**NOTICE OF GRANT OF STOCK OPTION**

            ****             (the *“****Optionee****”*) has been granted an option(the *“****Option****”*) to purchase certain shares of Stock of Kintera, Inc. pursuant to the Kintera, Inc. 2004 Equity Incentive Plan (Fundware) (the *“****Plan****”*), as follows: 

 

**Date of Option Grant:**
  ____________
**Number of Option Shares:**
  ____________
**Exercise Price:**
  $___________ per share
**Initial Vesting Date:**
  ____________
**Option Expiration Date:**
  The date ten (10) years after the Date of Option Grant.
**Tax Status of Option:**
  ****Nonstatutory Stock Option.
**Vested Shares:** Except as provided in the Plan and Stock Option Agreement, the number ofVested Shares (disregarding any resulting fractional share) as of any date is determined by multiplying the Number of Option Shares by the *“****Vested Ratio****”* determined as of such date as follows: 

 
   **Vested Ratio**
a.      Initially, all shares of stock shall be Unvested Shares
  0
b.      On Initial Vesting Date, provided Optionee’s Service has not terminated prior to suchdate
  1/4
Plus:
  
c.      For each full day of the Optionee’s continuous Service from Initial Vesting Date until the VestedRatio equals 1/1, an additional
  1/1,460
By their signatures below, the Company and the Optionee agree that the Option is governed by thisNotice and by the provisions of the Plan and the Stock Option Agreement, both of which are attached to and made a part of this document. The Optionee acknowledges receipt of copies of the Plan and the Stock Option Agreement, represents that theOptionee has read and is familiar with their provisions, and hereby accepts the Option subject to all of their terms and conditions. 

 

KINTERA, INC.
  
OPTIONEE

By:
        Signature
Its:
        DateAddress: 9605 Scranton Rd., Suite 240   
       San Diego, CA 92121
  Address    
 

ATTACHMENTS:
  2004 Equity Incentive Plan (Fundware), as amended to the Date of Option Grant; Stock Option Agreement and Exercise Notice
 

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**KINTERA, INC.**

**2004 EQUITY INCENTIVE PLAN (FUNDWARE)**

**STOCK OPTION AGREEMENT**

Kintera, Inc. has granted to the individual (the *“****Optionee****”*) named in the *Notice of Grant of Stock Option* (the*“****Notice****”*) to which this Stock Option Agreement (the *“****Option Agreement****”*) is attached an option (the *“****Option****”*) to purchase certain sharesof Stock upon the terms and conditions set forth in the Notice and this Option Agreement. The Option has been granted pursuant to and shall in all respects be subject to the terms and conditions of the Kintera, Inc. 2004 Equity Incentive Plan(Fundware) (the *“****Plan****”*), as amended to the Date of Option Grant, the provisions of which are incorporated herein by reference. By signing the Notice, the Optionee: (a) represents that the Optionee has readand is familiar with the terms and conditions of the Notice, the Plan and this Option Agreement, including the Effect of Termination of Service set forth in Section 7, (b) accepts the Option subject to all of the terms and conditions ofthe Notice, the Plan and this Option Agreement, (c) agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions arising under the Notice, the Plan or this Option Agreement, and(d) acknowledges receipt of a copy of the Notice, the Plan and this Option Agreement. 

1. ***DEFINITIONS ANDCONSTRUCTION*****.**

1.1 **Definitions*****.*** Unless otherwise defined herein, capitalized terms shall have the meanings assigned tosuch terms in the Notice or the Plan. 

1.2 **Construction*****.*** Captions and titles contained herein are for convenience only and shall notaffect the meaning or interpretation of any provision of this Option Agreement. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is notintended to be exclusive, unless the context clearly requires otherwise. 

2. **TAX STATUS OF OPTION*****.***

This Option is intended to be a Nonstatutory Stock Option and shall not be treated as an Incentive Stock Option within the meaning of Section 422(b) of the Code.

3. ***ADMINISTRATION***. 

