Document:

EXHIBIT
      4.2

     

    AURIGA
      LABORATORIES, INC.

     

    2006
      STOCK OPTION PLAN

     

    1. Purposes
      of the Plan.
      The
      purposes of this 2006 Stock
      Option Plan are to attract and retain the best available personnel for positions
      of substantial responsibility, to provide additional incentive to Employees
      and
      Consultants and to promote the success of the Company’s business. Options
      granted under the Plan may be Incentive Stock Options or Nonstatutory Stock
      Options, as determined by the Administrator at the time of grant of an option
      and subject to the applicable provisions of Section 422 of the Code and the
      regulations and interpretations promulgated thereunder.

     

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

     

    (a) “Administrator”
      means
      the Board or its Committee appointed pursuant to Section 4 of the
      Plan.

     

    (b) “Affiliate”
      means an
      entity other than a Subsidiary (as defined below) which, together with the
      Company, is under common control of a third person or entity.

     

    (c) “Applicable
      Laws”
      means
      the legal requirements relating to the administration of stock option and
      restricted stock purchase plans, including under applicable U.S. state corporate
      laws, U.S. federal and applicable state securities laws, other U.S. federal
      and
      state laws, the Code, any Stock Exchange rules or regulations and the applicable
      laws, rules and regulations of any other country or jurisdiction where Options
      are granted under the Plan, as such laws, rules, regulations and requirements
      shall be in place from time to time.

     

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

     

    (e) “Cause”
      for
      termination of a Participant’s Continuous Service Status will exist if the
      Participant is terminated by the Company for any of the following reasons:
      (i)
      Participant’s failure substantially to perform his or her duties and
      responsibilities to the Company or deliberate violation of a Company policy;
      (ii) Participant’s commission of any act of fraud, embezzlement, dishonesty or
      any other willful misconduct; (iii) unauthorized use or disclosure by
      Participant of any proprietary information or trade secrets of the Company
      or
      any other party to whom the Participant owes an obligation of nondisclosure
      as a
      result of his or her relationship with the Company; or (iv) Participant’s
      willful breach of any of his or her obligations under any written agreement
      or
      covenant with the Company. The determination as to whether a Participant is
      being terminated for Cause shall be made in good faith by the Company and shall
      be final and binding on the Participant. The foregoing definition does not
      in
      any way limit the Company’s ability to terminate a Participant’s employment or
      consulting relationship at any time as provided in Section 5(d) below, and
      the
      term “Company” will be interpreted to include any Subsidiary, Parent or
      Affiliate, as appropriate. 

    
      
         

      

      
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    (f) "Change
      of Control"
      means
      (1) a sale of all or substantially all of the Company’s assets, or (2) any
      merger, consolidation or other business combination transaction of the Company
      with or into another corporation, entity or person, other than a transaction
      in
      which the holders of at least a majority of the shares of voting capital stock
      of the Company outstanding immediately prior to such transaction continue to
      hold (either by such shares remaining outstanding or by their being converted
      into shares of voting capital stock of the surviving entity) a majority of
      the
      total voting power represented by the shares of voting capital stock of the
      Company (or the surviving entity) outstanding immediately after such
      transaction, or (3) the direct or indirect acquisition (including by way of
      a
      tender or exchange offer) by any person, or persons acting as a group, of
      beneficial ownership or a right to acquire beneficial ownership of shares
      representing a majority of the voting power of the then outstanding shares
      of
      capital stock of the Company.

     

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

     

    (h) “Committee”
      means
      one or more committees or subcommittees of the Board appointed by the Board
      to
      administer the Plan in accordance with Section 4 below.

     

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

     

    (j) “Company”
      means
      Auriga Laboratories, Inc., a Delaware corporation.

     

    (k) “Consultant”
      means
      any person, including an advisor, who is engaged by the Company or any Parent,
      Subsidiary or Affiliate to render services (other than capital-raising services)
      and is compensated for such services, and any director of the Company whether
      compensated for such services or not.

