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EXHIBIT 4.2




INPHOMATCH, INC.




2000 Equity Incentive Plan




Adopted: May 1, 2000

Approved By Stockholders: May 1, 2000

Termination Date: May 1, 2010






1. Purposes.




     (a) Eligible Stock Award Recipients. The persons eligible to receive Stock Awards are the
Employees, Directors and Consultants of the Company and its Affiliates.



     (b) Available Stock Awards. The purpose of the Plan is to provide a means by which eligible
recipients of Stock Awards may be given an opportunity to benefit from increases in value of the
Common Stock through the granting of the following Stock Awards: (i) Incentive Stock Options, (ii)
Nonstatutory Stock Options, (iii) stock bonuses and (iv) rights to acquire restricted stock.



     (c) General Purpose. The Company, by means of the Plan, seeks to retain the services of the
group of persons eligible to receive Stock Awards, to secure and retain the services of new members
of this group and to provide incentives for such persons to exert maximum efforts for the success
of the Company and its Affiliates.



2. Definitions.




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



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



     (c) “Cause” means if Participant is subject to a written employment agreement with the Company
in which the term “Cause” is specifically defined, the term shall have the same meaning for
purposes of this Plan. In all other instances, “Cause” shall mean (i) Participant’s failure to
perform duties consistent with his or her position; (ii) indictment or conviction of a felony or
any other crime involving moral turpitude or dishonesty; (iii) failure or refusal to comply with
Company policies, standards or regulations; (iv) conduct by the Participant that demonstrates gross
unfitness to serve in the capacity in which the Participant is serving at the time of such conduct;
(v) material violation of any agreement with the Company (including, but not limited to, any
proprietary information, inventions, non-solicitation and/or non-competition agreements with the
Company) or of any statutory duty to the Company; or (vi) the Participant’s willful dishonesty,
fraud, or misconduct with respect to the business or affairs of the Company.



 









 





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



     (e) “Committee” means a committee of one or more members of the Board appointed by the Board
in accordance with subsection 3(c).



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



     (g) “Company” means InphoMatch, Inc., a Delaware corporation.



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



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



     (j) “Covered Employee” means the chief executive officer and the four (4) other highest
compensated officers of the Company for whom total compensation is required to be reported to
stockholders under the Exchange Act, as determined for purposes of Section 162(m) of the Code.



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



     (l) “Disability” means the permanent and total disability of a person within the meaning of
Section 22(e)(3) of the Code.



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



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



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



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          (i) If the Common Stock is listed on any established stock exchange or traded on the Nasdaq
National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share of Common Stock
shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or market (or the exchange or market with the greatest volume of trading in
the Common Stock) on the last market trading day prior to the day of determination, as reported in
The Wall Street Journal or such other source as the Board deems reliable.




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




     (p) “Good Reason” shall mean (i) reduction of a Participant’s rate of Compensation as in
effect immediately prior to a Change in Control by greater than ten percent (10%) without the
Participant’s prior written consent, except to the extent such reduction is part of a general
reduction of Compensation affecting all or substantially all employees of the Company or affecting
all or substantially all employees at the same level as the Participant; (ii) a material reduction
of a Participant’s job duties, powers or responsibilities to a level below that which would
ordinarily be assigned to an employee at the Participant’s level without his or her prior written
consent (but not merely a change in title or reporting relationships), provided that an assignment
of specific duties and functions of a Participant to someone else as a result of Company growth
and/or reorganization of the business shall not, by itself, constitute “Good Reason” unless in the
aggregate there has been a material reduction of the Participant’s job functions; (iii) a
relocation of the Participant’s principal work site on other than a temporary basis to a location
that is more than fifty (50) miles away from his or her principal work site at the time of the
Change in Control, unless the new location is the same distance or closer to the Participant’s
personal residence; or (iv) a failure or refusal of any successor company to assume the obligations
of the Company under an agreement with a Participant, or a material breach by the successor company
of any of the material provisions of an agreement with such Participant. The term “Compensation”
as used herein refers to a Participant’s base salary, as well as any bonus or commission that the
Participant is eligible to receive upon the attainment of performance goals or otherwise.



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



     (r) “Listing Date” means the first date upon which any security of the Company is listed (or
approved for listing) upon notice of issuance on any securities exchange or designated (or approved
for designation) upon notice of issuance as a national market security on an interdealer quotation
system.



