Exhibit 10.1


BIOCRYST PHARMACEUTICALS, INC.
 STOCK INCENTIVE PLAN
 (formerly the “BioCryst Pharmaceuticals, Inc. 1991 Stock Option Plan”)


(AMENDED AND RESTATED EFFECTIVE MARCH 7, 2006)


ARTICLE ONE
 GENERAL PROVISIONS

	
  I.          PURPOSES   OF THE PLAN
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
     A.          This   Stock Incentive Plan (the “Plan”), formerly the “BioCryst Pharmaceuticals,   Inc. 1991 Stock Option Plan,” is intended to promote the interests of   BioCryst Pharmaceuticals, Inc., a Delaware corporation (the “Company”), by   providing a method whereby (i) key employees (including officers and directors)   of the Company (or its parent or subsidiary corporations) who are responsible   for the management, growth and financial success of the Company (or any   parent or subsidiary corporations), (ii) non-employee members of the board of   directors of the Company (the “Board”) (or of any parent or subsidiary   corporations) and (iii) consultants and other independent contractors who   provide valuable services to the Company (or any parent or subsidiary   corporations) may be offered the opportunity to acquire a proprietary
interest, or otherwise increase their proprietary interest, in the Company as   an incentive for them to remain in the service of the Company (or any parent   or subsidiary corporations).
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
     B.          For   purposes of the Plan, the following provisions shall be applicable in   determining the parent and subsidiary corporations of the Company:
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
                              -          Any   corporation (other than the Company) in an unbroken chain of corporations   ending with the Company shall be considered to be a parent corporation of the   Company, provided each such corporation in the unbroken chain (other than the   Company) owns, at the time of the determination, stock possessing fifty   percent (50%) or more of the total combined voting power of all classes of   stock in one of the other corporations in such chain.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
                              -          Each   corporation (other than the Company) in an unbroken chain of corporations   beginning with the Company shall be considered to be a subsidiary of the   Company, provided each such corporation (other than the last corporation) in   the unbroken chain owns, at the time of the determination, stock possessing   fifty percent (50%) or more of the total combined voting power of all classes   of stock in one of the other corporations in such chain.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
     C.          The   Plan, as hereby amended and restated, was approved and adopted by the Board   effective March 7, 2006 (the “Effective Date”) in order to (i) increase by   1,500,000 the number of shares of the Company’s common stock, par value $.01   per share (the “Common Stock”), that may be issued pursuant to the Plan, (ii)   expand the types of awards available under the Plan by adding a Stock   Issuance Program (as described below), (iii) change the name of the Plan in   accordance with the expanded types of awards that may be issued under the   Plan, and (iv) incorporate other items the Board deemed desirable.  The Board’s adoption of the Plan is   subject to approval by the Company’s stockholders at the Company’s 2006   Annual Stockholders Meeting.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
II.         STRUCTURE   OF THE PLAN
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
A.               The   Plan shall be divided into three separate equity programs:
  



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                              -          the   Discretionary Option Grant Program specified in Article Two, pursuant to   which eligible persons may, at the discretion of the Plan Administrator, be   granted options to purchase shares of Common Stock,
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
                              -          the   Stock Issuance Program specified in Article Three, pursuant to which eligible   persons may, at the discretion of the Plan Administrator, be issued shares of   Common Stock directly, either through immediate purchase of such shares or as   compensation for services rendered to the Company (or any parent or   subsidiary), and
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
                              -          the   Automatic Option Grant Program specified in Article Four, pursuant to which   non-employee members of the Board will automatically receive option grants to   purchase shares of Common Stock.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
     B.          Unless   the context clearly indicates otherwise, the provisions of Articles One and   Five of the Plan shall apply to all equity programs under the Plan and shall   accordingly govern the interests of all individuals under the Plan.
  





	
  
III.        ADMINISTRATION   OF THE PLAN
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
     A.          A   committee of two (2) or more non-employee Board members appointed by the   Board (the “Primary Committee”) shall have sole and exclusive authority to   administer the Discretionary Option Grant and Stock Issuance Programs with   respect to Section 16 Insiders.  For   purposes of this Section, a Section 16 Insider shall mean an officer or   director of the Company subject to the short-swing profit liabilities of   Section 16 of the Securities Exchange Act of 1934 (the “1934 Act”).
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
     B.          Administration   of the Discretionary Option Grant and Stock Issuance Programs with respect to   all other persons eligible to participate in the programs may, at the Board’s   discretion, be vested in the Primary Committee, another committee of one (1)   or more Board members appointed by the Board (the “Secondary Committee”), or   the Board may retain the power to administer those programs with respect to   all such persons.
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
     C.          Members   of the Primary Committee and any Secondary Committee shall serve for such   period of time as the Board may determine and shall be subject to removal by   the Board at any time.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
     D.          Each   Plan Administrator (whether the Primary Committee, the Board or the Secondary   Committee) shall, within the scope of its administrative functions under the   Plan, have full power and authority (subject to the express provisions of the   Plan) to establish such rules and regulations as it may deem appropriate for   the proper administration of the Discretionary Option Grant and Stock   Issuance Programs and to make such determinations under, and issue   interpretations of, the provisions of such programs and any outstanding   options or stock issuances thereunder as it may deem necessary or   advisable.  Decisions of the Plan   Administrator within the scope of its administrative authority under the Plan   shall be final and binding on all parties.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
     E.          Service   on the Primary Committee or the Secondary Committee shall constitute service   as a Board member, and members of each such committee shall accordingly be   entitled to full indemnification and reimbursement as Board members for their   service on such committee.  No member   of the Primary Committee or Secondary Committee shall be liable for any act   of omission made in good faith with respect to the Plan or any option grants   or stock issuances under the Plan.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
     F.          Administration   of the Automatic Option Grant Program shall be self-executing in accordance   with the express terms and conditions of Article Four, and no Plan   Administrator shall exercise any discretionary functions under that program.
  




