Document:

EXHIBIT 10.11

                              Employment Agreement

April 30, 2001

Mr. Martin E. Hanaka
Chairman and Chief Executive Officer
The Sports Authority, Inc.
3383 North State Road 7
Ft. Lauderdale, FL  33319

Dear Mr. Hanaka:

This letter will confirm our understanding concerning your continued employment
with The Sports Authority, Inc. (the "Company").

1. The Company agrees to employ you as, and you agree to serve as, the Company's
Chief Executive Officer through December 31, 2003, subject to the terms of this
agreement.

2. If your employment with the Company is terminated by the Company other than
for Cause, and if paragraph 3 does not apply, the Company will pay to you
through the later of December 31, 2003 or one year after such termination, a
monthly fee equal to (a) one-twelfth of your annualized base salary in effect on
the date your employment is terminated, plus (b) one-twelfth of the "on plan"
bonus amount targeted for you for the fiscal year during which your employment
is terminated (to be paid on or about the 15th day of each month). In addition,
all of your unvested options to purchase Company stock under the Company's stock
option plans will vest upon the termination of your employment other than for
Cause or upon your death on or before December 31, 2003.

3. If there is a Change in Control of the Company while you are employed by the
Company and if (i) your employment with the Company is terminated by the Company
other than for Cause, or (ii) you terminate your employment with the Company for
Good Reason, in either case within a two-year period following such a Change in
Control, the Company will pay to you an amount equal to 2.99 times the sum of
(i) your annual rate of base salary at the time of termination or immediately
prior to the Change in Control, whichever base salary amount is greater, and
(ii) the "on plan" bonus amount targeted for you for the fiscal year in which
termination occurs or the fiscal year immediately prior to the Change in
Control, whichever bonus amount is greater. Such payment shall be made within
fifteen days after your termination.

<PAGE>

4. If there is a Change in Control of the Company while you are employed by the
Company and if, at any time after one year after the Change in Control and
before December 31, 2003, (i) you are not the chief executive officer of (A) the
corporation or other entity (whether or not it is the Company) which is the
survivor of any merger or consolidation resulting from the Change in Control, if
such surviving corporation or entity is not more than 50% owned by any other
corporation or entity, or (B) the corporation or other entity which, as a result
of the Change in Control, owns more than 50% of the stock of the Company or the
corporation or entity which is the survivor of any merger or consolidation
resulting from the Change in Control, other than due to your resignation from
such position or your refusal to serve in such position, and (ii) you terminate
your employment with the Company or such other entity (other than under the
circumstances described in paragraph 3), the Company will pay to you through one
year after the last day of your employment a monthly fee equal to (a)
one-twelfth of your annualized base salary in effect on the date your employment
is terminated, plus (b) one-twelfth of the "on plan" bonus amount targeted for
the fiscal year in which termination occurs or the fiscal year immediately prior
to the Change in Control, whichever bonus amount is greater (to be paid on or
about the 15th day of each month).

5. (a) Termination by the Company for "Cause" means termination based on (i)
conduct which is a material violation of Company policy, as in effect
immediately before any Change in Control, or which is fraudulent or unlawful or
which materially interferes with your ability to perform your duties, (ii)
misconduct which damages or injures the Company or substantially damages the
Company's reputation, or (iii) gross negligence in the performance of, or
willful failure to perform, your duties and responsibilities.

   (b) Termination by you for "Good Reason" means termination based on the
occurrence without your express written consent of any of the following: (i) a
significant diminution by the Company of your role with the Company or a
significant detrimental change in the nature and/or scope of your status with
the Company, other than for Cause, (ii) a reduction in your base salary, other
than for Cause and other than as part of an across-the-board reduction in
salaries of management personnel (including all Vice Presidents and above) of
less than 20%, (iii) a material diminution by the Company of benefits (taken as
a whole) provided to you immediately prior to the Change in Control, or (iv) the
relocation of the Company's principal executive offices to a location outside of
Broward County, Palm Beach County or Dade County, Florida or any requirement
that you be based anywhere other than the Company's principal executive offices.

   (c) A "Change in Control" shall be deemed to have occurred if:

          (i) the "beneficial ownership" (as defined in Rule l3d-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) of securities
representing more than 50% of the combined voting power of the Company is
acquired by any "person" as defined in sections 13(d) and 14(d) of the Exchange
Act (other than

<PAGE>

the Company or any trustee or other fiduciary holding securities under an
employee benefit plan of the Company), or

          (ii) the shareholders of the Company approve a definitive agreement to
merge or consolidate the Company with or into another corporation or to sell or
otherwise dispose of all or substantially all of its assets, or

          (iii) during any period of three consecutive years, individuals who at
the beginning of such period were members of the Board of Directors of the
Company cease for any reason to constitute at least a majority thereof (unless
the election, or the nomination for election by the Company's shareholders, of
each new director was approved by a vote of at least a majority of the directors
then still in office who were directors at the beginning of such period).

