exv10w67



 






Exhibit 10.67




INFOMMERSION, INC.




AMENDMENT NO. 1




TO




2002 STOCK INCENTIVE PLAN




     1. Purposes of the Plan. The purposes of this Stock Incentive Plan are to attract and
retain the best available personnel, to provide additional incentive to Employees, Directors and
Consultants and to promote the success of the Company’s business.



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



          (a) “Administrator” means the Board or any of the Committees appointed to administer
the Plan.




          (b) “Affiliate” and “Associate” shall have the respective meanings ascribed to
such terms in Rule 12b-2 promulgated under the Exchange Act.




          (c) “Applicable Laws” means the legal requirements relating to the administration of
stock incentive plans, if any, under applicable provisions of federal and state securities laws,
the corporate laws of California and, to the extent other than California, the corporate law of the
state of the Company’s incorporation, the Code, the rules of any applicable stock exchange or
national market system, and the rules of any foreign jurisdiction applicable to Awards granted to
residents therein.




          (d) “Assumed” means that (i) pursuant to a Corporate Transaction defined in Section
2(q)(i), 2(q)(ii) or 2(q)(iii) or a Related Entity Disposition, the contractual obligations
represented by the Award are assumed by the successor entity or its Parent in connection with the
Corporate Transaction or Related Entity Disposition or (ii) pursuant to a Corporate Transaction
defined in Section 2(q)(iv) or 2(q)(v), the Award is affirmed by the Company. The Award shall not
be deemed “Assumed” for purposes of terminating the Award (in the case of a Corporate Transaction)
and the termination of the Continuous Service of the Grantee (in the case of a Related Entity
Disposition) if pursuant to a Corporate Transaction or a Related Entity Disposition the Award is
replaced with a comparable award with respect to shares of capital stock of the successor entity or
its Parent. However, for purposes of determining whether the vesting of the Award accelerates, the
Award shall be deemed “Assumed” if the Award is replaced with such a comparable stock award or the
Award is replaced with a cash incentive program of the successor entity or Parent thereof which
preserves the compensation element of such Award existing at the time of the Corporate Transaction
or Related Entity Disposition and provides for subsequent payout in accordance with the same
vesting schedule applicable to such Award. The determination of Award comparability shall be made
by the Administrator and its determination shall be final, binding and conclusive.




          (e) “Award” means the grant of an Option, Restricted Stock, or other right or benefit
under the Plan.




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          (f) “Award Agreement” means the written agreement evidencing the grant of an Award
executed by the Company and the Grantee, including any amendments thereto.




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




          (h) “Cause” means, with respect to the termination by the Company or a Related Entity
of the Grantee’s Continuous Service, that such termination is for “Cause” as such term is expressly
defined in a then-effective written agreement between the Grantee and the Company or such Related
Entity, or in the absence of such then-effective written agreement and definition, is based on, in
the determination of the Administrator, the Grantee’s: (i) performance of any act or failure to
perform any act in bad faith and to the detriment of the Company or a Related Entity; (ii)
dishonesty, intentional misconduct or material breach of any agreement with the Company or a
Related Entity; or (iii) commission of a crime involving dishonesty, breach of trust, or physical
or emotional harm to any person.




          (i) “Change in Control” means a change in ownership or control of the Company after
the Registration Date effected through either of the following transactions:




          (i) the direct or indirect acquisition by any person or related group of persons (other than
an acquisition from or by the Company or by a Company-sponsored employee benefit plan or by a
person that directly or indirectly controls, is controlled by, or is under common control with, the
Company) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of
securities possessing more than fifty percent (50%) of the total combined voting power of the
Company’s outstanding securities pursuant to a tender or exchange offer made directly to the
Company’s shareholders which a majority of the Continuing Directors who are not Affiliates or
Associates of the offeror do not recommend such shareholders accept, or



          (ii) a change in the composition of the Board over a period of thirty-six (36) months or less
such that a majority of the Board members (rounded up to the next whole number) ceases, by reason
of one or more contested elections for Board membership, to be comprised of individuals who are
Continuing Directors.



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




          (k) “Committee” means any committee appointed by the Board to administer the Plan.




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




          (m) “Company” means Infommersion, Inc., a Delaware corporation.




          (n) “Consultant” means any person (other than an Employee or a Director, solely with
respect to rendering services in such person’s capacity as a Director) who is engaged by the
Company or any Related Entity to render consulting or advisory services to the Company or such
Related Entity.




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          (o) “Continuing Directors” means members of the Board who either (i) have been Board
members continuously for a period of at least thirty-six (36) months or (ii) have been Board
members for less than thirty-six (36) months and were elected or nominated for election as Board
members by at least a majority of the Board members described in clause (i) who were still in
office at the time such election or nomination was approved by the Board.




