Document:

<PAGE>
                                 EXHIBIT (10-9)

                     The Procter & Gamble Future Shares Plan
<PAGE>

THE PROCTER & GAMBLE FUTURE SHARES PLAN

CONTENTS
--------------------------------------------------------------------------------
Article 1. Establishment, Objectives, and Duration                      1

Article 2. Definitions                                                  1

Article 3. Administration                                               3

Article 4. Shares Subject to the Plan                                   3

Article 5. Eligibility and Participation                                4

Article 6. Awards                                                       4

Article 7. General Provisions                                           6
<PAGE>

THE PROCTER & GAMBLE FUTURE SHARES PLAN

ARTICLE 1. ESTABLISHMENT, OBJECTIVES, AND DURATION

         1.1 ESTABLISHMENT OF THE PLAN. The Procter & Gamble Company, an Ohio
corporation (hereinafter referred to as the "Company"), hereby establishes a
worldwide stock option plan to be known as "The Procter & Gamble Future Shares
Plan" (hereinafter referred to as the "Plan"), as set forth herein.

         1.2 PURPOSE. The purpose of the Plan is to advance the interests of the
Company by giving substantially all employees a stake in the Company's future
growth and success, to increase employee focus on the Company's stock price, to
strengthen the alignment of interests between employees and the Company's
shareholders through the increased ownership of shares of the Company's common
stock, and to encourage employees to remain in the employ of the Company and its
Affiliates.

         1.3 DURATION OF THE PLAN. The Plan shall become effective as of October
14, 1997 (the "Effective Date"). The Plan shall terminate on October 13, 2007.
No Award may be granted after the termination date of the Plan, but Awards
theretofore granted shall continue in force beyond that date pursuant to their
terms.

ARTICLE 2. DEFINITIONS

         Whenever used in the Plan, the following terms shall have the meanings
set forth below, and when the meaning is intended, the initial letter of the
word shall be capitalized:

         2.1 "AFFILIATE" means any entity in which the Company has an ownership
             interest of fifty percent (50%) or more.

         2.2 "AWARD" means a grant of an Option, a Modified Option, an SAR, or a
             Modified SAR under the Plan.

         2.3 "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of the
             Company.

         2.4 "CODE" means the Internal Revenue Code of 1986 and the regulations
             thereunder, as amended from time to time.

         2.5 "COMMITTEE" means the Compensation Committee of the Board or such
             other committee appointed by the Board to administer the Plan.

         2.6 "COMMON STOCK" means the common stock, without par value, of the
             Company.

         2.7 "COMPANY" means The Procter & Gamble Company, an Ohio corporation,
             and any successor thereto.

         2.8 "DISABILITY" or "DISABLED" shall mean qualifying for benefits under
             a long-term disability pay plan maintained by the Company or any
             Affiliate, or as required by or
<PAGE>

              available under applicable local law, or in the absence of any
              such plan or local law, as determined by the Committee.

         2.9  "EMPLOYEE" means a full- or part-time employee on the regular
              payroll of the Company or any Affiliate as of the Grant Date of an
              Award. For purposes of this definition, "on the regular payroll"
              shall mean paid through the payroll department of the Company or
              an Affiliate (or, if there is no such payroll department,
              classified as a regular employee on the Company's or Affiliate's
              employment records), and shall exclude individuals classified by
              the Company or Affiliate as intermittent or temporary, or as
              independent contractors, regardless of how such person may be
              classified by any federal, state, or local, domestic or foreign,
              government agency or instrumentality thereof, or court. An
              individual whose only relationship to the Company or an Affiliate
              is that of a temporary employee (except regular employees on
              temporary assignment from another unit) or leased employee (as
              defined in Section 414(n)(2) of the Code) shall not be an Employee
              unless determined otherwise by the Committee at its sole
              discretion. The determination of whether an individual is an
              "employee on the regular payroll" shall be made solely according
              to the method of paying the individual for services, and such
              determination shall be within the discretion of the Committee.

         2.10 "FAIR MARKET VALUE" means, unless determined otherwise by the
              Committee, the average of the high and low prices of a share of
              Common Stock on the New York Stock Exchange on the date of
              measurement as determined by the Committee, and if there were no
              trades on such date, on the day on which a trade occurred next
              preceding such date, or as otherwise determined by the Committee.

         2.11 "GRANT DATE" means such date, as determined by the Committee, upon
              which Awards are granted to Participants pursuant to the terms of
              this Plan.

         2.12 "MODIFIED OPTION" means an Option that must be exercised on the
              fifth anniversary of the Grant Date or forfeited.

         2.13 "MODIFIED SAR" means an SAR that must be exercised on the fifth
              anniversary of the Grant Date or forfeited.

