EXHIBIT 10









EXHIBIT 10.1




 




 




COMMUNICATIONS CORPORATION




 




AMENDED 1998 STOCK OPTION PLAN




 




SECTION 1.         PURPOSE




 




The purpose of the

CenterSpan Communications Corporation Amended 1998 Stock Option Plan (the

“Plan”) is to enhance the long-term shareholder value of CenterSpan Communications

Corporation, an Oregon corporation (the “Company”), by offering opportunities

to employees (and persons offered employment), directors, officers,

consultants, agents, advisors and independent contractors of the Company and

its Subsidiaries (as defined in Section 2) to participate in the Company’s

growth and success, and to encourage them to remain in the service of the

Company and its Subsidiaries and to acquire and maintain stock ownership in the

Company.




 




SECTION 2.         DEFINITIONS




 




For purposes of the Plan,

the following terms shall be defined as set forth below:




 




2.1          Board




 




“Board” means the Board

of Directors of the Company.




 




2.2          Cause




 




“Cause” means dishonesty,

fraud, misconduct, unauthorized use or disclosure of confidential information

or trade secrets, or conviction or confession of a crime punishable by law

(except minor violations), in each case as determined by the Plan

Administrator, and its determination shall be conclusive and binding.




 




2.3          Code




 




“Code” means the Internal

Revenue Code of 1986, as amended from time to time.




 




2.4          Common Stock




 




“Common Stock” means the

common stock of the Company.




 




2.5          Corporate Transaction




 




“Corporate Transaction”

means any of the following events:




 




(a)         Consummation of any merger or

consolidation of the Company in which the Company is not the continuing or

surviving corporation, or pursuant to which shares




 




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of the Common

Stock are converted into cash, securities or other property, if following such

merger or consolidation the holders of the Company’s outstanding voting

securities immediately prior to such merger or consolidation own less than

66-2/3% of the outstanding voting securities of the surviving corporation;




 




(b)         Consummation of any sale, lease, exchange

or other transfer in one transaction or a series of related transactions of all

or substantially all of the Company’s assets other than a transfer of the

Company’s assets to a majority-owned subsidiary corporation (as the term

“subsidiary corporation” is defined in Section 8.3) of the Company; or




 




(c)         Approval by the holders of the Common

Stock of any plan or proposal for the liquidation or dissolution of the

Company.




 




Ownership of voting

securities shall take into account and shall include ownership as determined by

applying Rule 13d-3(d)(1)(i) (as in effect on the date of adoption of the

Plan) under the Exchange Act.




 




2.6          Disability




 




“Disability” means

“disability” as that term is defined for purposes of Section 22(e)(3) of

the Code.




 




2.7          Early Retirement




 




“Early Retirement” means

early retirement as that term is defined by the Plan Administrator from time to

time for purposes of the Plan.




 




2.8          Exchange Act




 




“Exchange Act” means the

Securities Exchange Act of 1934, as amended.




 




2.9          Fair Market Value




 




The “Fair Market Value”

shall be as established in good faith by the Plan Administrator or (a) if

the Common Stock is listed on the Nasdaq National Market, the closing per share

sales price for the Common Stock as reported by the Nasdaq National Market for

a single trading day or (b) if the Common Stock is listed on the New York

Stock Exchange or the American Stock Exchange, the closing per share sales

price for the Common Stock as such price is officially quoted in the composite

tape of transactions on such exchange for a single trading day.  If there is no such reported price for the

Common Stock for the date in question, then such price on the last preceding

date for which such price exists shall be determinative of the Fair Market

Value.




 




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2.10        Good Reason




 




“Good Reason” means the

occurrence of any of the following events or conditions and the failure of the

Successor Corporation to cure such event or condition within 30 days after

receipt of written notice by the Optionee:




 




(a)          a change in the

Optionee’s status, title, position or responsibilities (including reporting

responsibilities) that, in the Optionee’s reasonable judgment, represents a

substantial reduction in the status, title, position or responsibilities as in

effect immediately prior thereto; the assignment to the Optionee of any duties

or responsibilities that, in the Optionee’s reasonable judgment, are materially

inconsistent with such status, title, position or responsibilities; or any removal

of the Optionee from or failure to reappoint or reelect the Optionee to any of

such positions, except in connection with the termination of the Optionee’s

employment for Cause, for Disability or as a result of his or her death, or by

the Optionee other than for Good Reason;




