Document:

EXHIBIT 10.4B

                              EXHIBIT A (of Plan)
                          EMPLOYEE STOCK PURCHASE PLAN
                             SUBSCRIPTION AGREEMENT

<TABLE>
<S>                                    <C>
____ Original Application              Check Your Enrollment Date:  _____ May 1, _____
____ Change in Payroll Deduction Rate                               _____ Nov 1, _____
____ Change of Beneficiary(ies)
</TABLE>

1.  ___________________________________________ hereby elects to participate in
    the NetIQ Corporation 1999 Employee Stock Purchase Plan (the "ESPP") and
    subscribes to purchase shares of the Company's Common Stock in accordance
    with this Subscription Agreement and the ESPP.

2.  I hereby authorize payroll deductions from each paycheck in the amount of
    ______% of my Compensation on each payday (from 1% to 15%) during the
    Offering Period in accordance with the ESPP. (Please note that no
    fractional percentages are permitted.)

3.  I understand that said payroll deduction shall be accumulated for the
    purchase of shares of Common Stock at the applicable Purchase Price
    determined in accordance with the ESPP. I understand that if I do not
    withdraw from an Offering Period, any accumulated payroll deductions will
    be used to automatically exercise my option.

4.  I have received a copy of the complete ESPP. I understand that my
    participation in the ESPP is in all respects subject to the terms of the
    Plan. I understand that my ability to exercise the option under this
    Subscription Agreement is subject to shareholder approval of the ESPP.

5.  Shares purchased for me under the ESPP should be issued in the name(s) of
    Employee or Employee and Spouse only.

6.  I understand that if I dispose of any shares received by me pursuant to the
    Plan within 2 years after the Enrollment Date (the first day of the
    Offering Period during which I purchased such shares) or one year after the
    Exercise Date, I will be treated for federal income tax purposes as having
    received ordinary income at the time of such disposition in an amount equal
    to the excess of the fair market value of the shares at the time such
    shares were purchased by me over the price which I paid for the shares. I
    hereby agree to notify the Company in writing within 30 days after the date
    of any disposition of my shares and I will make adequate provision for
    Federal, state or other tax withholding obligations, if any, which arise
    upon the disposition of the Common Stock. The Company may, but will not be
    obligated to, withhold from my compensation the amount necessary to meet
    any applicable withholding obligation including any withholding necessary
    to make available to the Company any tax deductions or benefits
    attributable to sale or early disposition of Common Stock by me. If I
    dispose of such shares at any time after the expiration of the 2-year and
    1-year holding periods, I understand that I will be treated for federal
    income tax purposes as having received income only at the time of such
    disposition, and that such income will be taxed as ordinary income only to
    the extent of an amount equal to the lesser of (1) the excess of the fair
    market value of the shares at the time of such disposition over the
    purchase price which I paid for the shares, or (2) 15% of the fair market
    value of the shares on the first day of the Offering Period. The remainder
    of the gain, if any, recognized on such disposition will be taxed as
    capital gain.

7.  I hereby agree to be bound by the terms of the ESPP. The effectiveness of
    this Subscription Agreement is dependent upon my eligibility to
    participate in the ESPP.

8.  In the event of my death, I hereby designate the following as my
    beneficiary(ies) to receive all payments and shares due me under the ESPP:

    ------------------------------------    -----------------------------------
    Name   (First)   (Middle)    (Last)     Address

    ------------------------------------    -----------------------------------
    Relationship

     Employee's Social Security Number:
                                       -------------------------------

     Employee's Address:
                                       -------------------------------

I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

Dated:
      -----------------------        ------------------------------------------
                                     Signature of Employee

                                     ------------------------------------------
                                     Spouse's Signature (ONLY if beneficiary is
                                     other than spouse)

Fax to: Stock Services                              Mail To:  NetIQ Corporation
        (408) 856-1804                                           Stock Services
                                                        3553 North First Street
                                                             San Jose, CA 95134

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                              EXHIBIT B (of Plan)

                               NetIQ Corporation

                          EMPLOYEE STOCK PURCHASE PLAN

                              NOTICE OF WITHDRAWAL

     The undersigned participant in the Offering Period of the NetIQ
Corporation Employee Stock Purchase Plan, which began on ____________, ______
(the "Enrollment Date") hereby notifies the Company that he or she hereby
withdraws from the Offering Period. He or she hereby directs the Company to pay
to the undersigned as promptly as practicable all the payroll deductions
credited to his or her account with respect to such Offering Period. The
undersigned understands and agrees that his or her option for such Offering
Period will be automatically terminated. The undersigned understands further
that no further payroll deductions will be made for the purchase of shares in
the current Offering Period and the undersigned shall be eligible to
participate in succeeding Offering Periods only by delivering to the Company a
new Subscription Agreement.

