2007 STOCK PLAN


    IELEMENT
      CORPORATION

    


    2007
      STOCK PLAN

    


    1.  Purposes
      of the Plan.
      The
      purposes of this 2007 Stock Plan are:

    


    a.  to
      attract and retain the best available personnel for positions of substantial
      responsibility,

    


    b.  to
      provide additional incentive to Employees, Directors and Consultants,
      and

    


    c.  to
      promote the success of the Company’s business

    


    Options
      granted under the Plan may be Incentive Stock Options or Nonstatutory Stock
      Options, as determined by the Administrator at the time of grant. Stock
      Purchase

            Rights
      may also be
      granted under the Plan.

    


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

    


    a.  “Administrator”
      means the Board or any of its Committees as shall be administering the Plan,
      in
      accordance with Section 4 of the Plan.

    


    b.  “Applicable
      Laws” means the requirements relating to the administration of stock option
      plans under U.S. state corporate laws, U.S. federal and state securities
      laws,

        the
      Code, any
      stock exchange or quotation system on which the Common Stock is listed or quoted
      and the applicable laws of any foreign country or jurisdiction

        where
      Options
      or Stock Purchase Rights are, or will be, granted under the Plan.

    


    c.  “Board”
      means the Board of Directors of the Company.

    


    d.  “Change
      in Control” means the occurrence of any of the following events:

    


    i.  Any
      “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
      becomes the “beneficial owner” (as defined in Rule 13d-3 of the

        Exchange
      Act), directly or indirectly, of securities of the Company representing fifty
      percent (50%) or more of the total voting power represented by

        the
      Company’s
      then outstanding voting securities; or

    


    ii.  The
      consummation of the sale or disposition by the Company of all or substantially
      all of the Company’s assets;

    


    iii.  A
      change
      in the composition of the Board occurring within a two-year period, as a result
      of which fewer than a majority of the directors are Incumbent

        Directors.

    


    “Incumbent
      Directors” means directors who either (A) are Directors as of the effective date
      of the Plan, or (B) are elected, or nominated for election, to the Board
      with

                the
      affirmative votes
      of at least a majority of the Incumbent Directors at the time of such election
      or nomination (but will not include an individual whose election or

                nomination
      is in
      connection with an actual or threatened proxy contest relating to the election
      of directors to the Company); or

    


    iv.  The
      consummation of a merger or consolidation of the Company with any other
      corporation, other than a merger or consolidation which would
      result

        in
      the voting
      securities of the Company outstanding immediately prior thereto continuing
      to
      represent (either by remaining outstanding or by being

        converted
      into voting securities of the surviving entity or its parent) at least fifty
      percent (50%) of the total voting power represented by the voting

        securities
      of
      the Company or such surviving entity or its parent outstanding immediately
      after
      such merger or consolidation.

    


    e.  “Code”
      means the Internal Revenue Code of 1986, as amended.

    


    f.  “Committee”
      means a committee of Directors appointed by the Board in accordance with Section
      4 of the Plan.

    


    g.  “Common
      Stock” means the common stock of the Company.

    


    h.  “Company”
      means IElement Corporation, a Nevada corporation.

    


    i.  “Consultant”
      means any natural person, including an advisor, engaged by the Company or a
      Parent or Subsidiary to render services to such entity.

    


    j.  “Director”
      means a member of the Board.

    


    k.  “Disability”
      means total and permanent disability as defined in Section 22(e)(3) of the
      Code.

    


    l.  “Employee”
      means any person, including Officers and Directors, employed by the Company
      or
      any Parent or Subsidiary of the Company. A Service Provider shall

        not
      cease to
      be an Employee in the case of (i) any leave of absence approved by the Company
      or (ii) transfers between locations of the Company or between the

        Company,
      its
      Parent, any Subsidiary, or any successor. For purposes of Incentive Stock
      Options, no such leave may exceed ninety days, unless reemployment

        upon
      expiration of such leave is guaranteed by statute or contract. If reemployment
      upon expiration of a leave of absence approved by the Company is not
      so

        guaranteed,
      then three (3) months following the 91st day of such leave any Incentive Stock
      Option held by the Optionee shall cease to be treated as an
      Incentive

        Stock
      Option
      and shall be treated for tax purposes as a Non­statutory Stock Option.
      Neither service as a Director nor payment of a director’s fee by the
      Company

        shall
      be
      sufficient to constitute “employment” by the Company.