         2.14 "OPTION" means a right to purchase a specified number of shares of
              Common Stock at the Option Price, which is not intended to qualify
              under Code Section 422 as an Incentive Stock Option, except as
              otherwise provided in Section 6.1(j).

         2.15 "OPTION PRICE" means the price at which a share of Common Stock
              may be purchased by a Participant pursuant to an Option or a
              Modified Option.

         2.16 "PARTICIPANT" means an Employee who has been selected by the
              Committee in its sole discretion to receive an Award or who has
              outstanding an Award granted under the Plan.
<PAGE>

         2.17 "RETIREMENT" means, strictly for purposes of this Plan, the
              termination of employment on or after the date the Participant has
              attained age fifty-five (55), except as otherwise determined by
              the Committee.

         2.18 "SAR" means an Award pursuant to which the Participant receives a
              right to a cash settlement payment upon exercise equal to the
              excess of the Fair Market Value of one share of Common Stock on
              the date of exercise over the Fair Market Value of one share of
              Common Stock on the Grant Date of the SAR, multiplied by the
              number of SARs granted.

         2.19 "SPECIAL SEPARATION" means any termination of employment, except a
              termination for cause or a voluntary resignation that is not
              initiated or encouraged by the Company, that occurs prior to the
              time a recipient is eligible to retire.

         2.20 "SPREAD VALUE" means the excess of the Fair Market Value of one
              share of Common Stock on the date of exercise over the Fair Market
              Value of one share of Common Stock on the Grant Date, multiplied
              by the number of shares of Common Stock underlying the Award.

ARTICLE 3. ADMINISTRATION

         The Plan and all Awards granted pursuant thereto shall be administered
by the Compensation Committee of the Board. The Committee may, from time to
time, adopt rules and regulations for carrying out the provisions and purposes
of the Plan. The Committee, in its absolute discretion, shall have the power to
interpret and construe the Plan; provided, however, that the Committee may
designate persons other than members of the Committee to carry out such
responsibilities of the Committee under the Plan as it may deem appropriate. Any
interpretation of construction of any provision of this Plan by the Committee
shall be final and conclusive upon all parties. No member of the Committee or
the Board shall be liable for any action or determination made hereunder in good
faith.

ARTICLE 4. SHARES SUBJECT TO THE PLAN

         4.1 NUMBER OF SHARES AVAILABLE FOR OPTIONS. The number of shares of
Common Stock available with respect to all Awards granted under the Plan shall
not exceed seventeen million (17,000,000) in the aggregate, subject to
adjustment under Section 4.2 herein. The shares of Common Stock subject to the
Plan shall consist of either authorized but unissued shares or treasury shares,
as determined by the Committee. Notwithstanding any terms or conditions
contained herein, the shares to be delivered by the Company upon exercise of an
Award by a Participant located in Italy shall be authorized but unissued shares.

         4.2 CHANGES IN CAPITALIZATION. In the event of any future
reorganization, recapitalization, stock split, stock dividend, combination of
shares, merger, consolidation, rights offering, share exchange,
reclassification, distribution, spin-off or other change affecting the corporate
structure, capitalization or Common Stock of the Company occurring after the
date of approval of the Plan by the Company shareholders, appropriate
adjustments and changes shall be made by the Committee to the extent necessary
to prevent dilution or enlargement of rights under the Plan in (a) the aggregate
number of shares of Common Stock subject to the Plan; (b) the number of shares
of Common Stock for which Awards may be granted or awarded to any Participant;
(c) the
<PAGE>

number of shares and the Option Price per share of all shares of Common Stock
subject to outstanding Options or Modified Options, as applicable; (d) the
number of SARs or Modified SARs subject to an Award and the Fair Market Value of
a share of Common Stock for purposes of determining the cash settlement payment
on exercise of an SAR or Modified SAR, as applicable; and (e) such other
provisions of the Plan as may be necessary and equitable to carry out the
foregoing purposes.

ARTICLE 5. ELIGIBILITY AND PARTICIPATION

         An Award may be granted by the Committee, in its discretion, to an
Employee who is actively employed by the Company or any Affiliate on the Grant
Date. The granting of Awards under the terms of this Plan is made at the sole
discretion of the Committee and does not entitle a Participant to receive future
Awards. The adoption of this Plan shall not be deemed to give any Participant
any right to be granted an Award, except to the extent as may be determined by
the Committee.

