Document:

Exhibit 4.2

POLYSERVE,
INC.

2000
STOCK PLAN

(AS
AMENDED THROUGH NOVEMBER 10, 2000; INCLUDING MARCH 23, 2000

AMENDMENTS)

1.             Purposes
of the Plan.  The purposes of this
Stock Plan are to attract and retain the best available personnel for positions
of substantial responsibility, to provide additional incentive to Employees,
Directors and Consultants and to promote the success of the Company’s
business.  Options granted under the Plan
may be Incentive Stock Options or Nonstatutory Stock Options, as determined by
the Administrator at the time of grant. 
Stock Purchase Rights may also be granted under the Plan.

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

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

(b)           “Applicable
Laws” means the requirements relating to the administration of stock option
plans under U.S. state corporate laws, U.S. federal and state securities laws,
the Code, any stock exchange or quotation system on which the Common Stock is
listed or quoted and the applicable laws of any other country or jurisdiction
where Options or Stock Purchase Rights are granted under the Plan.

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

(d)           “Code”
means the Internal Revenue Code of 1986, as amended.

(e)           “Committee”  means a committee of Directors appointed by
the Board in accordance with Section 4 hereof.

(f)            “Common
Stock” means the Common Stock of the Company.

(g)           “Company”
means PolyServe, Inc., a Delaware corporation.

(h)           “Consultant”
means any person who is engaged by the Company or any Parent or Subsidiary to
render consulting or advisory services to such entity.

(i)            “Director”
means a member of the Board of Directors of the Company.

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

(k)           “Employee”
means any person, including Officers and Directors, employed by the Company or
any Parent or Subsidiary of the Company. 
A Service Provider shall not cease to be an Employee in the case of
(i) any leave of absence approved by the Company or (ii) transfers
between locations of the Company or between the Company, its Parent, any
Subsidiary, or any successor.  For
purposes of Incentive

 

Stock Options, no such leave may
exceed ninety days, unless reemployment upon expiration of such leave is
guaranteed by statute or contract.  If
reemployment upon expiration of a leave of absence approved by the Company is
not so guaranteed, on the 181st day of such leave any Incentive Stock Option
held by the Optionee shall cease to be treated as an Incentive Stock Option and
shall be treated for tax purposes as a Nonstatutory Stock Option.  Neither service as a Director nor payment of a
director’s fee by the Company shall be sufficient to constitute “employment” by
the Company.

 

(l)            “Exchange Act”
means the Securities Exchange Act of 1934, as amended.

(m)          “Fair Market Value”
means, as of any date, the value of Common Stock determined as follows:

(i)            If the Common Stock
is listed on any established stock exchange or a national market system,
including without limitation the Nasdaq National Market or The Nasdaq SmallCap
Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or system for the last market trading day prior to the
time of determination, as reported in The Wall Street Journal
or such other source as the Administrator deems reliable;

(ii)           If the Common Stock
is regularly quoted by a recognized securities dealer but selling prices are
not reported, its Fair Market Value shall be the mean between the high bid and
low asked prices for the Common Stock on the last market trading day prior to
the day of determination; or

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

(n)           “Incentive Stock
Option” means an Option intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code.

(o)           “Nonstatutory
Stock Option” means an Option not intended to qualify as an Incentive Stock
Option.

(p)           “Officer”
means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder.

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

(r)            “Option
Agreement” means a written or electronic agreement between the Company and
an Optionee evidencing the terms and conditions of an individual Option
grant.  The Option Agreement is subject
to the terms and conditions of the Plan.

(s)           “Option Exchange
Program” means a program whereby outstanding Options are exchanged for
Options with a lower exercise price.

(t)            “Optioned Stock”
means the Common Stock subject to an Option or a Stock Purchase Right.

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

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

 

(w)          “Plan” means
this 2000 Stock Plan.

(x)            “Restricted
Stock” means shares of Common Stock acquired pursuant to a grant of a Stock
Purchase Right under Section 11 below.

(y)           “Section 16(b)”
means Section 16(b) of the Securities Exchange Act of 1934, as amended.

(z)            “Service
Provider”  means an Employee,
Director or Consultant.

(aa)         “Share” means
a share of the Common Stock, as adjusted in accordance with Section 12
below.