All questions ofinterpretation concerning this Option Agreement shall be determined by the Board. All determinations by the Board shall be final and binding upon all persons having an interest in the Option. Any officer of a Participating Company shall have theauthority to act on behalf of the Company with respect to any matter, right, obligation, or election which is the responsibility of or which is allocated to the Company herein, provided the officer has apparent authority with respect to such matter,right, obligation, or election. 

4. ***EXERCISE OF THE OPTION***. 

4.1 **Right to Exercise.** Except as otherwise provided herein, the Option shall be exercisable on and after the Date of Option Grant (or if later, the Optionee’s Service commencement date) and prior to thetermination of the Option (as provided in Section 6) in an amount not to exceed the number of Vested Shares less the number of shares previously acquired upon exercise of the Option. 

 

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4.2 **Method of Exercise*****.*** Exercise of the Option shall be by written notice to the Company which muststate the election to exercise the Option, the number of whole shares of Stock for which the Option is being exercised and such other representations and agreements as to the Optionee’s investment intent with respect to such shares as may berequired pursuant to the provisions of this Option Agreement. The written notice must be signed by the Optionee and must be delivered in person, by certified or registered mail, return receipt requested, by confirmed facsimile transmission, or bysuch other means as the Company may permit, to the Chief Financial Officer of the Company, or other authorized representative of the Participating Company Group, prior to the termination of the Option as set forth in Section 6, accompanied byfull payment of the aggregate Exercise Price for the number of shares of Stock being purchased. The Option shall be deemed to be exercised upon receipt by the Company of such written notice and the aggregate Exercise Price. 

4.3 **Payment of Exercise Price.**

(a) ***Forms ofConsideration Authorized*****.** Except as otherwise provided below, payment of the aggregate Exercise Price for the number of shares of Stock for which the Option is being exercised shall be made (i) in cash, by check, or cashequivalent, (ii) by tender to the Company, or attestation to the ownership, of whole shares of Stock owned by the Optionee having a Fair Market Value (as determined by the Company without regard to any restrictions on transferability applicableto such stock by reason of federal or state securities laws or agreements with an underwriter for the Company) not less than the aggregate Exercise Price, (iii) by means of a Cashless Exercise, as defined in Section 4.3(b), or (iv) byany combination of the foregoing. 

(b) ***Limitations on Forms of Consideration.***

(i) **Tender of Stock.** Notwithstanding the foregoing, the Option may not be exercised by tender to the Company, or attestation to the ownership, ofshares of Stock to the extent such tender or attestation would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock. The Option may not be exercised by tender to theCompany, or attestation to the ownership, of shares of Stock unless such shares either have been owned by the Optionee for more than six (6) months or were not acquired, directly or indirectly, from the Company. 

(ii) **Cashless Exercise.** A *“****Cashless Exercise****”* means the delivery of a properly executed notice together withirrevocable instructions to a broker in a form acceptable to the Company providing for the assignment to the Company of the proceeds of a sale with respect to some or all of the shares of Stock acquired upon the exercise of the Option pursuant to aprogram or procedure approved by the Company. The Company reserves, at any and all times, the right, in the Company’s sole and absolute discretion, to decline to approve or terminate any such program or procedure. 

4.4 **Tax Withholding*****.*** At the time the Option is exercised, in whole or in part, or at any time thereafter as requested by the Company, the Optioneehereby authorizes withholding from payroll and any other amounts payable to the Optionee, and otherwise agrees to make adequate provision for (including by means of a Cashless Exercise to the extent permitted by the Company), any sums required tosatisfy the federal, state, local and foreign tax withholding obligations of the Participating Company Group, if any, which arise in connection with the Option, including, 

 

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without limitation, obligations arising upon (i) the exercise, in whole or in part, of the Option, (ii) the transfer, in whole or in part, of anyshares acquired upon exercise of the Option, (iii) the operation of any law or regulation providing for the imputation of interest, or (iv) the lapsing of any restriction with respect to any shares acquired upon exercise of the Option. TheCompany shall have no obligation to deliver shares of Stock until the tax withholding obligations of the Participating Company Group have been satisfied by the Optionee. 