    


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

    


    n.  “Fair
      Market Value” means, as of any date, the value of Common Stock determined as
      follows:

    


    i.  If
      the
      Common Stock is listed on any established stock exchange or a national market
      system, including without limitation the Over the Counter Bulletin

        Board,
      Nasdaq
      National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
      Fair Market Value shall be the closing sales price

        for
      such
      stock (or the closing bid, if no sales were reported) as quoted on such exchange
      or system on the day of determination, as reported in The

        Wall
      Street
      Journal or such other source as the Administrator deems reliable;

    


    ii.  If
      the
      Common Stock is regularly quoted by a recognized securities dealer but selling
      prices are not reported, the Fair Market Value of a Share of

        Common
      Stock
      shall be the mean between the high bid and low asked prices for the Common
      Stock
      on the day of deter­mination, as reported in The

        Wall
      Street
      Journal or such other source as the Administrator deems reliable;
      or

    


    iii.  In
      the
      absence of an established market for the Common Stock, the Fair Market Value
      shall be determined in good faith by the Administrator.

    


    o.  “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.

    


    p.  “Inside
      Director” means a Director who is an Employee.

    


    q.  “Nonstatutory
      Stock Option” means an Option not intended to qualify as an Incentive Stock
      Option.

    


    r.  “Notice
      of Grant” means a written or electronic notice evidencing certain terms and
      conditions of an individual Option or Stock Purchase Right grant. The Notice
      of

        Grant
      is part
      of the Option Agreement.

    


    s.  “Officer”
      means 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.

    


    t.  “Option”
      means a stock option granted pursuant to the Plan.

    


    u.  “Option
      Agreement” means an agreement between the Company and an Optionee evidencing the
      terms and conditions of an individual Option grant. The Option

        Agreement
      is
      subject to the terms and conditions of the Plan.

    


    v.  “Option
      Exchange Program” means a program whereby outstanding Options are surrendered in
      exchange for Options with a lower exercise price.

    


    w.  “Optioned
      Stock” means the Common Stock subject to an Option or Stock Purchase
      Right.

    


    x.  “Optionee”
      means the holder of an outstanding Option or Stock Purchase Right granted under
      the Plan.

    


    y.  “Outside
      Director” means a Director who is not an Employee.

    


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

    


    aa.  “Plan”
      means this 2007 Stock Plan.

    


    bb.  “Restricted
      Stock” means shares of Common Stock acquired pursuant to a grant of Stock
      Purchase Rights under Section 11 of the Plan.

    


    cc.  “Restricted
      Stock Purchase Agreement” means a written agreement between the Company and the
      Optionee evidencing the terms and restrictions applying to

        stock
      purchased under a Stock Purchase Right. The Restricted Stock Purchase Agreement
      is subject to the terms and conditions of the Plan and the Notice
      of

        Grant.

    


    dd.  “Rule
      16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as
      in effect when discretion is being exercised with respect to the
      Plan.

    


    ee.  “Section
      16(b)” means Section 16(b) of the Exchange Act.

    


    ff.  “Service
      Provider” means an Employee, Director or Consultant.

    


    gg.  “Share”
      means a share of the Common Stock, as adjusted in accordance with Section 14
      of
      the Plan.

    


    hh.  “Stock
      Purchase Right” means the right to purchase Common Stock pursuant to Section 11
      of the Plan, as evidenced by a Notice of Grant.

    


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

    


    3.  Stock
      Subject to the Plan.
      Subject
      to the provisions of Section 14 of the Plan, the maximum aggregate number of
      Shares that may be optioned and sold under the Plan is

        57,953,180
      Shares plus (a) any Shares which have been reserved but not issued under the
      Company’s 2001 Employee Stock Compensation Plan (the “2001 Plan”) as of
      the

        date
      of
      stockholder approval of this Plan, and (b) any Shares returned to the 2001
      Plan
      as a result of termination of options or repurchase of Shares issued under
      the
      2001

        Plan.