                                   Please Print Name and Address of Participant:

                                   ________________________________

                                   ________________________________

                                   ________________________________

                                   Social Security Number:____________
                                   - OR -
                                   Country, if other than U.S:_________

                                   Signature:

                                   ________________________________

                                   Date:___________________________

Fax to:                                                                Mail to:
Stock Services                                                NetIQ Corporation
408-856-1804                                               Attn: Stock Services
                                                        3553 North First Street
                                                        San Jose, CA 95134  USAEXHIBIT 10.5

                               NetIQ CORPORATION

                                2002 STOCK PLAN

     1.   Purposes of the Plan. The purposes of this 2002 Stock Plan are:

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

          o    to provide additional incentive to Employees and Consultants,
               and

          o    to promote the success of the Company's business.

     Options granted under the Plan will be Nonstatutory Stock Options. 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 of the Plan.

          (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 foreign country or jurisdiction where Options or
     Stock Purchase Rights are, or will be, granted under the Plan.

          (c) "Board" means the Board of Directors of the Company.

          (d) "Cause" means (i) any act of personal dishonesty taken by the
     Optionee in connection with his responsibilities as an Employee which is
     intended to result in substantial personal enrichment of the Optionee,
     (ii) the Optionee's conviction of a felony which the Board reasonably
     believes has had or will have a material detrimental effect on the
     Company's reputation or business, (iii) a willful act by the Optionee
     which constitutes misconduct and is injurious to the Company, and (iv)
     continued willful violations by the Optionee of the Optionee's obligations
     to the Company after there has been delivered to the Optionee a written
     demand for performance from the Company which describes the basis for the
     Company's belief that the Optionee has not substantially performed his
     duties.

          (e) "Change of Control" means the occurrence of any of the following
     events:

               (i) the approval by shareholders of the Company of 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) more than 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;

               (ii) any approval by the shareholders of the Company of a plan
          of complete liquidation of the Company or an agreement for the sale
          or disposition by the Company of all or substantially all of the
          Company's assets;

               (iii) any "person" (as such term is used in Sections 13(d) and
          14(d) of the Securities Exchange Act of 1934, as amended) becoming
          the "beneficial owner" (as defined in Rule 13d-3 under said Act),
          directly or indirectly, of securities of the Company representing 50%
          or more of the total voting power represented by the Company's then
          outstanding voting securities; or

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               (iv) a change in the composition of the Board, 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 hereof, or (B) are elected,
          or nominated for election, to the Board with the affirmative votes of
          at least a majority of those Directors whose election or nomination
          was not in connection with any transaction described in subsections
          (i), (ii) or (iii) or in connection with an actual or threatened
          proxy contest relating to the election of directors of the Company.

          (f) "Code" means the Internal Revenue Code of 1986, as amended.

          (g) "Committee" means a committee of Directors appointed by the Board
     in accordance with Section 4 of the Plan.

          (h) "Common Stock" means the common stock of the Company.

          (i) "Company" means NetIQ Corporation, Inc., a Delaware corporation.

          (j) "Consultant" means any person, including an advisor, engaged by
     the Company or a Parent or Subsidiary to render services to such entity.

          (k) "Director" means a member of the Board.

          (l) "Disability" means total and permanent disability as defined in
     Section 22(e)(3) of the Code.

          (m) "Employee" means any person (excluding 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.

          (n) "Exchange Act" means the Securities Exchange Act of 1934, as
     amended.

          (o) "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, 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; or

               (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.

          (p) "Nonstatutory Stock Option" means an Option not intended to
     qualify as an incentive stock option within the meaning of Section 422 of
     the Code and the regulations promulgated thereunder.

          (q) "Notice of Grant" means a written or electronic notice evidencing
     certain times 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 as set
     forth in the Company's by-laws.

                                  Page 2 of 9
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          (s) "Option" means a stock option granted pursuant to the Plan.

          (t) "Option Agreement" means an 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) "Option Exchange Program" means a program whereby outstanding
     Options are surrendered in exchange for Options with a lower exercise
     price.

          (v) "Optioned Stock" means the Common Stock subject to an Option or
     Stock Purchase Right.

          (w) "Optionee" means the holder of an outstanding Option or Stock
     Purchase Right granted under the Plan.

          (x) "Plan" means this 2002 Stock Option Plan, as amended from time to
     time.

          (y) "Restricted Stock" means shares of Common Stock acquired pursuant
     to a grant of Stock Purchase Rights under Section 11 of the Plan.

          (z) "Restricted Stock Purchase 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 Restricted
     Stock Purchase Agreement is subject to the terms and conditions of the
     Plan and the Notice of Grant.