6. (a) Anything in this Agreement to the contrary notwithstanding, in the event
that it shall be determined that any payment or distribution to or for your
benefit, whether paid or payable or distributed or distributable pursuant to the
terms of this agreement or otherwise (the "Payment"), would constitute an
"excess parachute payment" within the meaning of Section 280G of the Code, you
shall be paid an additional amount (the "Gross-Up Payment") such that the net
amount retained by you after deduction of any excise tax imposed on you under
Section 4999 of the Code , and any federal, state and local income and
employment tax and excise tax imposed upon the Gross-Up Payment shall be equal
to the Payment. For purposes of determining the amount of the Gross-Up Payment,
you shall be deemed to pay federal income tax and employment taxes at the
highest marginal rate of federal income and employment taxation in the calendar
year in which the Gross-Up Payment is to be made and state and local income
taxes at the highest marginal rate of taxation in the state and locality of your
residence (or, if greater, the state and locality in which you are required to
file a nonresident income tax return with respect to the Payment) on the
Termination Date, net of the maximum reduction in federal income taxes that may
be obtained by you from the deduction of such state and local taxes.

   (b) All determinations to be made under this paragraph 6 shall be made by the
Company's independent public accountant immediately prior to the Change of
Control (the "Accounting Firm"), which firm shall provide its determinations and
any supporting calculations both to the Company and you within 10 days of your
termination. Any such determination by the Accounting Firm shall be binding upon
the Company and you. Within five days after the Accounting Firm's determination,
the Company shall pay (or cause to be paid) or distribute (or cause to be
distributed) to you, or for your benefit, such amounts as are then due to you
under this agreement.

   (c) You shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of
the Gross-Up Payment. Such notification shall be given as soon as practicable
but no later than ten business days after you know of such claim and shall
apprise the Company of the

<PAGE>

nature of such claim and the date on which such claim is requested to be paid.
You shall not pay such claim prior to the expiration of the thirty day period
following the date on which you give such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies you in writing prior to the expiration of such
period that it desires to contest such claim, you shall:

      (i)   give the Company any information reasonably requested by the Company
            relating to such claim;

      (ii)  take such action in connection with contesting such claim as the
            Company shall reasonably request in writing from time to time,
            including, without limitation, accepting legal representation with
            respect to such claim by an attorney reasonably selected by the
            Company;

      (iii) cooperate with the Company in good faith in order to effectively
            contest such claim; and

      (iv)  permit the Company to participate in any proceedings relating to
            such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold you harmless, on an after-tax
basis, for any excise tax, income tax or employment tax, including interest and
penalties, with respect thereto, imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this paragraph 6, the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearing and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
you to pay the tax claimed and sue for a refund or contest the claim in any
permissible manner, and you agree to prosecute such contest to a termination
before any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall determine; provided further,
however, that if the Company directs you to pay such claim and sue for a refund
the Company shall advance the amount of such payment to you, on an interest-free
basis and shall indemnify and hold you harmless, on an after-tax basis, from any
excise tax, income tax or employment tax, including interest or penalties with
respect thereto, imposed with respect to such advance or with respect to any
imputed income with respect to such advance; and provided further that any
extension of the statute of limitations relating to payment of taxes for your
taxable year with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company's control of
the contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and you shall be entitled to settle or contest, as
the case may be, any other issue raised by the Internal Revenue Service or any
other taxing authority.

<PAGE>

   (d) If, after the receipt by you of an amount advanced by the Company
pursuant to this Section, you become entitled to receive any refund with respect
to such claim, you shall (subject to the Company's complying with the
requirements of this paragraph) promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by you of an amount advanced by the
Company pursuant to this Section, a determination is made that you shall not be
entitled to any refund with respect to such claim and the Company does not
notify you in writing of its intent to contest such denial of refund prior to
the expiration of thirty days after such determination, then such advance shall
be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.

   (e) All of the fees and expenses of the Accounting Firm in performing the
determinations referred to in this paragraph shall be borne solely by the
Company. The Company agrees to indemnify and hold harmless the Accounting Firm
of and from any and all claims, damages and expenses resulting from or relating
to its determinations pursuant to this paragraph, except for claims, damages or
expenses resulting from the gross negligence or willful misconduct of the
Accounting Firm.

7.   The Company will provide you with life insurance coverage as follows.

   (a) In the event your employment is terminated by death on or before December
31, 2003 and paragraph 3 does not apply, such insurance will pay to your
designated beneficiary or beneficiaries (collectively, "Beneficiary") in a lump
sum the present value, using a discount rate equal to the asked yield on the
longest term U.S. Treasury bill quoted in The Wall Street Journal on the date of
your death (the "Present Value") of the following amount: a monthly amount equal
to (a) one-twelfth of your annualized base salary in effect on the date of your
death, plus (b) one-twelfth of the "on plan" bonus amount targeted for you for
the fiscal year during which your death occurs (due on or about the 15th day of
each month), through the later of December 31, 2003 or one year after your
death.

