**EXHIBIT10.20**

 

**BROADVISION,INC.****2000 NON-OFFICER EQUITY INCENTIVE PLAN**

 

**ADOPTED ON FEBRUARY 8, 2000****STOCKHOLDERAPPROVAL NOT REQUIREDAMENDED BY THE BOARD OF DIRECTORS ON SEPTEMBER 11, 2002**

 

**Reflects the three-for-one stocksplit effected February 22, 2000 and the one-for-nine reverse stock split effected July 29, 2002**

 

**1.****                                      PURPOSES.**

 

**(a)****                                 **Thepurpose of the Plan is to provide a means by which selected Employees of andConsultants to the Company and its Affiliates who are not Officers or Directorsmay be given an opportunity to benefit from increases in value of the stock ofthe Company through the granting of (i) Nonstatutory Stock Options, (ii) stockbonuses and (iii) rights to purchase restricted stock, all as described below.The Plan is also intended to provide a means by which the Company may grantoptions to persons not previously employed by the Company as an inducementessential to those persons entering employment contracts with the Company.  Such “inducement grants” may be made to anyEmployee, including persons who ultimately are employed by the Company asOfficers.

 

**(b)****                                 **TheCompany, by means of the Plan, seeks to retain the services of persons who arenow Employees or Consultants, to secure and retain the services of newEmployees and Consultants, and to provide incentives for such persons to exertmaximum efforts for the success of the Company and its Affiliates.

 

**(c)****                                 **TheCompany intends that the Stock Awards issued under the Plan shall be, in thediscretion of the Board or any Committee to which responsibility foradministration of the Plan has been delegated pursuant to subsection 3(c),either (i) Nonstatutory Stock Options granted pursuant to Section 6 hereof or(ii) stock bonuses or rights to purchase restricted stock granted pursuant toSection 7 hereof.

 

**2.****                                      DEFINITIONS.**

 

**(a)****                                  *“Affiliate”***means any parent corporation or subsidiary corporation, whether now orhereafter 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)****                                  *“Code”***means the Internal Revenue Code of 1986, as amended.

 

**(d)****                                  *“Committee”***means a Committee appointed by the Board in accordance with subsection 3(c) ofthe Plan.

 

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**(e)****                                  *“Company”***means BroadVision, Inc., a Delaware corporation.

 

**(f)****                                    *“Consultant”***means any person, including an advisor, engaged by the Company or an Affiliateto render consulting services and who is compensated for such services; *providedthat* the term “Consultant” shall not include Directors.

 

**(g)****                                **“***Continuous Service***”(formerly “***Continuous Status asan Employee, Director or Consultant***”) means that theParticipant’s service with the Company or an Affiliate, whether as an Employee,Officer, Director or Consultant, is not interrupted or terminated.  The Participant’s Continuous Service shallnot be deemed to have terminated merely because of a change in the capacity inwhich the Participant renders service to the Company or an Affiliate as anEmployee, Officer, Consultant or Director or a change in the entity for whichthe Participant renders such service, provided that there is no interruption ortermination of the Participant’s Continuous Service.  For example, a change in status from an Employee of the Companyto a Consultant of an Affiliate or a Director of the Company will notconstitute an interruption of Continuous Service.  The Board or the chief executive officer of the Company, in thatparty’s sole discretion, may determine whether Continuous Service shall beconsidered interrupted in the case of any leave of absence approved by thatparty, including sick leave, military leave or any other personal leave.

 

**(h)****                                 *“Director”***means a member of the Board.

 

**(i)****                                    *“Employee”***means any person employed by the Company or any Affiliate of the Company; *providedthat* except as provided below, Officers and Directors of the Companyshall not be considered Employees for purposes of the Plan.  Notwithstanding the foregoing, an Officershall be considered an Employee for purposes of the grant under this Plan of aStock Award to that Officer as an inducement essential to such Officer’sentering into an employment contract with the Company if such Officer was notan Employee of the Company immediately prior to the date on which such StockAward is granted.