4.5 **Certificate Registration*****.*** Except in the event the Exercise Price is paid by means of a Cashless Exercise, the certificate for the shares as to which the Option is exercised shall be registeredin the name of the Optionee, or, if applicable, in the names of the heirs of the Optionee. 

4.6 **Restrictions on Grant of the Option and Issuance ofShares*****.*** The grant of the Option and the issuance of shares of Stock upon exercise of the Option shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to such securities. TheOption may not be exercised if the issuance of shares of Stock upon exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or marketsystem upon which the Stock may then be listed. In addition, the Option may not be exercised unless (i) a registration statement under the Securities Act shall at the time of exercise of the Option be in effect with respect to the sharesissuable upon exercise of the Option or (ii) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Option may be issued in accordance with the terms of an applicable exemption from the registrationrequirements of the Securities Act. THE OPTIONEE IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION ISVESTED. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares subject to the Option shallrelieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to the exercise of the Option, the Company may require the Optionee tosatisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company. 

4.7 **Fractional Shares*****.*** The Company shall not be required to issue fractional shares upon the exercise of the Option. 

5. ***NONTRANSFERABILITY OF THE OPTION***. 

The Option may be exercised during the lifetime of the Optionee only by the Optionee or the Optionee’s guardian or legal representative and may not be assigned or transferred in any manner except by will or by the laws of descent anddistribution. Following the death of the Optionee, the Option, to the extent provided in Section 7, may be exercised by the Optionee’s legal representative or by any person empowered to do so under the deceased Optionee’s will orunder the then applicable laws of descent and distribution. 

 

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6. ***TERMINATION OF THE OPTION***. 

The Option shall terminate and may no longer be exercised on the first to occur of (a) the Option Expiration Date, (b) the last date for exercising the Option following termination of the Optionee’sService as described in Section 7, or (c) a Change in Control to the extent provided in Section 8. 

7. ***EFFECT OF TERMINATION OFSERVICE***. 

7.1 **Option Exercisability.**

(a) ***Disability*****.** If the Optionee’s Service with the Participating Company Group terminates because of the Disability of the Optionee, the Option, to the extent unexercised and exercisable on the date on which theOptionee’s Service terminated, may be exercised by the Optionee (or the Optionee’s guardian or legal representative) at any time prior to the expiration of twelve (12) months after the date on which the Optionee’s Serviceterminated, but in any event no later than the Option Expiration Date. 

(b) ***Death*****.** If the Optionee’s Service withthe Participating Company Group terminates because of the death of the Optionee, the Option, to the extent unexercised and exercisable on the date on which the Optionee’s Service terminated, may be exercised by the Optionee’s legalrepresentative or other person who acquired the right to exercise the Option by reason of the Optionee’s death at any time prior to the expiration of twelve (12) months after the date on which the Optionee’s Service terminated, but inany event no later than the Option Expiration Date. The Optionee’s Service shall be deemed to have terminated on account of death if the Optionee dies within three (3) months after the Optionee’s termination of Service. 

(c) ***Termination After Change in Control***. If the Optionee’s Service ceases as aresult of Termination After Change in Control (as defined in 7.4(a) below), (i) the Option, to the extent unexercised and exercisable on the date on which the Optionee’s Service terminated, may be exercised by the Optionee (or theOptionee’s guardian or legal representative) at any time prior to the expiration of six (6) months after the date on which the Optionee’s Service terminated, but in any event no later than the Option Expiration Date, and (ii) theOption shall become immediately vested and exercisable in full and the Vested Ratio shall be deemed to be 1/1 as of the date on which theOptionee’s Service terminated. 

(d) ***Other Termination of Service*****.** If the Optionee’s Service with theParticipating Company Group terminates for any reason, except Disability, death or Termination After Change in Control, the Option, to the extent unexercised and exercisable by the Optionee on the date on which the Optionee’s Serviceterminated, may be exercised by the Optionee at any time prior to the expiration of three (3) months (or such other longer period of time as determined by the Board, in its discretion) after the date on which the Optionee’s Serviceterminated, but in any event no later than the Option Expiration Date. 