   (b) In the event you die after your employment has been terminated under
paragraph 2 but before the date the last payment due to you under paragraph 2 is
made, such insurance will pay to your Beneficiary in a lump sum the Present
Value of the following amount: (i) a monthly amount equal to (a) one-twelfth of
your annualized base salary in effect on the date your employment was
terminated, plus (b) one-twelfth of the "on plan" bonus amount targeted for you
for the fiscal year during which your employment was terminated (due on or about
the 15th day of each month), through the later of December 31, 2003 or one year
after such termination, less (ii) all amounts already paid to you under
paragraph 2.

   (c) In the event your employment is terminated by death within a two-year
period following a Change in Control, such insurance will pay to your
Beneficiary an

<PAGE>

amount equal to 2.99 times the sum of (i) your annual rate of base salary at the
time of your death or immediately prior to the Change in Control, whichever base
salary amount is greater, and (ii) the "on plan" bonus amount targeted for you
for the fiscal year in which your death occurs or the fiscal year immediately
prior to the Change in Control, whichever bonus amount is greater.

8. In consideration of the obligations of the Company hereunder, you agree that
you shall not, for a period of one year from the termination of your employment
by you or the Company for any reason (or the later of one year from the
termination of your employment or December 31, 2003, if your employment is
terminated under paragraph 2), (a) directly or indirectly become an employee,
director, consultant or advisor of, or otherwise affiliated with, any retailer
of sporting goods, athletic footwear or athletic apparel which sells in the
United States though any retail channel (unless the classes of products sold by
such retailer constitute less than 10% of the total sales by the Company and its
licensees in the United States during the fiscal year of the Company immediately
preceding the year of such termination), (b) directly or indirectly solicit or
hire, or encourage the solicitation or hiring of, any person who was an employee
of the Company at any time on or after the date of such termination (unless more
than six months shall have elapsed between the last day of such person's
employment by the Company and the first date of such solicitation or hiring),
(c) disparage the name, business reputation or business practices of the Company
or any of its officers or directors, or interfere with the Company's existing or
prospective business relationships, or (d) without the written consent of the
Chief Executive Officer of the Company, disclose to any person other than as
required by law or court order, any confidential information obtained by you
while in the employ of the Company, provided, however, that confidential
information shall not include any information known generally to the public
(other than as a result of unauthorized disclosure by you) or any specific
information or type of information generally not considered confidential by
persons engaged in the same business as the Company, or information disclosed by
the Company by any member of its Board of Directors or any other officer thereof
to a third party without restrictions on the disclosure of such information.

You acknowledge that these restrictions are reasonable and necessary to protect
the Company's legitimate interests, that the Company would not have entered into
this agreement in the absence of such restrictions, and that any violation of
these restrictions will result in irreparable harm to the Company. You agree
that the Company shall be entitled to preliminary and permanent injunctive
relief, without the necessity of proving actual damages, as well as an equitable
accounting of all earnings, profits and other benefits arising from any
violation hereof, which rights shall be cumulative and in addition to any other
rights or remedies to which the Company may be entitled. You irrevocably and
unconditionally (i) agree that any legal proceeding arising out of this
paragraph may be brought in the United States District Court for the Southern
District of Florida, or if such court does not have jurisdiction or will not
accept jurisdiction, in any court of general jurisdiction in Broward County,
Florida, (ii) consent to the non-exclusive jurisdiction of such court in any
such proceeding, and (iii) waive any objection to the

<PAGE>

laying of venue of any such proceeding in any such court. You also irrevocably
and unconditionally consent to the service of any process, pleadings, notices or
other papers.

9. The payments provided hereunder shall constitute the exclusive payments due
you from, and the exclusive obligation of, the Company in the event of any
termination of your employment, except for any benefits which may be due you in
normal course under any employee or executive benefit plan of the Company which
provides benefits after termination of employment, other than a severance pay
plan. You shall not be required to mitigate the amount of any payment or benefit
provided for in this agreement by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for herein be reduced by any
compensation earned by other employment or otherwise. The payments hereunder may
not be transferred, assigned or encumbered in any manner, either voluntarily or
involuntarily. In the event of your death, any payments then or thereafter due
hereunder will be made to your estate.

10. It is the intent of the parties that you not be required to incur any
expenses associated with the enforcement of your right to receive payments due
under paragraph 3 or paragraph 4 of this agreement by arbitration, litigation or
other legal action because the cost and expense thereof would substantially
detract from the benefits intended to be extended to you. Accordingly, the
Company shall pay you on demand the amount necessary to reimburse you in full
for all reasonable expenses (including all attorneys' fees and legal expenses)
incurred by you in enforcing the obligations of the Company to make the payments
due under paragraph 3 or paragraph 4 of this agreement.