ARTICLE 6. AWARDS

         6.1 AWARDS. The Award to each Participant under the Plan shall consist
of either Options, Modified Options, SARs, or Modified SARs. The Committee shall
determine (i) the number of shares of Common Stock to be covered by each Award;
(ii) the terms and conditions of the Awards (including, but not limited to,
restrictions upon the Awards, when Awards are first exercisable and the period
of exercise, conditions of their exercise, requirements regarding payment of the
exercise price, withholding requirements and restrictions on the shares of
Common Stock issuable upon the exercise thereof); and (iii) the form of the
instruments necessary or advisable in the administration of the Awards.

         (a) TERM OF AWARD. The term of each Award shall be no more than ten
         (10) years from the Grant Date, except as provided in Section 6.1(j).

         (b) OPTION PRICE. With respect to an Option or Modified Option, the
         Option Price shall be not less than the Fair Market Value of the Common
         Stock on the Grant Date.

         (c) EXERCISE AND LIMITATIONS ON EXERCISE. Except as otherwise provided
         for herein, if a Participant has been in the continuous employ of the
         Company through the fifth anniversary of the Grant Date, at any time on
         or after the fifth anniversary of the Grant Date, but in no event later
         than the tenth anniversary of the Grant Date (except as provided in
         Section 6.1(j)), the Participant may exercise the Award, and purchase
         the number of shares of Common Stock covered by the Option (or Modified
         Option if the Award is exercised on the fifth anniversary of the Grant
         Date), or receive the cash settlement payment with respect to the SAR
         (or Modified SAR if the Award is exercised on the fifth anniversary of
         the Grant Date), as applicable. An Award must be exercised for the full
         number of shares of Common Stock covered by the Option or Modified
         Option, or for the entire cash settlement payment with respect to the
         SAR or Modified SAR, as applicable. Notwithstanding the foregoing,
         stock options and stock appreciation rights granted hereunder shall
         vest immediately upon a "Change in Control." A "Change in Control"
         shall mean the occurrence of any of the following:

                  (i) An acquisition (other than directly from the Company) of
         any voting securities of the Company (the "Voting Securities") by any
         "Person" (as the term person is used
<PAGE>

         for purposes of Section 13(d) or 14(d) of the Exchange Act),
         immediately after which such Person has "Beneficial Ownership" (within
         the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty
         percent (20%) or more of the then outstanding Shares or the combined
         voting power of the Company's then outstanding Voting Securities;
         provided, however, in determining whether a Change in Control has
         occurred pursuant to this Section 6.1(c), Shares or Voting Securities
         which are acquired in a "Non-Control Acquisition" (as hereinafter
         defined) shall not constitute an acquisition which would cause a Change
         in Control. A "Non-Control Acquisition" shall mean an acquisition by
         (i) an employee benefit plan (or a trust forming a part thereof)
         maintained by (A) the Company or (B) any corporation or other Person of
         which a majority of its voting power or its voting equity securities or
         equity interest is owned, directly or indirectly, by the Company (for
         purposes of this definition, a "Related Entity"), (ii) the Company or
         any Related Entity, or (iii) any Person in connection with a
         "Non-Control Transaction" (as hereinafter defined);

                  (ii) The individuals who, as of July 11, 2000 are members of
         the Board (the "Incumbent Board"), cease for any reason to constitute
         at least half of the members of the Board; or, following a Merger (as
         hereinafter defined) which results in a Parent Corporation (as
         hereinafter defined), the board of directors of the ultimate Parent
         Corporation; provided, however, that if the election, or nomination for
         election by the Company's common stockholders, of any new director was
         approved by a vote of at least two-thirds of the Incumbent Board, such
         new director shall, for purposes of this Plan, be considered as a
         member of the Incumbent Board; provided further, however, that no
         individual shall be considered a member of the Incumbent Board if such
         individual initially assumed office as a result of either an actual or
         threatened "Election Contest" (as described in Rule 14a-11 promulgated
         under the Exchange Act) or other actual or threatened solicitation of
         proxies or consents by or on behalf of a Person other than the Board (a
         "Proxy Contest") including by reason of any agreement intended to avoid
         or settle any Election Contest or Proxy Contest; or

                  (iii) The consummation of:

                        (A) A merger, consolidation or reorganization with or
         into the Company or in which securities of the Company are issued (a
         "Merger), unless such Merger is a "Non-Control Transaction." A
         "Non-Control Transaction" shall mean a Merger where:

                            (1) the stockholders of the Company, immediately
         before such Merger own directly or indirectly immediately following
         such Merger at least fifty percent (50%) of the combined voting power
         of the outstanding voting securities of (x) the corporation resulting
         from such Merger (the "Surviving Corporation") if fifty percent (50%)
         or more of the combined voting power of the then outstanding voting
         securities of the Surviving Corporation is not Beneficially Owned,
         directly or indirectly by another Person (a "Parent Corporation"), or
         (y) if there is one or more Parent Corporations, the ultimate Parent
         Corporation;