 




(b)          a reduction in the

Optionee’s annual base salary;




 




(c)          the Successor

Corporation’s requiring the Optionee (without the Optionee’s consent) to be

based at any place outside a 35-mile radius of his or her place of employment

prior to a Corporate Transaction, except for reasonably required travel on the

Successor Corporation’s business that is not materially greater than such

travel requirements prior to the Corporate Transaction;




 




(d)          the Successor

Corporation’s failure to (i) continue in effect any material compensation

or benefit plan (or the substantial equivalent thereof) in which the Optionee

was participating at the time of a Corporate Transaction, including, but not

limited to, the Plan, or (ii) provide the Optionee with compensation and

benefits substantially equivalent (in terms of benefit levels and/or reward

opportunities) to those provided for under each material employee benefit plan,

program and practice as in effect immediately prior to the Corporate

Transaction;




 




(e)          any material breach

by the Successor Corporation of its obligations to the Optionee under the Plan

or any substantially equivalent plan of the Successor Corporation; or




 




(f)           any purported

termination of the Optionee’s employment or services for Cause by the Successor

Corporation that does not comply with the terms of the Plan or any

substantially equivalent plan of the Successor Corporation.




 




2.11        Grant Date




 




“Grant Date” means the

date the Plan Administrator adopted the granting resolution or a later date

designated in a resolution of the Plan Administrator as the date an Option is

to be granted.




 




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2.12        Incentive Stock Option




 




“Incentive Stock Option”

means an Option to purchase Common Stock granted under Section 7 with the

intention that it qualify as an “incentive stock option” as that term is

defined in Section 422 of the Code.




 




2.13        Nonqualified Stock Option




 




“Nonqualified Stock

Option” means an Option to purchase Common Stock granted under Section 7

other than an Incentive Stock Option.




 




2.14        Option




 




“Option” means the right

to purchase Common Stock granted under Section 7.




 




2.15        Optionee




 




“Optionee” means

(i) the person to whom an Option is granted; (ii) for an Optionee who

has died, the personal representative of the Optionee’s estate, the person(s)

to whom the Optionee’s rights under the Option have passed by will or by the

applicable laws of descent and distribution, or the beneficiary designated in

accordance with Section 9; or (iii) person(s) to whom an Option has

been transferred in accordance with Section 9.




 




2.16        Plan Administrator




 




“Plan Administrator”

means the Board or any committee of the Board designated to administer the Plan

under Section 3.1.




 




2.17        Retirement




 




“Retirement” means

retirement as of the individual’s normal retirement date as that term is

defined by the Plan Administrator from time to time for purposes of the Plan.




 




2.18        Securities Act




 




“Securities Act” means

the Securities Act of 1933, as amended.




 




2.19        Subsidiary




 




“Subsidiary,” except as

provided in Section 8.3 in connection with Incentive Stock Options, means

any entity that is directly or indirectly controlled by the Company or in which

the Company has a significant ownership interest, as determined by the Plan

Administrator, and any entity that may become a direct or indirect parent of

the Company.




 




2.20        Successor Corporation




 




“Successor Corporation”

has the meaning set forth under Section 10.2.




 




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SECTION 3.         ADMINISTRATION




 




3.1          Plan Administrator




 




The Plan shall be

administered by the Board or a committee or committees (which term includes

subcommittees) appointed by, and consisting of  two or more members of, the

Board.  If and so long as the Common

Stock is registered under Section 12(b) or 12(g) of the Exchange Act, the

Board shall consider in selecting the Plan Administrator and the membership of

any committee acting as Plan Administrator, with respect to any persons subject

or likely to become subject to Section 16 of the Exchange Act, the

provisions regarding (a) ”outside directors” as contemplated by

Section 162(m) of the Code and (b) ”nonemployee directors” as

contemplated by Rule 16b–3 under the Exchange Act.  The Board may delegate the responsibility

for administering the Plan with respect to designated classes of eligible

persons to different committees consisting of two  or more members of the

Board, subject to such limitations as the Board deems appropriate.  Committee members shall serve for such term

as the Board may determine, subject to removal by the Board at any time.