11. The obligation to make the payments hereunder is conditioned upon your
execution and delivery to the Company at the time of the termination of your
employment of a release, in form satisfactory to the Company, of any claims you
may have as a result of your employment or termination of employment under any
federal, state or local law, excluding any claim for benefits which may be due
you in normal course under any employee or executive benefit plan of the Company
which provides benefits after termination of employment, other than a severance
pay plan, and excluding any claims for reimbursement for liabilities, costs or
expenses incurred in any action against you within the scope of your employment
by the Company and for which you would have been indemnified pursuant to the
bylaws of the Company as of the date hereof (in which case you shall notify the
Company in writing within ten days after receiving service of process as to the
commencement of the action and give the Company the right to control the defense
of any such action), unless later limited in accordance with applicable law.

12. The Company shall require any successor or successors (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to you, to acknowledge expressly that this
agreement is binding upon and enforceable against the Company in accordance with
the terms hereof, and in the same manner and to the same extent that the Company
would be required to perform if no such succession or successions had taken
place. Failure of the Company to obtain such agreement prior to

                                       1
<PAGE>

the effectiveness of any such succession shall be a breach of this agreement. As
used in this agreement, the Company shall mean the Company as hereinbefore
defined and any such successor or successors to its business and/or assets,
jointly and severally.

13. All payments hereunder shall be subject to applicable tax withholding and
deductions.

14. This agreement sets forth the entire understanding between you and the
Company concerning your relationship with the Company and supersedes all prior
agreements, written or oral, express or implied, between you and the Company as
to such subject matter. This agreement may not be amended, nor may any provision
hereof be modified or waived, except by an instrument in writing duly signed by
you and the Company.

15. If any provision of this agreement, or any application thereof to any
circumstances, is invalid, in whole or in part, such provision or application
shall to that extent be severable and shall not affect other provisions or
applications of this agreement.

16. This agreement shall be governed by and interpreted under the laws of the
State of Delaware without giving effect to any conflict of laws provisions.

Please indicate your agreement by signing below and retain one copy for you
records.

                                            Sincerely,

                                            THE SPORTS AUTHORITY, INC.

                                            By: /s/ Cynthia R. Cohen

                                                   Cynthia Cohen
                                                   Chair, Compensation Committee

Agreed:

/s/ Martin E. Hanaka

Martin E. HanakaExhibit 10.31

		
	 	 	Exhibit 10.31	 

	

THE GYMBOREE
CORPORATION

1993 STOCK OPTION PLAN 

(AS AMENDED AND RESTATED THROUGH DECEMBER 31, 2000) 

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

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

		•		
to provide additional incentive to Employees, Consultants and Outside Directors, 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. The Plan also provides for automatic
grants of Nonstatutory Stock Options to Outside Directors. 

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

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

	 	     (b) 
“Applicable Laws” means the legal requirements relating to the administration of stock
option plans under state corporate and securities laws and the Code. 

	 	     (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 appointed by the Board in accordance with Section 4 of the
Plan. 

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

	 	     (g) 
“Company” means The Gymboree Corporation, a Delaware corporation. 

	 	     (h) 
“Consultant” means any person, including an advisor, engaged by the Company or a Parent
or Subsidiary to render services and who is compensated for such services, provided that
the term “Consultant” shall not include Directors who are paid only a director’s fee by
the Company or who are not compensated by the Company for their services as Directors. 

	 	     (i) 
“Continuous Status as an Employee, Consultant or Outside Director” means that the
employment, consulting or Outside Director relationship is not interrupted or terminated
by the Company, any Parent or Subsidiary. Continuous Status as an Employee, Consultant or
Outside Director shall not be considered interrupted in the case of: (i) any leave of
absence approved by the Administrator, including sick leave, military leave, or any other
personal leave; provided, however, that for purposes of Incentive Stock Options, any such
leave may not exceed ninety (90) days, unless reemployment upon the expiration of such
leave is guaranteed by contract (including certain Company policies) or statute; or (ii)
transfers between locations of the Company or between the Company, its Parent, its
Subsidiaries or its successor. 

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

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

	

1 

	 	     (l) 
“Employee” means any person, including Officers and Directors, employed by the Company or
any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a
director’s fee by the Company shall be sufficient to constitute “employment” by the
Company. 

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

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

	 	     (i) If
the Common Stock is listed on any established stock exchange or a national market system,
including without limitation the National Market System of the National Association of
Securities Dealers, Inc. Automated Quotation (“NASDAQ”) System, the Fair Market
Value of a Share of Common Stock shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such system or exchange (or the
exchange with the greatest volume of trading in Common Stock) on the last market trading
day prior to the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;

	 	     (ii) If
the Common Stock is quoted on the NASDAQ System (but not on the National Market System
thereof) or is regularly quoted by a recognized securities dealer but selling prices are
not reported, the Fair Market Value of a Share of Common Stock shall be the mean between
the high bid and low asked prices for the Common Stock on the last market trading day
prior to the day of determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable;

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

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

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

	 	     (q) 
“Notice of Grant” means a written notice evidencing certain terms and conditions
of an individual Option or Stock Purchase Right grant. The Notice of Grant is part of the
Option Agreement. 

	 	     (r) 
“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. 

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

	 	     (t) 
“Option Agreement” means a written 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. 