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IV.         ELIGIBILITY
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
     A.          The   persons eligible to participate in the Discretionary Option Grant and Stock   Issuance Programs shall be limited to the following:
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
                              (i)          officers   and other key employees of the Company (or its parent or subsidiary   corporations) who render services which contribute to the management, growth   and financial success of the Company (or its parent or subsidiary   corporations);
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
                              (ii)         individuals   who are consultants or independent advisors and who provide valuable services   to the Company (or its parent or subsidiary corporations); and
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
                              (iii)        non-employee   members of the Board (or of the board of directors of parent or subsidiary   corporations).
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
     B.          Only   Board members who are not employees of the Company (or any parent or   subsidiary) shall be eligible to receive automatic option grants pursuant to   the Automatic Option Grant Program specified in Article Four.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
     C.          The   Plan Administrator shall, within the scope of its administrative jurisdiction   under the Plan, have full power and authority to determine (i) whether to   grant options in accordance with the Discretionary Option Grant Program or to   effect stock issuances in accordance with the Stock Issuance Program, (ii)   which eligible persons are to receive option grants under the Discretionary   Option Grant Program, the time or times when such option grants are to be   made, the number of shares to be covered by each such grant, the status of   the granted option as either an incentive stock option (“Incentive Option”)   which satisfies the requirements of Section 422 of the Internal Revenue Code   of 1986, as amended (the “Code”) or a non-statutory option not intended to   meet such requirements, the time or times when each such option is to become
exercisable, the vesting schedule (if any) applicable to the option shares   and the maximum term for which such option is to remain outstanding, and   (iii) which eligible persons are to receive stock issuances under the Stock   Issuance Program, the time or times when such issuances are to be made, the   number of shares to be issued to each participant, the vesting schedule (if   any) applicable to the shares and the consideration for such shares.
  
	
   
  	
  
 
  	
  
 
  





	
  
V.          STOCK   SUBJECT TO THE PLAN
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
     A.          Shares   of the Company’s Common Stock shall be available for issuance under the Plan   and shall be drawn from either the Company’s authorized but unissued shares   of Common Stock or from reacquired shares of Common Stock, including shares   repurchased by the Company on the open market.  The maximum number of shares of Common Stock which may be   issued over the term of the Plan, as amended and restated, shall not exceed   4,957,982 shares, subject to adjustment from time to time in accordance with   the provisions of this Section V.    Such authorized share reserve includes (i) the 3,457,982 shares of   Common Stock reserved and available for issuance under the Plan as of March   20, 2006; and (ii) the increase of 1,500,000 shares of Common Stock   authorized by the Board on March 7, 2006 subject to shareholder approval at   the 2006 Annual
Stockholders Meeting.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
     B.          In   no event shall the number of shares of Common Stock for which any one   individual participating in the Plan may receive options, separately   exercisable stock appreciation rights and direct stock issuances exceed   1,500,000 shares of Common Stock in the aggregate.  For purposes of such limitation, however, no stock options granted   prior to the date the Common Stock was first registered under Section 12 of   the 1934 Act (the “Section 12(g) Registration Date”) shall be taken into   account.
  




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     C.          Should   an outstanding option under this Plan expire or terminate for any reason   prior to exercise in full, the shares subject to the portion of the option   not so exercised shall be available for subsequent option grant or direct   stock issuances under the Plan.  Unvested   shares issued under the Plan and subsequently repurchased by the Corporation,   at the original issue price paid per share, pursuant to the Corporation’s   repurchase rights under the Plan, or shares underlying terminated share right   awards, shall be added back to the number of shares of Common Stock reserved   for issuance under the Plan and shall accordingly be available for reissuance   through one or more subsequent option grants or direct stock issuances under   the Plan.  However, should the   exercise price of an outstanding option under the Plan be paid with shares of
Common Stock or should shares of Common Stock otherwise issuable under the   Plan be withheld by the Company in satisfaction of the withholding taxes   incurred in connection with the exercise of an outstanding option or the   vesting of a direct stock issuance under the Plan, then the number of shares   of Common Stock available for issuance under the Plan shall be reduced by the   gross number of shares for which the option is exercised or which vest under   the direct stock issuance, and not by the net number of shares of Common   Stock actually issued to the holder of such option or stock issuance.  Shares of Common Stock subject to any   option surrendered for an appreciation distribution under Section IV of   Article Two or Section IV of Article Four shall not be available for   subsequent issuance under the Plan.
  
	
   
  	
  
 
  
	
  
 
  	
  
     D.          In   the event any change is made to the Common Stock issuable under the Plan by   reason of any stock split, stock dividend, recapitalization, combination of   shares, exchange of shares or other change affecting the outstanding Common   Stock as a class without receipt of consideration, then appropriate   adjustments shall be made to (i) the maximum number and/or class of   securities issuable under the Plan, (ii) the maximum number and/or class of   securities for which any one individual participating in the Plan may be   granted stock options, separately exercisable stock appreciation rights, and   direct stock issuances under the Plan from and after the Section 12(g)   Registration Date, (iii) the number and/or class of securities and price per   share in effect under each outstanding option under the Plan, (iv) the number   and/or class of securities in effect under
each outstanding direct stock   issuance under the Plan, and (v) the number and/or class of securities for   which automatic option grants are subsequently to be made per non-employee   Board member under the Automatic Option Grant Program.  The purpose of such adjustments shall be   to preclude the enlargement or dilution of rights and benefits under the   Plan.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
     E.          The   fair market value per share of Common Stock on any relevant date under the   Plan shall be determined in accordance with the following provisions:
  






	
  
 
  	
  
                              (i)          If   the Common Stock is not at the time listed or admitted to trading on any   national securities exchange but is traded in the over-the-counter market,   the fair market value shall be the mean between the highest bid and lowest   asked prices (or, if such information is available, the closing selling   price) per share of Common Stock on the date in question in the   over-the-counter market, as such prices are reported by the National   Association of Securities Dealers through the Nasdaq National Market or any successor   system.  If there are no reported bid   and asked prices (or closing selling price) for the Common Stock on the date   in question, then the mean between the highest bid price and lowest asked
price (or the closing selling price) on the last preceding date for which   such quotations exist shall be determinative of fair market value.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                              (ii)          If   the Common Stock is at the time listed or admitted to trading on any national   securities exchange, then the fair market value shall be the closing selling   price per share of Common Stock on the date in question on the securities   exchange determined by the Plan Administrator to be the primary market for   the Common Stock, as such price is officially quoted in the composite tape of   transactions on such exchange.  If   there is no reported sale of Common Stock on the exchange on the date in   question, then the fair market value shall be the closing selling price on   the exchange on the last preceding date for which such quotation exists.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
                              (iii)          If   the Common Stock is at the time neither listed nor admitted to trading on any   securities exchange nor traded in the over-the-counter market, then the fair   market value shall be determined by the Plan Administrator after taking into   account such factors as the Plan Administrator shall deem appropriate.
  




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ARTICLE TWO
 DISCRETIONARY OPTION GRANT PROGRAM


     I.          TERMS AND CONDITIONS OF OPTIONS


                              Options granted pursuant to this Article Two shall be authorized by action of the Plan Administrator and may, at the Plan Administrator’s discretion, be either Incentive Options or non-statutory options.  Individuals who are not Employees may only be granted non-statutory options under this Article Two.  Each option granted shall be evidenced by one or more instruments in the form approved by the Plan Administrator.  Each such instrument shall, however, comply with the terms and conditions specified below, and each instrument evidencing an Incentive Option shall, in addition, be subject to the applicable provisions of Section II of this Article Two.