7.2 **Extension if Exercise Prevented by Law*****.*** Notwithstandingthe foregoing, if the exercise of the Option within the applicable time periods set forth in Section 7.1 is prevented by the provisions of Section 4.6, the Option shall remain exercisable until three (3) months after the date theOptionee is notified by the Company that the Option is exercisable, but in any event no later than the Option Expiration Date. 

7.3 **Extension ifOptionee Subject to Section 16(b).** Notwithstanding the foregoing, if a sale within the applicable time periods set forth in Section 7.1 of shares acquired upon the exercise of the Option would subject the Optionee to suit underSection 16(b) of the Exchange Act, the Option shall remain exercisable until the earliest to occur of (i) the tenth (10th) day following the date on which a sale of such shares by the Optionee would no longer be subject to such suit,(ii) the one hundred and ninetieth (190th) day after the Optionee’s termination of Service, or (iii) the Option Expiration Date. 

 

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7.4 **Certain Definitions.**

(a) *“****Termination After Change in Control****”* shall mean either of the following events occurring within twenty-four (24) months after a Change in Control: 

(i) termination by the Participating Company Group of the Optionee’s Service with the Participating Company Group for any reason other than for Cause(as defined in 7.4(b) below); or 

(ii) the Optionee’s resignation for Good Reason (as defined in 7.4(c) below) from all capacities inwhich the Optionee is then rendering Service to the Participating Company Group within a reasonable period of time following the event constituting Good Reason. 

Notwithstanding any provision herein to the contrary, Termination After Change in Control shall not include any termination of the Optionee’s Service with the Participating Company Group which (1) is for Cause (as defined below);(2) is a result of the Optionee’s death or disability; (3) is a result of the Optionee’s voluntary termination of Service other than for Good Reason; or (4) occurs prior to the effectiveness of a Change in Control.

(b) *“****Cause****”* shall mean any of the following: (i) the Optionee’s theft, dishonesty, orfalsification of any Participating Company documents or records; (ii) the Optionee’s improper use or disclosure of a Participating Company’s confidential or proprietary information; (iii) any action by the Optionee which has adetrimental effect on a Participating Company’s reputation or business; (iv) the Optionee’s failure or inability to perform adequately any reasonable assigned duties as determined by a Participating Company; (v) any violation bythe Optionee of any material agreement between the Optionee and a Participating Company, which breach is not cured pursuant to the terms of such agreement or any breach of any material statutory duty to a Participating Company; or (vi) theOptionee’s conviction (including any plea of guilty or nolo contendere) of any felony or crime involving moral turpitude or dishonesty. 

(c) *“****Good Reason****”* shall mean any one or more of the following: 

(i) without theOptionee’s express written consent, the relocation of the principal place of the Optionee’s Service to a location that is more than fifty (50) miles from the Optionee’s principal place of Service immediately prior to the date ofthe Change in Control; 

(ii) any failure by the Participating Company Group to pay, or any reduction by the Participating Company Group ofthe Optionee’s base salary in effect immediately prior to the date of the Change in Control; or 

(iii) any failure by the ParticipatingCompany Group to (1) continue to provide to the Optionee a package of welfare benefit plans, including, but not limited to, the Participating Company Group’s life, disability, health, dental, medical, savings, profit sharing and retirementplans, that, taken as a whole, provide substantially similar benefits to those to which the Optionee was entitled immediately prior to the Change 

 

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in Control (except that the Optionee’s contributions may be increased to the extent of any cost increases imposed by third parties) or (2) providethe Optionee with all other fringe benefits (or their equivalent) from time to time in effect for the benefit of any employee of the Participating Company Group. 

8. ***CHANGE IN CONTROL***. 