 




3.2          Administration and Interpretation by

the Plan Administrator




 




Except for the terms and

conditions explicitly set forth in the Plan, the Plan Administrator shall have

exclusive authority, in its discretion, to determine all matters relating to

Options under the Plan, including the selection of individuals to be granted

Options, the type of Options, the number of shares of Common Stock subject to

an Option, all terms, conditions, restrictions and limitations, if any, of an

Option and the terms of any instrument that evidences the Option.  The Plan Administrator shall also have

exclusive authority to interpret the Plan and may from time to time adopt, and

change, rules and regulations of general application for the Plan’s

administration.  The Plan

Administrator’s interpretation of the Plan and its rules and regulations, and

all actions taken and determinations made by the Plan Administrator pursuant to

the Plan, shall be conclusive and binding on all parties involved or

affected.  The Plan Administrator may

delegate administrative duties to such of the Company’s officers as it so

determines.




 




SECTION 4.         STOCK SUBJECT TO THE PLAN




 




4.1          Authorized Number of Shares




 




(a)           Subject to the following provisions of

this subsection 4.1, the maximum number of shares of Stock that may be

delivered to Participants and their beneficiaries under the Plan shall be equal

to the sum of: (i) 2,500,000 shares of Common Stock; (ii) any shares of

Common Stock available for future awards under the 1994 Stock Option Plan (the

“1994 Plan”) or the Directors’ Non-Qualified Stock Option Plan (the “Directors’

Plan”) as of the Effective Date (as defined in Section 14); and (iii) any

shares of Common Stock that are represented by awards granted under the 1994

Plan or the Directors’ Plan, which are forfeited, expire or are canceled

without delivery of shares of Common Stock or which result in the forfeiture of

shares of Common Stock back to the Company.




 




(b)           If the Exercise Price of any stock

option granted under the Plan or the 1994 Plan is satisfied by tendering shares

of Common Stock to the Company (by either actual delivery or by attestation),

only the number of shares of Common Stock issued net of the shares of Common

Stock tendered shall be deemed delivered for purposes of determining the

maximum number of shares of Common Stock available for delivery under the Plan.




 




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(c)           Shares of Common Stock delivered

under the Plan in settlement, assumption or substitution of outstanding awards

(or obligations to grant future awards) under the plans or arrangements of

another entity shall not reduce the maximum number of shares of Common Stock

available for delivery under the Plan, to the extent that such settlement,

assumption or substitution is a result of the Company or a Subsidiary acquiring

another entity (or an interest in another entity).




 




(d)           Shares issued under the Plan shall be

drawn from authorized and unissued shares or shares.




 




4.2          Limitations




 




Subject to adjustment

from time to time as provided in Section 10.1, not more than 200,000 shares

of Common Stock may be made subject to Options under the Plan to any individual

in the aggregate in any one fiscal year of the Company, except that the Company

may make additional one-time grants of up to 250,000 shares to newly hired

individuals or newly promoted individuals, such limitation to be applied in a

manner consistent with the requirements of, and only to the extent required for

compliance with, the exclusion from the limitation on deductibility of

compensation under Section 162(m) of the Code.




 




4.3          Reuse of Shares




 




Any shares of Common

Stock that have been made subject to an Option that cease to be subject to the

Option (other than by reason of exercise of the Option to the extent it is

exercised for shares) shall again be available for issuance in connection with

future grants of Options under the Plan; provided, however, that for purposes

of Section 4.2, any such shares shall be counted in accordance with the

requirements of Section 162(m) of the Code.




 




SECTION 5.         ELIGIBILITY




 




Options may be granted

under the Plan to those officers, directors and employees of the Company and

its Subsidiaries as the Plan Administrator from time to time selects.  Options may also be made to consultants,

agents, advisors and independent contractors who provide services to the

Company and its Subsidiaries.




 




SECTION 6.         AWARDS




 




6.1          Form and Grant of Options




 




The Plan Administrator

shall have the authority, in its sole discretion, to determine the type or

types of awards to be made under the Plan. 

Such awards may consist of Incentive Stock Options and/or Nonqualified

Stock Options.  Options may be granted

singly or in combination.