          A.          Option Price.


                                        1.          The option price per share shall be fixed by the Plan Administrator.  In no event, however, shall the option price per share be less than one hundred percent (100%) of the fair market value per share of Common Stock on the date of the option grant.


                                        2.          The option price shall become immediately due upon exercise of the option and shall, subject to the provisions of Section V of this Article Two and the instrument evidencing the grant, be payable as follows:

	
  
 
  	
  
                                          -          full   payment in cash or check drawn to the Company’s order;
  
	
  
 
  	
  
 
  
	
   
  	
  
                                          -          full   payment in shares of Common Stock held by the optionee for the requisite   period necessary to avoid a charge to the Company’s earnings for financial   reporting purposes and valued at fair market value on the Exercise Date (as   such term is defined below);
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                                          -          full   payment through a combination of shares of Common Stock held by the optionee   for the requisite period necessary to avoid a charge to the Company’s   earnings for financial reporting purposes and valued at fair market value on   the Exercise Date and cash or cash equivalent; or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                                          -          full   payment through a broker-dealer sale and remittance procedure pursuant to   which the optionee (I) shall provide irrevocable written instructions to a   designated brokerage firm to effect the immediate sale of the purchased   shares and remit to the Company, out of the sale proceeds available on the   settlement date, sufficient funds to cover the aggregate option price payable   for the purchased shares plus all applicable Federal and State income and   employment taxes required to be withheld by the Company in connection with   such purchase and (II) shall provide written directives to the Company to   deliver the certificates for the purchased
shares directly to such brokerage   firm in order to complete the sale transaction.
  



                    For purposes of this subparagraph 2, the Exercise Date shall be the date on which written notice of the option exercise is delivered to the Corporation.  Except to the extent the sale and remittance procedure is utilized in connection with the exercise of the option, payment of the option price for the purchased shares must accompany such notice.

	
  
 
  	
  
B.      Term and Exercise of Options.
  
	
  
 
  	
  
 
  
	
  
                    Each   option granted under this Article Two shall be exercisable at such time or   times, during such period, and for such number of shares as shall be   determined by the Plan Administrator and set forth in the instrument   evidencing the option grant.  No such   option, however, shall have a maximum term in excess of ten (10) years from   the grant date.  During the lifetime   of the optionee, the option, together with any stock appreciation rights   pertaining to such option, shall be exercisable only by the optionee and   shall not be assignable or transferable by the optionee except for a 
  




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  transfer of   the option by will or by the laws of descent and distribution following the   optionee’s death.  However, the Plan   Administrator shall have the discretion to provide that a non-statutory   option may, in connection with the optionee’s estate plan, be assigned in   whole or in part during the optionee’s lifetime either as (i) as a gift to   one or more members of optionee’s immediate family, to a trust in which   optionee and/or one or more such family members hold more than fifty percent   (50%) of the beneficial interest or an entity in which more than fifty   percent (50%) of the voting interests are owned by optionee and/or one or   more such family members, or (ii) pursuant to a domestic relations   order.  The assigned portion shall be   exercisable only by the person or persons who acquire a proprietary interest   in the option pursuant to such assignment.    The terms applicable to the assigned portion

shall be the same as   those in effect for this option immediately prior to such assignment and   shall be set forth in such documents issued to the assignee as the Plan   Administrator may deem appropriate.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
C.          Termination of Service.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                              1.             Except to the   extent otherwise provided pursuant to Section V of this Article Two, the   following provisions shall govern the exercise period applicable to any   options held by the optionee at the time of cessation of Service or death.
  





	
  
 
  	
  
                                             -          Should   the optionee cease to remain in Service for any reason other than death or   permanent disability, then the period for which each outstanding option held   by such optionee is to remain exercisable shall be limited to the three   (3)-month period following the date of such cessation of Service.  However, should optionee die during the   three (3)-month period following his or her cessation of service, the   personal representative of the optionee’s estate or the person or persons to   whom the option is transferred pursuant to the optionee’s will or in   accordance with the laws of descent and distribution shall
have a twelve   (12)-month period following the date of the optionee’s death during which to   exercise such option.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                                             -          In   the event such Service terminates by reason of permanent disability (as   defined in Section 22(e)(3) of the Internal Revenue Code), then the period   for which each outstanding option held by the optionee is to remain   exercisable shall be limited to the twelve (12)-month period following the   date of such cessation of Service.
  





	
  
 
  	
  
                                             -          Should   the optionee, after completing five (5) full years of service, die while in   Service, then the exercisability of each of his or her outstanding options   shall automatically accelerate so that each such option shall become fully   exercisable with respect to the total number of shares of Common Stock at the   time subject to such option and may be exercised for all or any portion of   such shares.  The personal   representative of the optionee’s estate or the person or persons to whom the   option is transferred pursuant to the optionee’s will or in accordance with   the laws of descent and distribution shall have
a twelve (12)-month period   following the date of the optionee’s death during which to exercise such   option.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                                             -          In   the event such service terminates by reason of death prior to the optionee   obtaining five (5) full years of service, then the period for which each   outstanding vested option held by the optionee at the time of death shall be   exercisable by the optionee’s estate or the person or persons to whom the   option is transferred pursuant to the optionee’s will shall be limited to the   twelve (12)-month period following the date of the optionee’s death.
  
	
   
  	
  
 
  
	
  
 
  	
  
                                             -          Under   no circumstances, however, shall any such option be exercisable after the   specified expiration date of the option term.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                                             -          Each   such option shall, during such limited exercise period, be exercisable for   any or all of the shares for which the option is exercisable on the date of   the optionee’s cessation of Service.    Upon the expiration of such limited exercise period or (if earlier)   upon the expiration of the option term, the option shall terminate and cease   to be exercisable.  However, each   outstanding option shall immediately terminate and cease to remain   outstanding, at the time of the optionee’s cessation of Service, with respect   to any shares for which the option is not otherwise at that time exercisable   or in which
the optionee is not otherwise vested.
  




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                                             -          Should   (i) the optionee’s Service be terminated for misconduct (including, but not   limited to, any act of dishonesty, willful misconduct, fraud or embezzlement)   or (ii) the optionee make any unauthorized use or disclosure of confidential   information or trade secrets of the Company or its parent or subsidiary   corporations, then in any such event all outstanding options held by the   optionee under this Article Two shall terminate immediately and cease to be   exercisable.
  