(a) In the event of a Change in Control, the surviving, continuing, successor, or purchasingcorporation or other business entity or parent thereof, as the case may be (the ***“Acquiring Corporation”***), may, without the consent of the Optionee, either assume the Company’s rights and obligations under the Option orsubstitute for the Option a substantially equivalent option for the Acquiring Corporation’s stock. In the event of such assumption or substitution, the vesting schedule set forth in the Notice shall accelerate by one full year. The vestingschedule shall be adjusted as follows: 

(i) if the Change of Control occurs prior to the Initial Vesting Date, the Initial Vesting Dateshall remain unchanged; however, thereafter the daily vesting shall be adjusted so that the remaining 75% of the Stock shall vest daily in 730 equal increments for the two-year period immediately following the Initial Vesting Date, provided that theOptionee provides continuous Service to the Acquiring Corporation or any Participating Company, and the Vested Ratio shall be calculated accordingly; 

(ii) if the Change of Control occurs on or after the Initial Vesting Date, all Option Shares vested as of the date of the Change of Control shall remain Vested Shares and, in lieu of the daily vesting schedule thatwould otherwise be applicable, all shares that were not vested at the time of the Change of Control will vest daily in equal increments from the date of the Change of Control through the date two years after the Initial Vesting Date, provided thatthe Optionee provides continuous Service to the Acquiring Corporation or any Participating Company, and the Vested Ratio shall be calculated accordingly. Notwithstanding the foregoing, if the Change of Control occurs after the third anniversary ofthe Initial Vesting Date, then all remaining Option Shares that had not yet vested shall vest at the time of the Change of Control. 

(b) In the event the Acquiring Corporation elects not to assume the Company’s rights andobligations under the Option or substitute for the Option in connection with the Change in Control, and provided that the Optionee’s Service has not terminated prior to such date, the Vested Ratio shall be deemed to be 1/1 and all shares acquired upon exercise of the Option shall be Vested Shares as of the date ten (10) days prior to the date of the Change in Control. Anyvesting of the Option that was permissible solely by reason of this Section 8 shall be conditioned upon the consummation of the Change in Control. The Option shall terminate and cease to be outstanding effective as of the date of the Change inControl to the extent that the Option is neither assumed or substituted for by the Acquiring Corporation in connection with the Change in Control nor exercised as of the date of the Change in Control. Notwithstanding the foregoing, shares acquiredupon exercise of the Option prior to the Change in Control and any consideration received pursuant to the Change in Control with respect to such shares shall continue to be subject to all applicable provisions of this Option Agreement except asotherwise provided herein. Furthermore, notwithstanding the foregoing, if the corporation the stock of which is subject to the Option immediately prior to an Ownership Change Event described in Section 12.1(a)(i) of the Plan constituting aChange in Control is the surviving or continuing corporation and immediately after such Ownership Change Event less than fifty percent (50%) of the total combined voting 

 

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power of its voting stock is held by another corporation or by other corporations that are members of an affiliated group within the meaning ofSection 1504(a) of the Code without regard to the provisions of Section 1504(b) of the Code, the Option shall not terminate unless the Board otherwise provides in its discretion. 

9. ***ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE***. 

In theevent of any stock dividend, stock split, reverse stock split, recapitalization, combination, reclassification, or similar change in the capital structure of the Company, appropriate adjustments shall be made in the number, Exercise Price and classof shares of stock subject to the Option. If a majority of the shares which are of the same class as the shares that are subject to the Option are exchanged for, converted into, or otherwise become (whether or not pursuant to an Ownership ChangeEvent) shares of another corporation (the *“****New Shares****”*), the Board may unilaterally amend the Option to provide that the Option is exercisable for New Shares. In the event of any such amendment, the Number ofOption Shares and the Exercise Price shall be adjusted in a fair and equitable manner, as determined by the Board, in its discretion. Notwithstanding the foregoing, any fractional share resulting from an adjustment pursuant to this Section 9shall be rounded down to the nearest whole number, and in no event may the Exercise Price be decreased to an amount less than the par value, if any, of the stock subject to the Option. The adjustments determined by the Board pursuant to thisSection 9 shall be final, binding and conclusive. 

10. ***RIGHTS AS A STOCKHOLDER, EMPLOYEE OR CONSULTANT***. 

