OCTOBER 23, 2002, AN
ADDITIONAL 4,849,050 SHARES THAT WERE APPROVED FOR ISSUANCE BY THE BOARD AND
STOCKHOLDERS ON OCTOBER 18, 2002, PLUS (VI) AN ADDITIONAL 1,000,000 SHARES THAT
WERE APPROVED FOR ISSUANCE BY THE BOARD ON NOVEMBER 5, 2002 AND BY THE
STOCKHOLDERS ON NOVEMBER 5, 2002.
SUCH 5,876,153 SHARE RESERVE SHALL BE IN
ADDITION TO THE 13,671 SHARES ISSUED OR RESERVED FOR ISSUANCE UNDER THE
CORPORATION'S 1997 STOCK OPTION/STOCK ISSUANCE PLAN FOLLOWING THE STOCK SPLIT.
B.
SHARES OF COMMON STOCK SUBJECT TO OUTSTANDING OPTIONS SHALL BE
AVAILABLE FOR SUBSEQUENT ISSUANCE UNDER THE PLAN TO THE EXTENT THOSE OPTIONS
EXPIRE OR TERMINATE FOR ANY REASON PRIOR TO EXERCISE IN FULL.
UNVESTED SHARES
ISSUED UNDER THE PLAN AND SUBSEQUENTLY CANCELLED OR REPURCHASED BY THE
CORPORATION, AT THE ORIGINAL ISSUE PRICE PAID PER SHARE, PURSUANT TO THE
CORPORATION'S REPURCHASE RIGHTS UNDER THE PLAN SHALL BE ADDED BACK TO THE NUMBER
OF SHARES OF COMMON STOCK RESERVED FOR ISSUANCE UNDER THE PLAN.
C.
IF ANY CHANGE IS MADE TO THE COMMON STOCK 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
THE CORPORATION'S RECEIPT OF CONSIDERATION, APPROPRIATE ADJUSTMENTS SHALL BE
MADE TO (I) THE MAXIMUM NUMBER AND/OR CLASS OF SECURITIES ISSUABLE UNDER THE
PLAN, (II) THE NUMBER AND/OR CLASS OF SECURITIES FOR WHICH ANY ONE PERSON MAY BE
GRANTED STOCK OPTIONS, SEPARATELY EXERCISABLE STOCK APPRECIATION RIGHTS AND
DIRECT STOCK ISSUANCES UNDER THIS PLAN PER CALENDAR YEAR, AND (III) THE NUMBER
AND/OR CLASS OF SECURITIES AND THE EXERCISE PRICE PER SHARE IN EFFECT UNDER EACH
OUTSTANDING OPTION UNDER THE PLAN.
SUCH ADJUSTMENTS TO THE OUTSTANDING OPTIONS
ARE TO BE EFFECTED IN A MANNER WHICH SHALL PRECLUDE THE ENLARGEMENT OR DILUTION
OF RIGHTS AND BENEFITS UNDER SUCH OPTIONS. THE ADJUSTMENTS DETER-MINED BY THE
PLAN ADMINISTRATOR SHALL BE FINAL, BINDING AND CONCLUSIVE.
3
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
I.
OPTION TERMS
Each option shall be evidenced by one or more documents in the form approved by
the Plan Administrator; provided, however, that each such document shall comply
with the terms specified below.
Each document evidencing an Incentive Option
shall, in addition, be subject to the provisions of the Plan applicable to such
options.
A.
EXERCISE PRICE.
1.
THE EXERCISE PRICE PER SHARE SHALL BE FIXED BY THE PLAN
ADMINISTRATOR BUT SHALL NOT BE LESS THAN EIGHTY-FIVE PERCENT (85%) OF THE FAIR
MARKET VALUE PER SHARE OF COMMON STOCK ON THE OPTION GRANT DATE, PROVIDED THAT
THE PLAN ADMINISTRATOR MAY FIX THE EXERCISE PRICE AT LESS THAN 85% IF THE
OPTIONEE, AT THE TIME OF THE OPTION GRANT, SHALL HAVE MADE A PAYMENT TO THE
COMPANY (INCLUDING PAYMENT MADE BY MEANS OF A SALARY REDUCTION) EQUAL TO THE
EXCESS OF THE FAIR MARKET VALUE OF THE COMMON STOCK ON THE OPTION GRANT DATE
OVER SUCH EXERCISE PRICE.
2.
THE EXERCISE PRICE SHALL BECOME IMMEDIATELY DUE UPON EXERCISE OF
THE OPTION AND MAY, SUBJECT TO THE PROVISIONS OF