	
  
 
  	
  
 
  
	
  
                                        2.             The Plan   Administrator shall have complete discretion, exercisable either at the time   the option is granted or at any time while the option remains outstanding, to   permit one or more options held by the optionee under this Article Two to be   exercised, during the limited period of exercisability provided under   subparagraph 1 above, not only with respect to the number of shares for which   each such option is exercisable at the time of the optionee’s cessation of   Service but also with respect to one or more subsequent installments of   purchasable shares for which the option would otherwise have become   exercisable had such cessation of Service not
occurred.
  
	
   
  
	
  
                                        3.             For purposes of   the foregoing provisions of this Section I.C (and for all other purposes   under the Plan):
  





	
  
 
  	
  
                                          -          The   optionee shall be deemed to remain in the Service of the Company for so long   as such individual renders services on a periodic basis to the Company (or   any parent or subsidiary corporation) in the capacity of an Employee, a   non-employee member of the board of directors or an independent consultant or   advisor, unless the agreement evidencing the applicable option grant   specifically states otherwise.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                                          -          The   optionee shall be considered to be an Employee for so long as such individual   remains in the employ of the Company or one or more of its parent or   subsidiary corporations, subject to the control and direction of the employer   entity not only as to the work to be performed but also as to the manner and   method of performance.
  
	
   
  	
  
 
  
	
  
     D.          Stockholder Rights.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
An optionee   shall have no stockholder rights with respect to any shares covered by the   option until such individual shall have exercised the option and paid the   option price for the purchased shares.
  
	
  
 
  	
  
 
  
	
  
     E.          Repurchase Rights.
  
	
  
 
  	
  
 
  
	
  
                                        The   shares of Common Stock acquired upon the exercise of options granted under   this Article Two may be subject to repurchase by the Company in accordance   with the following provisions:
  





	
  
 
  	
  
                                        (a)          The   Plan Administrator shall have the discretion to grant options which are   exercisable for unvested shares of Common Stock under this Article Two.  Should the optionee cease Service while   holding such unvested shares, the Company shall have the right to repurchase   any or all those unvested shares at the option price paid per share.  The terms and conditions upon which such   repurchase right shall be exercisable (including the period and procedure for   exercise and the appropriate vesting schedule for the purchased shares) shall   be established by the Plan Administrator and set forth in the instrument   evidencing such repurchase
right.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                                        (b)          All   of the Company’s outstanding repurchase rights shall automatically terminate,   and all shares subject to such terminated rights shall immediately vest in   full, upon the occurrence of any Corporate Transaction under Section III of   this Article Two, except to the extent:    (i) any such repurchase right is expressly assigned to the successor   corporation (or parent thereof) in connection with the Corporate Transaction   or (ii) such termination is precluded by other limitations imposed by the   Plan Administrator at the time the repurchase right is issued.
  
	
   
  	
  
 
  
	
  
 
  	
  
                                        (c)          The   Plan Administrator shall have the discretionary authority, exercisable either   before or after the optionee’s cessation of Service, to cancel the   Corporation’s outstanding repurchase rights with respect to one or more   shares purchased or purchasable by the optionee under this Discretionary   Option Grant Program and thereby accelerate the vesting of such shares in   whole or in part at any time.
  




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II.
  	
  
INCENTIVE   OPTIONS
  
	
  
 
  	
  
 
  
	
  
                       The terms and conditions specified below shall be applicable to all Incentive   Options granted under this Article Two.    Incentive Options may only be granted to individuals who are Employees   of the Company.  Options which are   specifically designated as “non-statutory” options when issued under the Plan   shall not be subject to such terms and conditions.
  





	
  
 
  	
  
     A.          Dollar Limitation.  The aggregate fair market value   (determined as of the respective date or dates of grant) of the Common Stock   for which one or more options granted to any Employee under this Plan (or any   other option plan of the Company or its parent or subsidiary corporations)   may for the first time become exercisable as incentive stock options under   the Federal tax laws during any one calendar year shall not exceed the sum of   One Hundred Thousand Dollars ($100,000).    To the extent the Employee holds two or more such options which become   exercisable for the first time in the same calendar year, the foregoing limitation   on the exercisability of such options as incentive stock options under the   Federal tax laws shall be applied on the basis of the order in which such   options are granted.  Should the   number of shares of
Common Stock for which any Incentive Option first becomes   exercisable in any calendar year exceed the applicable One Hundred Thousand   Dollar ($100,000) limitation, then that option may nevertheless be exercised   in such calendar year for the excess number of shares as a non-statutory   option under the Federal tax laws.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
     B.          10% Stockholder.  If any individual to whom an Incentive   Option is granted is the owner of stock (as determined under Section 424(d)   of the Internal Revenue Code) possessing 10% or more of the total combined   voting power of all classes of stock of the Company or any one of its parent   or subsidiary corporations, then the option price per share shall not be less   than one hundred and ten percent (110%) of the fair market value per share of   Common Stock on the grant date, and the option term shall not exceed five (5)   years, measured from the grant date.
  
	
   
  	
  
 
  
	
  
 
  	
  
     C.          Termination   of Employment.    Any portion of an Incentive Option that remains outstanding (by reason   of the optionee remaining in the Service of the Company, pursuant to the Plan   Administrator’s exercise of discretion under Section V of this Article Two,   or otherwise) more than 3 months following the date an optionee ceases to be   an Employee of the Company shall thereafter be exercisable as a non-statutory   option under federal tax laws.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
                         Except   as modified by the preceding provisions of this Section II, the provisions of   Articles One, Two and Five of the Plan shall apply to all Incentive Options   granted hereunder.
  




     III.     CORPORATE TRANSACTIONS/CHANGES IN CONTROL


          A.          In the event of any of the following stockholder-approved transactions (a “Corporate Transaction”):

	
   
  	
  
                                        (i)          a   merger or consolidation in which the Company is not the surviving entity,   except for a transaction the principal purpose of which is to change the   State of the Company’s incorporation,
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                                        (ii)         the   sale, transfer or other disposition of all or substantially all of the assets   of the Company in liquidation or dissolution of the Company, or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                                        (iii)        any   reverse merger in which the Company is the surviving entity but in which   securities possessing more than fifty percent (50%) of the total combined   voting power of the Company’s outstanding securities are transferred to a   person or persons different from the persons holding those securities   immediately prior to such merger,
  



then the exercisability of each option outstanding under this Article Two shall automatically accelerate so that each such option shall, immediately prior to the specified effective date for the Corporate Transaction, become fully exercisable with respect to the total number of shares of Common Stock at the time subject to such option and may be exercised for


8









all or any portion of such shares.  However, an outstanding option under this Article Two shall not so accelerate if and to the extent the acceleration of such option is subject to other limitations imposed by the Plan Administrator at the time of grant, unless the Plan Administrator, in its discretion, later determines to waive such limitations.