     (s) “Non-Employee Director” means a Director who either (i) is not a current Employee or
Officer of the Company or its parent or a subsidiary, does not receive compensation (directly or
indirectly) from the Company or its parent or a subsidiary for services rendered as a consultant or
in any capacity other than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation



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S-K promulgated pursuant to the Securities Act
(“Regulation S-K”)), does not possess an interest in any other transaction as to which disclosure
would be required under Item 404(a) of Regulation S-K and is not engaged in a business relationship
as to which disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is otherwise
considered a “non-employee director” for purposes of Rule 16b-3.



     (t) “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock
Option.



     (u) “Officer” means (i) before the Listing Date, any person designated by the Company as an
officer and (ii) on and after the Listing Date, a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.



     (v) “Option” means an Incentive Stock Option or a Nonstatutory Stock Option granted pursuant
to the Plan.



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



     (x) “Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Option.



     (y) “Outside Director” means a Director who either (i) is not a current employee of the
Company or an “affiliated corporation” (within the meaning of Treasury Regulations promulgated
under Section 162(m) of the Code), is not a former employee of the Company or an “affiliated
corporation” receiving compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an “affiliated corporation” at any time and is
not currently receiving direct or indirect remuneration from the Company or an “affiliated
corporation” for services in any capacity other than as a Director or (ii) is otherwise considered
an “outside director” for purposes of Section 162(m) of the Code.



     (z) “Participant” means a person to whom a Stock Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Stock Award.



     (aa) “Plan” means this InphoMatch, Inc. 2000 Equity Incentive Plan.



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



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



     (dd) “Stock Award” means any right granted under the Plan, including an Option, a stock bonus
and a right to acquire restricted stock.



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     (ee) “Stock Award Agreement” means a written agreement between the Company and a holder of a
Stock Award evidencing the terms and conditions of an individual Stock Award grant. Each Stock
Award Agreement shall be subject to the terms and conditions of the Plan.



     (ff) “Ten Percent Stockholder” means a person who owns (or is deemed to own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of any of its Affiliates.



3. Administration.




     (a) Administration by Board. The Board shall administer the Plan unless and until the Board
delegates administration to a Committee, as provided in subsection 3(c).



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



          (i) To determine from time to time which of the persons eligible under the Plan shall be
granted Stock Awards; when and how each Stock Award shall be granted; what type or combination of
types of Stock Award shall be granted; the provisions of each Stock Award granted (which need not
be identical), including the time or times when a person shall be permitted to receive Common Stock
pursuant to a Stock Award; and the number of shares of Common Stock with respect to which a Stock
Award shall be granted to each such person.




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




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




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




     (c) Delegation to Committee.



          (i) General. The Board may delegate administration of the Plan to a Committee or Committees
of one (1) or more members of the Board, and the term “Committee” shall apply to any person or
persons to whom such authority has been delegated. If administration is delegated to a Committee,
the Committee shall have, in connection with the administration of the Plan, the powers theretofore
possessed by the Board, including the power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise (and references in this Plan to the Board





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shall
thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board.
The Board may abolish the Committee at any time and revest in the Board the administration of the
Plan.




          (ii) Committee Composition when Common Stock is Publicly Traded. At such time as the Common
Stock is publicly traded, in the discretion of the Board, a Committee may consist solely of two or
more Outside Directors, in accordance with Section 162(m) of the Code, and/or solely of two or more
Non-Employee Directors, in accordance with Rule 16b-3. Within the scope of such authority, the
Board or the Committee may (1) delegate to a committee of one or more members of the Board who are
not Outside Directors the authority to grant Stock Awards to eligible persons who are either (a)
not then Covered Employees and are not expected to be Covered Employees at the time of recognition
of income resulting from such Stock Award or (b) not persons with respect to whom the Company
wishes to comply with Section 162(m) of the Code or (2) delegate to a committee of one or more
members of the Board who are not Non-Employee Directors the authority to grant Stock Awards to
eligible persons who are not then subject to Section 16 of the Exchange Act.