(bb)         “Stock Purchase
Right” means a right to purchase Common Stock pursuant to Section 11
below.

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

3.             Stock Subject to the Plan.  Subject to the provisions of Section 12
of the Plan, the maximum aggregate number of Shares which may be subject to
option and sold under the Plan is 8,670,000 Shares.  The Shares may be authorized but unissued, or
reacquired Common Stock.

If an Option or
Stock Purchase Right expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Option Exchange Program,
the unpurchased Shares which were subject thereto shall become available for
future grant or sale under the Plan (unless the Plan has terminated).  However, Shares that have actually been
issued under the Plan, upon exercise of either an Option or Stock Purchase
Right, shall not be returned to the Plan and shall not become available for
future distribution under the Plan, except that if Shares of Restricted Stock
are repurchased by the Company at their original purchase price, such Shares
shall become available for future grant under the Plan.

4.             Administration of the Plan.

(a)           Administrator.  The Plan shall be administered by the Board
or a Committee appointed by the Board, which Committee shall be constituted to
comply with Applicable Laws.

(b)           Powers of the Administrator.  Subject to the provisions of the Plan and, in
the case of a Committee, the specific duties delegated by the Board to such
Committee, and subject to the approval of any relevant authorities, the
Administrator shall have the authority in its discretion:

(i)            to determine the Fair Market Value;

(ii)           to select the Service Providers to
whom Options and Stock Purchase Rights may from time to time be granted
hereunder;

(iii)          to determine the number of Shares to
be covered by each such award granted hereunder;

 

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

 

(v)           to determine the terms and
conditions, of any Option or Stock Purchase Right granted hereunder.  Such terms and conditions include, but are
not limited to, the exercise price, the time or times when Options or Stock
Purchase Rights may be exercised (which may be based on performance criteria),
any vesting acceleration or waiver of forfeiture restrictions, and any
restriction or limitation regarding any Option or Stock Purchase Right or the
Common Stock relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;

 

(vi)          to determine whether and under what
circumstances an Option may be settled in cash under subsection 9(e)
instead of Common Stock;

 

(vii)         to reduce the exercise price of any
Option to the then current Fair Market Value if the Fair Market Value of the
Common Stock covered by such Option has declined since the date the Option was
granted;

 

(viii)        to initiate an Option Exchange Program;

 

(ix)          to prescribe, amend and rescind rules
and regulations relating to the Plan, including rules and regulations relating
to sub-plans established for the purpose of qualifying for preferred tax
treatment under foreign tax laws;

 

(x)           to allow Optionees to satisfy
withholding tax obligations by electing to have the Company withhold from the
Shares to be issued upon exercise of an Option or Stock Purchase Right that
number of Shares having a Fair Market Value equal to the amount required to be
withheld.  The Fair Market Value of the
Shares to be withheld shall be determined on the date that the amount of tax to
be withheld is to be determined.  All
elections by Optionees to have Shares withheld for this purpose shall be made
in such form and under such conditions as the Administrator may deem necessary
or advisable; and

 

(xi)          to construe and interpret the terms of
the Plan and awards granted pursuant to the Plan.

 

(c)           Effect of
Administrator’s Decision.  All
decisions, determinations and interpretations of the Administrator shall be
final and binding on all Optionees.

5.             Eligibility.

(a)           Nonstatutory Stock
Options and Stock Purchase Rights may be granted to Service Providers.  Incentive Stock Options may be granted only
to Employees.

(b)           Each Option shall be
designated in the Option Agreement as either an Incentive Stock Option or a
Nonstatutory Stock Option.  However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options.  For purposes of this Section 5(b),
Incentive Stock Options shall be taken into account in the order in which they
were granted.  The Fair Market Value of
the Shares shall be determined as of the time the Option with respect to such
Shares is granted.

(c)           Neither the Plan nor
any Option or Stock Purchase Right shall confer upon any Optionee any right
with respect to continuing the Optionee’s relationship as a Service Provider
with the

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Company, nor shall it interfere in any way
with his or her right or the Company’s right to terminate such relationship at
any time, with or without cause.

 

6.             Term
of Plan.  The Plan shall become
effective upon its adoption by the Board. 
It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 14 of the Plan.