                            (2) the individuals who were members of the
         Incumbent Board immediately prior to the execution of the agreement
         providing for such Merger constitute at least half of the members of
         the board of directors of (x) the Surviving Corporation, if there is no
         Parent Corporation, or (y) if there is one or more Parent Corporations,
         the ultimate Parent Corporation; and
<PAGE>

                            (3) no Person other than (1) the Company, (2) any
         Related Entity, (3) any employee benefit plan (or any trust forming a
         part thereof) that, immediately prior to such Merger was maintained by
         the Company or any Related Entity, or (4) any Person who, immediately
         prior to such Merger had Beneficial Ownership of twenty percent (20%)
         or more of the then outstanding Voting Securities or Shares, has
         Beneficial Ownership of twenty percent (20%) or more of the combined
         voting power of the outstanding voting securities or common stock of
         (x) the Surviving Corporation if there is no Parent Corporation, or (y)
         if there is one or more Parent Corporations, the ultimate Parent
         Corporation;

                        (b) A complete liquidation or dissolution of the
         Company; or

                        (c) The sale or other disposition of all or
         substantially all of the assets of the Company to any Person (other
         than a transfer to a Related Entity or under conditions that would
         constitute a Non-Control Transaction with the disposition of assets
         being regarded as a Merger for this purpose or the distribution to the
         Company's stockholders of the stock of a Related Entity or any other
         assets).

         Notwithstanding the foregoing, a Change in Control shall not be deemed
         to occur solely because any Person (the "Subject Person") acquired
         Beneficial Ownership of more than the permitted amount of the then
         outstanding Shares or Voting Securities as a result of the acquisition
         of Shares or Voting Securities by the Company which, by reducing the
         number of Shares or Voting Securities then outstanding, increases the
         proportional number of shares Beneficially Owned by the Subject
         Persons, provided that if a Change in Control would occur (but for the
         operation of this sentence) as a result of the acquisition of Shares or
         Voting Securities by the Company, and after such share acquisition by
         the Company, the Subject Person becomes the Beneficial Owner of any
         additional Shares or Voting Securities which increases the percentage
         of the then outstanding Shares or Voting Securities Beneficially Owned
         by the Subject Person, then a Change in Control shall occur.

            (d) TERMINATION OF EMPLOYMENT GENERALLY.

                (i) If a Participant's employment is terminated on or after the
            fifth anniversary of the Grant Date, for any reason other than
            death, Disability, Retirement, or Special Separation the Award shall
            be exercisable only for thirty (30) calendar days following such
            termination, and only to the extent such Award was exercisable on
            the date of such termination, except as may be otherwise determined
            by the Committee. In no event, however, may an Award be exercised
            more than ten (10) years after the Grant Date, except as provided in
            Section 6.1(j). If a Participant's employment is terminated prior to
            the fifth anniversary of the Grant Date, for any reason other than
            death, Disability, Retirement, or Special Separation, each Award
            granted to such Participant shall be immediately canceled and the
            Participant shall forfeit the Award upon such termination of
            employment.

                (ii) Neither the Company nor the Committee shall have any
            obligation to notify a Participant of the expiration of an Award.

                (iii) Unless the Committee shall determine otherwise, a
            Participant employed by an Affiliate or business unit of the Company
            that is sold or otherwise divested from the
<PAGE>

            Company shall be considered to have his or her employment terminated
            as of the effective date of the divestiture.

            (e) TERMINATION OF EMPLOYMENT DUE TO DISABILITY, RETIREMENT, OR
                SPECIAL SEPARATION.

                (i) If prior to the fifth anniversary of the Grant Date a
            Participant's employment is terminated due to Disability,
            Retirement, or Special Separation the Award may be exercised on or
            after the fifth anniversary of the Grant Date, but in no event may
            such an Award be exercised more than ten (10) years after the Grant
            Date, except as provided in Section 6.1(j). If a Participant's
            employment is terminated due to Disability, Retirement, or Special
            Separation on or after the fifth anniversary of the Grant Date, the
            Award may be exercised, to the extent such Award was exercisable on
            the date of such termination, within the remaining period of the
            Award.

                (ii) Notwithstanding the above and except for Participants
            located in Italy, the Committee reserves the discretionary ability
            to substitute an immediate cash payment equal to the Spread Value of
            the Award in full satisfaction of the Award, in the event of a
            termination of employment due to Disability, Retirement, or Special
            Separation to the extent such payment is permitted by law.