 

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

 

**(k)****                                “*Fair MarketValue”*** means, as of any date, the value of the Common Stock ofthe Company determined as follows:

 

**(1)****                                **Ifthe Common Stock is listed on any established stock exchange or a nationalmarket system, including without limitation the National Market of The NasdaqStock Market, the Fair Market Value of a share of Common Stock shall be theclosing sales price for such stock (or the closing bid, if no sales werereported) as quoted on such system or exchange (or the exchange with thegreatest volume of trading in Common Stock) on the last market trading dayprior to the day of determination, as reported in the Wall Street Journal orsuch other source as the Board deems reliable.

 

**(2)****                                **Ifthe Common Stock is quoted on The Nasdaq Stock Market (but not on the NationalMarket thereof) or is regularly quoted by a recognized securities dealer butselling prices are not reported, the Fair Market Value of a share of CommonStock shall be the mean between the bid and asked prices for the Common Stockon the last market trading day prior to

 

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the day ofdetermination, as reported in the Wall Street Journal or such other source asthe Board deems reliable.

 

**(3)****                                **Inthe absence of an established market for the Common Stock, the Fair MarketValue shall be determined in good faith by the Board.

 

**(l)****                                   **“***Non-Employee Director***”means a Director of the Company who either (i) is not a current Employee or anofficer (within the meaning of Section 16 of the Exchange Act and the rules andregulations promulgated thereunder) of the Company or its parent or asubsidiary, does not receive compensation (directly or indirectly) from theCompany or its parent or a subsidiary for services rendered as a consultant orin any capacity other than as a Director (except for an amount as to whichdisclosure would not be required under Item 404(a) of Regulation S-Kpromulgated pursuant to the Securities Act (“Regulation S-K”)), does notpossess an interest in any other transaction as to which disclosure would berequired under Item 404(a) of Regulation S-K and is not engaged in a businessrelationship as to which disclosure would be required under Item 404(b) ofRegulation S-K or (ii) is otherwise considered a “non-employee director” forpurposes of Rule 16b-3.

 

**(m)****                              *“NonstatutoryStock Option”*** means an Option not intended to qualify as anincentive stock option within the meaning of Section 422 of the Code and theregulations promulgated thereunder.

 

**(n)****                                 *“Officer”***means a person who is an officer of the Company, including any corporateofficer with a title of Vice President or above or any other Employee of theCompany whom the Board or the Committee classifies as an “Officer.”

 

**(o)****                                  *“Option”***means a stock option granted pursuant to the Plan.

 

**(p)****                                  *“OptionAgreement”*** means a written agreement between the Company and anOptionee evidencing the terms and conditions of an individual Optiongrant.  Each Option Agreement shall besubject to the terms and conditions of the Plan.

 

**(q)****                                  *“Optionee”***means a person to whom an Option is granted pursuant to the Plan or, ifapplicable, such other person who holds an outstanding Option.

 

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

 

**(s)****                                  *“Plan”***means this BroadVision, Inc. 2000 Non-Officer Equity Incentive Plan.

 

**(t)****                                    *“Rule 16b-3”***means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as ineffect when discretion is being exercised with respect to the Plan.

 

**(u)****                                **“***Securities Act***” meansthe Securities Act of 1933, as amended.

 

**(v)****                                   *“StockAward”*** means any right granted under the Plan, including anyOption, any stock bonus and any right to purchase restricted stock.

 

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**(w)****                                *“Stock AwardAgreement”*** means a written agreement between the Company and aholder of a Stock Award evidencing the terms and conditions of an individualStock Award grant.  Each Stock AwardAgreement shall be subject to the terms and conditions of the Plan.

 

**3.****                                      ADMINISTRATION.**

 

**(a)****                                 **TheBoard shall administer the Plan unless and until the Board delegatesadministration to a Committee, as provided in subsection 3(c).

 

**(b)****                                 **TheBoard shall have the power, subject to, and within the limitations of, theexpress provisions of the Plan:

 

**(1)****                                **Todetermine from time to time which of the persons eligible under the Plan shallbe granted Stock Awards; when and how each Stock Award shall be granted;whether a Stock Award will be an Option, a stock bonus, a right to purchaserestricted stock or the provisions of each Stock Award granted (which need notbe identical), including the time or times when a person shall be permitted toreceive stock pursuant to a Stock Award; and the number of shares with respectto which a Stock Award shall be granted to each such person.