 




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6.2          Acquired Company Option Awards




 




Notwithstanding anything

in the Plan to the contrary, the Plan Administrator may grant Options under the

Plan in substitution for awards issued under other plans, or assume under the

Plan awards issued under other plans, if the other plans are or were plans of

other acquired entities (“Acquired Entities”) (or the parent of the Acquired

Entity) and the new Option is substituted, or the old award is assumed, by

reason of a merger, consolidation, acquisition of property or of stock,

reorganization or liquidation (the “Acquisition Transaction”).  In the event that a written agreement

pursuant to which the Acquisition Transaction is completed is approved by the

Board and said agreement sets forth the terms and conditions of the

substitution for or assumption of outstanding awards of the Acquired Entity,

said terms and conditions shall be deemed to be the action of the Plan

Administrator without any further action by the Plan Administrator, except as

may be required for compliance with Rule 16b-3 under the Exchange Act, and

the persons holding such awards shall be deemed to be Optionees.




 




SECTION 7.         TERMS AND CONDITIONS OF OPTIONS




 




7.1          Grant of Options




 




The Plan Administrator is

authorized under the Plan, in its sole discretion, to issue Options as

Incentive Stock Options or as Nonqualified Stock Options, which shall be

appropriately designated.




 




7.2          Option Exercise Price




 




The exercise price for

shares purchased under an Option shall be as determined by the Plan

Administrator, but shall not be less than 100% of the Fair Market Value of the

Common Stock on the Grant Date with respect to Incentive Stock Options.




 




7.3          Term of Options




 




The term of each Option

shall be as established by the Plan Administrator or, if not so established,

shall be 10 years from the Grant Date.




 




 




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7.4          Exercise of Options




 




The Plan Administrator

shall establish and set forth in each instrument that evidences an Option the

time at which or the installments in which the Option shall vest and become

exercisable, which provisions may be waived or modified by the Plan

Administrator at any time.  If not so

established in the instrument evidencing the Option, the Option will vest and

become exercisable according to the following schedule, which may be waived or

modified by the Plan Administrator at any time:




 




	

  Period of

  Optionee’s Continuous Employment or 


  Service With the Company or Its Subsidiaries 


  From the Grant Date


  	

   


  	

  Percent of

  Total Option 


  That Is Vested and Exercisable


  	

   


  
	

  After 1 year


  	

   


  	

  25


  	

  %


  
	

  After 2 years


  	

   


  	

  50


  	

  %


  
	

  After 3 years


  	

   


  	

  75


  	

  %


  
	

  After 4 years


  	

   


  	

  100


  	

  %


  





 




To the extent that the

right to purchase shares has accrued thereunder, an Option may be exercised

from time to time by written notice to the Company, in accordance with

procedures established by the Plan Administrator, setting forth the number of

shares with respect to which the Option is being exercised and accompanied by

payment in full as described in Section 7.5.  The Plan Administrator may determine at any time that an Option

may not be exercised as to less than 100 shares at any one time (or the

lesser number of remaining shares covered by the Option).




 




7.5          Payment of Exercise Price




 




The exercise price for

shares purchased under an Option shall be paid in full to the Company by

delivery of consideration equal to the product of the Option exercise price and

the number of shares purchased.  Such

consideration must be paid in cash or by check or, unless the Plan

Administrator in its sole discretion determines otherwise, either at the time

the Option is granted or at any time before it is exercised, a combination of

cash and/or check (if any) and one or both of the following alternative

forms:  (a) tendering (either

actually or, if and so long as the Common Stock is registered under

Section 12(b) or 12(g) of the Exchange Act, by attestation) Common Stock

already owned by the Optionee for at least six months (or any shorter period

necessary to avoid a charge to the Company’s earnings for financial reporting

purposes) having a Fair Market Value on the day prior to the exercise date

equal to the aggregate Option exercise price or (b) if and so long as the

Common Stock is registered under Section 12(b) or 12(g) of the Exchange

Act, delivery of a properly executed exercise notice, together with irrevocable

instructions, to (i) a brokerage firm designated by the Company to deliver

promptly to the Company the aggregate amount of sale or loan proceeds to pay

the Option exercise price and any withholding tax obligations that may arise in

connection with the exercise and (ii) the Company to deliver the

certificates for such purchased shares directly to such brokerage firm, all in

accordance with the regulations of the Federal Reserve Board.  In addition, the exercise price for shares

purchased under an Option may be paid, either singly or in combination with one

or more of the alternative forms of payment authorized by this

Section 7.5, by such other consideration as the Plan Administrator may

permit.