            (f) DEATH OF A PARTICIPANT. Upon the death of a Participant, while
            an Award is still outstanding, regardless of whether the Award is or
            is not exercisable, a cash payment equal to the Spread Value of the
            Award, as of the date of the Participant's death, shall be paid as
            soon as administratively practicable to the Participant's estate, in
            full satisfaction of the Award. Notwithstanding the above, upon the
            death of a Participant located in Italy, the outstanding Award
            granted to such Participant shall be (i) immediately canceled if the
            death occurs prior to the fifth anniversary of the Grant Date, or
            (ii) exercisable by the executors, administrators or heirs of the
            deceased Participant only for six (6) months following such death if
            the death occurs on or after the fifth anniversary of the Grant
            Date.

            (g) NONTRANSFERABILITY. Awards are not transferable and may only be
            exercised by the Participant.

            (h) EXERCISE; NOTICE THEREOF. Awards shall be exercised by
            delivering written notice of intention to exercise the Award,
            pursuant to such terms and conditions as may be determined by the
            Committee. The Committee shall have the authority to establish
            procedures under any or all methods of exercise, including the
            designation of the brokerage firm or firms through which exercises
            may be effected, which need not be the same for each grant or for
            each Participant. The Committee shall have the authority to change
            without notice any method of exercise for any reason whatsoever,
            notwithstanding the fact that the method of exercise had been
            available to Participants in the past.

            (i) RIGHTS AS SHAREHOLDER. A Participant shall have none of the
            rights of a shareholder with respect to shares of Common Stock
            covered by any Award until the Participant becomes the record holder
            of such shares as determined by the records of the Company's
            transfer agent.
<PAGE>

            (j) ADDITIONAL TERMS. With respect to any Award, the Committee may,
            in its discretion: (i) determine which Affiliates will be covered by
            the Plan; (ii) determine which Employees are eligible to participate
            in the Plan; (iii) modify or restrict any of the terms and
            conditions of any Awards including but not limited to extending the
            term of an Award beyond ten (10) years; (iv) modify or restrict
            exercise procedures and any other Plan procedures; (v) establish
            local country plans as subplans to this Plan, each of which may be
            attached as an Appendix hereto; and (vi) take any action, before or
            after an Award is made, which it deems advisable to obtain or comply
            with any necessary local government regulatory exemptions or
            approvals; provided that the Committee may not take any action
            hereunder which would (1) increase the number of shares of Common
            Stock covered by the Plan; or (2) violate any securities law, the
            Code, or any governing statute.

            (k) STOCK APPRECIATION RIGHTS. The Committee may grant SARs or
            Modified SARs, as applicable, in lieu of Options or Modified Options
            under the Plan.

            6.2 REFUSAL OF AWARD. Any Participant may refuse the grant of an
Award by notifying the Committee of his or her refusal in writing in a form and
pursuant to procedures to be determined by the Committee.

ARTICLE 7. GENERAL PROVISIONS

         7.1 NO ADDITIONAL RIGHTS. Nothing in the Plan shall interfere with or
limit in any way the right of the Company to terminate any Participant's
employment at any time, or confer upon any Participant any right to continue in
the employ of the Company. No Employee shall have the right to be selected to
receive an Award under this Plan or having been so selected, to be selected to
receive a future Award. Neither the Award nor any benefits arising under this
Plan shall constitute part of a Participant's employment contract with the
Company or any Affiliate, and accordingly, this Plan and the benefits hereunder
may be terminated at any time in the sole and exclusive discretion of the
Committee without giving rise to liability on the part of the Company or any
Affiliate for severance payments.

         7.2 NO EFFECT ON OTHER BENEFITS. The receipt of Awards under the Plan
shall have no effect on any benefits and obligations to which a Participant may
be entitled from the Company or any Affiliate, under another plan or otherwise,
or preclude a Participant from receiving any such benefits.

         7.3 BINDING EFFECT. Any decision made or action taken by the Company,
the Board, or by the Committee arising out of or in connection with the
construction, administration, interpretation, and effect of the Plan shall be
conclusive and binding upon all persons, including the Company, its
shareholders, Employees, Participants, and their estates and beneficiaries.

         7.4 INALIENABILITY OF BENEFITS AND INTEREST. No benefit payable under,
or interest in, the Plan shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any
such attempted action shall be void and no such benefits or interest shall be in
any manner liable for or subject to debts, liabilities, engagements, or torts of
any Participant or beneficiary.
<PAGE>

         7.5 REQUIREMENTS OF LAW. The granting of Awards and the issuance of
shares of Common Stock under the Plan shall be subject to all applicable laws,
rules, and regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required.