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

	 	     (v) 
“Optionee” means an Employee, Consultant or Outside Director who holds an
outstanding Option or Stock Purchase Right. 

	 	     (w) 
“Outside Director” shall mean a member of the Board who is not an Employee or a
Consultant. 

	

2

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

	 	     (y) 
“Plan” means The Gymboree Corporation 1993 Stock Option Plan. 

	 	     (aa) 
“Stock Purchase Right Agreement” means a written agreement between the Company
and the Optionee evidencing the terms and restrictions applying to stock purchased under
a Stock Purchase Right. The Stock Purchase Right Agreement is subject to the terms and
conditions of the Plan and the Notice of Grant. 

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

	 	     (cc) 
“Share” means a share of the Common Stock, as adjusted in accordance with
Section 13 of the Plan. 

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

	 	     (ee) 
“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 13 of the
Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 6,025,000 Shares of Common Stock. The Shares may be
authorized, but unissued, or reacquired Common Stock. However, should the
Company reacquire Shares which were issued pursuant to the exercise of an Option
or Stock Purchase Right, such Shares shall not become available for future grant
under the Plan. 

     If
an Option or Stock Purchase Right expires or becomes unexercisable without
having been exercised in full, the unpurchased Shares which were subject thereto
shall become available for future grant under the Plan (unless the Plan has
terminated). 

     4.  
Administration of the Plan.  

	 	     (a) 
Procedure. 

	 	     (i) 
Multiple Administrative Bodies. The Plan may be administered by different Committees with
respect to different groups of persons providing services to the Company. 

	 	     (ii) 
Section 162(m).To the extent that the Administrator determines it to be desirable
to qualify Options granted hereunder as “performance-based compensation” within
the meaning of Section 162(m) of the Code, the Plan shall be administered by a Committee
of two or more “outside directors” within the meaning of Section 162(m) of the
Code.

	 	     (iii) 
Rule 16b-3.To the extent desirable to qualify transactions hereunder as exempt
under Rule 16b-3, the transactions contemplated hereunder shall be structured to satisfy
the requirements for exemption under Rule 16b-3.

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

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

	

3

	 	     (i) 
to determine the Fair Market Value of the Common Stock, in accordance with Section 2(n)
of the Plan;

	 	     (ii) 
to select the Consultants and Employees to whom Options and Stock Purchase Rights may be
granted hereunder;

	 	     (iii)
to determine whether and to what extent Options and Stock Purchase Rights or any
combination thereof, are granted hereunder;

	 	     (iv) 
to determine the number of shares of Common Stock to be covered by each Option and Stock
Purchase Right granted hereunder;

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

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

	 	     (vii) 
to determine whether, to what extent and under what circumstances Common Stock and other
amounts payable with respect to an award under this Plan shall be deferred either
automatically or at the election of the participant (including providing for and
determining the amount (if any) of any deemed earnings on any deferred amount during any
deferral period);

	 	     (viii) 
to construe and interpret the terms of the Plan;

	 	     (ix) 
to prescribe, amend and rescind rules and regulations relating to the Plan;

	 	     (x) to
authorize any person to execute on behalf of the Company any instrument required to
effect the grant of an Option or Stock Purchase Right previously granted by the
Administrator;

	 	     (xi) to
determine the terms and restrictions applicable to Options and Stock Purchase Rights; and

	 	     (xii) 
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 an
Optionee to have Shares withheld for this purpose shall be made in such form and under
such conditions as the Administrator may deem necessary or advisable;

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

	 	     (c)
Effect of Administrator’s Decision. The Administrator’s decisions,
determinations and interpretations shall be final and binding on all Optionees and any
other holders of Options or Stock Purchase Rights.

	

4 

	

     5.  
Eligibility.  

     (a) 
Stock Purchase Rights and Options may be granted to Employees, Consultants and
Outside Directors provided that (i) Incentive Stock Options may only be granted
to Employees and (ii) only Options may be granted to Outside Directors, and such
grants may only be made in accordance with the provisions of Section 5(b)
hereof. Each Option shall be designated in the written option agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. Subject to
Section 5(b) with respect to Outside Directors, an Employee or Consultant who
has been granted an Option or Stock Purchase Right may, if such Employee or
Consultant is otherwise eligible, be granted additional Option(s) or Stock
Purchase Right(s). 

     (b) 
All grants of Options to Outside Directors under this Plan shall be automatic
and non-discretionary (except as set forth in this Section 5(b)) and shall be
made strictly in accordance with the following provisions: 

	 	     (i) 
On the date first elected to the Board of Directors and on such date each year thereafter
during the term of this Plan, each Outside Director shall automatically receive an Option
to purchase 2,500 Shares. Also, on each anniversary of such person’s election to the
Board of Directors, each Outside Director who is then the chairperson of a committee
shall receive an Option to purchase 500 Shares. In addition, each Outside Director who is
an Outside Director on the date on which this Plan becomes effective shall automatically
receive an Option to purchase 15,000 Shares. 