          (p) “Continuous Service” means that the provision of services to the Company or a
Related Entity in any capacity of Employee, Director or Consultant, is not interrupted or
terminated. Continuous Service shall not be considered interrupted in the case of (i) any approved
leave of absence, (ii) transfers among the Company, any Related Entity, or any successor, in any
capacity of Employee, Director or Consultant, or (iii) any change in status as long as the
individual remains in the service of the Company or a Related Entity in any capacity of Employee,
Director or Consultant (except as otherwise provided in the Award Agreement). An approved leave of
absence shall include sick leave, military leave, or any other authorized personal leave. For
purposes of each Incentive Stock Option granted under the Plan, if such leave exceeds ninety (90)
days, and reemployment upon expiration of such leave is not guaranteed by statute or contract, then
the Incentive Stock Option shall be treated as a Non-Qualified Stock Option on the day three (3)
months and one (1) day following the expiration of such ninety (90) day period.




          (q) “Corporate Transaction” means any of the following transactions:




          (i) a merger or consolidation in which the Company is not the surviving entity, except for a
transaction the principal purpose of which is to change the state in which the Company is
incorporated;



          (ii) the sale, transfer or other disposition of all or substantially all of the assets of the
Company (including the capital stock of the Company’s subsidiary corporations);



          (iii) the complete liquidation or dissolution of the Company;



          (iv) any reverse merger in which the Company is the surviving entity but in which securities
possessing more than fifty percent (50%) of the total combined voting power of the Company’s
outstanding securities are transferred to a person or persons different from those who held such
securities immediately prior to such merger; or



          (v) acquisition in a single or series of related transactions by any person or related group
of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial
ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than
fifty percent (50%) of the total combined voting power of the Company’s outstanding securities but
excluding any such transaction or series of related transactions that the Administrator determines
shall not be a Corporate Transaction.



          (r) “Covered Employee” means an Employee who is a “covered employee” under Section
162(m)(3) of the Code.




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          (s) “Director” means a member of the Board or the board of directors of any Related
Entity.




          (t) “Disability” means as defined under the long-term disability policy of the Company
or the Related Entity to which the Grantee provides services regardless of whether the Grantee is
covered by such policy. If the Company or the Related Entity to which the Grantee provides service
does not have a long-term disability plan in place, “Disability” means that a Grantee is unable to
carry out the responsibilities and functions of the position held by the Grantee by reason of any
medically determinable physical or mental impairment for a period of not less than ninety (90)
consecutive days. A Grantee will not be considered to have incurred a Disability unless he or she
furnishes proof of such impairment sufficient to satisfy the Administrator in its discretion.




          (u) “Employee” means any person, including an Officer or Director, who is in the
employ of the Company or any Related Entity, subject to the control and direction of the Company or
any Related Entity as to both the work to be performed and the manner and method of performance.
The payment of a director’s fee by the Company or a Related Entity shall not be sufficient to
constitute “employment” by the Company.




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




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




              (i) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation The Nasdaq National Market or The Nasdaq SmallCap Market of
The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or
the closing bid, if no sales were reported) as quoted on such exchange or system on the date of
determination (or, if no closing sales price or closing bid was reported on that date, as
applicable, on the last trading date such closing sales price or closing bid was reported), as
reported in The Wall Street Journal or such other source as the Administrator deems reliable;



              (ii) If the Common Stock is regularly quoted on an automated quotation system (including the
OTC Bulletin Board) or by a recognized securities dealer, but selling prices are not reported, the
Fair Market Value of a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on date of determination (or, if no such prices were reported on that
date, on the last date such prices were reported), as reported in The Wall Street Journal or such
other source as the Administrator deems reliable; or



              (iii) In the absence of an established market for the Common Stock of the type described in
(i) and (ii), above, the Fair Market Value thereof shall be determined by the Administrator in good
faith and in a manner consistent with Section 260.140.50 of Title 10 of the California Code of
Regulations which requires that consideration be given to (A) the price at which securities of
reasonably comparable corporations (if any) in the same industry are being traded, or (B) if there
are no securities of reasonably comparable corporations in the same



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industry being traded, the earnings history, book value and prospects of the issuer in light
of market conditions generally.




          (x) “Grantee” means an Employee, Director or Consultant who receives an Award under
the Plan.




          (y) “Immediate Family” means any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in
law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any
person sharing the Grantee’s household (other than a tenant or employee), a trust in which these
persons (or the Grantee) have more than fifty percent (50%) of the beneficial interest, a
foundation in which these persons (or the Grantee) control the management of assets, and any other
entity in which these persons (or the Grantee) own more than fifty percent (50%) of the voting
interests; notwithstanding the foregoing, in the case of any inconsistency, and only during such
period or periods of inconsistency, the term “Immediate Family” shall be defined in a manner
consistent with Section 260.140.41 of Title 10 of the California Code of Regulations, as amended
from time to time.




          (z) “Incentive Stock Option” means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code.




          (aa) “Non-Qualified Stock Option” means an Option not intended to qualify as an
Incentive Stock Option.




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




          (cc) “Option” means an option to purchase Shares pursuant to an Award Agreement
granted under the Plan.