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



4. Shares Subject to the Plan.




     (a) Share Reserve. Subject to the provisions of Section 11 relating to adjustments upon
changes in Common Stock, the Common Stock that may be issued pursuant to Stock Awards shall not
exceed in the aggregate five hundred twenty thousand (520,000) shares of Common Stock.



     (b) Reversion of Shares to the Share Reserve. If any Stock Award shall for any reason expire
or otherwise terminate, in whole or in part, without having been exercised in full, the shares of
Common Stock not acquired under such Stock Award shall revert to and again become available for
issuance under the Plan.



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



5. Eligibility.




     (a) Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to
Employees. Stock Awards other than Incentive Stock Options may be granted to Employees, Directors
and Consultants.



     (b) Ten Percent Stockholders. A Ten Percent Stockholder shall not be granted an Incentive
Stock Option unless the exercise price of such Option is at least one hundred ten percent (110%) of
the Fair Market Value of the Common Stock at the date of



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grant and the Option is not exercisable
after the expiration of five (5) years from the date of grant.



     (c) Section 162(m) Limitation. Subject to the provisions of Section 11 relating to
adjustments upon changes in the shares of Common Stock, no Employee shall be eligible to be granted
Options covering more than three hundred eighty-five thousand (385,000) shares of Common Stock
during any calendar year. This subsection 5(c) shall not apply prior to the Listing Date and,
following the Listing Date, this subsection 5(c) shall not apply until (i) the earliest of: (1) the
first material modification of the Plan (including any increase in the number of shares of Common
Stock reserved for issuance under the Plan in accordance with Section 4); (2) the issuance of all
of the shares of Common Stock reserved for issuance under the Plan; (3) the expiration of the Plan;
or (4) the first meeting of stockholders at which Directors are to be elected that occurs after the
close of the third calendar year following the calendar year in which occurred the first
registration of an equity security under Section 12 of the Exchange Act; or (ii) such other date
required by Section 162(m) of the Code and the rules and regulations promulgated thereunder.



     (d) Consultants.



          (i) Prior to the Listing Date, a Consultant shall not be eligible for the grant of a Stock
Award if, at the time of grant, either the offer or the sale of the Company’s securities to such
Consultant is not exempt under Rule 701 of the Securities Act (“Rule 701”) because of the nature of
the services that the Consultant is providing to the Company, or because the Consultant is not a
natural person, or as otherwise provided by Rule 701, unless the Company determines that such grant
need not comply with the requirements of Rule 701 and will satisfy another exemption under the
Securities Act as well as comply with the securities laws of all other relevant jurisdictions.




          (ii) From and after the Listing Date, a Consultant shall not be eligible for the grant of a
Stock Award if, at the time of grant, a Form S-8 Registration Statement under the Securities Act
(“Form S-8”) is not available to register either the offer or the sale of the Company’s securities
to such Consultant because of the nature of the services that the Consultant is providing to the
Company, or because the Consultant is not a natural person, or as otherwise provided by the rules
governing the use of Form S-8, unless the Company determines both (i) that such grant (A) shall be
registered in another manner under the Securities Act (e.g., on a Form S-3 Registration Statement)
or (B) does not require registration under the Securities Act in order to comply with the
requirements of the Securities Act, if applicable, and (ii) that such grant complies with the
securities laws of all other relevant jurisdictions.




          (iii) Rule 701 and Form S-8 generally are available to consultants and advisors only if (i)
they are natural persons; (ii) they provide bona fide services to the issuer, its parents, its
majority-owned subsidiaries or majority-owned subsidiaries of the issuer’s parent; and (iii) the
services are not in connection with the offer or sale of securities in a capital-raising
transaction, and do not directly or indirectly promote or maintain a market for the issuer’s
securities.





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6. Option Provisions.




     Each Option shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate. All Options shall be separately designated Incentive Stock Options or
Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate
certificate or certificates will be issued for shares of Common Stock purchased on exercise of each
type of Option. The provisions of separate Options need not be identical, but each Option shall
include (through incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:



     (a) Term. Subject to the provisions of subsection 5(b) regarding Ten Percent Stockholders, no
Incentive Stock Option shall be exercisable after the expiration of ten (10) years from the date it
was granted.