 

7.             Term
of Option.  The term of each Option
shall be stated in the Option Agreement; provided, however, that the term shall
be no more than ten (10) years from the date of grant thereof.  In the case of an Incentive Stock Option
granted to an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Option shall
be five (5) years from the date of grant or such shorter term as may be
provided in the Option Agreement.

 

8.             Option
Exercise Price and Consideration.

 

(a)           The per share exercise price for the
Shares to be issued upon exercise of an Option shall be such price as is
determined by the Administrator, but shall be subject to the following:

 

(i)    In the case of an Incentive Stock Option

 

(A)          granted to an Employee who, at the
time of grant of such Option, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the exercise price shall be no less than 110% of the Fair Market
Value per Share on the date of grant.

 

(B)           granted to any other Employee, the
per Share exercise price shall be no less than 100% of the Fair Market Value
per Share on the date of grant.

 

(ii)   In the case of a Nonstatutory Stock Option

 

(A)          granted to a Service Provider who, at
the time of grant of such Option, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the exercise price shall be no less than 110% of the Fair Market
Value per Share on the date of grant.

 

(B)           granted to any other Service
Provider, the per Share exercise price shall be no less than 85% of the Fair
Market Value per Share on the date of grant.

 

(iii)  Notwithstanding the foregoing, Options may be
granted with a per Share exercise price other than as required above pursuant
to a merger or other corporate transaction.

 

(b)           The consideration to be paid for the
Shares to be issued upon exercise of an Option, including the method of
payment, shall be determined by the Administrator (and, in the case of an
Incentive Stock Option, shall be determined at the time of grant).  Such consideration may consist of
(1) cash, (2) check, (3) promissory note, (4) other Shares
which (x) in the case of Shares acquired upon exercise of an Option, have
been owned by the Optionee for more than six months on the date of surrender,
and (y) have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which such Option shall be
exercised, (5) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan, or
(6) any combination of the foregoing methods of payment.  In making its determination as to the type of
consideration to accept, the Administrator shall consider if acceptance of such
consideration may be reasonably expected to benefit the Company.

 

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9.             Exercise
of Option.

 

(a)           Procedure for Exercise; Rights as
a Shareholder.  Any Option granted
hereunder shall be exercisable according to the terms hereof at such times and
under such conditions as determined by the Administrator and set forth in the
Option Agreement.  Except in the case of
Options granted to Officers, Directors and Consultants, Options shall become
exercisable at a rate of no less than 20% per year over five (5) years from the
date the Options are granted.  Unless the
Administrator provides otherwise, vesting of Options granted hereunder shall be
tolled during any unpaid leave of absence. 
An Option may not be exercised for a fraction of a Share.

 

An Option shall be deemed exercised when the Company receives:  (i) written or electronic notice of
exercise (in accordance with the Option Agreement) from the person entitled to
exercise the Option, and (ii) full payment for the Shares with respect to
which the Option is exercised.  Full
payment may consist of any consideration and method of payment authorized by
the Administrator and permitted by the Option Agreement and the Plan.  Shares issued upon exercise of an Option
shall be issued in the name of the Optionee or, if requested by the Optionee,
in the name of the Optionee and his or her spouse.  Until the Shares are issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Shares,
notwithstanding the exercise of the Option. 
The Company shall issue (or cause to be issued) such Shares promptly
after the Option is exercised.  No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the Shares are issued, except as provided in
Section 12 of the Plan.

 

Exercise of an Option in any manner shall result in a decrease in the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.

 

(b)           Termination of Relationship as a
Service Provider.  If an Optionee
ceases to be a Service Provider, such Optionee may exercise his or her Option
within such period of time as is specified in the Option Agreement (of at least
thirty (30) days) to the extent that the Option is vested on the date of
termination (but in no event later than the expiration of the term of the
Option as set forth in the Option Agreement). 
In the absence of a specified time in the Option Agreement, the Option
shall remain exercisable for three (3) months following the Optionee’s
termination.  If, on the date of termination,
the Optionee is not vested as to his or her entire Option, the Shares covered
by the unvested portion of the Option shall revert to the Plan.  If, after termination, the Optionee does not
exercise his or her Option within the time specified by the Administrator, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.