	
  
 
  	
  
     B.          Immediately   after the consummation of the Corporate Transaction, all outstanding options   under this Article Two shall terminate and cease to be outstanding, except to   the extent assumed by the successor corporation or its parent company.  The Plan Administrator shall have complete   discretion to provide, on such terms and conditions as it sees fit, for a   cash payment to be made to any optionee on account of any option terminated   in accordance with this paragraph, in an amount equal to the excess (if any)   of (A) the fair market value of the shares subject to the option as of the   date of the Corporate Transaction, over (B) the aggregate exercise price of   the option.
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
     C.          Each   outstanding option under this Article Two which is assumed in connection with   the Corporate Transaction or is otherwise to continue in effect shall be   appropriately adjusted, immediately after such Corporate Transaction, to   apply and pertain to the number and class of securities which would have been   issued to the option holder, in consummation of such Corporate Transaction,   had such person exercised the option immediately prior to such Corporate   Transaction.  Appropriate adjustments   shall also be made to the option price payable per share, provided the   aggregate option price payable for such securities shall remain the   same.  In addition, the class and   number of securities available for issuance under the Plan following the   consummation of the Corporate Transaction shall be appropriately adjusted.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
     D.          The   grant of options under this Article Two shall in no way affect the right of   the Company to adjust, reclassify, reorganize or otherwise change its capital   or business structure or to merge, consolidate, dissolve, liquidate or sell   or transfer all or any part of its business or assets.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
     E.          The   exercisability of each outstanding option under this Article Two shall   automatically accelerate, and the Company’s outstanding repurchase rights   under this Article Two shall immediately terminate upon the occurrence of a   Change in Control.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
     F.          For   purposes of this Section III (and for all other purposes under the Plan), a   Change in Control shall be deemed to occur in the event:
  





	
  
 
  	
  
                                        (i)          any   person or related group of persons (other than the Company or a person that   directly or indirectly controls, is controlled by, or is under common control   with, the Company) directly or indirectly acquires beneficial ownership   (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing   more than fifty percent (50%) of the total combined voting power of the   Company’s outstanding securities pursuant to a tender or exchange offer made   directly to the Company’s stockholders; or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                                        (ii)          there   is a change in the composition of the Board over a period of twenty-four (24)   consecutive months or less such that a majority of the Board members (rounded   up to the next whole number) ceases, by reason of one or more contested   elections for Board membership, to be comprised of individuals who either (A)   have been Board members continuously since the beginning of such period or   (B) have been elected or nominated for election as Board members during such   period by at least two-thirds of the Board members described in clause (A)   who were still in office at the time such election or nomination was approved   by the Board.
  





	
  
 
  	
  
     G.          All   options accelerated in connection with the Change in Control shall remain   fully exercisable until the expiration or sooner termination of the option   term.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
     H.          The   portion of any Incentive Option accelerated under this Section III in   connection with a Corporate Transaction or Change in Control shall remain   exercisable as an incentive stock option under the Federal tax laws only to   the extent the dollar limitation of Section II of this Article Two is not   exceeded.  To the extent such dollar   limitation is exceeded, the accelerated portion of such option shall be   exercisable as a non-statutory option under the Federal tax laws.
  




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IV.          STOCK APPRECIATION RIGHTS

	
  
 
  	
  
     A.          Provided   and only if the Plan Administrator determines in its discretion to implement   the stock appreciation right provisions of this Section IV, one or more   optionees may be granted the right, exercisable upon such terms and   conditions as the Plan Administrator may establish, to surrender all or part   of an unexercised option granted under this Article Two in exchange for a   distribution from the Company in an amount equal to the excess of (i) the   fair market value (on the option surrender date) of the number of shares in   which the optionee is at the time vested under the surrendered option (or   surrendered portion thereof) over (ii) the aggregate option price payable for   such vested shares.  The distribution   may be made in shares of Common Stock valued at fair market value on the   option surrender date, in cash, or partly in shares and partly in
cash, as   the Plan Administrator shall determine in its sole discretion.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
     B.          The   shares of Common Stock subject to any option surrendered for an appreciation   distribution pursuant to this Section IV shall not be available for   subsequent option grant under the Plan.
  




V.          EXTENSION OF EXERCISE PERIOD


                              The Plan Administrator shall have full power and authority, exercisable either at the time the option is granted or at any time while the option remains outstanding, to extend the period of time for which any option granted under this Article Two is to remain exercisable following the optionee’s cessation of Service or death from the limited period in effect under Section I.C.1 of Article Two to such greater period of time as the Plan Administrator shall deem appropriate; provided, however, that in no event shall such option be exercisable after the specified expiration date of the option term.


ARTICLE THREE
 STOCK ISSUANCE PROGRAM


     I.          STOCK ISSUANCE TERMS


Shares of Common Stock may be issued under the Stock Issuance Program through direct and immediate issuances without any intervening option grants.  Each such stock issuance shall be evidenced by a Stock Issuance Agreement which complies with the terms specified below. Shares of Common Stock may also be issued under the Stock Issuance Program pursuant to share right awards which entitle the recipients to receive shares upon the attainment of designated Service and/or performance goals.


          A.          Purchase Price.


                                        1.          The purchase price per share shall be fixed by the Plan Administrator, but shall not be less than one hundred percent (100%) of the fair market value per share of Common Stock on the issuance date. 


                                        2.          Shares of Common Stock may be issued under the Stock Issuance Program for any of the following items of consideration which the Plan Administrator may deem appropriate in each individual instance: 

	
   
  	
  
                                          -          cash   or check made payable to the Company, or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                                          -          services   rendered to the Company (or any parent or subsidiary).
  




          B.          Vesting Provisions.


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                                        1.          The Plan Administrator may issue shares of Common Stock under the Stock Issuance Program which are fully and immediately vested upon issuance or which are to vest in one or more installments over the participant’s period of Service or upon attainment of specified performance objectives. Alternatively, the Plan Administrator may issue share right awards under the Stock Issuance Program which shall entitle the recipient to receive a specified number of shares of Common Stock upon the attainment of one or more Service and/or performance goals established by the Plan Administrator. Upon the attainment of such Service and/or performance goals, fully-vested shares of
Common Stock shall be issued in satisfaction of those share right awards. 