     (b) Exercise Price of an Incentive Stock Option. Subject to the provisions of subsection 5(b)
regarding Ten Percent Stockholders, the exercise price of each Incentive Stock Option shall be not
less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the
Option on the date the Option is granted. Notwithstanding the foregoing, an Incentive Stock Option
may be granted with an exercise price lower than that set forth in the preceding sentence if such
Option is granted pursuant to an assumption or substitution for another option in a manner
satisfying the provisions of Section 424(a) of the Code.



     (c) Exercise Price of a Nonstatutory Stock Option. The exercise price of each Nonstatutory
Stock Option shall be not less than eighty-five percent (85%) of the Fair Market Value of the
Common Stock subject to the Option on the date the Option is granted. Notwithstanding the
foregoing, a Nonstatutory Stock Option may be granted with an exercise price lower than that set
forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution
for another option in a manner satisfying the provisions of Section 424(a) of the Code.



     (d) Consideration. The purchase price of Common Stock acquired pursuant to an Option shall be
paid, to the extent permitted by applicable statutes and regulations, either (i) in cash at the
time the Option is exercised or (ii) at the discretion of the Board at the time of the grant of the
Option (or subsequently in the case of a Nonstatutory Stock Option) (1) by delivery to the Company
of other Common Stock, (2) according to a deferred payment or other similar arrangement with the
Optionholder or (3) in any other form of legal consideration that may be acceptable to the Board.
Unless otherwise specifically provided in the Option, the purchase price of Common Stock acquired
pursuant to an Option that is paid by delivery to the Company of other Common Stock acquired,
directly or indirectly from the Company, shall be paid only by shares of the Common Stock of the
Company that have been held for more than six (6) months (or such longer or shorter period of time
required to avoid a charge to earnings for financial accounting purposes). At any time that the
Company is incorporated in Delaware, payment of the Common Stock’s “par value,” as defined in the
Delaware General Corporation Law, shall not be made by deferred payment.



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     In the case of any deferred payment arrangement, interest shall be compounded at least
annually and shall be charged at the minimum rate of interest necessary to avoid the treatment as
interest, under any applicable provisions of the Code, of any amounts other than amounts stated to
be interest under the deferred payment arrangement.



     (e) Transferability of an Incentive Stock Option. An Incentive Stock Option shall not be
transferable except by will or by the laws of descent and distribution and shall be exercisable
during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing,
the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the Optionholder, shall
thereafter be entitled to exercise the Option.



     (f) Transferability of a Nonstatutory Stock Option. A Nonstatutory Stock Option shall be
transferable to the extent provided in the Option Agreement. If the Nonstatutory Stock Option does
not provide for transferability, then the Nonstatutory Stock Option shall not be transferable
except by will or by the laws of descent and distribution and shall be exercisable during the
lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the
Optionholder may, by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the Optionholder, shall
thereafter be entitled to exercise the Option.



     (g) Vesting Generally. The total number of shares of Common Stock subject to an Option may,
but need not, vest and therefore become exercisable in periodic installments that may, but need
not, be equal. The Option may be subject to such other terms and conditions on the time or times
when it may be exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary. The provisions of this
subsection 6(g) are subject to any Option provisions governing the minimum number of shares of
Common Stock as to which an Option may be exercised.



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



     (i) Extension of Termination Date. An Optionholder’s Option Agreement may also provide that
if the exercise of the Option following the termination of the Optionholder’s Continuous Service
(other than upon the Optionholder’s death or Disability) would be prohibited at any time solely
because the issuance of shares of Common Stock would violate the registration requirements under
the Securities Act, then the Option shall terminate on the earlier of (i) the expiration of the
term of the Option set



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forth in subsection 6(a) or (ii) the expiration of a period of three (3)
months after the termination of the Optionholder’s Continuous Service during which the exercise of
the Option would not be in violation of such registration requirements.



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



     (k) Death of Optionholder. In the event (i) an Optionholder’s Continuous Service terminates
as a result of the Optionholder’s death or (ii) the Optionholder dies within the period (if any)
specified in the Option Agreement after the termination of the Optionholder’s Continuous Service
for a reason other than death, then the Option may be exercised (to the extent the Optionholder was
entitled to exercise such Option as of the date of death) by the Optionholder’s estate, by a person
who acquired the right to exercise the Option by bequest or inheritance or by a person designated
to exercise the Option upon the Optionholder’s death pursuant to subsection 6(e) or 6(f), but only
within the period ending on the earlier of (1) the date eighteen (18) months following the date of
death (or such longer or shorter period specified in the Option Agreement) or (2) the expiration of
the term of such Option as set forth in the Option Agreement. If, after death, the Option is not
exercised within the time specified herein, the Option shall terminate.