 

**(2)****                                **Toconstrue 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 StockAward Agreement, in a manner and to the extent it shall deem necessary orexpedient to make the Plan fully effective.

 

**(3)****                                **Toamend the Plan or a Stock Award as provided in Section 12.

 

**(4)****                                **Toterminate or suspend the Plan as provided in Section 13.

 

**(5)****                                **Generally,to exercise such powers and to perform such acts as the Board deems necessaryor expedient to promote the best interests of the Company which are not inconflict with the provisions of the Plan.

 

**(c)****                                 **TheBoard may delegate administration of the Plan to a Committee or Committees ofone or more members of the Board, and the term “Committee” shall apply to anyperson or persons to whom such authority has been delegated.  If administration is delegated to aCommittee, the Committee shall have, in connection with the administration ofthe Plan, the powers theretofore possessed by the Board, including the power todelegate to a subcommittee any of the administrative powers the Committee isauthorized to exercise (and references in this Plan to the Board shallthereafter be to the Committee or subcommittee), subject, however, to suchresolutions, not inconsistent with the provisions of the Plan, as may beadopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Boardthe administration of the Plan.  In thediscretion of the Board, a Committee may consist solely of two or moreNon-Employee Directors, in accordance with Rule 16b-3.  Within the scope of such authority, theBoard or the Committee may delegate to a committee of one or more members ofthe Board who are not Non-Employee Directors the authority to grant StockAwards to eligible persons who are not then subject to Section 16 of theExchange Act.

 

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**4.****                                      SHARESSUBJECT TO THE PLAN.**

 

**(a)****                                 **Subjectto the provisions of Section 11 relating to adjustments upon changes in stock,the stock that may be issued pursuant to Stock Awards shall not exceed in theaggregate two million six hundred thousand six hundred and sixty-seven(2,666,667) shares of the Company’s Common Stock.  If any Stock Award shall for any reason expire or otherwiseterminate, in whole or in part, without having been exercised in full, thestock not acquired under such Stock Award shall revert to and again becomeavailable for issuance under the Plan.

 

**(b)****                                 **Thestock subject to the Plan may be unissued shares or reacquired shares, boughton the market or otherwise.

 

**5.****                                      ELIGIBILITY.**

 

**(a)****                                 **StockAwards may be granted only to Employees or Consultants.

 

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

 

**6.****                                      OPTIONPROVISIONS.**

 

Each Option shallbe in such form and shall contain such terms and conditions as the Board shalldeem appropriate.  The provisions ofseparate Options need not be identical, but each Option shall include (throughincorporation of provisions hereof by reference in the Option or otherwise) thesubstance of each of the following provisions:

 

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

 

**(b)****                                  Price.**  The exercise price of each Option shall benot less than eighty-five percent (85%) of the Fair Market Value of the stocksubject to the Option on the date the Option is granted.

 

**(c)****                                  Consideration.**  The purchase price of stock acquiredpursuant to an Option shall be paid, to the extent permitted by applicablestatutes and regulations, either (i) in cash at the time the Option isexercised or (ii) at the discretion of the Board or the Committee, at the timeof the grant of the Option, (A) by delivery to the Company of other CommonStock of the Company, (B) according to a deferred payment or other arrangement(which may include, without limiting the generality of the foregoing, the useof other Common Stock of the Company) with the person to whom the Option isgranted or to whom the Option is transferred

 

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pursuant tosubsection 6(d) or (C) in any other form of legal consideration that may beacceptable to the Board; *provided, however,* that at any time thatthe Company is incorporated in Delaware, payment of the Common Stock’s “parvalue,” as defined in the Delaware General Corporation Law, shall not be madeby deferred payment.

 

In the case of anydeferred payment arrangement, interest shall be compounded at least annuallyand shall be charged at the minimum rate of interest necessary to avoid thetreatment as interest, under any applicable provisions of the Code, of anyamounts other than amounts stated to be interest under the deferred paymentarrangement.

 

**(d)****                                  Transferability.**An Option shall be transferable to the extent provided in the OptionAgreement.  If the Option does notprovide for transferability, then the Option shall not be transferable exceptby will or by the laws of descent and distribution and shall be exercisableduring the lifetime of the Optionholder only by the Optionholder.  Notwithstanding the foregoing, the person towhom the Option is granted may, by delivering written notice to the Company, ina form satisfactory to the Company, designate a third party who, in the eventof the death of the Optionee, shall thereafter be entitled to exercise theOption.