    


    If
      an
      Option or Stock Purchase Right expires or becomes unexercisable without having
      been exercised in full, or is surrendered pursuant to an Option
      Exchange

                Program,
      the
      unpurchased Shares which were subject thereto shall become available for future
      grant or sale under the Plan (unless the Plan has terminated);

                provided,
      however,
      that Shares that have actually been issued under the Plan, whether upon exercise
      of an Option or Right, shall not be returned to the Plan and

                shall
      not become
      available for future distribution under the Plan, except that if Shares of
      Restricted Stock are repurchased by the Company at their original

                purchase
      price, such
      Shares shall become available for future grant under the Plan.

    


    4.  Administration
      of the Plan.

    


    a.  Procedure.

    


    i.  Multiple
      Administrative Bodies.
      Different Committees with respect to different groups of Service Providers
      may
      administer the Plan.

    


    ii.  Section
      162(m).
      To the
      extent that the Administrator determines it to be desirable to qualify Options
      granted hereunder as “performance-based

        compensation”
      within the meaning of Section 162(m) of the Code, the Plan shall be administered
      by a Committee of two or more “outside directors”

        within
      the
      meaning of Section 162(m) of the Code.

    


    iii.  Rule
      16b-3.
      To the
      extent desirable to qualify transactions hereunder as exempt under Rule 16b-3,
      the transactions contemplated hereunder shall be

        structured
      to
      satisfy the requirements for exemption under Rule 16b-3.

    


    iv.  Other
      Administration.
      Other
      than as provided above, the Plan shall be administered by (A) the Board or
      (B) a
      Committee, which committee shall be

        constituted
      to satisfy Applicable Laws.

    


    b.  Powers
      of the Administrator.
      Subject
      to the provisions of the Plan, and in the case of a Committee, subject to the
      specific duties delegated by the Board to such

        Committee,
      the Administrator shall have the authority, in its discretion:

    


    i.  to
      determine the Fair Market Value;

    


    ii.  to
      select
      the Service Providers to whom Options and Stock Purchase Rights may be granted
      hereunder;

    


    iii.  to
      determine the number of shares of Common Stock to be covered by each Option
      and
      Stock Purchase Right granted hereunder;

    


    iv.  to
      approve forms of agreement for use under the Plan;

    


    v.  to
      determine the terms and conditions, not inconsistent with the terms of the
      Plan,
      of any Option or Stock Purchase Right granted hereunder. Such

        terms
      and
      conditions include, but are not limited to, the exercise price, the time or
      times when Options or Stock Purchase Rights may be exercised

        (which
      may be
      based on performance criteria), any vesting acceleration or waiver of forfeiture
      restrictions, and any restriction or limitation regarding

        any
      Option or
      Stock Purchase Right or the shares of Common Stock relating thereto, based
      in
      each case on such factors as the Administrator, in its

        sole
      discretion, shall determine;

    


    vi.  to
      reduce
      the exercise price of any Option or Stock Purchase Right to the then current
      Fair Market Value if the Fair Market Value of the Common Stock

        covered
      by
      such Option or Stock Purchase Right shall have declined since the date the
      Option or Stock Purchase Right was granted;

    


    vii.  to
      institute an Option Exchange Program;

    


    viii.  to
      construe and interpret the terms of the Plan and awards granted pursuant to
      the
      Plan;

    


    ix.  to
      prescribe, amend and rescind rules and regulations relating to the Plan,
      including rules and regulations relating to subplans established for
      the

        purpose
      of
      satisfying applicable foreign laws;

    


    x.  to
      modify
      or amend each Option or Stock Purchase Right (subject to Section 16(c) of the
      Plan), including the discretionary authority to extend the post

        termination
      exercisability period of Options longer than is otherwise provided for in the
      Plan;

    


    xi.  to
      allow
      Optionees to satisfy withholding tax obligations by electing to have the Company
      withhold from the Shares to be issued upon exercise of an

        Option
      or
      Stock Purchase Right that number of Shares having a Fair Market Value equal
      to
      the minimum amount required to be withheld. The Fair

        Market
      Value
      of the Shares to be withheld shall be determined on the date that the amount
      of
      tax to be withheld is to be determined. All elections by

        an
      Optionee
      to have Shares withheld for this purpose shall be made in such form and under
      such conditions as the Administrator may deem

        necessary
      or
      advisable;

    


    xii.  to
      authorize any person to execute on behalf of the Company any instru­ment
      required to effect the grant of an Option or Stock Purchase Right

        previously
      granted by the Administrator;

    


    xiii.  to
      make
      all other determinations deemed necessary or advisable for administering the
      Plan.