         7.6 GOVERNING LAW. To the extent not preempted by federal law, the Plan
and all agreements hereunder shall be construed in accordance with and governed
by the laws of the state of Ohio.

         7.7 WITHHOLDING. The Company shall have the power and the right to
deduct or withhold, to require an Affiliate to deduct or withhold, or to require
a Participant to remit to the Company or an Affiliate, an amount sufficient to
satisfy federal, state, and local taxes, domestic or foreign, required by law or
regulation to be withheld with respect to any taxable event arising as a result
of this Plan.

         7.8 AMENDMENTS. Subject to the terms of the Plan, the Committee may at
any time and from time to time alter, amend, suspend, or terminate the Plan in
whole or in part.

Adopted October 14, 1997
Article 2, Paragraph 2.19 added, Article 4, Paragraph 4.1 amended, Article 6,
  Paragraphs 6.1(d)(i), (e) (i) and (ii) and (f) amended - May 12, 1998
Article 4, Paragraph 4.1 amended - April 11, 2000
Article 2, Paragraph 2.19 amended - June 13, 2000
Article 6, Paragraph 6.1(c) amended and Paragraph 6.1(c)(i), (ii) and (iii)
adopted - July 11, 2000
Article 4.2 amended - December 11, 2001<PAGE>
                                                                 EXHIBIT 10.3(b)

                              SYNAPTIC INCORPORATED

                             1996 STOCK OPTION PLAN

                             STOCK OPTION AGREEMENT

         1. GRANT OF OPTION. Synaptics Incorporated, a Delaware corporation (the
"Company"), hereby grants to the person ("Optionee") whose name is set forth on
the Notice of Grant of Stock Options attached hereto and made a part hereof, an
option (the "Option") to purchase the total number of shares of Common Stock
(the "Shares") set forth in the Notice of Grant of Stock Options, at the
exercise price per share set forth in the Notice of Grant of Stock Options (the
"Exercise Price") subject to the terms, definitions and provisions of the
Synaptics Incorporated 1996 Stock Option Plan (the "Plan") adopted by the
Company, which is incorporated herein by reference. Unless otherwise defined
herein, the terms defined in the Plan shall have the same defined meanings in
this Option.

         If designated an Incentive Stock Option on the Notice of Grant of Stock
Options, this Option is intended to qualify as an Incentive Stock Option as
defined in Section 422 of the Code.

         2. EXERCISE OF OPTION. This Option shall be exercisable during its Term
in accordance with the Vesting Schedule set out in the Notice of Grant of Stock
Options and with the provisions of Section 9 of the Plan as follows:

                  (a) RIGHT TO EXERCISE.

                           (i) This Option may not be exercised for a fraction
of a share.

                           (ii) In the event of Optionee's death, disability or
other termination of employment, the exercisability of the Option is governed by
Sections 5, 6 and 7 below, subject to the limitation contained in Section
2(a)(i).

                           (iii) In no event may this Option be exercised after
the Expiration Date of this Option as set forth in the Notice of Grant of Stock
Options.

                  (b) METHOD OF EXERCISE. This Option shall be exercisable by
execution and delivery of an Exercise Notice or of any other form of written
notice approved for such purpose by the Company ("Exercise Agreement"), which
shall state the election to exercise the Option, the number of Shares in respect
of which the Option is being exercised, and such other representations and
agreements with respect to such shares of Common Stock as may be required by the
Company pursuant to the provisions of the Plan. Such written notice shall be
signed by Optionee and shall be delivered in person or by certified mail to the
Secretary of the Company. The written notice shall be accompanied by payment of
the Exercise Price. This Option shall be deemed to be exercised upon receipt by
the Company of such written notice accompanied by the Exercise Price.
<PAGE>
         No Shares will be issued pursuant to the exercise of an Option unless
such issuance and such exercise shall comply with all relevant provisions of
applicable law and the requirements of any stock exchange upon which the Shares
may then be listed. Assuming such compliance, for income tax purposes the Shares
shall be considered transferred to Optionee on the date on which the Option is
exercised with respect to such Shares.

         3. METHOD OF PAYMENT. Payment of the Exercise Price shall be by any of
the following, or a combination thereof, at the election of Optionee:

                  (a) cash;

                  (b) check;

                  (c) surrender of other shares of Common Stock of the Company
which (i) in the case of Shares acquired pursuant to the exercise of a Company
option, have been owned by Optionee for more than six months on the date of
surrender, and (ii) have a Fair Market Value on the date of surrender equal to
the Exercise Price of the Shares as to which the Option is being exercised;

                  (d) if there is a public market for the Shares and they are
registered under the Exchange Act, delivery of a properly executed exercise
notice together with irrevocable instructions to a broker to deliver promptly to
the Company the amount of sale or loan proceeds required to pay the Exercise
Price; or

                  (e) a promissory note.