 

**(e)****                                  Vesting.**  The total number of shares of stock subjectto an Option may, but need not, be allotted in periodic installments (whichmay, but need not, be equal).  TheOption Agreement may provide that from time to time during each of suchinstallment periods, the Option may become exercisable (“vest”) with respect tosome or all of the shares allotted to that period, and may be exercised withrespect to some or all of the shares allotted to such period and/or any priorperiod as to which the Option became vested but was not fully exercised.  The Option may be subject to such otherterms and conditions on the time or times when it may be exercised (which maybe based on performance or other criteria) as the Board may deemappropriate.  The provisions of thissubsection 6(e) are subject to any Option provisions governing the minimumnumber of shares as to which an Option may be exercised.

 

**(f)****                                    Terminationof Continuous Service.**  In the eventan Optionee’s Continuous Service terminates (other than upon the Optionee’sdeath or disability), the Optionee may exercise his or her Option (to theextent that the Optionee was entitled to exercise it at the date oftermination) but only within such period of time ending on the earlier of (i)the date three (3) months after the termination of the Optionee’s ContinuousService (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 OptionAgreement.  If, after termination, theOptionee does not exercise his or her Option within the time specified in theOption Agreement, the Option shall terminate, and the shares covered by suchOption shall revert to and again become available for issuance under the Plan.

 

An Optionee’sOption Agreement may also provide that if the exercise of the Option followingthe termination of the Optionee’s Continuous Service (other than upon theOptionee’s death or disability) would result in liability under Section 16(b)of the Exchange Act, then the Option shall terminate on the earlier of (i) theexpiration of the term of the Option set forth in the Option Agreement, or (ii)the tenth (10th) day after the last date on which such exercise would result insuch liability under Section 16(b) of the Exchange Act.

 

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Finally, anOptionee’s Option Agreement may also provide that if the exercise of the Optionfollowing the termination of the Optionee’s Continuous Service (other than uponthe Optionee’s death or disability) would be prohibited at any time solelybecause the issuance of shares would violate the registration requirementsunder the Securities Act, then the Option shall terminate on the earlier of (i)the expiration of the term of the Option set forth in the first paragraph ofthis subsection 6(f) or (ii) the expiration of a period of three (3) monthsafter the termination of the Optionee’s Continuous Service during which theexercise of the Option would not be in violation of such registrationrequirements.

 

**(g)****                                 Disabilityof Optionee.**  In the event anOptionee’s Continuous Service terminates as a result of the Optionee’sdisability, the Optionee may exercise his or her Option (to the extent that theOptionee was entitled to exercise it at the date of termination), but onlywithin such period of time ending on the earlier of (i) the date twelve (12)months following such termination (or such longer or shorter period specifiedin the Option Agreement) or (ii) the expiration of the term of the Option asset forth in the Option Agreement.  If,at the date of termination, the Optionee is not entitled to exercise his or herentire Option, the shares covered by the unexercisable portion of the Optionshall revert to and again become available for issuance under the Plan.  If, after termination, the Optionee does notexercise his or her Option within the time specified herein, the Option shallterminate, and the shares covered by such Option shall revert to and againbecome available for issuance under the Plan.

 

**(h)****                                 Deathof Optionee.**  In the event of thedeath of an Optionee during, or within a period specified in the Option afterthe termination of, the Optionee’s Continuous Service, the Option may beexercised (to the extent the Optionee was entitled to exercise the Option atthe date of death) by the Optionee’s estate, by a person who acquired the rightto exercise the Option by bequest or inheritance or by a person designated toexercise the option upon the Optionee’s death pursuant to subsection 6(d), butonly within the period ending on the earlier of (i) the date eighteen (18)months following the date of death (or such longer or shorter period specifiedin the Option Agreement) or (ii) the expiration of the term of such Option asset forth in the Option Agreement.  If,at the time of death, the Optionee was not entitled to exercise his or herentire Option, the shares covered by the unexercisable portion of the Optionshall revert to and again become available for issuance under the Plan.  If, after death, the Option is not exercisedwithin the time specified herein, the Option shall terminate, and the sharescovered by such Option shall revert to and again become available for issuanceunder the Plan.