 

(c)           Disability of Optionee.  If an Optionee ceases to be a Service
Provider as a result of the Optionee’s Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option
Agreement (of at least six (6) months) to the extent the Option is vested on
the date of termination (but in no event later than the expiration of the term
of such Option as set forth in the Option Agreement).  In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for twelve (12) months
following the Optionee’s termination. 
If, on the date of termination, the Optionee is not vested as to his or
her entire Option, the Shares covered by the unvested portion of the Option
shall revert to the Plan.  If, after
termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.

 

(d)           Death of Optionee.  If an Optionee dies while a Service Provider,
the Option may be exercised within such period of time as is specified in the
Option Agreement (of at least six (6) months) to the extent that the Option is
vested on the date of death (but in no event later than the expiration of the
term of

 

 6
 

 

such Option as set forth in the Option
Agreement) by the Optionee’s estate or by a person who acquires the right to
exercise the Option by bequest or inheritance. 
In the absence of a specified time in the Option Agreement, the Option
shall remain exercisable for twelve (12) months following the Optionee’s
termination.  If, at the time of death,
the Optionee is not vested as to the entire Option, the Shares covered by the
unvested portion of the Option shall immediately revert to the Plan.  If the Option is not so exercised within the
time specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.

 

(e)           Buyout Provisions.  The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.

 

10.           Non-Transferability
of Options and Stock Purchase Rights. 
The Options and Stock Purchase Rights may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.

 

11.           Stock
Purchase Rights.

 

(a)           Rights to Purchase.  Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. 
After the Administrator determines that it will offer Stock Purchase
Rights under the Plan, it shall advise the offeree in writing or electronically
of the terms, conditions and restrictions related to the offer, including the
number of Shares that such person shall be entitled to purchase, the price to
be paid, and the time within which such person must accept such offer.  The terms of the offer shall comply in all
respects with Section 260.140.42 of Title 10 of the California Code of
Regulations.  The offer shall be accepted
by execution of a Restricted Stock purchase agreement in the form determined by
the Administrator.

 

(b)           Repurchase Option.  Unless the Administrator determines
otherwise, the Restricted Stock purchase agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser’s service with the Company for any reason (including death or
disability).  The purchase price for
Shares repurchased pursuant to the Restricted Stock purchase agreement shall be
the original price paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company. 
The repurchase option shall lapse at such rate as the Administrator may
determine.  Except with respect to Shares
purchased by Officers, Directors and Consultants, the repurchase option shall
in no case lapse at a rate of less than 20% per year over five (5) years from
the date of purchase.

 

(c)           Other Provisions.  The Restricted Stock purchase agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.

 

(d)           Rights as a Shareholder.  Once the Stock Purchase Right is exercised,
the purchaser shall have rights equivalent to those of a shareholder and shall
be a shareholder when his or her purchase is entered upon the records of the
duly authorized transfer agent of the Company. 
No adjustment shall be made for a dividend or other right for which the
record date is prior to the date the Stock Purchase Right is exercised, except
as provided in Section 12 of the Plan.

 

12.           Adjustments
Upon Changes in Capitalization, Merger or Asset Sale.

 

(a)           Changes in Capitalization.  Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan

 7
 

 

but as to which no Options or Stock Purchase
Rights have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Option or Stock Purchase Right, as well as the
price per share of Common Stock covered by each such outstanding Option or
Stock Purchase Right, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the
Company.  The conversion of any
convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.”  Such
adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. 
Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option
or Stock Purchase Right.

 

(b)           Dissolution or Liquidation.  In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Optionee as
soon as practicable prior to the effective date of such proposed transaction.  The Administrator in its discretion may
provide for an Optionee to have the right to exercise his or her Option or
Stock Purchase Right until fifteen (15) days prior to such transaction as to
all of the Optioned Stock covered thereby, including Shares as to which the
Option or Stock Purchase Right would not otherwise be exercisable.  In addition, the Administrator may provide
that any Company repurchase option applicable to any Shares purchased upon
exercise of an Option or Stock Purchase Right shall lapse as to all such
Shares, provided the proposed dissolution or liquidation takes place at the
time and in the manner contemplated.  To
the extent it has not been previously exercised, an Option or Stock Purchase
Right will terminate immediately prior to the consummation of such proposed
action.