    


    c.  Effect
      of Administrator’s Decision.
      The
      Administrator’s decisions, determina­tions and interpretations shall be
      final and binding on all Optionees and any other

        holders
      of
      Options or Stock Purchase Rights.

    


    5.  Eligibility.
      Nonstatutory Stock Options and Stock Purchase Rights may be granted to Service
      Providers. Incentive Stock Options may be granted only to
      Employees.

    


    6.  Limitations.

    


    a.  Each
      Option shall be designated in the Option Agreement as either an Incentive Stock
      Option or a Nonstatutory Stock Option. However, notwithstanding
      such

        designa­tion,
      to
      the extent that the aggregate Fair Market Value of the Shares with respect
      to
      which Incentive Stock Options are exercisable for the first time by
      the

        Optionee
      during any calendar year (under all plans of the Company and any Parent or
      Subsidiary) exceeds $100,000, such Options shall be treated as
      Nonstatutory

        Stock
      Options. For purposes of this Section 6(a), Incentive Stock Options shall be
      taken into account in the order in which they were granted. The Fair
      Market

        Value
      of the
      Shares shall be determined as of the time the Option with respect to such Shares
      is granted.

    


    b.  Neither
      the Plan nor any Option or Stock Purchase Right shall confer upon an Optionee
      any right with respect to continuing the Optionee’s relationship as a
      Service

        Provider
      with
      the Company, nor shall they interfere in any way with the Optionee’s right or
      the Company’s right to terminate such relationship at any time, with
      or

        without
      cause.

    


    7.  Term
      of Plan.
      Subject
      to Section 20 of the Plan, the Plan shall become effective upon its adoption
      by
      the Board. It shall continue in effect for a term of ten (10) years
      unless

        terminated
      earlier under Section 16 of the Plan.

    


    8.  Term
      of Option.
      The
      term of each Option shall be stated in the Option Agreement. In the case of
      an
      Incentive Stock Option, the term shall be ten (10) years from the date
      of

        grant
      or such
      shorter term as may be provided in the Option Agreement. Moreover, in the case
      of an Incentive Stock Option granted to an Optionee who, at the time
      the

        Incentive
      Stock Option is granted, owns stock representing more than ten percent (10%)
      of
      the total combined voting power of all classes of stock of the Company or
      any

        Parent
      or
      Subsidiary, the term of the Incentive Stock Option shall be five (5) years
      from
      the date of grant or such shorter term as may be provided in the Option
      Agreement.

    


    9.  Option
      Exercise Price and Consideration.

    


    a.
      Exercise
      Price.
      The per
      share exercise price for the Shares to be issued pursuant to exercise of an
      Option shall be determined by the Administrator. 

    i.  

     

    b.  Waiting
      Period and Exercise Dates.
      At the
      time an Option is granted, the Administrator shall fix the period within which
      the Option may be exercised and shall

        determine
      any
      conditions that must be satisfied before the Option may be
      exercised.

    


    c.  Form
      of Consideration.
      The
      Administrator shall determine the acceptable form of consideration for
      exercising an Option, including the method of payment. In the

        case
      of an
      Incentive Stock Option, the Administrator shall determine the acceptable form
      of
      consideration at the time of grant. Such consideration may consist

        entirely
      of:

    


    i.  cash;

    


    ii.  check;

    


    iii.  promissory
      note;

    


    iv.  other
      Shares which, in the case of Shares acquired directly or indirectly from the
      Company, (A) have been owned by the Optionee for more than six (6)

        months
      on the
      date of surrender, and (B) have a Fair Market Value on the date of surrender
      equal to the aggregate exercise price of the Shares as to

        which
      said
      Option shall be exercised;

    


    v.  consideration
      received by the Company under a cashless exercise program implemented by the
      Company in connection with the Plan;

    


    vi.  a
      reduction in the amount of any Company liability to the Optionee, including
      any
      liability attributable to the Optionee’s participation in any

        Company-sponsored
      deferred compensation program or arrangement;

    


    vii.  any
      combination of the foregoing methods of payment; or

    


    viii.  such
      other consideration and method of payment for the issuance of Shares to the
      extent permitted by Applicable Laws.