	 	     (ii) 
The terms of an Option granted pursuant to this Section 5(b) shall be as follows: 

	 	     (A) 
the term of the Option shall be ten (10) years;

	 	     (B) 
except as provided in Section 10 of this Plan, the Option shall be exercisable only while
the Outside Director remains a Director;

	 	     (C) 
the exercise price per share of Common Stock shall be 100% of the Fair Market Value on
the date of grant of the Option;

	 	     (D) 
the Option shall become exercisable in installments cumulatively with respect to
twenty-five percent (25%) of the Optioned Stock one year after the date of grant and as
to an additional twenty-five percent (25%) of the Optioned Stock each year thereafter, so
that one hundred percent (100%) of the Optioned Stock shall be exercisable four years
after the date of grant; provided, however, that in no event shall any Option be
exercisable prior to obtaining stockholder approval of the Plan.

	 	     (iii) 
The Board of Directors may make discretionary grants of Options to Outside Directors for
a number of Shares not to exceed in the aggregate 15,000.

	

     6.  
Limitations.  

	 	     (a) 
Each Option shall be designated in the Notice of Grant as either an Incentive Stock
Option or a Nonstatutory Stock Option. However, notwithstanding such designations, to the
extent that the aggregate Fair Market Value: (i) of Shares subject to an Optionee’s
incentive stock options granted by the Company, any Parent or Subsidiary, which (ii)
become exercisable for the first time during any calendar year (under all plans of the
Company or any Parent or Subsidiary) exceeds $100,000, such excess Options shall be
treated as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock
Options shall be taken into account in the order in which they were granted, and the Fair
Market Value of the Shares shall be determined as of the time of grant.

	 	     (b) 
Neither the Plan nor any Option or Stock Purchase Right shall confer upon an Optionee any
right with respect to continuing the Optionee’s employment relationship, consulting
relationship or directorship with the Company, nor shall they interfere in any way with
the Optionee’s right or the Company’s right to terminate such relationship at
any time, with or without cause.

	 	     (c) 
The following limitations shall apply to grants of Options:

	

5

	 	     (i) 
No Employee shall be granted, in any fiscal year of the Company, Options to purchase more
than 400,000 Shares.

	 	     (ii) 
In connection with his or her initial service, an Employee may be granted Options to
purchase up to an additional 400,000 Shares which shall not count against the limit set
forth in subsection (i) above.

	 	     (iii) 
The foregoing limitations shall be adjusted proportionately in connection with any change
in the Company’s capitalization as described in Section 13.

	

     7.  
Term of Plan. Subject to Section 19 of the Plan and any resolution of the
Board of Directors concerning effectiveness, the Plan shall become effective
upon the earlier to occur of its adoption by the Board or its approval by the
stockholders of the Company as described in Section 19 of the Plan. It shall
continue in effect for a term of ten (10) years unless terminated earlier under
Section 15 of the Plan. 

     8.  
Term of Option. The term of each Option shall be stated in the Notice of
Grant; provided, however, that in the case of an Incentive Stock Option, the
term shall be ten (10) years from the date of grant or such shorter term as may
be provided in the Notice of Grant. However, in the case of an Incentive Stock
Option granted to an Optionee who, at the time the Incentive Stock Option is
granted, owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary, the term of
the Incentive Stock Option shall be five (5) years from the date of grant or
such shorter term as may be provided in the Notice of Grant. 

     9.  
Option Exercise Price and Consideration.  

	 	     (a) 
Exercise Price. The per share exercise price for the Shares to be issued pursuant to
exercise of an Option shall be determined by the Administrator, subject to the following: 

	 	     (i) 
In the case of an Incentive Stock Option

	 	     (A) 
granted to an Employee who, at the time the Incentive Stock 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 per Share exercise price shall be no less
than 110% of the Fair Market Value per Share on the date of grant.

	 	     (B) 
granted to any 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, the per Share exercise price shall be no less
than 100% of the Fair Market Value per Share on the date of grant; provided, however,
that the per exercise price shall be no less than 85% of the Fair Market Value per Share
on the date of grant if the Option is expressly granted at a discount in lieu of a
reasonable amount of salary or cash bonus.

	 	     (b) 
Waiting Period and Exercise Dates. At the time an Option is granted, the Administrator
shall fix the period within which the Option may be exercised and shall determine any
conditions which must be satisfied before the Option may be exercised. In so doing, the
Administrator may specify that an Option may not be exercised until the completion of a
service period. 

	 	     (c) 
Form of Consideration. The Administrator shall determine the acceptable form of
consideration for exercising an Option, including the method of payment. In the case of
an Incentive Stock Option, the Administrator shall determine the acceptable form of
consideration at the time of grant. Such consideration may consist of: 

	

6 

	 	     (i) 
cash;

	 	     (ii) 
check;

	 	     (iii) 
promissory note;

	 	     (iv) 
other Shares which (A) 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 (B)
have a Fair Market Value on the date of surrender equal to the aggregate exercise price
of the Shares as to which said Option shall be exercised;

	 	     (v) 
delivery of a properly executed exercise notice together with such other documentation as
the Administrator and the broker, if applicable, shall require to effect an exercise of
the Option and delivery to the Company of the sale or loan proceeds required to pay the
exercise price;

	 	     (vi) 
any combination of the foregoing methods of payment; or

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

	

     10.
Exercise of Option.  

	 	     (a) Procedure
for Exercise; Rights as a Stockholder. Any Option granted hereunder shall be
exercisable according to the terms of the Plan and at such times and under such
conditions as determined by the Administrator and set forth in the Option Agreement. 