 

**(i)****                                    EarlyExercise.**  The Option may, but neednot, include a provision whereby the Optionee may elect at any time while anEmployee, Officer, Director or Consultant to exercise the Option as to any partor all of the shares subject to the Option prior to the full vesting of theOption.  Any unvested shares sopurchased may be subject to a repurchase right in favor of the Company or toany other restriction the Board determines to be appropriate.

 

**(j)****                                    Re-LoadOptions.**  Without in any waylimiting the authority of the Board or Committee to make or not to make grantsof Options hereunder, the Board or Committee shall have the authority (but notan obligation) to include as part of any Option Agreement a provision entitlingthe Optionee to a further Option (a “Re-Load Option”) in the event the Optioneeexercises the Option evidenced by the Option agreement, in whole or in part, bysurrendering other shares of Common Stock in accordance with this Plan and theterms and conditions of the

 

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OptionAgreement.  Any such Re-Load Option (i)shall be for a number of shares equal to the number of shares surrendered aspart or all of the exercise price of such Option, (ii) shall have an expirationdate that is the same as the expiration date of the Option the exercise ofwhich gave rise to such Re-Load Option, and (iii) shall have an exercise pricethat is at least eighty-five percent (85%) of the Fair Market Value of theCommon Stock subject to the Re-Load Option on the date of exercise of theoriginal Option.

 

There shall be noRe-Load Options on a Re-Load Option. Any such Re-Load Option shall be subject to the availability ofsufficient shares under subsection 4(a) and shall be subject to such otherterms and conditions as the Board or Committee may determine which are notinconsistent with the express provisions of the Plan regarding the terms ofOptions.

 

**7.****                                      TERMSOF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK.**

 

Each stock bonusor restricted stock purchase agreement shall be in such form and shall containsuch terms and conditions as the Board or the Committee shall deemappropriate.  The terms and conditionsof stock bonus or restricted stock purchase agreements may change from time totime, and the terms and conditions of separate agreements need not beidentical, but each stock bonus or restricted stock purchase agreement shallinclude (through incorporation of provisions hereof by reference in theagreement or otherwise) the substance of each of the following provisions asappropriate:

 

**(a)****                                  PurchasePrice.**  The purchase price undereach restricted stock purchase agreement shall be such amount as the Board orCommittee shall determine and designate in such agreement but in no event shallthe purchase price be less than eighty-five percent (85%) of the stock’s FairMarket Value on the date such award is made. Notwithstanding the foregoing, the Board or the Committee may determinethat eligible participants in the Plan may be awarded stock pursuant to a stockbonus agreement in consideration for past services actually rendered to theCompany for its benefit.

 

**(b)****                                  Transferability**.  Rights to acquire shares under the stockbonus or restricted stock purchase agreement shall be transferable only uponsuch terms and conditions as are set forth in the agreement, as the Board shalldetermine in its discretion, so long as stock awarded under the agreementremains subject to the terms of the agreement.

 

**(c)****                                  Consideration.**  The purchase price of stock acquiredpursuant to a stock purchase agreement shall be paid either:  (i) in cash at the time of purchase, (ii) atthe discretion of the Board or the Committee, according to a deferred paymentor other arrangement with the person to whom the stock is sold or (iii) in anyother form of legal consideration that may be acceptable to the Board or theCommittee in its discretion; *provided, however,* that at any time thatthe Company is incorporated in Delaware, payment of the Common Stock’s “parvalue,” as defined in the Delaware General Corporation Law, shall not be madeby deferred payment.  Notwithstandingthe foregoing, the Board or the Committee to which administration of the Planhas been delegated may award stock pursuant to a stock bonus agreement inconsideration for past services actually rendered to the Company or for itsbenefit.

 

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**(d)****                                  Vesting.**  Shares of stock sold or awarded under thePlan may, but need not, be subject to a repurchase option in favor of theCompany in accordance with a vesting schedule to be determined by the Board orthe Committee.