     (l) Early Exercise. The Option may, but need not, include a provision whereby the
Optionholder may elect at any time before the Optionholder’s Continuous Service terminates to
exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior
to the full vesting of the Option. Any unvested shares of Common Stock so purchased may be subject
to a repurchase option in favor of the Company or to any other restriction the Board determines to
be appropriate. The Company will not exercise its repurchase option until at least six (6) months
(or such longer or shorter period of time required to avoid a charge to earnings for financial
accounting purposes) have elapsed following exercise of the Option unless the Board otherwise
specifically provides in the Option.



     (m) Right of Repurchase. The Option may, but need not, include a provision whereby the
Company may elect, prior to the Listing Date, to repurchase all or any part of the vested shares of
Common Stock acquired by the Optionholder pursuant to the exercise of the Option. The Company will
not exercise its repurchase option until at least six (6) months (or such longer or shorter period
of time required to avoid a charge to earnings for financial accounting purposes) have elapsed
following exercise of the Option unless the Board otherwise specifically provides in the Option.



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     (n) Right of First Refusal. The Option may, but need not, include a provision whereby the
Company may elect, prior to the listing Date, to exercise a right of first refusal following
receipt of notice from the Optionholder of the intent to transfer all or any part of the shares of
Common Stock received upon the exercise of the Option.



     (o) Re-Load Options.



          (i) Without in any way limiting the authority of the Board to make or not to make grants of
Options hereunder, the Board shall have the authority (but not an obligation) to include as part of
any Option Agreement a provision entitling the Optionholder to a further Option (a “Re-Load
Option”) in the event the Option holder exercises the Option evidenced by the Option Agreement, in
whole or in part, by surrendering other shares of Common Stock in accordance with this Plan and the
terms and conditions of the Option Agreement. Unless otherwise specifically provided in the
Option, the Optionholder shall not surrender shares of Common Stock acquired, directly or
indirectly from the Company, unless such shares have been held for more than six (6) months (or
such longer or shorter period of time required to avoid a charge to earnings for financial
accounting purposes).




          (ii) Any such Re-Load Option shall (1) provide for a number of shares of Common Stock equal to
the number of shares of Common Stock surrendered as part or all of the exercise price of such
Option; (2) have an expiration date which is the same as the expiration date of the Option the
exercise of which gave rise to such Re-Load Option; and (3) have an exercise price which is equal
to one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Re-Load
Option on the date of exercise of the original Option. Notwithstanding the foregoing, a Re-Load
Option shall be subject to the same exercise price and term provisions heretofore described for
Options under the Plan.




          (iii) Any such Re-Load Option may be an Incentive Stock Option or a Nonstatutory Stock Option,
as the Board may designate at the time of the grant of the original Option; provided, however, that
the designation of any Re-Load Option as an Incentive Stock Option shall be subject to the one
hundred thousand dollar ($100,000) annual limitation on the exercisability of Incentive Stock
Options described in subsection 10(d) and in Section 422(d) of the Code. There shall be no Re-Load
Options on a Re-Load Option. Any such Re-Load Option shall be subject to the availability of
sufficient shares of Common Stock under subsection 4(a) and the “Section 162(m) Limitation” on the
grants of Options under subsection 5(c) and shall be subject to such other terms and conditions as
the Board may determine which are not inconsistent with the express provisions of the Plan
regarding the terms of Options.




7. Provisions of Stock Awards Other Than Options.




     (a) Stock Bonus Awards. Each stock bonus agreement shall be in such form and shall contain
such terms and conditions as the Board shall deem appropriate. The terms and conditions of stock
bonus agreements may change from time to time, and the terms and conditions of separate stock bonus
agreements need not be identical, but each



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stock bonus agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:



          (i) Consideration. A stock bonus may be awarded in consideration for past services actually
rendered to the Company or an Affiliate for its benefit.