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




          (ee) “Performance-Based Compensation” means compensation qualifying as
“performance-based compensation” under Section 162(m) of the Code.




          (ff) “Plan” means this 2002 Stock Incentive Plan.




          (gg) “Post-Termination Exercise Period” means the period specified in the Award
Agreement of not less than thirty (30) days commencing on the date of termination (other than
termination by the Company or any Related Entity for Cause) of the Grantee’s Continuous Service, or
such longer period as may be applicable upon death or Disability.




          (hh) “Registration Date” means the first to occur of (i) the closing of the first sale
to the general public pursuant to a registration statement filed with and declared effective by the
Securities and Exchange Commission under the Securities Act of 1933, as amended, of (A) the Common
Stock or (B) the same class of securities of a successor corporation (or its






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Parent) issued pursuant to a Corporate Transaction in exchange for or in substitution of the
Common Stock; and (ii) in the event of a Corporate Transaction, the date of the consummation of the
Corporate Transaction if the same class of securities of the successor corporation (or its Parent)
issuable in such Corporate Transaction shall have been sold to the general public pursuant to a
registration statement filed with and declared effective by the Securities and Exchange Commission
under the Securities Act of 1933, as amended, on or prior to the date of consummation of such
Corporate Transaction.




          (ii) “Related Entity” means any Parent or Subsidiary of the Company and any business,
corporation, partnership, limited liability company or other entity in which the Company or a
Parent or a Subsidiary of the Company holds a substantial ownership interest, directly or
indirectly.




          (jj) “Related Entity Disposition” means the sale, distribution or other disposition by
the Company or a Parent or a Subsidiary of the Company of all or substantially all of the interests
of the Company or a Parent or a Subsidiary of the Company in any Related Entity effected by a sale,
merger or consolidation or other transaction involving that Related Entity or the sale of all or
substantially all of the assets of that Related Entity, other than any Related Entity Disposition
to the Company or a Parent or a Subsidiary of the Company.




          (kk) “Restricted Stock” means Shares issued under the Plan to the Grantee for such
consideration, if any, and subject to such restrictions on transfer, rights of first refusal,
repurchase provisions, forfeiture provisions, and other terms and conditions as established by the
Administrator.




          (ll) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor
thereto.




          (mm) “Share” means a share of the Common Stock.




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




     3. Stock Subject to the Plan.



          (a) Subject to the provisions of Section 10 below, the maximum aggregate number of Shares
which may be issued pursuant to all Awards (including Incentive Stock Options) is One Million
(1,000,000) Shares. The Shares may be authorized, but unissued, or reacquired Common Stock.




          (b) Any Shares covered by an Award (or portion of an Award) which is forfeited or canceled,
expires or is settled in cash, shall be deemed not to have been issued for purposes of determining
the maximum aggregate number of Shares which may be issued under the Plan. Shares that actually
have been issued under the Plan pursuant to an Award shall not be returned to the Plan and shall
not become available for future issuance under the Plan, except that if unvested Shares are
forfeited, or repurchased by the Company at their original purchase price, such Shares shall become
available for future grant under the Plan.




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     4. Administration of the Plan.



          (a) Plan Administrator.




          (i) Administration with Respect to Directors and Officers. Prior to the Registration
Date, with respect to grants of Awards to Directors or Employees who are also Officers or Directors
of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated by
the Board, which Committee shall be constituted in such a manner as to satisfy the Applicable Laws.
On or after the Registration Date, with respect to grants of Awards to Directors or Employees who
are also Officers or Directors of the Company, the Plan shall be administered by (A) the Board or
(B) a Committee designated by the Board, which Committee shall be constituted in such a manner as
to satisfy the Applicable Laws and to permit such grants and related transactions under the Plan to
be exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3. Once appointed,
such Committee shall continue to serve in its designated capacity until otherwise directed by the
Board.



          (ii) Administration With Respect to Consultants and Other Employees. With respect to
grants of Awards to Employees or Consultants who are neither Directors nor Officers of the Company,
the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board, which
Committee shall be constituted in such a manner as to satisfy the Applicable Laws. Once appointed,
such Committee shall continue to serve in its designated capacity until otherwise directed by the
Board.



          (iii) Administration With Respect to Covered Employees. Notwithstanding the
foregoing, as of and after the date that the exemption for the Plan under Section 162(m) of the
Code expires, as set forth in Section 20 herein, grants of Awards to any Covered Employee intended
to qualify as Performance-Based Compensation shall be made only by a Committee (or subcommittee of
a Committee) which is comprised solely of two or more Directors eligible to serve on a committee
making Awards qualifying as Performance-Based Compensation. In the case of such Awards granted to
Covered Employees, references to the “Administrator” or to a “Committee” shall be deemed to be
references to such Committee or subcommittee.



          (b) Multiple Administrative Bodies. The Plan may be administered by different bodies
with respect to Directors, Officers, Consultants, and Employees who are neither Directors nor
Officers.