                                        2.          Any new, substituted or additional securities or other property (including money paid other than as a regular cash dividend) issued by reason of any stock dividend, stock split, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without the Company’s receipt of consideration, shall be issued or set aside with respect to the shares of unvested Common Stock granted to a participant or subject to a participant’s share right award, subject to (i) the same vesting requirements applicable to the participant’s unvested shares of Common Stock or share rights award, and (ii) such
escrow arrangements as the Plan Administrator shall deem appropriate. 


                                        3.          The participant shall have full stockholder rights with respect to any shares of Common Stock issued to the participant under the Stock Issuance Program, whether or not the participant’s interest in those shares is vested. Accordingly, the participant shall have the right to vote such shares and to receive any regular cash dividends paid on such shares.  


                                        4.          The participant shall not have any stockholders rights with respect to any shares of Common Stock subject to a share right award. However, the Plan Administrator may provide for a participant to receive one or more dividend equivalents with respect to such shares, entitling the participant to all regular cash dividends payable on the shares of Common Stock underlying the share right award, which amounts shall be (i) subject to the same vesting requirements applicable to the shares of Common Stock underlying the share rights award, and (ii) payable upon issuance of the shares to which such dividend equivalents relate.


                                        5.          Should the participant cease to remain in Service while holding one or more unvested shares of Common Stock issued under the Stock Issuance Program or should the performance objectives not be attained with respect to one or more such unvested shares of Common Stock, then those shares shall be immediately surrendered to the Company for cancellation, and the participant shall have no further stockholder rights with respect to those shares. To the extent the surrendered shares were previously issued to the participant for consideration paid in cash, the Company shall repay to the participant the cash consideration paid for the surrendered shares. 


                                        6.          The Plan Administrator may in its discretion waive the surrender and cancellation of one or more unvested shares of Common Stock which would otherwise occur upon the cessation of the Participant’s Service or the non-attainment of the performance objectives applicable to those shares. Such waiver shall result in the immediate vesting of the participant’s interest in the shares of Common Stock as to which the waiver applies.  Such waiver may be effected at any time, whether before or after the participant’s cessation of Service or the attainment or non-attainment of the applicable performance objectives. 


                                        7.          Outstanding share right awards under the Stock Issuance Program shall automatically terminate, and no shares of Common Stock shall actually be issued in satisfaction of those awards, if the Service and/or performance goals established for such awards are not attained. The Plan Administrator, however, shall have the discretionary authority to issue shares of Common Stock in satisfaction of one or more outstanding share right awards as to which the designated Service and/or performance goals are not attained. Such authority may be exercised at any time, whether before or after the participant’s cessation of Service or the attainment or non-attainment of the
applicable performance objectives.


     II.          CORPORATE TRANSACTION/CHANGE IN CONTROL


          A.          All
of the Company’s outstanding repurchase rights under the Stock Issuance
Program shall terminate automatically, and all the shares of Common Stock
subject to those terminated rights shall immediately vest in full, in the event
of any Corporate Transaction, except to the extent (i) those repurchase rights
are to be assigned to the 


11









successor corporation (or parent thereof)
in connection with the such Corporate Transaction, or (ii) such accelerated
vesting is precluded by other limitations imposed in the Stock Issuance
Agreement, unless the Plan Administrator determines to waive such
limitations.


          B.          Each repurchase right which is assigned in connection with (or is otherwise to continue in effect after) a Corporate Transaction shall be appropriately adjusted such that it shall apply and pertain to the number and class of securities issued to the participant in consummation of the Corporate Transaction with respect to the shares granted to participant under this Article III.


          C.          All of the Company’s outstanding repurchase rights under the Stock Issuance Program shall automatically terminate, and all shares of Common Stock subject to those terminated rights shall immediately vest, in the event of any Change in Control.


          D.          All shares of Common Stock underlying outstanding share right awards issued under the Stock Issuance Program shall vest, and all of the shares of Common Stock subject to such share right awards shall be issued to participants, immediately prior to the consummation of any Corporate Transaction or Change in Control. 


     III.          SHARE ESCROW/LEGENDS


                             Unvested shares may, in the Plan Administrator’s discretion, be held in escrow by the Company until the participant’s interest in such shares vests or may be issued directly to the participant with restrictive legends on the certificates evidencing those unvested shares.


ARTICLE FOUR
 AUTOMATIC OPTION GRANT PROGRAM


     I.          ELIGIBILITY.  


                              The individuals eligible to receive automatic option grants pursuant to the provisions of this Article Four shall be (i) those individuals who, after the Effective Date, first become non-employee Board members, whether through appointment by the Board, election by the Company’s stockholders, or by continuing to serve as a Board member after ceasing to be employed by the Company, and (ii) those individuals already serving as non-employee Board members on the Effective Date.  As used herein, a “non-employee” Board member is any Board member who is not employed by the Company on the date in question.


     II.          TERMS AND CONDITIONS OF AUTOMATIC OPTION GRANTS


          A.                  Grants.  Option grants shall be made under this Article Three as follows:


                                        1.          Each individual who first becomes a non-employee Board member on or after the Effective Date shall automatically be granted at such time a non-statutory stock option under the terms and conditions of this Article Four, to purchase a number shares of Common Stock equal to the product of (i) 20,000, and (ii) a fraction, the numerator of which is the number of months (rounded to the nearest whole number) remaining between the date such Board member first became a non-employee Board member and the Company’s next scheduled Annual Stockholders Meeting, and the denominator of which is 12.


                                        2.          Immediately following each Annual Stockholders Meeting of the Company, each individual who is then serving as a non-employee Board member (except for those individuals first elected to serve as 


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non-employee Board members at such meeting), shall automatically be granted a non-statutory stock option under this Article Four to acquire 15,000 shares of Common Stock.


          B.          Exercise Price.  The exercise price per share of each automatic option grant made under this Article Four shall be equal to one hundred percent (100%) of the fair market value per share of Common Stock on the automatic grant date.


          C.          Payment.  The exercise price shall be payable in one of the alternative forms specified below:

	
  
 
  	
  
                                        (i)          full   payment in cash or check made payable to the Company’s order; or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                                        (ii)         full   payment in shares of Common Stock held for the requisite period necessary to   avoid a charge to the Company’s reported earnings and valued at fair market   value on the Exercise Date (as such term is defined below); or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                                        (iii)        full   payment in a combination of shares of Common Stock held for the requisite   period necessary to avoid a charge to the Company’s reported earnings and   valued at fair market value on the Exercise Date and cash or check payable to   the Company’s order; or
  
	
   
  	
  
 
  
	
  
 
  	
  
                                        (iv)         full   payment through a sale and remittance procedure pursuant to which the   non-employee Board member (I) shall provide irrevocable written instructions   to a designated brokerage firm to effect the immediate sale of the purchased   shares and remit to the Company, out of the sale proceeds available on the   settlement date, sufficient funds to cover the aggregate exercise price   payable for the purchased shares and shall (II) concurrently provide written   directives to the Company to deliver the certificates for the purchased   shares directly to such brokerage firm in order to complete the sale   transaction.
  