          (ii) Vesting. Shares of Common Stock awarded under the stock bonus agreement may, but need
not, be subject to a share repurchase option in favor of the Company in accordance with a vesting
schedule to be determined by the Board.




          (iii) Termination of Participant’s Continuous Service. In the event a Participant’s
Continuous Service terminates, the Company may reacquire any or all of the shares of Common Stock
held by the Participant which have not vested as of the date of termination under the terms of the
stock bonus agreement.




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




     (b) Restricted Stock Awards. Each restricted stock purchase agreement shall be in such form
and shall contain such terms and conditions as the Board shall deem appropriate. The terms and
conditions of the restricted stock purchase agreements may change from time to time, and the terms
and conditions of separate restricted stock purchase agreements need not be identical, but each
restricted stock purchase agreement shall include (through incorporation of provisions hereof by
reference in the agreement or otherwise) the substance of each of the following provisions:



          (i) Purchase Price. The purchase price of restricted stock awards shall not be less than
eighty-five percent (85%) of the Common Stock’s Fair Market Value on the date such award is made or
at the time the purchase is consummated.




          (ii) Consideration. The purchase price of Common Stock acquired pursuant to the restricted
stock purchase agreement shall be paid either. (i) in cash at the time of purchase; (ii) at the
discretion of the Board, according to a deferred payment or other similar arrangement with the
Participant; or (iii) in any other form of legal consideration that may be acceptable to the Board
in its discretion; provided, however, that at any time that the Company is incorporated in
Delaware, then payment of the Common Stock’s “par value,” as defined in the Delaware General
Corporation Law, shall not be made by deferred payment.




          (iii) Vesting. Shares of Common Stock acquired under the restricted stock purchase agreement
may, but need not, be subject to a share repurchase option in favor of the Company in accordance
with a vesting schedule to be determined by the Board.




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          (iv) Termination of Participant’s Continuous Service. In the event a Participant’s Continuous
Service terminates, the Company may repurchase or otherwise reacquire any or all of the shares of
Common Stock held by the Participant which have not vested as of the date of termination under the
terms of the restricted stock purchase agreement.




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




8. Covenants of the Company.




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



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



9. Use of Proceeds From Stock.




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



10. Miscellaneous.




     (a) Acceleration of Exercisability and Vesting. The Board shall have the power to accelerate
the time at which a Stock Award may first be exercised or the time during which a Stock Award or
any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Stock
Award stating the time at which it may first be exercised or the time during which it will vest.



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



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



     (d) Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market
Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by any Optionholder during any calendar year (under all
plans of the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), the
Options or portions thereof which exceed such limit (according to the order in which they were
granted) shall be treated as Nonstatutory Stock Options.



     (e) Investment Assurances. The Company may require a Participant, as a condition of
exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances
satisfactory to the Company as to the Participant’s knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably satisfactory to the Company
who is knowledgeable and experienced in financial and business matters and that he or she is
capable of evaluating, alone or together with the purchaser representative, the merits and risks of
exercising the Stock Award; and (ii) to give written assurances satisfactory to the Company stating
that the Participant is acquiring Common Stock subject to the Stock Award for the Participant’s own
account and not with any present intention of selling or otherwise distributing the Common Stock.
The foregoing requirements, and any assurances given pursuant to such requirements, shall be
inoperative if (1) the issuance of the shares of Common Stock upon the exercise or acquisition of
Common Stock under the Stock Award has been registered under a then currently effective
registration statement under the Securities Act or (2) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws. The Company may, upon advice of counsel
to the Company, place legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws, including, but not
limited to, legends restricting the transfer of the Common Stock.



     (f) Withholding Obligations. To the extent provided by the terms of a Stock Award Agreement,
the Participant may satisfy any federal, state or local tax withholding obligation relating to the
exercise or acquisition of Common Stock under a Stock Award by any of the following means (in
addition to the Company’s right to withhold from any compensation paid to the Participant
by the
Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the
Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to
the Participant



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as a result of the exercise or acquisition of Common Stock under the Stock Award,
provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum
amount of tax required to be withheld by law; or (iii) delivering to the Company owned and
unencumbered shares of Common Stock.