          (c) Powers of the Administrator. Subject to Applicable Laws and the provisions of the
Plan (including any other powers given to the Administrator hereunder), and except as otherwise
provided by the Board, the Administrator shall have the authority, in its discretion:




              (i) to select the Employees, Directors and Consultants to whom Awards may be granted from time
to time hereunder;



              (ii) to determine whether and to what extent Awards are granted hereunder;



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              (iii) to determine the number of Shares or the amount of other consideration to be covered by
each Award granted hereunder;



              (iv) to approve forms of Award Agreements for use under the Plan;



              (v) to determine the terms and conditions of any Award granted hereunder;



              (vi) to establish additional terms, conditions, rules or procedures to accommodate the rules
or laws of applicable foreign jurisdictions and to afford Grantees favorable treatment under such
rules or laws; provided, however, that no Award shall be granted under any such additional terms,
conditions, rules or procedures with terms or conditions which are inconsistent with the provisions
of the Plan;



              (vii) to amend the terms of any outstanding Award granted under the Plan, provided that any
amendment that would adversely affect the Grantee’s rights under an outstanding Award shall not be
made without the Grantee’s written consent;



              (viii) to construe and interpret the terms of the Plan and Awards, including without
limitation, any notice of award or Award Agreement, granted pursuant to the Plan; and



              (ix) to take such other action, not inconsistent with the terms of the Plan, as the
Administrator deems appropriate.



     5. Eligibility. Awards other than Incentive Stock Options may be granted to
Employees, Directors and Consultants. Incentive Stock Options may be granted only to Employees of
the Company, a Parent or a Subsidiary. An Employee, Director or Consultant who has been granted an
Award may, if otherwise eligible, be granted additional Awards. Awards may be granted to such
Employees, Directors or Consultants who are residing in foreign jurisdictions as the Administrator
may determine from time to time.



     6. Terms and Conditions of Awards.



          (a) Type of Awards. The Administrator is authorized under the Plan to award any type
of arrangement to an Employee, Director or Consultant that is not inconsistent with the provisions
of the Plan and that by its terms involves or might involve the issuance of (i) Shares, (ii) an
Option, or similar right with a fixed or variable price related to the Fair Market Value of the
Shares and with an exercise or conversion privilege related to the passage of time, the occurrence
of one or more events, or the satisfaction of performance criteria or other conditions, or (iii)
any other security with the value derived from the value of the Shares. Such awards include,
without limitation, Options, or sales or bonuses of Restricted Stock, and an Award may consist of
one such security or benefit, or two (2) or more of them in any combination or alternative.




          (b) Designation of Award. Each Award shall be designated in the Award Agreement. In
the case of an Option, the Option shall be designated as either an Incentive Stock Option or a
Non-Qualified Stock Option. However, notwithstanding such designation, to the


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extent that the aggregate Fair Market Value of Shares subject to Options designated as
Incentive Stock Options which become exercisable for the first time by a Grantee during any
calendar year (under all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such
excess Options, to the extent of the Shares covered thereby in excess of the foregoing limitation,
shall be treated as Non-Qualified Stock Options. For this purpose, Incentive Stock Options shall
be taken into account in the order in which they were granted, and the Fair Market Value of the
Shares shall be determined as of the grant date of the relevant Option.




          (c) Conditions of Award. Subject to the terms of the Plan, the Administrator shall
determine the provisions, terms, and conditions of each Award including, but not limited to, the
Award vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions, form
of payment (cash, Shares, or other consideration) upon settlement of the Award, payment
contingencies, and satisfaction of any performance criteria. The performance criteria established
by the Administrator may be based on any one of, or combination of, increase in share price,
earnings per share, total shareholder return, return on equity, return on assets, return on
investment, net operating income, cash flow, revenue, economic value added, personal management
objectives, or other measure of performance selected by the Administrator. Partial achievement of
the specified criteria may result in a payment or vesting corresponding to the degree of
achievement as specified in the Award Agreement.




          (d) Acquisitions and Other Transactions. The Administrator may issue Awards under the
Plan in settlement, assumption or substitution for, outstanding awards or obligations to grant
future awards in connection with the Company or a Related Entity acquiring another entity, an
interest in another entity or an additional interest in a Related Entity whether by merger, stock
purchase, asset purchase or other form of transaction.




          (e) Deferral of Award Payment. The Administrator may establish one or more programs
under the Plan to permit selected Grantees the opportunity to elect to defer receipt of
consideration upon exercise of an Award, satisfaction of performance criteria, or other event that
absent the election would entitle the Grantee to payment or receipt of Shares or other
consideration under an Award (but only to the extent that such deferral programs would not result
in an accounting compensation charge unless otherwise determined by the Administrator). The
Administrator may establish the election procedures, the timing of such elections, the mechanisms
for payments of, and accrual of interest or other earnings, if any, on amounts, Shares or other
consideration so deferred, and such other terms, conditions, rules and procedures that the
Administrator deems advisable for the administration of any such deferral program.