                              For purposes of this subparagraph C, the Exercise Date shall be the date on which written notice of the option exercise is delivered to the Company.  Except to the extent the sale and remittance procedure specified above is utilized for the exercise of the option, payment of the option price for the purchased shares must accompany the exercise notice. 


          D.          Option Term.  Each automatic grant under this Article Four shall have a term of ten (10) years measured from the automatic grant date.


          E.          Exercisability.


                              1.          Each initial automatic grant made pursuant to Section II.A.1 of this Article Four shall vest and become exercisable over the period extending from the date of grant to the scheduled date of the next Annual Stockholders Meeting following the grant.  A pro rata portion of such automatic grant shall vest on the last day of each calendar month following the date of grant, with the final portion vesting on the scheduled date of such Annual Stockholders Meeting.


                              2.          Each 15,000 share automatic grant made pursuant to Section II.A.2 of this Article Four shall vest and become exercisable for 1/12th of the option shares upon the optionee’s completion of each month of Board service over the twelve (12)-month period measured from the automatic grant date.


          F.          Non-Transferability.  During the lifetime of the optionee, each automatic option, together with the limited stock appreciation right pertaining to such option, shall be exercisable only by the optionee, except to the extent such option or the limited stock appreciation right is assigned or transferred (i) by will or by the laws of descent and distribution following the optionee’s death, or (ii) during optionee’s lifetime either (A) as a gift in connection with the optionee’s estate plan to one or more members of optionee’s immediate family, to a trust in which optionee and/or one or more such family members hold more than fifty percent (50%) of the beneficial

interest or to an entity in which more than fifty percent (50%) of the voting interests are owned by optionee and/or one or more such family members, or (B) pursuant to a domestic relations order.  The portion of any option 


13









assigned or transferred during optionee’s lifetime shall be exercisable only by the person or persons who acquire a proprietary interest in the option pursuant to such assignment.  The terms applicable to the assigned portion shall be the same as those in effect for this option immediately prior to such assignment and shall be set forth in such documents issued to the assignee as the Plan Administrator may deem appropriate.


          G.          Cessation of Board Service.


                                        1.          Should the optionee cease to serve as a Board member for any reason while holding one or more automatic option grants under this Article Four, then such optionee shall have the remainder of the ten (10) year term of each such option in which to exercise each such option for any or all of the shares of Common Stock for which the option is exercisable at the time of such cessation of Board service.  Each such option shall immediately terminate and cease to be outstanding, at the time of such cessation of Board service, with respect to any shares for which the option is not otherwise at that time exercisable.  Upon the expiration of the ten (10)-year option
term, the automatic grant shall terminate and cease to be outstanding in its entirety.  Upon the death of the optionee, whether before or after cessation of Board service, any option held by optionee at the time of optionee’s death may be exercised, for any or all of the shares of Common Stock for which the option was exercisable at the time of cessation of Board service by the optionee and which have not been theretofore exercised by the optionee, by the personal representative of the optionee’s estate or by the person or persons to whom the option is transferred pursuant to the optionee’s will or in accordance with the laws of descent and distribution. Any such exercise must occur during the reminder of the ten (10) year term of such option.


          H.          Stockholder
Rights.  The holder of an automatic option grant under this Article
Four shall have none of the rights of a stockholder with respect to any shares
subject to such option until such individual shall have exercised the option and
paid the exercise price for the purchased shares.


     III.          CORPORATE TRANSACTIONS/CHANGES IN CONTROL


          A.          In the event of a Corporate Transaction, the exercisability of each option outstanding under this Article Four shall      automatically accelerate so that each such option shall, immediately prior to the specified effective date for the Corporate      Transaction, become fully exercisable with respect to the total number of shares of Common Stock at the time subject to such      option and may be exercised for all or any portion of such shares.  


          B.          Immediately
after the consummation of the Corporate Transaction, all outstanding options
under this Article Four shall terminate and cease to be outstanding, except to
the extent assumed by the successor corporation or its parent company.  If
so provided by the terms of the Corporate Transaction, the optionee shall
receive a cash payment on account of any option terminated in accordance with
this paragraph, in an amount equal to the excess (if any) of (A) the fair market
value of the shares subject to the option as valued pursuant to the Corporate
Transaction over (B) the aggregate exercise price of the option.


          C.          Each
outstanding option under this Article Four which is assumed in connection with
the Corporate Transaction or is otherwise to continue in effect shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply
and pertain to the number and class of securities which would have been issued
to the option holder, in consummation of such Corporate Transaction, had such
person exercised the option immediately prior to such Corporate
Transaction.  Appropriate adjustments shall also be made to the option
price payable per share, provided the aggregate option price payable for such
securities shall remain the same.


          D.          In
connection with any Change in Control, the exercisability of each option grant
outstanding at the time under this Article Four shall automatically accelerate
so that each such option shall, immediately prior to the specified effective
date for the Change in Control, become fully exercisable with respect to the
total number of shares of Common Stock at the time subject to such option and
may be exercised for all or any portion of such shares. 



14









          E.          The automatic grant of options under this Article Four shall in no way affect the right of the Company to adjust,      reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or      transfer all or any part of its business or assets.


     IV.          STOCK APPRECIATION RIGHTS


          A.          With
respect to options granted under the Automatic Option Grant Program prior to the
Effective Date of this amendment and
restatement:


                                        1.          Upon the occurrence of a Hostile Take-Over, the optionee shall have a thirty (30)-day period in which to surrender to the Company each option held by him or her under this Article Four.  The optionee shall in return be entitled to a cash distribution from the Company in an amount equal to the excess of (i) the Take-Over Price of the shares of Common Stock at the time subject to each surrendered option (whether or not the option is then exercisable for those shares) over (ii) the aggregate exercise price payable for such shares.  The cash distribution shall be made within five (5) days following the date the option is surrendered to the Company, and neither
the approval of the Plan Administrator nor the consent of the Board shall be required in connection with the option surrender and cash distribution.  Any unsurrendered portion of the option shall continue to remain outstanding and become exercisable in accordance with the terms of the instrument evidencing such grant.  This limited stock appreciation right shall in all events terminate upon the expiration or sooner termination of the option term and may not be assigned or transferred by the optionee.