    


    10.  Exercise
      of Option.

    


    a.  Procedure
      for Exercise; Rights as a Stockholder.
      Any
      Option granted here­under shall be exercisable according to the terms of the
      Plan and at such times and under

        such
      conditions as determined by the Administrator and set forth in the Option
      Agreement. Unless the Administrator provides otherwise, vesting of
      Options

        granted
      hereunder shall be suspended during any unpaid leave of absence. An Option
      may
      not be exercised for a fraction of a Share.

    


    An
      Option
      shall be deemed exercised when the Company receives: (i) written or electronic
      notice of exercise (in accordance with the Option Agreement) from
      the

                person
      entitled to
      exercise the Option, and (ii) full payment for the Shares with respect to which
      the Option is exercised. Full payment may consist of any

                consideration
      and
      method of payment authorized by the Administrator and permitted by the Option
      Agreement and the Plan. Shares issued upon exercise of an

                Option
      shall be
      issued in the name of the Optionee or, if requested by the Optionee, in the
      name
      of the Optionee and his or her spouse. Until the Shares are issued

                (as
      evidenced by the
      appropriate entry on the books of the Company or of a duly authorized transfer
      agent of the Company), no right to vote or receive dividends

                or
      any other rights
      as a stockholder shall exist with respect to the Optioned Stock, notwithstanding
      the exercise of the Option. The Company shall issue (or cause

                to
      be issued) such
      Shares promptly after the Option is exercised. No adjustment will be made for
      a
      dividend or other right for which the record date is prior to the

                date
      the Shares are
      issued, except as provided in Section 14 of the Plan.

    


    Exercising
      an Option in any manner shall decrease the number of Shares thereafter
      available, both for purposes of the Plan and for sale under the Option, by
      the

                number
      of Shares as
      to which the Option is exercised.

    


    b.  Termination
      of Relationship as a Service Provider.
      If an
      Optionee ceases to be a Service Provider, other than upon the Optionee’s death
      or Disability, the Optionee

        may
      exercise
      his or her Option within such period of time as is specified in the Option
      Agreement to the extent that the Option is vested on the date of
      termination

        (but
      in no
      event later than the expiration of the term of such Option as set forth in
      the
      Option Agreement). In the absence of a specified time in the Option

        Agreement,
      the Option shall remain exercisable for three (3) months following the
      Optionee’s termination. If, on the date of termination, the Optionee is not
      vested

        as
      to his or
      her entire Option, the Shares covered by the unvested portion of the Option
      shall revert to the Plan. If, after termination, the Optionee does not
      exercise

        his
      or her
      Option within the time specified by the Administrator, the Option shall
      terminate, and the Shares covered by such Option shall revert to the
      Plan.

    


    c.  Disability
      of Optionee.
      If an
      Optionee ceases to be a Service Provider as a result of the Optionee’s
      Disability, the Optionee may exercise his or her Option within

        such
      period
      of time as is specified in the Option Agreement to the extent the Option is
      vested on the date of termination (but in no event later than the expiration
      of

        the
      term of
      such Option as set forth in the Option Agreement). In the absence of a specified
      time in the Option Agreement, the Option shall remain exercisable
      for

        twelve
      (12)
      months following the Optionee’s termination. If, on the date of termination, the
      Optionee is not vested as to his or her entire Option, the Shares
      covered

        by
      the
      unvested portion of the Option shall revert to the Plan. If, after termination,
      the Optionee does not exercise his or her Option within the time specified
      herein,

        the
      Option
      shall terminate, and the Shares covered by such Option shall revert to the
      Plan.

    


    d.  Death
      of Optionee.
      If an
      Optionee dies while a Service Provider, the Option may be exercised following
      the Optionee’s death within such period of time as is

        specified
      in
      the Option Agreement to the extent that the Option is vested on the date of
      death (but in no event may the option be exercised later than the
      expiration

        of
      the term
      of such Option as set forth in the Option Agreement), by the Optionee’s
      designated beneficiary, provided such beneficiary has been designated prior
      to

        Optionee’s
      death in a form acceptable to the Administrator. If no such beneficiary has
      been
      designated by the Optionee, then such Option may be exercised by
      the

        personal
      representative of the Optionee’s estate or by the person(s) to whom the Option
      is transferred pursuant to the Optionee’s will or in accordance with
      the

        laws
      of
      descent and distribution. In the absence of a specified time in the Option
      Agreement, the Option shall remain exercisable for twelve (12) months
      following

        Optionee’s
      death. If, at the time of death, Optionee is not vested as to his or her entire
      Option, the Shares covered by the unvested portion of the Option
      shall

        immediately
      revert to the Plan. If the Option is not so exercised within the time specified
      herein, the Option shall terminate, and the Shares covered by such
      Option

        shall
      revert
      to the Plan.