          (f) Separate Programs. The Administrator may establish one or more separate programs
under the Plan for the purpose of issuing particular forms of Awards to one or more classes of
Grantees on such terms and conditions as determined by the Administrator from time to time.




          (g) Individual Option Limit. Following the date that the exemption from application
of Section 162(m) of the Code described in Section 20 (or any exemption having similar effect)
ceases to apply to Awards, the maximum number of Shares with respect to which Options may be
granted to any Grantee in any fiscal year of the Company shall be Two Hundred Fifty Thousand
(250,000) Shares. In connection with a Grantee’s commencement of Continuous


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Service, a Grantee may be granted Options for up to an additional Two Hundred Fifty Thousand
(250,000) Shares which shall not count against the limit set forth in the previous sentence. The
foregoing limitations shall be adjusted proportionately in connection with any change in the
Company’s capitalization pursuant to Section 10, below. To the extent required by Section 162(m)
of the Code or the regulations thereunder, in applying the foregoing limitations with respect to a
Grantee, if any Option is canceled, the canceled Option shall continue to count against the maximum
number of Shares with respect to which Options may be granted to the Grantee. For this purpose,
the repricing of an Option shall be treated as the cancellation of the existing Option and the
grant of a new Option.




          (h) Early Exercise. The Award Agreement may, but need not, include a provision
whereby the Grantee may elect at any time while an Employee, Director or Consultant to exercise any
part or all of the Award prior to full vesting of the Award. Any unvested Shares received pursuant
to such exercise may be subject to a repurchase right in favor of the Company or a Related Entity
or to any other restriction the Administrator determines to be appropriate.




          (i) Term of Award. The term of each Award shall be the term stated in the Award
Agreement, provided, however, that the term shall be no more than ten (10) years from the date of
grant thereof. However, in the case of an Incentive Stock Option granted to a Grantee who, at the
time the Option is granted, owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock
Option shall be five (5) years from the date of grant thereof or such shorter term as may be
provided in the Award Agreement.




          (j) Transferability of Awards. Non-Qualified Stock Options shall be transferable (i)
by will, by the laws of descent and distribution, by instrument to an inter vivos or testamentary
trust in which the Non-Qualified Stock Options are to be passed to beneficiaries upon the death of
the Grantee or (ii) to the extent and in the manner authorized by the Administrator by gift to
members of the Grantee’s Immediate Family. Incentive Stock Options and other Awards may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will
or by the laws of descent or distribution and may be exercised, during the lifetime of the Grantee,
only by the Grantee.




          (k) Time of Granting Awards. The date of grant of an Award shall for all purposes be
the date on which the Administrator makes the determination to grant such Award, or such other date
as is determined by the Administrator. Notice of the grant determination shall be given to each
Employee, Director or Consultant to whom an Award is so granted within a reasonable time after the
date of such grant.




     7. Award Exercise or Purchase Price, Consideration and Taxes.



          (a) Exercise or Purchase Price. The exercise or purchase price, if any, for an Award
shall be as follows:




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          (i) In the case of an Incentive Stock Option:



              (A) granted to an Employee who, at the time of the grant of such Incentive Stock Option owns
stock representing more than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the per Share exercise price shall be not less than one
hundred ten percent (110%) of the Fair Market Value per Share on the date of grant; or



              (B) granted to any Employee other than an Employee described in the preceding paragraph, the
per Share exercise price shall be not less than one hundred percent (100%) of the Fair Market Value
per Share on the date of grant.



          (ii) In the case of a Non-Qualified Stock Option:



              (A) granted to a person who, at the time of the grant of such Option, owns stock representing
more than ten percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be not less than one hundred ten percent
(110%) of the Fair Market Value per Share on the date of grant; or



              (B) granted to any person other than a person described in the preceding paragraph, the per
Share exercise price shall be not less than eighty-five percent (85%) of the Fair Market Value per
Share on the date of grant.



          (iii) In the case of Awards intended to qualify as Performance-Based Compensation, the
exercise or purchase price, if any, shall be not less than one hundred percent (100%) of the Fair
Market Value per Share on the date of grant.



          (iv) In the case of the sale of Shares:



              (A) granted to a person who, at the time of the grant of such Award, or at the time the
purchase is consummated, owns stock representing more than ten percent (10%) of the voting power of
all classes of stock of the Company or any Parent or Subsidiary, the per Share purchase price shall
be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of
grant; or



              (B) granted to any person other than a person described in the preceding paragraph, the per
Share purchase price shall be not less than eighty-five percent (85%) of the Fair Market Value per
Share on the date of grant.



          (v) In the case of other Awards, such price as is determined by the Administrator.



          (vi) Notwithstanding the foregoing provisions of this Section 7(a), in the case of an Award
issued pursuant to Section 6(d), above, the exercise or purchase price for the Award shall be
determined in accordance with the principles of Section 424(a) of the Code.