          (aa) "Service Provider" means an Employee or Consultant.

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

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

          (dd) "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 1,500,000 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); provided, however, that Shares that have actually been issued
under the Plan, whether upon exercise of an Option or 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) Procedure. 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:

              (i) to determine the Fair Market Value;

                                  Page 3 of 9
<PAGE>

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

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

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

                (v) to determine the terms and conditions, not inconsistent with
          the terms of the Plan, 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 shares of Common Stock relating thereto, based in each
          case on such factors as the Administrator, in its sole discretion,
          shall determine;

               (vi) to reduce the exercise price of any Option or Stock
          Purchase Right to the then current Fair Market Value if the Fair
          Market Value of the Common Stock covered by such Option or Stock
          Purchase Right shall have declined since the date the Option or Stock
          Purchase Right was granted;

              (vii) to institute an Option Exchange Program;

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

               (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 modify or amend each Option or Stock Purchase Right
          (subject to Section 15(b) of the Plan), including the discretionary
          authority to extend the post-termination exercisability period of
          Options longer than is otherwise provided for in the Plan;

               (xi) 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;

              (xii) 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;

             (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.

     5.   Eligibility. Nonstatutory Stock Options and Stock Purchase Rights may
be granted to Service Providers.  Directors and Officers shall not be eligible
for awards under the Plan.

                                  Page 4 of 9

<PAGE>

     6.   Limitations. Neither the Plan nor any Option or Stock Purchase Right
shall confer upon an Optionee any right with respect to continuing the
Optionee's relationship as a Service Provider 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.

     7.    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
terminated earlier under Section 15 of the Plan.

     8.   Term of Option. The term of each Option shall be stated in the Option
Agreement.

     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) The per Share exercise price shall be determined by the
          Administrator.

               (ii) Notwithstanding the foregoing, Options may be granted with
          a per Share exercise price of less than 100% of the Fair Market Value
          per Share on the date of grant pursuant to a merger or other
          corporate transaction.

          (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.

          (c) Form of Consideration. The Administrator shall determine the
     acceptable form of consideration for exercising an Option, including the
     method of payment. Such consideration may consist entirely of:

               (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)  consideration received by the Company under a cashless
          exercise program implemented by the Company in connection with the
          Plan;

              (vi)  a reduction in the amount of any Company liability to the
          Optionee, including any liability attributable to the Optionee's
          participation in any Company-sponsored deferred compensation program
          or arrangement;

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

            (viii)  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 Shareholder. 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. 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.

                                  Page 5 of 9

<PAGE>

     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 Optioned Stock, 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 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 Relationship as a Service Provider. Subject to
     Section 13, if an Optionee ceases to be a Service Provider (but not in the
     event of an Optionee's change of status from Employee to Consultant or
     from Consultant to Employee), such Optionee may, but only within such
     period of time as is specified in the Option Agreement (but in no event
     later than the expiration date of the term of such Option as set forth in
     the Option Agreement), exercise his or her Option to the extent that
     Optionee was entitled to exercise it at the date of such termination. 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, but
     only within twelve (12) months from the date of such termination (and in
     no event later than the expiration date of the term of such Option as set
     forth in the Option Agreement), exercise his or her Option the extent the
     Option is vested on the date of 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.

          (c) Death of Optionee. If an Optionee dies while a Service Provider,
     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 acquires the right to exercise the
     Option by bequest or inheritance, but only to the extent that the Option
     is vested on the date of death. If, at the time of death, the Optionee is
     not vested as to his or her entire Option, the Shares covered by the
     unvested portion of the Option shall immediately revert to the Plan. The
     Option may be exercised by the executor or administrator of the Optionee's
     estate or, if none, by the person(s) entitled to exercise the Option under
     the Optionee's will or the laws of descent or distribution. 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.

     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, 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, and the time within which the offeree
     must

                                  Page 6 of 9

<PAGE>

     accept such offer. 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 a rate determined by the Administrator.

          (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 the 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 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 or
Asset Sale.

          (a) Changes in Capitalization. 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, 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 until ten (10)
     days prior to such transaction as to all of the Optioned Stock covered
     thereby, including Shares as to which the Option 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.

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          (c) Merger or Asset Sale. Subject to subsection (d), 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 vested and 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.

          (d) Termination Following a Change of Control. If, at any time within
     twelve (12) months after a Change of Control, an Optionee's status as
     Employee is terminated for any reason other than Cause, the vesting and
     exercisability of each outstanding Option or Stock Purchase Right shall be
     automatically accelerated in full. The Option or Stock Purchase Right
     shall remain exercisable in accordance with Section 10 and the Option
     Agreement.

     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) 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.

     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 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 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.

                                  Page 8 of 9

<PAGE>

     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.

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