    


    11.  Stock
      Purchase Rights.

    


    a.  Rights
      to Purchase.
      Stock
      Purchase Rights may be issued either alone, in addition to, or in tandem with
      other awards granted under the Plan and/or cash awards

        made
      outside
      of the Plan. After the Administrator determines that it will offer Stock
      Purchase Rights under the Plan, it shall advise the offeree in writing
      or

        electronically,
      by
      means of a Notice of Grant, of the terms, conditions and restrictions related
      to
      the offer, including the number of Shares that the offeree shall be

        entitled
      to
      purchase, the price to be paid, and the time within which the offeree must
      accept such offer. The offer shall be accepted by execution of a
      Restricted

        Stock
      Purchase Agreement in the form determined by the Administrator.

    


    b.  Repurchase
      Option.
      Unless
      the Administrator determines otherwise, the Restricted Stock Purchase Agreement
      shall grant the Company a repurchase option

        exercisable
      upon the voluntary or involuntary termination of the purchaser’s service with
      the Company for any reason (including death or Disability). The
      purchase

        price
      for
      Shares repurchased pursuant to the Restricted Stock Purchase Agreement shall
      be
      the original price paid by the purchaser and may be paid by

        cancellation
      of any indebtedness of the purchaser to the Company. The repurchase option
      shall
      lapse at a rate determined by the Administrator.

    


    c.  Other
      Provisions.
      The
      Restricted Stock Purchase Agreement shall contain such other terms, provisions
      and conditions not inconsistent with the Plan as may be

        determined
      by
      the Administrator in its sole discretion.

    


    d.  Rights
      as a Stockholder.
      Once
      the Stock Purchase Right is exercised, the purchaser shall have the rights
      equivalent to those of a stockholder, and shall be a

        stockholder
      when his or her purchase is entered upon the records of the duly authorized
      transfer agent of the Company. No adjustment will be made for a
      dividend

        or
      other
      right for which the record date is prior to the date the Stock Purchase Right
      is
      exercised, except as provided in Section 14 of the Plan.

     

    12.  Transferaility
      of Options and Stock Purchase Rights.
      Unless
      determined otherwise by the Administrator, an Option or Stock Purchase Right
      may
      not be sold, pledged,

        assigned,
      hypothecated, transferred, or disposed of in any manner other than by will
      or by
      the laws of descent or distribution and may be exercised, during the lifetime
      of

        the
      Optionee,
      only by the Optionee. If the Administrator makes an Option or Stock Purchase
      Right transferable, such Option or Stock Purchase Right shall contain
      such

        additional
      terms and conditions as the Administrator deems appropriate.

    


    13.  Formula
      Option Grants to Outside Directors.
      All
      grants of Options to Outside Directors pursuant to this Section shall be
      automatic and nondiscretionary and shall be made

        strictly
      in
      accordance with the following provisions:

    


    a.  All
      Options granted pursuant to this Section shall be Nonstatutory Stock Options
      and, except as otherwise provided herein, shall be subject to the other terms
      and

        conditions
      of
      the Plan.

    


    b.  No
      person
      shall have any discretion to select which Outside Directors shall be granted
      Options under this Section or to determine the number of Shares to
      be

        covered
      by
      such Options.

    


    c.  Each
      person who first becomes an Outside Director following the effective date of
      this Plan, as determined in accordance with Section 7 hereof, shall
      be

        automatically
      granted an Option to purchase an amount of stock as determined by the
      Compensation Committee of the Directors from time to time (the
“First

        Option”)
      or
      the date on which such person first becomes an Outside Director, whether through
      election by the stockholders of the Company or appointment by the

        Board
      to fill
      a vacancy; provided, however, that an Inside Director who ceases to be an Inside
      Director but who remains a Director shall not receive a First
      Option.

     

    d.  Notwithstanding
      the provisions of subsections (c) and (d) hereof, any exercise of an Option
      granted before the Company has obtained stockholder approval of the

        Plan
      in
      accordance with Section 20 hereof shall be conditioned upon obtaining such
      stockholder approval of the Plan in accordance with Section 20
      hereof.