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          (b) Consideration. Subject to Applicable Laws, the consideration to be paid for the
Shares to be issued upon exercise or purchase of an Award including the method of payment, shall be
determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined
at the time of grant). In addition to any other types of consideration the Administrator may
determine, the Administrator is authorized to accept as consideration for Shares issued under the
Plan the following, provided that the portion of the consideration equal to the par value of the
Shares must be paid in cash or other legal consideration permitted by the Delaware General
Corporation Law.




              (i) cash;



              (ii) check;



              (iii) delivery of Grantee’s promissory note with such recourse, interest, security, and
redemption provisions as the Administrator determines as appropriate (but only to the extent that
the terms of the promissory note would not result in an accounting compensation charge with respect
to the use of such promissory note to pay the exercise price unless otherwise determined by the
Administrator);



              (iv) if the exercise or purchase occurs on or after the Registration Date, surrender of Shares
or delivery of a properly executed form of attestation of ownership of Shares as the Administrator
may require which have a Fair Market Value on the date of surrender or attestation equal to the
aggregate exercise price of the Shares as to which said Award shall be exercised (but only to the
extent that such exercise of the Award would not result in an accounting compensation charge with
respect to the Shares used to pay the exercise price unless otherwise determined by the
Administrator; generally an accounting charge will result if the Shares used to pay the exercise
price were acquired less than six months before the exercise);



              (v) with respect to Options, if the exercise occurs on or after the Registration Date, payment
through a broker-dealer sale and remittance procedure pursuant to which the Grantee (A) shall
provide written instructions to a Company designated brokerage firm to effect the immediate sale of
some or all of the purchased Shares and remit to the Company, out of the sale proceeds available on
the settlement date, sufficient funds to cover the aggregate exercise price payable for the
purchased Shares and (B) shall provide written directives to the Company to deliver the
certificates for the purchased Shares directly to such brokerage firm in order to complete the sale
transaction; or



              (vi) any combination of the foregoing methods of payment.



          (c) Taxes. No Shares shall be delivered under the Plan to any Grantee or other person
until such Grantee or other person has made arrangements acceptable to the Administrator for the
satisfaction of any foreign, federal, state, or local income and employment tax withholding
obligations, including, without limitation, obligations incident to the receipt of Shares or the
disqualifying disposition of Shares received on exercise of an Incentive Stock Option. Upon
exercise of an Award the Company shall withhold or collect from Grantee an amount sufficient to
satisfy such tax obligations.




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     8. Exercise of Award.



          (a) Procedure for Exercise; Rights as a Shareholder.



              (i) Any Award granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator under the terms of the Plan and specified in the Award Agreement
but in the case of an Option, in no case at a rate of less than twenty percent (20%) per year over
five (5) years from the date the Option is granted, subject to reasonable conditions such as
continued employment. Notwithstanding the foregoing, in the case of an Option granted to an
Officer, Director or Consultant, the Award Agreement may provide that the Option may become
exercisable, subject to reasonable conditions such as such Officer’s, Director’s or Consultant’s
Continuous Service, at any time or during any period established in the Award Agreement.



              (ii) An Award shall be deemed to be exercised when written notice of such exercise has been
given to the Company in accordance with the terms of the Award by the person entitled to exercise
the Award and full payment for the Shares with respect to which the Award is exercised, including,
to the extent selected, use of the broker-dealer sale and remittance procedure to pay the purchase
price as provided in Section 7(b)(v). Until the issuance (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to Shares subject to an Award, notwithstanding the exercise of
an Option or other Award. No adjustment will be made for a dividend or other right for which the
record date is prior to the date the stock certificate is issued, except as provided in the Award
Agreement or Section 10 below.



          (b) Exercise of Award Following Termination of Continuous Service. In the event of
termination of a Grantee’s Continuous Service for any reason other than Disability or death (but
not in the event of a Grantee’s change of status from Employee to Consultant or from Consultant to
Employee), such Grantee may, but only during the Post-Termination Exercise Period (but in no event
later than the expiration date of the term of such Award as set forth in the Award Agreement),
exercise the portion of the Grantee’s Award that was vested at the date of such termination or such
other portion of the Grantee’s Award as may be determined by the Administrator. The Grantee’s
Award Agreement may provide that upon the termination of the Grantee’s Continuous Service for
Cause, the Grantee’s right to exercise the Award shall terminate concurrently with the termination
of Grantee’s Continuous Service. In the event of a Grantee’s change of status from Employee to
Consultant, an Employee’s Incentive Stock Option shall convert automatically to a Non-Qualified
Stock Option on the day three (3) months and one day following such change of status. To the
extent that the Grantee’s Award was unvested at the date of termination, or if the Grantee does not
exercise the vested portion of the Grantee’s Award within the Post-Termination Exercise Period, the
Award shall terminate.