 




7.6          Post-Termination Exercises




 




The Plan Administrator

shall establish and set forth in each instrument that evidences an Option

whether the Option will continue to be exercisable, and the terms and

conditions of such exercise, if a Optionee ceases to be employed by, or to

provide services to, the Company or its Subsidiaries, which provisions may be

waived or modified by the Plan Administrator at any time.  If not so established in the instrument

evidencing the Option, the Option will be exercisable according to the

following terms and conditions, which may be waived or modified by the Plan

Administrator at any time.




 




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In case of termination of

the Optionee’s employment or services other than by reason of death or Cause,

the Option shall be exercisable, to the extent of the number of shares

purchasable by the Optionee at the date of such termination, only

(a) within one year if the termination of the Optionee’s employment or

services is coincident with Retirement, Early Retirement at the Company’s

request or Disability or (b) within three months  after the date the Optionee

ceases to be an employee, director, officer, consultant, agent, advisor or

independent contractor of the Company or a Subsidiary if termination of the

Optionee’s employment or services is for any reason other than Retirement,

Early Retirement at the Company’s request or Disability, but in no event later

than the remaining term of the Option. 

Any Option exercisable at the time of the Optionee’s death may be

exercised, to the extent of the number of shares purchasable by the Optionee at

the date of the Optionee’s death, by the personal representative of the

Optionee’s estate, the person(s) to whom the Optionee’s rights under the Option

have passed by will or the applicable laws of descent and distribution or the

beneficiary designated pursuant to Section 9 at any time or from time to

time within one year after the date of death, but in no event later than the

remaining term of the Option.  Any

portion of an Option that is not exercisable on the date of termination of the

Optionee’s employment or services shall terminate on such date, unless the Plan

Administrator determines otherwise.  In

case of termination of the Optionee’s employment or services for Cause, the

Option shall automatically terminate upon first notification to the Optionee of

such termination, unless the Plan Administrator determines otherwise.  If a Optionee’s employment or services with

the Company are suspended pending an investigation of whether the Optionee

shall be terminated for Cause, all the Optionee’s rights under any Option

likewise shall be suspended during the period of investigation.




 




A transfer of employment

or services between or among the Company and its Subsidiaries shall not be

considered a termination of employment or services.  The effect of a Company-approved leave of absence on the terms

and conditions of an Option shall be determined by the Plan Administrator, in

its sole discretion.




 




SECTION 8.         INCENTIVE STOCK OPTION LIMITATIONS




 




To the extent required by

Section 422 of the Code, Incentive Stock Options shall be subject to the

following additional terms and conditions:




 




8.1          Dollar Limitation




 




To the extent the

aggregate Fair Market Value (determined as of the Grant Date) of Common Stock

with respect to which Incentive Stock Options are exercisable for the first

time during any calendar year (under the Plan and all other stock option plans

of the Company) exceeds $100,000, such portion in excess of $100,000 shall be treated

as a Nonqualified Stock Option.  In the

event the Optionee holds two or more such Options that become exercisable for

the first time in the same calendar year, such limitation shall be applied on

the basis of the order in which such Options are granted.




 




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8.2          10% Shareholders




 




If an individual owns

more than 10% of the total voting power of all classes of the Company’s stock,

then the exercise price per share of an Incentive Stock Option shall not be

less than 110% of the Fair Market Value of the Common Stock on the Grant Date

and the Option term shall not exceed five years.  The determination of 10% ownership shall be made in accordance

with Section 422 of the Code.




 




8.3          Eligible Employees




 




Individuals who are not

employees of the Company or one of its parent corporations or subsidiary

corporations may not be granted Incentive Stock Options.  For purposes of this Section 8.3,

“parent corporation” and “subsidiary corporation” shall have the meanings attributed

to those terms for purposes of Section 422 of the Code.




 




8.4          Term




 




The term of an Incentive

Stock Option shall not exceed 10 years.