 

**(e)****                                  Terminationof Continuous Service.**  In the eventa Participant’s Continuous Service terminates, the Company may repurchase orotherwise reacquire any or all of the shares of stock held by that person whichhave not vested as of the date of termination under the terms of the stockbonus or restricted stock purchase agreement between the Company and suchperson.

 

**8.****                                      COVENANTSOF THE COMPANY.**

 

**(a)****                                 **Duringthe terms of the Stock Awards, the Company shall keep available at all timesthe number of shares of stock required to satisfy such Stock Awards.

 

**(b)****                                 **TheCompany shall seek to obtain from each regulatory commission or agency havingjurisdiction over the Plan such authority as may be required to issue and sellshares of stock upon exercise of the Stock Award; *provided, however,* that thisundertaking shall not require the Company to register under the Securities Acteither the Plan, any Stock Award or any stock issued or issuable pursuant toany such Stock Award.  If, afterreasonable efforts, the Company is unable to obtain from any such regulatorycommission or agency the authority which counsel for the Company deemsnecessary for the lawful issuance and sale of stock under the Plan, the Companyshall be relieved from any liability for failure to issue and sell stock uponexercise of such Stock Awards unless and until such authority is obtained.

 

**9.****                                      USEOF PROCEEDS FROM STOCK.**

 

Proceeds from thesale of stock pursuant to Stock Awards shall constitute general funds of theCompany.

 

**10.****                               MISCELLANEOUS.**

 

**(a)****                                 **TheBoard shall have the power to accelerate the time at which a Stock Award mayfirst be exercised or the time during which a Stock Award or any part thereofwill vest pursuant to subsection 6(e) or 7(d) notwithstanding the provisions inthe Stock Award stating the time at which it may first be exercised or the timeduring which it will vest.

 

**(b)****                                 **Neitheran Employee, an Officer nor a Consultant nor any person to whom a Stock Awardis transferred in accordance with the Plan shall be deemed to be the holder of,or to have any of the rights of a holder with respect to, any shares subject tosuch Stock Award unless and until such person has exercised the Stock Awardpursuant to its terms.

 

**(c)****                                 **Nothingin the Plan or any instrument executed or Stock Award granted pursuant theretoshall confer upon any Employee, Officer, Consultant or other holder of StockAwards any right to continue in the employ of the Company or any Affiliate orto continue acting as a Consultant or shall affect the right of the Company orany Affiliate to terminate the employment of any Employee or Officer with orwithout notice and with or without cause, or the right to

 

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terminate therelationship of any Consultant pursuant to the terms of such Consultant’sagreement with the Company or Affiliate.

 

**(d)****                                 **TheCompany may require any person to whom a Stock Award is granted, or any personto whom a Stock Award is transferred in accordance with the Plan, as acondition of exercising or acquiring stock under any Stock Award, (i) to givewritten assurances satisfactory to the Company as to such person’s knowledgeand experience in financial and business matters and/or to employ a purchaserrepresentative reasonably satisfactory to the Company who is knowledgeable andexperienced in financial and business matters, and that he or she is capable ofevaluating, alone or together with the purchaser representative, the merits andrisks of exercising the Stock Award and (ii) to give written assurancessatisfactory to the Company stating that such person is acquiring the stocksubject to the Stock Award for such person’s own account and not with anypresent intention of selling or otherwise distributing the stock.  The foregoing requirements, and anyassurances given pursuant to such requirements, shall be inoperative if (A) theissuance of the shares upon the exercise or acquisition of stock under theStock Award has been registered under a then currently effective registrationstatement under the Securities Act, or (B) as to any particular requirement, adetermination is made by counsel for the Company that such requirement need notbe met in the circumstances under the then applicable securities laws.  The Company may, upon advice of counsel tothe Company, place legends on stock certificates issued under the Plan as suchcounsel deems necessary or appropriate in order to comply with applicablesecurities laws, including, but not limited to, legends restricting thetransfer of the stock.

 

**(e)****                                 **Tothe extent provided by the terms of a Stock Award Agreement, the person to whoma Stock Award is granted may satisfy any federal, state or local taxwithholding obligation relating to the exercise or acquisition of stock under aStock Award by any of the following means or by a combination of suchmeans:  (1) tendering a cash payment,(2) authorizing the Company to withhold shares from the shares of the CommonStock otherwise issuable to the participant as a result of the exercise oracquisition of stock under the Stock Award or (3) delivering to the Companyowned and unencumbered shares of the Common Stock of the Company.  Notwithstanding the foregoing, the Companyshall not be authorized to withhold shares of Common Stock at rates in excessof the minimum statutory withholding rates for federal and state tax purposes,including payroll taxes, if such excess withholding would result in a charge tothe Company’s earnings for accounting purposes.