          (c) Disability of Grantee. In the event of termination of a Grantee’s Continuous
Service as a result of his or her Disability, Grantee may, but only within twelve (12) months from
the date of such termination (and in no event later than the expiration date of the term of such
Award as set forth in the Award Agreement), exercise the portion of the Grantee’s Award that was
vested at the date of such termination; provided, however, that if such Disability

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is not a “disability” as such term is defined in Section 22(e)(3) of the Code, in the case of
an Incentive Stock Option such Incentive Stock Option shall automatically convert to a
Non-Qualified Stock Option on the day three (3) months and one day following such termination. To
the extent that the Grantee’s Award was unvested at the date of termination, or if Grantee does not
exercise the vested portion of the Grantee’s Award within the time specified herein, the Award
shall terminate.




          (d) Death of Grantee. In the event of a termination of the Grantee’s Continuous
Service as a result of his or her death, or in the event of the death of the Grantee during the
Post-Termination Exercise Period or during the twelve (12) month period following the Grantee’s
termination of Continuous Service as a result of his or her Disability, the Grantee’s estate or a
person who acquired the right to exercise the Award by bequest or inheritance may exercise the
portion of the Grantee’s Award that was vested as of the date of termination, within twelve (12)
months from the date of death (but in no event later than the expiration of the term of such Award
as set forth in the Award Agreement). To the extent that, at the time of death, the Grantee’s
Award was unvested, or if the Grantee’s estate or a person who acquired the right to exercise the
Award by bequest or inheritance does not exercise the vested portion of the Grantee’s Award within
the time specified herein, the Award shall terminate.




     9. Conditions Upon Issuance of Shares.



          (a) Shares shall not be issued pursuant to the exercise of an Award unless the exercise of
such Award and the issuance and delivery of such Shares pursuant thereto shall comply with all
Applicable Laws, and shall be further subject to the approval of counsel for the Company with
respect to such compliance.




          (b) As a condition to the exercise of an Award, the Company may require the person exercising
such Award to represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is required by any Applicable
Laws.




     10. Adjustments Upon Changes in Capitalization.



     Subject to any required action by the shareholders of the Company, the number of Shares
covered by each outstanding Award, and the number of Shares which have been authorized for issuance
under the Plan but as to which no Awards have yet been granted or which have been returned to the
Plan, the exercise or purchase price of each such outstanding Award, the maximum number of Shares
with respect to which Options may be granted to any Grantee in any fiscal year of the Company, as
well as any other terms that the Administrator determines require adjustment shall be
proportionately adjusted for (i) any increase or decrease in the number of issued Shares resulting
from a stock split, reverse stock split, stock dividend, combination or reclassification of the
Shares, or similar transaction affecting the Shares, (ii) any other increase or decrease in the
number of issued Shares effected without receipt of consideration by the Company, or (iii) as the
Administrator may determine in its discretion, any other transaction with respect to Common Stock
to which Section 424(a) of the Code applies or a similar transaction; provided, however that
conversion of any convertible securities of the Company shall not be



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deemed to have been “effected without receipt of consideration.” Such adjustment shall be
made by the Administrator and its determination shall be final, binding and conclusive. Except as
the Administrator determines, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no adjustment by reason
hereof shall be made with respect to, the number or price of Shares subject to an Award.




     11. Corporate Transactions/Changes in Control/Related Entity Dispositions.



          (a) Termination of Award to Extent Not Assumed.




              (i) Corporate Transaction. Effective upon the consummation of a Corporate
Transaction, all outstanding Awards under the Plan shall terminate. However, all such Awards shall
not terminate to the extent they are Assumed in connection with the Corporate Transaction.



              (ii) Related Entity Disposition. Effective upon the consummation of a Related Entity
Disposition, for purposes of the Plan and all Awards, there shall be a deemed termination of
Continuous Service of each Grantee who is at the time engaged primarily in service to the Related
Entity involved in such Related Entity Disposition and each Award of such Grantee which is at the
time outstanding under the Plan shall be exercisable in accordance with the terms of the Award
Agreement evidencing such Award. However, such Continuous Service shall not be deemed to terminate
as to the portion of any such award that is Assumed.



          (b) Acceleration of Award Upon Corporate Transaction/Change in Control/Related Entity
Disposition. Except as provided otherwise in an individual Award Agreement, in the event of
any Corporate Transaction, Change in Control or Related Entity Disposition, there will not be any
acceleration of vesting or exercisability of any Award.




     12. Repurchase Rights. If the provisions of an Award Agreement grant to the Company
the right to repurchase Shares upon termination of the Grantee’s Continuous Service, the Award
Agreement shall (or may, with respect to Awards granted or issued to Officers, Directors or
Consultants) provide that:



          (a) the right to repurchase must be exercised, if at all, within ninety (90) days of the
termination of the Grantee’s Continuous Service (or in the case of Shares issued upon exercise of
Awards after the date of termination of the Grantee’s Continuous Service, within ninety (90) days
after the date of the Award exercise);




          (b) the consideration payable for the Shares upon exercise of such repurchase right shall be
made in cash or by cancellation of purchase money indebtedness within the ninety (90) day periods
specified in Section 12(a);




          (c) the amount of such consideration shall (i) be equal to the original purchase price paid by
Grantee for each such Share; provided, that the right to repurchase such Shares at the original
purchase price shall lapse at the rate of at least twenty percent (20%) of the Shares subject to
the Award per year over five (5) years from the date the Award is granted (without respect to the
date the Award was exercised or became exercisable), and (ii) with respect to Shares, other than
Shares subject to repurchase at the original purchase price pursuant to clause




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(i) above, not less than the Fair Market Value of the Shares to be repurchased on the date of
termination of Grantee’s Continuous Service; and




          (d) the right to repurchase Shares, other than the right to repurchase Shares at the original
purchase price pursuant to clause (i) of Section 12(c), shall terminate on the Registration Date.