    


    e.  The
      terms
      of each Option granted pursuant to this Section shall be as
      follows:

    


    i.  the
      term
      of the Option shall be ten (10) years.

    


    ii.  subject
      to Section 14 hereof, the First Option shall vest and become exercisable
      immediately.

    


    iii.  subject
      to Section 14 hereof, the Subsequent Option shall vest and become exercisable
      immediately.

    


    14.  Adjustments
      Upon Changes in Capitalization, Merger or Change in Control.

    


    a.  Changes
      in Capitalization.
      Subject
      to any required action by the stockholders of the Company, the number of shares
      of Common Stock that have been authorized for

        issuance
      under the Plan but as to which no Options or Stock Purchase Rights have yet
      been
      granted or which have been returned to the Plan upon cancellation
      or

        expiration
      of
      an Option or Stock Purchase Right, the number of Shares that may be added
      annually to the Plan pursuant to Section 3(i), the number of shares
      which

        may
      be
      granted pursuant to the automatic grant provisions of Section 13 and the number
      of shares of Common Stock as well as the price per share of Common

        Stock
      covered
      by each such outstanding Option or Stock Purchase Right, shall be
      proportionately adjusted for any increase or decrease in the number of
      issued

        shares
      of
      Common Stock resulting from a stock split, reverse stock split, stock dividend,
      combination or reclassification of the Common Stock, or any other
      increase

        or
      decrease
      in the number of issued shares of Common Stock effected without receipt of
      consideration by the Company; provided, however, that conversion of
      any

        convertible
      securities of the Company shall not be deemed to have been “effected without
      receipt of consideration.” Such adjustment shall be made by the
      Board,

        whose
      determination in that respect shall be final, binding and conclusive. Except
      as
      expressly provided herein, no issuance by the Company of shares of stock
      of

        any
      class, or
      securities convertible into shares of stock of any class, shall affect, and
      no
      adjust­ment by reason thereof shall be made with respect to, the number
      or

        price
      of
      shares of Common Stock subject to an Option or Stock Purchase
      Right.

    


    b.  Dissolution
      or Liquidation.
      In the
      event of the proposed dissolution or liquidation of the Company, the
      Administrator shall notify each Optionee as soon as

        practicable
      prior to the effective date of such proposed transaction. The Administrator
      in
      its discretion may provide for an Optionee to have the right to exercise
      his

        or
      her Option
      until ten (10) days prior to such transaction as to all of the Optioned Stock
      covered thereby, including Shares as to which the Option would not

        otherwise
      be
      exercisable. In addition, the Administrator may provide that any Company
      repurchase option applicable to any Shares purchased upon exercise of
      an

        Option
      or
      Stock Purchase Right shall lapse as to all such Shares, provided the proposed
      dissolution or liquidation takes place at the time and in the
      manner

        contemplated.
      To the extent it has not been previously exercised, an Option or Stock Purchase
      Right will terminate immediately prior to the consummation of such

        proposed
      action.

    


    c.  Merger
      or Change in Control.
      In the
      event of a merger of the Company with or into another corporation, or a Change
      in Control, each outstanding Option and Stock

        Purchase
      Right shall be assumed or an equivalent option or right substituted by the
      successor corporation or a Parent or Subsidiary of the successor
      corporation.

        With
      respect
      to Options granted to an Outside Director pursuant to Section 13 that are
      assumed or substituted for, if following such assumption or substitution
      the

        Optionee’s
      status as a Director or a director of the successor corporation, as applicable,
      is terminated other than upon a voluntary resignation by the
      Optionee,

        then
      the
      Optionee shall fully vest in and have the right to exercise the Option as to
      all
      of the Optioned Stock, including Shares as to which it would not
      otherwise

        be
      vested or
      exercisable.

    


    In
      the
      event that the successor corporation refuses to assume or substitute for the
      Option or Stock Purchase Right, the Optionee shall fully vest in and have the
      right

                to
      exercise the
      Option or Stock Purchase Right as to all of the Optioned Stock, including Shares
      as to which it would not otherwise be vested or exercisable. If an

                Option
      or Stock
      Purchase Right becomes fully vested and exercisable in lieu of assumption or
      substitution in the event of a merger or sale of assets, the

                Administrator
      shall
      notify the Optionee in writing or electronically that the Option or Stock
      Purchase Right shall be fully vested and exercisable for a period
      of

                fifteen
      (15) days
      from the date of such notice, and the Option or Stock Purchase Right shall
      terminate upon the expiration of such period.