 




8.5          Exercisability




 




To qualify for Incentive

Stock Option tax treatment, an Option designated as an Incentive Stock Option

must be exercised within three months after termination of employment for

reasons other than death, except that, in the case of termination of employment

due to total disability, such Option must be exercised within one year after

such termination.  Employment shall not

be deemed to continue beyond the first 90 days of a leave of absence

unless the Optionee’s reemployment rights are guaranteed by statute or

contract.  For purposes of this

Section 8.5, “total disability” shall mean a mental or physical impairment

of the Optionee that is expected to result in death or that has lasted or is

expected to last for a continuous period of 12 months or more and that

causes the Optionee to be unable, in the opinion of the Company and two

independent physicians, to perform his or her duties for the Company and to be

engaged in any substantial gainful activity. 

Total disability shall be deemed to have occurred on the first day after

the Company and the two independent physicians have furnished their opinion of total

disability to the Plan Administrator.




 




SECTION 9.         ASSIGNABILITY




 




No Option granted under

the Plan may be assigned, pledged or transferred by the Optionee other than by

will or by the applicable laws of descent and distribution, and, during the

Optionee’s lifetime, such Option may be exercised only by the Optionee or a

permitted assignee or transferee of the Optionee (as provided below).  Notwithstanding the foregoing, and to the

extent permitted by Section 422 of the Code, the Plan Administrator, in its

sole discretion, may permit such assignment, transfer and exercisability and

may permit an Optionee to designate a beneficiary who may exercise the Option

after the Optionee’s death; provided, however, that any Option so assigned or

transferred shall be subject to all the same terms and conditions contained in

the instrument evidencing the Option.




 




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SECTION 10.       ADJUSTMENTS




 




10.1        Adjustment of Shares




 




In the event that, at any

time or from time to time, a stock dividend, stock split, spin–off,

combination or exchange of shares, recapitalization, merger, consolidation,

distribution to shareholders other than a normal cash dividend, or other change

in the Company’s corporate or capital structure results in (a) the

outstanding shares, or any securities exchanged therefor or received in their

place, being exchanged for a different number or class of securities of the

Company or of any other corporation or (b) new, different or additional

securities of the Company or of any other corporation being received by the

holders of shares of Common Stock of the Company, then the Plan Administrator

shall make proportional adjustments in (i) the maximum number and kind of

securities subject to the Plan as set forth in Section 4.1, (ii) the

maximum number and kind of securities that may be made subject to Options to

any individual as set forth in Section 4.2, and (iii) the number and

kind of securities that are subject to any outstanding Option and the per share

price of such securities, without any change in the aggregate price to be paid

therefor.  The determination by the Plan

Administrator as to the terms of any of the foregoing adjustments shall be

conclusive and binding.  Notwithstanding

the foregoing, a Corporate Transaction shall not be governed by this

Section 10.1 but shall be governed by Section 10.2.




 




10.2        Corporate Transaction




 




(a)       Except as otherwise provided in the

instrument that evidences the Option, in the event of any Corporate

Transaction, each Option that is at the time outstanding shall automatically

accelerate so that each such Option shall, immediately prior to the specified

effective date for the Corporate Transaction, become 100% vested and

exercisable.




 




(b)       Such Option shall not so accelerate,

however, if and to the extent that such Option is, in connection with the

Corporate Transaction, either to be assumed by the successor corporation or

parent thereof (the “Successor Corporation”) or to be replaced with a

comparable award for the purchase of shares of the capital stock of the

Successor Corporation.  The

determination of Option comparability shall be made by the Plan Administrator,

and its determination shall be conclusive and binding.  Any such Options granted to an “executive

officer” (as that term is defined for purposes of Section 16 of the

Exchange Act) of the Company that are assumed or replaced in the Corporate

Transaction and do not otherwise accelerate at that time shall be accelerated

in the event that the Optionee’s employment or services should subsequently

terminate within two years following such Corporate Transaction, unless such

employment or services are terminated by the Successor Corporation for Cause or

by the Optionee voluntarily without Good Reason.




 




(c)       All such Options shall terminate and

cease to remain outstanding immediately following the consummation of the

Corporate Transaction, except to the extent assumed by the Successor

Corporation.