	 	     An
Option may not be exercised for a fraction of a Share. 

	 	     An
Option shall be deemed exercised when the Company receives: (i) written 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 stock
certificate evidencing such Shares is issued (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a stockholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such stock certificate 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 stock certificate is issued, except as provided in Section
13 of the Plan. Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the Option, by the
number of Shares as to which the Option is exercised. 

	 	     (b) Termination
of Employment Relationship, Consulting Relationship or Directorship. In the event
that an Optionee’s Continuous Status as an Employee, Consultant or Outside Director
terminates (other than upon the Optionee’s death or Disability), the Optionee may
exercise his or her Option, but only within such period of time as is determined by the
Administrator, and only to the extent that the Optionee was entitled to exercise it at
the date of termination (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant). In the case of an Incentive Stock Option,
the Administrator shall determine such period of time (in no event to exceed ninety (90)
days from the date of termination) when the Option is granted. If, at the date of
termination, the Optionee is not entitled to exercise his or her entire Option, the
Shares covered by the unexercisable 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. 

	

7 

	 	     (c) Disability
of Optionee. In the event that an Optionee’s Continuous Status as an Employee,
Consultant or Outside Director terminates as a result of the Optionee’s Disability,
the Optionee may exercise his or her Option at any time within twelve (12) months from
the date of such termination, but only to the extent that the Optionee was entitled to
exercise it at the date of such termination (but in no event later than the expiration of
the term of such Option as set forth in the Notice of Grant). If, at the date of
termination, the Optionee is not entitled to exercise his or her entire Option, the
Shares covered by the unexercisable 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. In the event of the death of an Optionee, the Option may be exercised at
any time within twelve (12) months following the date of death (but in no event later
than the expiration of the term of such Option as set forth in the Notice of Grant), by
the Optionee’s estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent that the Optionee was entitled to
exercise the Option at the date of death. If, at the time of death, the Optionee was not
entitled to exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall revert to the Plan. If, after death, the Optionee’s
estate or a person who acquired the right to exercise the Option by bequest or
inheritance does not exercise the Option within the time specified herein, the Option
shall terminate, and the Shares covered by such Option shall immediately revert to the
Plan. 

	

     11.  
Stock Purchase Rights.  

	 	     (a) 
Rights to Purchase. An annual maximum of 200,000 Shares may be issued to Employees or
Consultants pursuant to Stock Purchase Rights. Stock Purchase Rights may be granted
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,
by means of a Notice of Grant, of the terms, conditions and restrictions related to the
offer, including the number of Shares that the offeree shall be entitled to purchase, the
price to be paid (which price shall be no less than 100% of the Fair Market Value per
Share on the date of grant; provided, however, that the price shall be no less than 85%
of the Fair Market Value per Share on the date of grant if the Stock Purchase Right is
expressly granted at a discount in lieu of a reasonable amount of salary or cash bonus),
and the time within which the offeree must accept such offer, which shall in no event
exceed six (6) months from the date upon which the Administrator made the determination
to grant the Stock Purchase Right. The offer shall be accepted by execution of a Stock
Purchase Right Agreement in the form determined by the Administrator. 

	 	     (b) 
Repurchase Option. Unless the Administrator determines otherwise, the Stock Purchase
Right 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 Stock Purchase Right Agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser to the
Company. The repurchase option shall lapse at a rate determined by the Administrator;
provided, however, that in no event may the repurchase option lapse more quickly than
ratably over the three (3) year period following the date of grant. 

	 	     (c) 
Other Provisions. The Stock Purchase Right 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. In addition, the provisions of Stock Purchase Right
Agreements need not be the same with respect to each purchaser. 

	

8 

	 	     (d) 
Rights as a Stockholder. Once the Stock Purchase Right is exercised, the purchaser shall
have the rights equivalent to those of a stockholder, and shall be a stockholder when his
or her purchase is entered upon the records of the duly authorized transfer agent of the
Company. No adjustment will be made for a dividend or other right for which the record
date is prior to the date the Stock Purchase Right is exercised, except as provided in
Section 13 of the Plan. 

	

     12.  
Non-Transferability of Options and Stock Purchase Rights. Unless
determined otherwise by the Administrator, an Option or Stock Purchase Right may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate. 