 

(c)           Merger or Asset Sale.  In the event of a merger of the Company with
or into another corporation, or the sale of substantially all of the assets of
the Company, each outstanding Option and Stock Purchase Right shall be assumed
or an equivalent option or right substituted by the successor corporation or a
Parent or Subsidiary of the successor corporation.  In the event that the successor corporation
refuses to assume or substitute for the Option or Stock Purchase Right, the
Optionee shall fully vest in and have the right to exercise the Option or Stock
Purchase Right as to all of the Optioned Stock, including Shares as to which it
would not otherwise be vested or exercisable. 
If an Option or Stock Purchase Right becomes fully vested and exercisable
in lieu of assumption or substitution in the event of a merger or sale of
assets, the Administrator shall notify the Optionee in writing or
electronically that the Option or Stock Purchase Right shall be fully
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option or Stock Purchase Right shall terminate upon the expiration of such
period.  For the purposes of this
paragraph, the Option or Stock Purchase Right shall be considered assumed if,
following the merger or sale of assets, the option or right confers the right
to purchase or receive, for each Share of Optioned Stock subject to the Option
or Stock Purchase Right immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, or other securities or property) received
in the merger or sale of assets by holders of Common Stock for each Share held
on the effective date of the transaction (and if holders were offered a choice
of consideration, the type of consideration chosen by the holders of a majority
of the outstanding Shares); provided, however, that if such consideration
received in the merger or sale of assets is not solely common stock of the
successor corporation or its Parent, the Administrator may, with the consent of
the successor corporation, provide for the consideration to be received upon
the exercise of the Option or Stock Purchase Right, for each Share of Optioned
Stock subject to the Option or Stock Purchase Right, to be solely common stock
of the successor corporation or its Parent equal in fair market value to the
per share consideration received by holders of Common Stock in the merger or
sale of assets.

 

13.           Time
of Granting Options and Stock Purchase Rights.  The date of grant of an Option or Stock
Purchase Right shall, for all purposes, be the date on which the Administrator
makes the determination

 

 8
 

 

granting
such Option or Stock Purchase Right, or such other date as is determined by the
Administrator.  Notice of the
determination shall be given to each Service Provider to whom an Option or
Stock Purchase Right is so granted within a reasonable time after the date of
such grant.

 

14.           Amendment
and Termination of the Plan.

 

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

 

(b)           Shareholder Approval.  The Board shall obtain shareholder approval
of any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.

 

(c)           Effect of Amendment or Termination.  No amendment, alteration, suspension or
termination of the Plan shall impair the rights of any Optionee, unless
mutually agreed otherwise between the Optionee and the Administrator, which
agreement must be in writing and signed by the Optionee and the Company.  Termination of the Plan shall not affect the
Administrator’s ability to exercise the powers granted to it hereunder with
respect to Options granted under the Plan prior to the date of such
termination.

 

15.           Conditions
Upon Issuance of Shares.

 

(a)           Legal Compliance.  Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

 

(b)           Investment Representations.  As a condition to the exercise of an Option,
the Administrator may require the person exercising such Option to represent
and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.

 

16.           Inability
to Obtain Authority.  The inability
of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.

 

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

 

18.           Shareholder
Approval.  The Plan shall be subject
to approval by the shareholders of the Company within twelve (12) months after
the date the Plan is adopted.  Such
shareholder approval shall be obtained in the degree and manner required under
Applicable Laws.

 

19.           Information
to Optionees and Purchasers.  The
Company shall provide to each Optionee and to each individual who acquires
Shares pursuant to the Plan, not less frequently than annually during the
period such Optionee or purchaser has one or more Options or Stock Purchase
Rights outstanding, and, in the case of an individual who acquires Shares
pursuant to the Plan, during the period such individual owns such Shares,
copies of annual financial statements. 
The Company shall not be required to provide such statements to key
employees whose duties in connection with the Company assure their access to
equivalent information.