         4. RESTRICTIONS ON EXERCISE. This Option may not be exercised until
such time as the Plan has been approved by the shareholders of the Company, or
if the issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations as promulgated by the
Federal Reserve Board. As a condition to the exercise of this Option, the
Company may require Optionee to make any representation and warranty to the
Company as may be required by any applicable law or regulation.

         5. TERMINATION OF RELATIONSHIP. In the event of termination of
Optionee's Continuous Status as an Employee or Consultant, Optionee may, to the
extent otherwise so entitled at the date of such termination (the "Termination
Date"), exercise this Option during the Termination Period set forth in the
Notice of Grant of Stock Options. To the extent that Optionee was not entitled
to exercise this Option at such Termination Date, or if Optionee does not
exercise this Option within the Termination Period, the Option shall terminate.

         6. DISABILITY OF OPTIONEE.

                  (a) Notwithstanding the provisions of Section 5 above, in the
event of termination of Optionee's Continuous Status as an Employee or
Consultant as a result of Optionee's total and permanent disability (as defined
in Section 22(e)(3) of the Code), Optionee

                                      -2-
<PAGE>
may, but only within twelve months from the Termination Date (but in no event
later than the Expiration Date set forth in the Notice of Grant of Stock
Options), exercise this Option to the extent Optionee was entitled to exercise
it as of such Termination Date. To the extent that Optionee was not entitled to
exercise the Option as of the Termination Date, or if Optionee does not exercise
such Option (to the extent so entitled) within the time specified in this
Section 6(a), the Option shall terminate.

                  (b) Notwithstanding the provisions of Section 5 above, in the
event of termination of Optionee's consulting relationship or Continuous Status
as an Employee as a result of disability not constituting a total and permanent
disability (as set forth in Section 22(e)(3) of the Code), Optionee may, but
only within six months from the Termination Date (but in no event later than the
Expiration Date set forth in the Notice of Grant of Stock Options), exercise the
Option to the extent Optionee was entitled to exercise it as of such Termination
Date; provided, however, that if this is an Incentive Stock Option and Optionee
fails to exercise this Incentive Stock Option within three months from the
Termination Date, this Option will cease to qualify as an Incentive Stock Option
(as defined in Section 422 of the Code) and Optionee will be treated for federal
income tax purposes as having received ordinary income at the time of such
exercise in an amount generally measured by the difference between the Exercise
Price for the Shares and the Fair Market Value of the Shares on the date of
exercise. To the extent that Optionee was not entitled to exercise the Option at
the Termination Date, or if Optionee does not exercise such Option to the extent
so entitled within the time specified in this Section 6(b), the Option shall
terminate.

         7. DEATH OF OPTIONEE. In the event of the death of Optionee (a) during
the Term of this Option and while an Employee or Consultant of the Company and
having been in Continuous Status as an Employee or Consultant since the date of
grant of the Option, or (b) within 30 days after Optionee's Termination Date,
the Option may be exercised at any time within six months following the date of
death (but in no event later than the Expiration Date set forth in the Notice of
Grant of Stock Options), by Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only to the extent
of the right to exercise that had accrued at the Termination Date.

         8. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by him or her. The terms
of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of Optionee.

         9. TERM OF OPTION. This Option may be exercised only within the Term
set forth in the Notice of Grant of Stock Options, subject to the limitations
set forth in Section 7 of the Plan.

         10. TAX CONSEQUENCES. Set forth below is a brief summary as of the date
of this Option of certain of the federal and California tax consequences of
exercise of this Option and disposition of the Shares under the laws in effect
as of the Date of Grant. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX
LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX
ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

                                      -3-
<PAGE>
                  (a) EXERCISE OF INCENTIVE STOCK OPTION. If this Option
qualifies as an Incentive Stock Option, there will be no regular federal or
California income tax liability upon the exercise of the Option, although the
excess, if any, of the Fair Market Value of the Shares on the date of exercise
over the Exercise Price will be treated as an adjustment to the alternative
minimum tax for federal tax purposes and may subject Optionee to the alternative
minimum tax in the year of exercise.

                  (b) EXERCISE OF NONSTATUTORY STOCK OPTION. If this Option does
not qualify as an Incentive Stock Option, there may be a regular federal income
tax liability and a California income tax liability upon the exercise of the
Option. Optionee will be treated as having received compensation income (taxable
at ordinary income tax rates) equal to the excess, if any, of the Fair Market
Value of the Shares on the date of exercise over the Exercise Price. If Optionee
is an employee, the Company will be required to withhold from Optionee's
compensation or collect from Optionee and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation income at the
time of exercise.