                                        2.          For purposes of Article Four, the following definitions shall be in effect:

	
  
 
  	
  
                                         -          A   Hostile Take-Over shall be deemed to occur in the event any person or related   group of persons (other than the Company or a person that directly or   indirectly controls, is controlled by, or is under common control with, the   Company) directly or indirectly acquires beneficial ownership (within the   meaning of Rule 13d-3 of the 1934 Act, as amended) of securities possessing   more than fifty percent (50%) of the total combined voting power of the   Company’s outstanding securities pursuant to a tender or exchange offer made   directly to the Company’s stockholders which the Board does not recommend   such stockholders to accept.


	
  
 
  	
  
 
  
	
  
 
  	
  
                                         -          The   Take-Over Price per share shall be deemed to be equal to the fair market   value per share on the option surrender date.
  



          B.          With
respect to each option granted under the Automatic Option Grant Program on and
after the Effective Date, each optionee shall have the right to surrender all or
part of the option (to the extent not then exercised) in exchange for a
distribution from the Company in an amount equal to the excess of (i) the fair
market value (on the option surrender date) of the number of shares in which the
optionee is at the time vested under the surrendered option (or surrendered
portion thereof) over (ii) the aggregate option price payable for such vested
shares.  The distribution shall be made in shares of Common Stock valued at
fair market value on the option surrender date.


          C.          The
shares of Common Stock subject to any option surrendered for an appreciation
distribution pursuant to this Section IV shall not be available for subsequent
option grant under the Plan.


ARTICLE FIVE
 MISCELLANEOUS


     I.          AMENDMENT OF THE PLAN


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                              The Board shall have complete and exclusive power and authority to amend or modify the Plan in any or all respects whatsoever.  However, no such amendment or modification shall, without the consent of the holders, adversely affect rights and obligations with respect to options at the time outstanding under the Plan.  In addition, certain amendments may require stockholder approval pursuant to applicable laws or regulations.


     II.          TAX WITHHOLDING


          A.          The
Company’s obligation to deliver shares or cash upon the exercise of stock
options or stock appreciation rights or upon the grant or vesting of direct
stock issuances under the Plan shall be subject to the satisfaction of all
applicable Federal, State and local income and employment tax withholding
requirements.


          B.          The
Plan Administrator may, in its discretion and upon such terms and conditions as
it may deem appropriate, provide any or all holders of outstanding options or
stock issuances under the Plan (other than the automatic option grants under
Article Four) with the election to have the Company withhold, from the shares of
Common Stock otherwise issuable upon the exercise or vesting of such awards, a
whole number of such shares with an aggregate fair market value equal to the
minimum amount necessary to satisfy the Federal, State and local income and
employment tax withholdings (the “Taxes”) incurred in connection with
the acquisition or vesting of such shares.  In lieu of such direct
withholding, one or more participants may also be granted the right to deliver
whole shares of Common Stock to the Company in satisfaction of such Taxes. 
Any withheld or delivered shares shall be valued at their fair market value on
the applicable determination date for such Taxes. 


     III.          EFFECTIVE DATE AND TERM OF PLAN


          A.          The
Plan, as amended and restated, shall be effective on the Effective Date set
forth in Section I.C of Article One.  Except as provided below, each option
issued and outstanding under the Plan immediately prior to such Effective Date
shall continue to be governed solely by the terms and conditions of the
agreement evidencing such grant, and nothing in this restatement of the Plan
shall be deemed to affect or otherwise modify the rights or obligations of the
holders of such options with respect to their acquisition of shares of Common
Stock thereunder.  The Plan Administrator shall, however, have full power
and authority, under such circumstances as the Plan Administrator may deem
appropriate (but in accordance with Article I of this Section Five), to extend
one or more features of this amendment and restatement to any options
outstanding on the Effective Date.  In addition, pursuant to the
Board’s approval of this Plan, the provisions of Article Four of this
amendment and restatement shall be applicable to all options previously granted
pursuant to the Plan’s Automatic Grant Program which are outstanding on the
Effective Date.


          B.          Unless
sooner terminated in accordance with the other provisions of this Plan, the Plan
shall terminate upon the earlier of (i) March 6, 2016 or (ii) the date on which
all shares available for issuance under the Plan shall have been issued or
cancelled pursuant to the exercise, surrender or cash-out of the options granted
hereunder.  If the date of termination is determined under clause (i)
above, then any options or stock issuances outstanding on such date shall
continue to have force and effect in accordance with the provisions of the
agreements evidencing those awards.


          C.          Options
may be granted with respect to a number of shares of Common Stock in excess of
the number of shares at the time available for issuance under the Plan, provided
each granted option is not to become exercisable, in whole or in part, at any
time prior to stockholder approval of an amendment authorizing a sufficient
increase in the number of shares issuable under the Plan.


     IV.          USE OF PROCEEDS


                                   Any cash proceeds received by the Company from the sale of shares pursuant to options or stock issuances granted under the Plan shall be used for general corporate purposes.


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     V.          REGULATORY APPROVALS


          A.          The
implementation of the Plan, the granting of any option hereunder, and the
issuance of stock (i) upon the exercise or surrender of any option or (ii) under
the Stock Issuance Program shall be subject to the procurement by the Company of
all approvals and permits required by regulatory authorities having jurisdiction
over the Plan, the options granted under it and the stock issued pursuant to
it.


          B.          No
shares of Common Stock or other assets shall be issued or delivered under the
Plan unless and until there shall have been compliance with all applicable
requirements of Federal and state securities laws, including (to the extent
required) the filing and effectiveness of the Form S-8 registration statement
for the shares of Common Stock issuable under the Plan, and all applicable
listing requirements of any stock exchange (or the Nasdaq National Market, if
applicable) on which Common Stock is then trading.



     VI.          NO EMPLOYMENT/SERVICE RIGHTS


                                   Neither the action of the Company in establishing or restating the Plan, nor any action taken by the Plan Administrator hereunder, nor any provision of the Plan shall be construed so as to grant any individual the right to remain in the employ or service of the Company (or any parent or subsidiary corporation) for any period of specific duration, and the Company (or any parent or subsidiary corporation retaining the services of such individual) may terminate such individual’s employment or service at any time and for any reason, with or without cause.


     VII.          MISCELLANEOUS PROVISIONS


          A.          Except
to the extent otherwise expressly provided in the Plan, the right to acquire
Common Stock or other assets under the Plan may not be assigned, encumbered or
otherwise transferred by any participant.


          B.          The
provisions of the Plan relating to the exercise of options and the issuance
and/or vesting of shares shall be governed by the laws of the State of Alabama
without resort to that state’s conflict-of-laws provisions, as such laws
are applied to contracts entered into and performed in such State.


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