11. Adjustments upon Changes in Stock.




     (a) Capitalization Adjustments. If any change is made in the Common Stock subject to the
Plan, or subject to any Stock Award, without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend
in property other than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan will be appropriately adjusted in the class(es) and maximum
number of securities subject to the Plan pursuant to subsection 4(a) and the maximum number of
securities subject to award to any person pursuant to subsection 5(c), and the outstanding Stock
Awards will be appropriately adjusted in the class(es) and number of securities and price per share
of Common Stock subject to such outstanding Stock Awards. The Board shall make such adjustments,
and its determination shall be final, binding and conclusive. (The conversion of any convertible
securities of the Company shall not be treated as a transaction “without receipt of consideration”
by the Company).



     (b) Change in Control—Dissolution or Liquidation. In the event of a dissolution or
liquidation of the Company, then all outstanding Stock Awards shall terminate immediately prior to
such event.



     (c) Change in Control—Asset Sale, Merger, Consolidation or Reverse Merger. In the event of
(i) a sale, lease or other disposition of all or substantially all of the assets of the Company,
(ii) a merger or consolidation in which the Company is not the surviving corporation or (iii) a
reverse merger in which the Company is the surviving corporation but the shares of Common Stock
outstanding immediately preceding the merger are converted by virtue of the merger into other
property, whether in the form of securities, cash or otherwise, then any surviving corporation or
acquiring corporation shall assume any Stock Awards outstanding under the Plan or shall substitute
similar stock awards (including an award to acquire the same consideration paid to the stockholders
in the transaction described in this subsection 11(c)) for those outstanding under the Plan. In
the event any surviving corporation or acquiring corporation refuses to assume such Stock Awards or
to substitute similar stock awards for those outstanding under the Plan, then with respect to Stock
Awards held by Participants whose Continuous Service has not terminated, the vesting of such Stock
Awards (and, if applicable, the time during which such Stock Awards may be exercised) shall be
accelerated to include an additional twelve (12) months of vesting, and the Stock Awards shall
terminate if not exercised (if applicable) at or prior to such event. With respect to any other
Stock Awards outstanding under the Plan, such Stock Awards shall terminate if not exercised (if
applicable) prior to such event.



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     (d) Change in Control—Termination of Continuous Service.



          (i) If the Continuous Service of a Participant is either involuntarily terminated without
Cause or is voluntarily terminated for a Good Reason on or within twelve (12) months after the date
of a Change in Control under Section 11(c) of the Plan, then the vesting of such Participant’s
Stock Award at the time of the Change in Control (and, if applicable, the time during which such
Stock Award may be exercised) shall be accelerated in full and the Participant’s Options, if any,
subject to this Plan shall immediately become exercisable in full.




          (ii) Any purported voluntarily termination of the Continuous Service of a Participant for Good
Reason shall be communicated by a notice of termination to the Company, and shall state the
specific termination provisions relied upon and set forth in reasonable detail the facts and
circumstances claimed to provide a basis for such termination.




          (iii) If any payment or benefit that the Participant would receive under this Plan when
combined with any other payment or benefit he or she receives pursuant to the termination of his
employment with the Company (collectively, the “Payment”) would (i) constitute a “parachute
payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject
to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall
be either (x) the full amount of such Payment or (y) such lesser amount (with cash payments being
reduced before stock compensation) as would result in no portion of the Payment being subject to
the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal,
state and local employment taxes, income taxes, and the Excise Tax, results in the Participant’s
receipt, on an after-tax basis, of the greater amount notwithstanding that all or some portion of
the Payment may be subject to the Excise Tax. Participant shall be solely responsible for the
payment of all personal tax liability that is incurred as a result of the payments and benefits
received under this Plan or other applicable agreements, and Participant will not be reimbursed by
the Company for any such payment.




          (iv) All determinations required to be made under Section 11(d)(iii) shall be made by the
Company’s independent public accountants (the “Accountants”). The Accountants shall provide
detailed supporting calculations both to the Company and the Participant within thirty (30)
business days of the date that the Participant’s employment with the Company terminates or such
earlier time as is requested by the Company. For purposes of making the calculations required by
Section 11(d)(iii), the Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith determinations concerning the application
of the Code. The Company and the Participant shall furnish to the Accountants such information and
documents as the Accountants may reasonably request in order to make a determination under Section
11(d)(iii). The Company shall bear all costs the Accountants may reasonably incur in connection
with any calculations contemplated by this Section. Any such determination by the Accountants
shall be binding upon the Company and Participant. Within five (5) days after receipt of the




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calculations, the Company shall pay to or distribute to or for the benefit of the Participant such
amounts as are then due to him or her under this Agreement.