    


    For
      the
      purposes of this subsection (c), the Option or Stock Purchase Right shall be
      considered assumed if, following the merger or Change in Control, the option
      or

                right
      confers the
      right to purchase or receive, for each Share of Optioned Stock subject to the
      Option or Stock Purchase Right immediately prior to the merger or

                Change
      in Control,
      the consideration (whether stock, cash, or other securities or property)
      received in the merger or Change in Control by holders of Common

                Stock
      for each Share
      held on the effective date of the transaction (and if holders were offered
      a
      choice of consideration, the type of consideration chosen by the

                holders
      of a majority
      of the outstanding Shares); provided, however, that if such consideration
      received in the merger or Change in Control is not solely common

                stock
      of the
      successor corporation or its Parent, the Administrator may, with the consent
      of
      the successor corporation, provide for the consideration to be
      received

                upon
      the exercise of
      the Option or Stock Purchase Right, for each Share of Optioned Stock subject
      to
      the Option or Stock Purchase Right, to be solely common

                stock
      of the
      successor corporation or its Parent equal in fair market value to the per share
      consideration received by holders of Common Stock in the merger or

                Change
      in
      Control.

    


    15.  Date
      of Grant.
      The
      date of grant of an Option or Stock Purchase Right shall be, for all purposes,
      the date on which the Administrator makes the determination granting
      such

        Option
      or
      Stock Purchase Right, or such other later date as is determined by the
      Administrator. Notice of the determination shall be provided to each Optionee
      within a

        reasonable
      time after the date of such grant.

    


    16.  Amendment
      and Termination of the Plan.

    


    a.  Amendment
      and Termination.
      The
      Board may at any time amend, alter, suspend or terminate the Plan.

    


    b.  Stockholder
      Approval.
      The
      Company shall obtain stockholder approval of any Plan amendment to the extent
      necessary and desirable to comply with Applicable

        Laws.

    


    c.  Effect
      of Amendment or Termination.
      No
      amendment, alteration, suspension or termination of the Plan shall impair the
      rights of any Optionee, unless mutually

        agreed
      otherwise between the Optionee and the Administrator, which agreement must
      be in
      writing and signed by the Optionee and the Company. Termination of

        the
      Plan
      shall not affect the Administrator’s ability to exercise the powers granted to
      it hereunder with respect to Options granted under the Plan prior to the date
      of

        such
      termination.

    


    17.  Conditions
      Upon Issuance of Shares.

    


    a.  Legal
      Compliance.
      Shares
      shall not be issued pursuant to the exercise of an Option or Stock Purchase
      Right unless the exercise of such Option or Stock Purchase

        Right
      and the
      issuance and delivery of such Shares shall comply with Applicable Laws and
      shall
      be further subject to the approval of counsel for the Company

        with
      respect
      to such compliance.

    


    b.  Investment
      Representations.
      As a
      condition to the exercise of an Option or Stock Purchase Right, the Company
      may
      require the person exercising such Option or

        Stock
      Purchase Right to represent and warrant at the time of any such exercise that
      the Shares are being purchased only for investment and without any
      present

        intention
      to
      sell or distribute such Shares if, in the opinion of counsel for the Company,
      such a representation is required.

    


    18.  Inability
      to Obtain Authority.
      The
      inability of the Company to obtain authority from any regulatory body having
      jurisdiction, which authority is deemed by the Company’s

        counsel
      to be
      necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
      the Company of any liability in respect of the failure to issue or sell
      such

        Shares
      as to
      which such requisite authority shall not have been obtained.

    


    19.  Reservation
      of Shares.
      The
      Company, during the term of this Plan, will at all times reserve and keep
      available such number of Shares as shall be sufficient to satisfy
      the

        requirements
      of the Plan.

    


    20.  Stockholder
      Approval.
      The
      Plan shall be subject to approval by the stockholders of the Company within
      twelve (12) months after the date the Plan is adopted. Such

        stockholder
      approval shall be obtained in the manner and to the degree required under
      Applicable Laws.