                  (c) DISPOSITION OF SHARES. In the case of a Nonstatutory Stock
Option, if Shares are held for at least one year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
and California income tax purposes. In the case of an Incentive Stock Option, if
Shares transferred pursuant to the Option are held for at least one year after
exercise and are disposed of at least two years after the Date of Grant, any
gain realized on disposition of the Shares will also be treated as long-term
capital gain for federal and California income tax purposes. In either case, the
long-term capital gain will be taxed for federal income tax and alternative
minimum tax purposes at a maximum rate of 28% if the Shares are held more than
one year but less than 18 months after exercise and at 20% if the Shares are
held more than 18 months after exercise. If Shares purchased under an Incentive
Stock Option are disposed of within one year after exercise or within two years
after the Date of Grant, any gain realized on such disposition will be treated
as compensation income (taxable at ordinary income rates) to the extent of the
difference between the Exercise Price and the lesser of (i) the Fair Market
Value of the Shares on the date of exercise, or (ii) the sale price of the
Shares.

                  (d) NOTICE OF DISQUALIFYING DISPOSITION OF INCENTIVE STOCK
OPTION SHARES. If the Option granted to Optionee herein is an Incentive Stock
Option, and if Optionee sells or otherwise disposes of any of the Shares
acquired pursuant to the Incentive Stock Option on or before the later of (i)
the date two years after the Date of Grant, or (ii) the date one year after the
date of exercise, Optionee shall immediately notify the Company in writing of
such disposition. Optionee acknowledges and agrees that he or she may be subject
to income tax withholding by the Company on the compensation income recognized
by Optionee from the early disposition by payment in cash or out of the current
earnings paid to Optionee.

                                      -4-
<PAGE>
         11. WITHHOLDING TAX OBLIGATIONS. Optionee understands that, upon
exercising a Nonstatutory Stock Option, he or she will recognize income for tax
purposes in an amount equal to the excess of the then Fair Market Value of the
Shares over the Exercise Price. However, the timing of this income recognition
may be deferred for up to six months if Optionee is subject to Section 16 of the
Exchange Act. If Optionee is an employee, the Company will be required to
withhold from Optionee's compensation, or collect from Optionee and pay to the
applicable taxing authorities an amount equal to a percentage of this
compensation income. Additionally, Optionee may at some point be required to
satisfy tax withholding obligations with respect to the disqualifying
disposition of an Incentive Stock Option. Optionee shall satisfy his or her tax
withholding obligation arising upon the exercise of this Option by one or some
combination of the following methods: (a) by cash payment, (b) out of Optionee's
current compensation, (c) if permitted by the Administrator, in its discretion,
by surrendering to the Company Shares which (i) in the case of Shares previously
acquired from the Company, have been owned by Optionee for more than six months
on the date of surrender, and (ii) have a Fair Market Value on the date of
surrender equal to or greater than Optionee's marginal tax rate times the
ordinary income recognized, or (d) by electing to have the Company withhold from
the Shares to be issued upon exercise of the Option that number of Shares having
a Fair Market Value equal to the amount required to be withheld. For this
purpose, 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 (the "Tax
Date").

         If Optionee is subject to Section 16 of the Exchange Act (an
"Insider"), any surrender of previously owned Shares to satisfy tax withholding
obligations arising upon exercise of this Option must comply with the applicable
provisions of Rule 16b-3 promulgated under the Exchange Act ("Rule 16b-3").

         All elections by Optionee to have Shares withheld to satisfy tax
withholding obligations shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:

                  (a) the election must be made on or prior to the applicable
Tax Date;

                  (b) once made, the election shall be irrevocable as to the
particular Shares of the Option as to which the election is made; and

                  (c) all elections shall be subject to the consent or
disapproval of the Administrator.

         12. NO RIGHT TO CONTINUED EMPLOYMENT. Optionee acknowledges and agrees
that the vesting of shares pursuant to the Option granted is earned only by
continuing employment or consultancy at the will of the Company (not through the
act of being hired, being granted this Option or acquiring shares hereunder).
Optionee further acknowledges and agrees that nothing in this Option Agreement,
nor in the Plan, shall confer upon Optionee any right with respect to
continuation of employment or consultancy by the Company, nor shall it interfere
in any way with Optionee's right or the Company's right to terminate Optionee's
employment or consultancy at any time, with or without cause.

                                      -5-
<PAGE>
         13. EXECUTION. This Option Agreement is executed by the parties hereto
on the Notice of Grant of Stock Options, which is attached hereto and made a
part hereof.

                                      -6-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00043-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00043-of-00352.parquet"}]]