     13. Effective Date and Term of Plan. The Plan shall become effective upon the earlier
to occur of its adoption by the Board or its approval by the shareholders of the Company. It shall
continue in effect for a term of ten (10) years unless sooner terminated. Subject to Section 18
below, and Applicable Laws, Awards may be granted under the Plan upon its becoming effective.



     14. Amendment, Suspension or Termination of the Plan.



          (a) The Board may at any time amend, suspend or terminate the Plan. To the extent necessary to
comply with Applicable Laws, the Company shall obtain shareholder approval of any Plan amendment in
such a manner and to such a degree as required.




          (b) No Award may be granted during any suspension of the Plan or after termination of the
Plan.




          (c) Any amendment, suspension or termination of the Plan (including termination of the Plan
under Section 13 above) shall not adversely affect any rights under Awards already granted to a
Grantee, unless consented to by the Grantee.




     15. Reservation of Shares.



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




          (b) The inability of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, 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.




     16. No Effect on Terms of Employment/Consulting Relationship. The Plan shall not
confer upon any Grantee any right with respect to the Grantee’s Continuous Service, nor shall it
interfere in any way with his or her right or the Company’s right to terminate the Grantee’s
Continuous Service at any time, with or without cause, and with or without notice. The Company’s
ability to characterize the termination of Continuous Service of a Grantee as a termination for
“Cause” as defined in the Plan does not affect the Grantee’s at will status.



     17. No Effect on Retirement and Other Benefit Plans. Except as specifically provided
in a retirement or other benefit plan of the Company or a Related Entity, Awards shall not be
deemed compensation for purposes of computing benefits or contributions under any retirement



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plan of the Company or a Related Entity, and shall not affect any benefits under any other
benefit plan of any kind or any benefit plan subsequently instituted under which the availability
or amount of benefits is related to level of compensation. The Plan is not a “Retirement Plan” or
“Welfare Plan” under the Employee Retirement Income Security Act of 1974, as amended.




     18. Shareholder Approval. Continuance of the Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months before or after the date the Plan is adopted.
Such shareholder approval shall be obtained in the degree and manner required under Applicable
Laws. Any Award exercised before shareholder approval is obtained shall be rescinded if
shareholder approval is not obtained within the time prescribed, and Shares issued on the exercise
of any such Award shall not be counted in determining whether shareholder approval is obtained.



     19. Information to Grantees. The Company shall provide to each Grantee, during the
period for which such Grantee has one or more Awards outstanding, copies of financial statements at
least annually.



     20. Effect of Section 162(m) of the Code. Section 162(m) of the Code does not apply
to the Plan prior to the Registration Date. Following the Registration Date, the Plan, and all
Awards (except Awards of Restricted Stock that vest over time) issued thereunder, are intended to
be exempt from the application of Section 162(m) of the Code, which restricts under certain
circumstances the Federal income tax deduction for compensation paid by a public company to named
executives in excess of $1 million per year. The exemption is based on Treasury Regulation Section
1.162-27(f), in the form existing on the effective date of the Plan, with the understanding that
such regulation generally exempts from the application of Section 162(m) of the Code compensation
paid pursuant to a plan that existed before a company becomes publicly held. Under such Treasury
Regulation, this exemption is available to the Plan for the duration of the period that lasts until
the earlier of (i) the expiration of the Plan, (ii) the material modification of the Plan, (iii)
the exhaustion of the maximum number of shares of Common Stock available for Awards under the Plan,
as set forth in Section 3(a), (iv) the first meeting of shareholders at which directors are to be
elected that occurs after the close of the third calendar year following the calendar year in which
the Company first becomes subject to the reporting obligations of Section 12 of the Exchange Act,
or (v) such other date required by Section 162(m) of the Code and the rules and regulations
promulgated thereunder. The Committee may, without shareholder approval, amend the Plan
retroactively and/or prospectively to the extent it determines necessary in order to comply with
any subsequent clarification of Section 162(m) of the Code required to preserve the Company’s
Federal income tax deduction for compensation paid pursuant to the Plan. To the extent that the
Administrator determines as of the date of grant of an Award that (i) the Award is intended to
qualify as Performance-Based Compensation and (ii) the exemption described above is no longer
available with respect to such Award, such Award shall not be effective until any shareholder
approval required under Section 162(m) of the Code has been obtained.




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