 

**11.****                               ADJUSTMENTSUPON CHANGES IN STOCK.**

 

**(a)****                                 **Ifany change is made in the stock subject to the Plan, or subject to any StockAward, without the receipt of consideration by the Company (through merger,consolidation, reorganization, recapitalization, reincorporation, stockdividend, dividend in property other than cash, stock split, liquidatingdividend, combination of shares, exchange of shares, change in corporatestructure or other transaction not involving the receipt of consideration bythe Company), the Plan will be appropriately adjusted in the class(es) andmaximum number of shares subject to the Plan pursuant to subsection 4(a) andthe outstanding Stock Awards will be appropriately adjusted in the class(es)and number of shares and price per share of stock subject to such outstandingStock Awards.  Such adjustments shall bemade by the Board or the Committee, the determination of which shall be final,binding and conclusive.  (The conversion

 

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of any convertiblesecurities of the Company shall not be treated as a “transaction not involvingthe receipt of consideration by the Company.”)

 

**(b)****                                 **Inthe event of: (1) a dissolution, liquidation or sale of substantially all ofthe assets of the Company, (2) a merger or consolidation in which the Companyis not the surviving corporation or (3) a reverse merger in which the Companyis the surviving corporation but the shares of the Company’s Common Stockoutstanding immediately preceding the merger are converted by virtue of themerger into other property, whether in the form of securities, cash orotherwise, then to the extent permitted by applicable law, any survivingcorporation or an Affiliate of such surviving corporation shall assume anyStock Awards outstanding under the Plan or shall substitute similar StockAwards for those outstanding under the Plan. In the event any surviving corporation and its Affiliates refuse toassume or continue such Stock Awards, or to substitute similar options forthose outstanding under the Plan, then, with respect to Stock Awards held bypersons then performing services as Employees, Directors or Consultants, thetime during which such Stock Awards may be exercised shall be accelerated andthe Stock Awards terminated if not exercised prior to such event.  With respect to any other Stock Awardsoutstanding under the Plan, such Stock Awards shall terminate if not exercisedprior to such event.

 

**12.****                               AMENDMENTOF THE PLAN AND STOCK AWARDS.**

 

**(a)****                                 **TheBoard at any time, and from time to time, may amend the Plan.  However, except as provided in Section 11relating to adjustments upon changes in stock, no amendment shall be effectiveunless approved by the stockholders if such modification requires stockholderapproval in order for the Plan to satisfy the requirements of Section 422 ofthe Code or any Nasdaq or securities exchange listing requirements, or tocomply with the requirements of Rule 16b-3. The Board may in its sole discretion submit any other amendment to thePlan for stockholder approval.

 

**(b)****                                 **Rightsand obligations under any Stock Award granted before amendment of the Planshall not be impaired by any amendment of the Plan unless (i) the Companyrequests the consent of the person to whom the Stock Award was granted and (ii)such person consents in writing.

 

**(c)****                                 **TheBoard at any time, and from time to time, may amend the terms of any one ormore Stock Award; *provided, however,* that the rights and obligations under anyStock Award shall not be impaired by any such amendment unless (i) the Companyrequests the consent of the person to whom the Stock Award was granted and (ii)such person consents in writing.

 

**13.****                               TERMINATIONOR SUSPENSION OF THE PLAN.**

 

**(a)****                                 **TheBoard may suspend or terminate the Plan at any time. No Stock Awards may begranted under the Plan while the Plan is suspended or after it is terminated.

 

**(b)****                                 **Rightsand obligations under any Stock Award granted while the Plan is in effect shallnot be impaired by suspension or termination of the Plan, except with theconsent of the person to whom the Stock Award was granted.

 

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**14.****                               EFFECTIVEDATE OF PLAN.**

 

The Plan shallbecome effective on the date on which it is adopted by the Board.

 

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