          (v) As a result of the uncertainty in the application of Section 280G of the Code at the time
of the initial determination by the Accountants hereunder, it is possible that a Payment or
Payments, as the case may be, will have been made by the Company that should not have been made
(“Overpayment”) or that an additional Payment or Payments, as the case may be, which will not have
been made by the Company could have been made (“Underpayment”), in each case, consistent with the
calculations required to be made hereunder. In the event that the Accountants, based upon the
assertion of the deficiency by the Internal Revenue Service against Participant or the Company that
the Accountant believe has a high probability of success, determine that an Overpayment has been
made, any such overpayment paid or distributed by the Company to or for the benefit of Participant
shall be treated for all purposes as a loan ab initio to Participant that he shall repay to the
Company together with interest at the applicable federal rate provided for in Section 7872(f)(2) of
the Code; provided; however, that no such loan shall be deemed to have been made and no amount
shall be payable by the Participant to the Company if and to the extent such deemed loan and
payment would not either reduce the amount on which the Participant is subject to tax under Section
1 and Section 4999 of the Code or generate a refund of such taxes. In the event that the
Accountants, based upon controlling precedent or other substantial authority, determine that an
Underpayment has occurred, any such Underpayment shall be promptly paid by the Company to or for
the benefit of the Participant together with interest at the applicable federal rate provided for
in Section 7872(f)(2) of the Code.




     (e) Change in Control—Securities Acquisition. After the Listing Date, in the event of an
acquisition by any person, entity or group within the meaning of Section 13(d) or 14(d) of the
Exchange Act, or any comparable successor provisions (excluding any employee benefit plan, or
related trust, sponsored or maintained by the Company or an Affiliate) of the beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable successor rule)
of securities of the Company representing at least fifty percent (50%) of the combined voting power
entitled to vote in the election of Directors and provided that such acquisition is not a result
of, and does not constitute a transaction described in, subsection 11(c) hereof, then with respect
to Stock Awards held by Participants whose Continuous Service has not terminated, the vesting of
such Stock Awards (and, if applicable, the time during which such Stock Awards may be exercised)
shall be accelerated to include an additional twelve (12) months of vesting.



12. Amendment of the Plan and Stock Awards.




     (a) Amendment of Plan. The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 11 relating to adjustments upon changes in Common Stock, no
amendment shall be effective unless approved by the stockholders of the Company to the extent
stockholder approval is necessary to satisfy the requirements of Section 422 of the Code, Rule
16b-3 or any Nasdaq or securities exchange listing requirements.



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     (b) Stockholder Approval. The Board may, in its sole discretion, submit any other amendment
to the Plan for stockholder approval, including, but not limited to, amendments to the Plan
intended to satisfy the requirements of Section 162(m) of the Code and the regulations thereunder
regarding the exclusion of performance-based compensation from the limit on corporate deductibility
of compensation paid to certain executive officers.



     (c) Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan
in any respect the Board deems necessary or advisable to provide eligible Employees with the
maximum benefits provided or to be provided under the provisions of the Code and the regulations
promulgated thereunder relating to Incentive Stock Options and/or to bring the Plan and/or
Incentive Stock Options granted under it into compliance therewith.



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



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



13. Termination or Suspension of the Plan.




     (a) Plan Term. The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate on the day before the tenth (10th) anniversary of the date the
Plan is adopted by the Board or approved by the stockholders of the Company, whichever is earlier.
No Stock Awards may be granted under the Plan while the Plan is suspended or after it is
terminated.



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



14. Effective Date of Plan.




     The Plan shall become effective as determined by the Board, but no Stock Award shall be
exercised (or, in the case of a stock bonus, shall be granted) unless and until the Plan has been
approved by the stockholders of the Company, which approval shall be within twelve (12) months
before or after the date the Plan is adopted by the Board.



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15. Choice of Law.




     The law of the State of Delaware shall govern all questions concerning the construction,
validity and interpretation of this Plan, without regard to such state’s conflict of law rules.



****





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