 




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(d)       The acceleration will not occur if, in

the opinion of the Company’s outside accountants, it would render unavailable

“pooling of interest” accounting for a Corporate Transaction that would

otherwise qualify for such accounting treatment.




 




10.3        Further Adjustment of Options




 




Subject to Section 10.2,

the Plan Administrator shall have the discretion, exercisable at any time

before a sale, merger, consolidation, reorganization, liquidation or change in

control of the Company, as defined by the Plan Administrator, to take such

further action as it determines to be necessary or advisable, and fair and

equitable to Optionees, with respect to Options.  Such authorized action may include (but shall not be limited to)

establishing, amending or waiving the type, terms, conditions or duration of,

or restrictions on, Options so as to provide for earlier, later, extended or

additional time for exercise and other modifications, and the Plan

Administrator may take such actions with respect to all Optionees, to certain

categories of Optionees or only to individual Optionees.  The Plan Administrator may take such action

before or after granting Options to which the action relates and before or

after any public announcement with respect to such sale, merger, consolidation,

reorganization, liquidation or change in control that is the reason for such

action.




 




10.4        Limitations




 




The grant of  Options will in no way affect the Company’s

right to adjust, reclassify, reorganize or otherwise change its capital or

business structure or to merge, consolidate, dissolve, liquidate or sell or

transfer all or any part of its business or assets.




 




SECTION 11.       WITHHOLDING




 




The Company may require

the Optionee to pay to the Company the amount of any withholding taxes that the

Company is required to withhold with respect to the grant or exercise of any

Option.  Subject to the Plan and

applicable law, the Plan Administrator may, in its sole discretion, permit the

Optionee to satisfy withholding obligations, in whole or in part, by paying cash,

by electing to have the Company withhold shares of Common Stock or by

transferring shares of Common Stock to the Company, in such amounts as are

equivalent to the Fair Market Value of the withholding obligation.  The Company shall have the right to withhold

from any shares of Common Stock issuable pursuant to an Option or from any cash

amounts otherwise due or to become due from the Company to the Optionee an

amount equal to such taxes.  The Company

may also deduct from any Option any other amounts due from the Optionee to the

Company or a Subsidiary.




 




SECTION 12.       AMENDMENT AND TERMINATION OF PLAN




 




12.1        Amendment of Plan




 




The Plan may be amended

only by the Board in such respects as it shall deem advisable; however, to the

extent required for compliance with Section 422 of the Code or any applicable

law or regulation, shareholder approval will be required for any amendment that

will (a) increase the total number of shares as to which Options may be

granted under the Plan, (b) modify the class of persons eligible to

receive Options, or (c) otherwise require shareholder approval under any

applicable law or regulation.




 




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12.2        Termination of Plan




 




The Board may suspend or

terminate the Plan at any time.  The

Plan will have no fixed expiration date; provided, however, that no Incentive

Stock Options may be granted more than 10 years after the earlier of the

Plan’s adoption by the Board and approval by the shareholders.




 




12.3        Consent of Optionee




 




The amendment or

termination of the Plan shall not, without the consent of the Optionee, impair

or diminish any rights or obligations under any Option theretofore granted

under the Plan.




 




Any change or adjustment

to an outstanding Incentive Stock Option shall not, without the consent of the

Optionee, be made in a manner so as to constitute a “modification” that would

cause such Incentive Stock Option to fail to continue to qualify as an

Incentive Stock Option.




 




SECTION 13.       GENERAL




 




13.1        Option Agreements




 




Options granted under the

Plan shall be evidenced by a written agreement that shall contain such terms,

conditions, limitations and restrictions as the Plan Administrator shall deem

advisable and that are not inconsistent with the Plan.




 




13.2        Continued Employment or Services; Rights

in Options




 




None of the Plan,

participation in the Plan or any action of the Plan Administrator taken under

the Plan shall be construed as giving any person any right to be retained in

the employ of the Company or limit the Company’s right to terminate the

employment or services of any person.




 




13.3        Registration




 




The Company shall be

under no obligation to any Optionee to register for offering or resale or to

qualify for exemption under the Securities Act, or to register or qualify under

state securities laws, any shares of Common Stock, security or interest in a

security paid or issued under, or created by, the Plan, or to continue in

effect any such registrations or qualifications if made.  The Company may issue certificates for

shares with such legends and subject to such restrictions on transfer and

stop-transfer instructions as counsel for the Company deems necessary or

desirable for compliance by the Company with federal and state securities laws.