     13.  
Adjustments Upon Changes in Capitalization, Dissolution, Merger, Asset Sale or Change of
Control. 

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

	 	     (b) 
Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of
the Company, to the extent that an Option or Stock Purchase Right has not been previously
exercised, it will terminate immediately prior to the consummation of such proposed
action. The Board may, in the exercise of its sole discretion in such instances, declare
that any Option or Stock Purchase Right shall terminate as of a date fixed by the Board
and give each Optionee the right to exercise his or her Option or Stock Purchase Right as
to all or any part of the Optioned Stock, including Shares as to which the Option or
Stock Purchase Right would not otherwise be exercisable. 

	 	     (c) 
Merger or Asset Sale. Subject to the provisions of paragraph (d) hereof, 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 shall be substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event that the
successor corporation does not agree to assume the Option or Stock Purchase Right or to
substitute an equivalent option or right, the Administrator shall, in lieu of such
assumption or substitution, provide for the Optionee to 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 exercisable. If the Administrator makes an Option or
Stock Purchase Right fully exercisable in lieu of assumption or substitution in the event
of a merger or sale of assets, the Administrator shall notify the Optionee 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 will 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, 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 was not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation and the participant,
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. 

	

9 

	 	     (d) 
Change of Control. In the event of a “Change of Control” of the Company, as
defined in paragraph (e) below, the following acceleration and valuation provisions shall
apply: 

	 	     (i) 
Any Options and Stock Purchase Rights outstanding as of the date on which such Change of
Control is determined to have occurred that are not yet exercisable and vested on such
date shall become fully exercisable and vested;

	 	     (ii) 
To the extent that they are exercisable and vested, all outstanding Options and Stock
Purchase Rights, unless otherwise determined by the Board at or after grant, shall be
terminated in exchange for a cash payment at the Change of Control Price, reduced by the
exercise price applicable to such Options or Stock Purchase Rights. These cash proceeds
shall be paid to the Optionee or, in the event of death of an Optionee prior to payment,
to the estate of the Optionee or to a person who acquired the right to exercise the
Option or Stock Purchase Right by bequest or inheritance.

	 	     (e) 
Definition of “Change of Control.” For purposes of this Section 13, a “Change
of Control” means the happening of any of the following: 

	 	     (i) When
any “person,” as such term is used in Sections 13(d) and 14(d) of the Exchange
Act (other than the Company, a Subsidiary or a Company employee benefit plan, including
any trustee of such plan acting as trustee) is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing fifty percent (50%) or more of the combined voting power of the
Company’s then outstanding securities entitled to vote generally in the election of
directors; or

	 	     (ii) 
The stockholders of the Company approve a merger or consolidation of the Company with any
other corporation, other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power represented by
the voting securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation, or the stockholders of the Company approve an
agreement for the sale or disposition by the Company of all or substantially all the
Company’s assets; or

	 	     (iii) 
A change in the composition of the Board of Directors of the Company, as a result of
which fewer than a majority of the directors are Incumbent Directors. “Incumbent
Directors” shall mean directors who either (A) are directors of the Company as of the
date the Plan is approved by the stockholders, or (B) are elected, or nominated for
election, to the Board of Directors of the Company with the affirmative votes of at least
a majority of the Incumbent Directors at the time of such election or nomination (but
shall not include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the Company).

	

10 

	 	     (f) 
Change of Control Price. For purposes of this Section 13, “Change of Control Price” shall
be, as determined by the Board, (i) the highest Fair Market Value of a Share within the
60-day period immediately preceding the date of determination of the Change of Control
Price by the Board (the “60-Day Period”), or (ii) the highest price paid or
offered per Share, as determined by the Board, in any bona fide transaction or bona fide
offer related to the Change of Control of the Company, at any time within the 60-Day
Period, or (iii) such lower price as the Board, in its discretion, determines to be a
reasonable estimate of the fair market value of a Share. 

	

     14.  
Date of Grant. The date of grant of an Option or Stock Purchase Right
shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the determination shall be
provided to each Optionee within a reasonable time after the date of such grant. 

     15.  
Amendment and Termination of the Plan.  

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

	 	     (b) 
Stockholder Approval. The Company shall obtain stockholder approval of any Plan amendment
to the extent necessary and desirable to comply with Applicable Laws, including, without
limitation, the requirements of any exchange or quotation system on which the Common
Stock is listed or quoted. 

	 	     (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. 

	

     16.  Conditions
Upon Issuance of Shares.  

	 	     (a)
Legal Compliance. Shares shall not be issued pursuant to the exercise of an Option or
Stock Purchase Right unless the exercise of such Option or Stock Purchase Right and the
issuance and delivery of such Shares shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the Exchange Act,
the rules and regulations promulgated thereunder, Applicable Laws, and the requirements
of any stock exchange or quotation system upon which the Shares may then be listed or
quoted, and shall be further subject to the approval of counsel for the Company with
respect to such compliance. 

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

	

     17.  
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. 

     18.  
Reservation of Shares. The Company, during the term of this Plan, will at all times
reserve and keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.  

     19.  
Stockholder Approval. Continuance of the Plan shall be subject to
approval by the stockholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such stockholder approval shall be obtained
in the manner and to the degree required under applicable federal and state law. 

11

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