The Optionee shall have no rights as a stockholder with respect to any shares covered by the Option until the date of the issuance of a certificate for the shares forwhich the Option has been exercised (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which therecord date is prior to the date such certificate is issued, except as provided in Section 9. If the Optionee is an Employee, the Optionee understands and acknowledges that, except as otherwise provided in a separate, written employmentagreement between a Participating Company and the Optionee, the Optionee’s employment is “at will” and is for no specified term. Nothing in this Option Agreement shall confer upon the Optionee any right to continue in the Service of aParticipating Company or interfere in any way with any right of the Participating Company Group to terminate the Optionee’s Service as an Employee or Consultant, as the case may be, at any time. 

11. ***NOTICE OF SALES UPON DISQUALIFYING DISPOSITION***. 

TheOptionee shall dispose of the shares acquired pursuant to the Option only in accordance with the provisions of this Option Agreement. 

12.***LEGENDS***. 

The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on allcertificates representing shares of stock subject to the provisions of this Option Agreement. The Optionee shall, at the request of the Company, promptly present to the Company any and all certificates representing shares acquired pursuant to theOption in the possession of the Optionee in order to carry out the provisions of this Section. 

 

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13. ***LOCK-UP AGREEMENT***. 

The Optionee hereby agrees that in the event of any underwritten public offering of stock, including an initial public offering of stock, made by the Company pursuant to an effective registration statement filed underthe Securities Act, the Optionee shall not offer, sell, contract to sell, pledge, hypothecate, grant any option to purchase or make any short sale of, or otherwise dispose of any shares of stock of the Company or any rights to acquire stock of theCompany for such period of time from and after the effective date of such registration statement as may be established by the underwriter for such public offering; provided, however, that such period of time shall not exceed one hundred eighty(180) days from the effective date of the registration statement to be filed in connection with such public offering. The foregoing limitation shall not apply to shares registered in the public offering under the Securities Act. 

14. ***RESTRICTIONS ON TRANSFER OF SHARES***. 

No shares acquiredupon exercise of the Option may be sold, exchanged, transferred (including, without limitation, any transfer to a nominee or agent of the Optionee), assigned, pledged, hypothecated or otherwise disposed of, including by operation of law, in anymanner which violates any of the provisions of this Option Agreement, and any such attempted disposition shall be void. The Company shall not be required (a) to transfer on its books any shares which will have been transferred in violation ofany of the provisions set forth in this Option Agreement or (b) to treat as owner of such shares or to accord the right to vote as such owner or to pay dividends to any transferee to whom such shares will have been so transferred. 

15. ***MISCELLANEOUS PROVISIONS***. 

15.1 **Binding Effect.**Subject to the restrictions on transfer set forth herein, this Option Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns. 

15.2 **Termination or Amendment.** The Board may terminate or amend the Plan or the Option at any time; provided, however, that except as provided in Section 8in connection with a Change in Control, no such termination or amendment may adversely affect the Option or any unexercised portion hereof without the consent of the Optionee unless such termination or amendment is necessary to comply with anyapplicable law or government regulation. No amendment or addition to this Option Agreement shall be effective unless in writing. 

15.3 **Notices.** Anynotice required or permitted hereunder shall be given in writing and shall be deemed effectively given (except to the extent that this Option Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery orupon deposit in the United States Post Office, by registered or certified mail, with postage and fees prepaid, addressed to the other party at the address shown below that party’s signature on the Notice or at such other address as such partymay designate in writing from time to time to the other party. 

15.4 **Integrated Agreement.** The Notice, this Option Agreement and the Plan constitutethe entire understanding and agreement of the Optionee and the Participating Company Group with respect to the subject matter contained herein or therein and supersedes any prior agreements, understandings, restrictions, representations, orwarranties among the Optionee and the Participating Company Group with respect to such subject matter other than those as set forth or provided for herein or therein. To the extent contemplated herein or therein, the provisions of the Notice and theOption Agreement shall survive any exercise of the Option and shall remain in full force and effect. 

15.5 **Applicable Law.** This Option Agreementshall be governed by the laws of the State of California as such laws are applied to agreements between California residents entered into and to be performed entirely within the State of California. 

15.6 **Counterparts.** The Notice may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and thesame instrument. 

 

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