 




Inability of the Company

to obtain, from any regulatory body having jurisdiction, the authority deemed

by the Company’s counsel to be necessary for the lawful issuance and sale of

any shares hereunder or the unavailability of an exemption from registration

for the issuance and sale of any shares hereunder shall relieve the Company of

any liability in respect of the nonissuance or sale of such shares as to which

such requisite authority shall not have been obtained.




 




 




13





























 




13.4        No Rights as a Shareholder




 




No Option shall entitle

the Optionee to any dividend, voting or other right of a shareholder unless and

until the date of issuance under the Plan of the shares that are the subject of

such Option, free of all applicable restrictions.




 




13.5        Compliance With Laws and Regulations




 




Notwithstanding anything

in the Plan to the contrary, the Board, in its sole discretion, may bifurcate

the Plan so as to restrict, limit or condition the use of any provision of the

Plan to Optionees who are officers or directors subject to Section 16 of

the Exchange Act without so restricting, limiting or conditioning the Plan with

respect to other Optionees. 

Additionally, in interpreting and applying the provisions of the Plan,

any Option granted as an Incentive Stock Option pursuant to the Plan shall, to

the extent permitted by law, be construed as an “incentive stock option” within

the meaning of Section 422 of the Code.




 




13.6        No Trust or Fund




 




The Plan is intended to

constitute an “unfunded” plan.  Nothing

contained herein shall require the Company to segregate any monies or other

property, or shares of Common Stock, or to create any trusts, or to make any

special deposits for any immediate or deferred amounts payable to any Optionee,

and no Optionee shall have any rights that are greater than those of a general

unsecured creditor of the Company.




 




13.7        Severability




 




If any provision of the

Plan or any Option is determined to be invalid, illegal or unenforceable in any

jurisdiction, or as to any person, or would disqualify the Plan or any Option

under any law deemed applicable by the Plan Administrator, such provision shall

be construed or deemed amended to conform to applicable laws, or, if it cannot

be so construed or deemed amended without, in the Plan Administrator’s

determination, materially altering the intent of the Plan or the Option, such

provision shall be stricken as to such jurisdiction, person or Option, and the

remainder of the Plan and any such Option shall remain in full force and

effect.




 




SECTION 14.       EFFECTIVE DATE




 




The Plan’s effective date

is the date on which it is adopted by the Board, so long as it is approved by

the Company’s shareholders at any time within 12 months of such adoption.




 




Adopted by the Board on January

23, 1998

and approved by the Company’s shareholders on May 21, 1998.




 




14





























 




CENTERSPAN COMMUNICATIONS CORPORATION


PLAN ADOPTION AND AMENDMENTS/ADJUSTMENTS




 




	

  Date of  


  Adoption/ 


  Amendment/ 


  Adjustment


  	

   


  	

  Section


  	

   


  	

  Effect of

  Amendment


  	

   


  	

  Date of

  Shareholder 


  Approval


  
	

  02/11/00


  	

   


  	

  4.1(a)

  Authorized 


  Number of Shares


  	

   


  	

  Authorized

  Number of Shares 


  increased from 1,000,000 


  shares to 1,500,000 shares


  	

   


  	

  05/16/00


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

  4.2 Limitations


  	

   


  	

  Limit on grants

  that may be 


  made to any individual 


  increased from 50,000 to 


  100,000 shares; limit on 


  additional one-time grants to 


  newly hired individuals 


  increased from 100,000 to 


  150,000 shares


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  01/5/01


  	

   


  	

  4.1(a)

  Authorized 


  Number of Shares


  	

   


  	

  Authorized

  Number of Shares 


  increased by 1,000,000 to 


  2,500,000 shares


  	

   


  	

  02/22/01


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

  4.2 Limitations


  	

   


  	

  Limit on grants

  that may be 


  made to any individual 


  increased from 100,000 to 


  200,000 shares; limit on 


  additional one-time grants to 


  newly hired individuals 


  increased from 150,000 to 


  250,000 shares


  	

   


  	

   


  





 




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