 

[END OF DOCUMENT]

 

 9Exhibit 10.22

EXTENSION AND AMENDMENT AGREEMENT

AGREEMENT dated as of February
15, 2007 (the “Agreement”) between Callisto Pharmaceuticals, Inc., a  Delaware corporation (the “Company”) and Gary
S. Jacob (the “Executive”).

The
Company’s Board of Directors has determined, in light of the importance of the
Executive’s services to the stability and interests of the Company and its
stockholders, to extend the term and amend certain provisions of the Employment
Agreement between the Company and the Executive dated as of June 13, 2003, as
amended October 19, 2005 (the “Employment Agreement”).

NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained
in this Agreement, it is agreed between the Company and the Executive as
follows:

1.             EXTENSION AND AMENDMENT OF EMPLOYMENT AGREEMENT.

(a)           Extension.  The “Employment Term” defined in Section 1.2
of the Employment Agreement as amended by the Extension and Severance
Compensation Agreement dated as of June 9, 2005 
between the Company and the Executive (the “Extension Agreement”) is
hereby extended to December 31, 2009, unless earlier terminated in accordance
with Section 4 of the Employment Agreement and the Extension Agreement.

(b)           Compensation.  The Company agrees to maintain Executive’s “Base
Salary” (as defined in the Employment Agreement) at $300,000 per year, payable
monthly in approximate equal installments in advance.  In addition, the Executive shall be granted
an aggregate of 225,000 ten-year incentive stock options pursuant to the Company’s
Stock Option Plan (the “Plan”) at an exercise price  per share equal to the fair market value of
the Company’s Common Stock on the date of execution of this Agreement, as such
value is defined in the Plan.  Subject to
the provisions of the Plan, the Extension Agreement and Section 4 of the
Employment Agreement, one third of such options shall vest on December 31,
2007, 2008 and 2009.  Once vested, the
options may be exercised until their expiration, notwithstanding any provision
of the Plan which requires exercise following termination of services in a
shorter period.  The Company will include
the shares of equity securities of the Company which may be issued upon the
exercise of the options in any registration statement under the Securities Act
of 1933 which includes securities issuable to any other executive officer of
the Company.  The Executive shall be
eligible to earn a cash bonus of up to $60,000 for each twelve-month period
during the Term based on meeting performance objectives and bonus criteria to
be mutually identified by Executive and the Company’s Board of Directors and
any additonal bonuses and option grants as may be determined by the
Compensation Committee of the Company’s Board in its sole discretion.

(c)           Effect on Employment Agreement.  Except as modified by this Agreement, all of
the terms of the Employment Agreement shall continue in full force and effect.
In the event of a discrepancy between the Employment Agreement and this
Agreement, the terms of this Agreement shall be controlling.

 

2.             NOTICE.

For
purposes of this Agreement, notices and all other communications provided for
in this Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by United States registered mail, return receipt
requested, postage prepaid, as follows:

if to the Company:

Callisto Pharmaceuticals,
Inc.

420 Lexington Avenue,
Suite 1609

New York, New York 10070

or such other
address as either party may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be
effective only upon receipt.

3.             MISCELLANEOUS.

No
provisions of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in a writing signed by the Executive
and the Company. No waiver by either party hereto at any time of any breach by
the other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior to
subsequent time. No agreements or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have been made by  either party which are not set forth expressly in this
Agreement. This Agreement shall be governed by and construed in accordance with
the laws of Delaware.

4.               VALIDITY.

The invalidity or enforceability of any provi­sions of
this Agreement shall not affect the validity or 
enforce­ability of any other provision of this Agreement, which shall
remain in full force and effect.

5.             COUNTERPARTS.

This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original but all of which together will constitute one and same
instrument.

 

6.             LEGAL FEES AND EXPENSES.

The
Company or one of its subsidiaries shall pay all legal fees and expenses which
the Executive may incur as a result of the Company’s contesting the  validity, enforceability or the Executive’s interpretation of,
or determinations under, this Agreement.

	
  

  	
  CALLISTO PHARMACEUTICALS, INC.,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gabriele
  M. Cerrone

  	
   

  
	
   

  	
   

  	
  Name: Gabriele M. Cerrone

  
	
   

  	
   

  	
  Title:   Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Gary S.
  Jacob

  	
   

  
	
   

  	
  Gary S. Jacob

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