     

    (l) “Continuous
      Service Status”
      means
      the absence of any interruption or termination of service as an Employee or
      Consultant. Continuous Service Status as an Employee or Consultant shall not
      be
      considered interrupted in the case of: (i) sick leave; (ii) military
      leave; (iii) any other leave of absence approved by the Administrator,
      provided that such leave is for a period of not more than ninety (90) days,
      unless reemployment upon the expiration of such leave is guaranteed by contract
      or statute, or unless provided otherwise pursuant to Company policy adopted
      from
      time to time; or (iv) in the case of transfers between locations of the
      Company or between the Company, its Parents, Subsidiaries, Affiliates or their
      respective successors. A change in status from an Employee to a Consultant
      or
      from a Consultant to an Employee will not constitute an interruption of
      Continuous Service Status.

     

    (m) "Corporate
      Transaction"
      means a
      sale of all or substantially all of the Company’s assets, or a merger,
      consolidation or other capital reorganization or business combination
      transaction of the Company with or into another corporation, entity or person,
      or the direct or indirect acquisition (including by way of a tender or exchange
      offer) by any person, or persons acting as a group, of beneficial ownership
      or a
      right to acquire beneficial ownership of shares representing a
      majority of
      the
      voting power of the then outstanding shares of capital stock of the
      Company.

     

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

     

    (o) “Employee”
      means
      any person employed by the Company or any Parent, Subsidiary or Affiliate,
      with
      the status of employment determined based upon such factors as are deemed
      appropriate by the Administrator in its discretion, subject to any requirements
      of the Code or the Applicable Laws. The payment by the Company of a director’s
      fee to a Director shall not be sufficient to constitute “employment” of such
      Director by the Company.

    
      
         

      

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

     

    (q) “Fair
      Market Value”
      means,
      as of any date, the fair market value of the Common Stock, as determined by
      the
      Administrator in good faith on such basis as it deems appropriate and applied
      consistently with respect to Participants. Whenever possible, the determination
      of Fair Market Value shall be based upon the closing price for the Shares as
      reported in the Wall
      Street Journal
      for the
      applicable date. 

     

    (r) “Incentive
      Stock Option”
      means an
      Option intended to qualify as an incentive stock option within the meaning
      of
      Section 422 of the Code, as designated in the applicable Option
      Agreement.

     

    (t)
       “Listed
      Security”
means
      any security of the Company that is listed or approved for listing on a national
      securities exchange or designated or approved for designation as a national
      market system security on an interdealer quotation system by the National
      Association of Securities Dealers, Inc.

     

    (u) “Named
      Executive”
      means
      any
      individual who, on the last day of the Company’s fiscal year, is the chief
      executive officer of the Company (or is acting in such capacity) or among the
      four most highly compensated officers of the Company (other than the chief
      executive officer). Such officer status shall be determined pursuant to the
      executive compensation disclosure rules under the Exchange Act.

     

    (v) “Nonstatutory
      Stock Option”
      means an
      Option not intended to qualify as an Incentive Stock Option, as designated
      in
      the applicable Option Agreement.

     

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

     

    (x) “Option
      Agreement”
      means a
      written document, the form(s) of which shall be approved from time to time
      by
      the Administrator, reflecting the terms of an Option granted under the Plan
      and
      includes any documents attached to or incorporated into such Option Agreement,
      including, but not limited to, a notice of stock option grant and a form of
      exercise notice.

     

    (y) “Option
      Exchange Program”
      means a
      program approved by the Administrator whereby outstanding Options are exchanged
      for Options with a lower exercise price or are amended to decrease the exercise
      price as a result of a decline in the Fair Market Value of the Common
      Stock.

     

    (z) “Optioned
      Stock”
      means
      the Common Stock subject to an Option.

     

    (aa) “Optionee”
      means an
      Employee or Consultant who receives an Option.

     

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

     

    (cc) “Participant”
      means
      any holder of one or more Options, or the Shares issuable or issued upon
      exercise of such Options, under the Plan.

    
      
         

      

      
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    (dd) “Plan”
      means
      this 2006 Stock Option Plan.

     

    (ee) “Reporting
      Person”
      means an
      officer, Director, or greater than ten percent shareholder of the Company within
      the meaning of Rule 16a-2 under the Exchange Act, who is required to file
      reports pursuant to Rule 16a-3 under the Exchange Act.

     

    (ff) “Rule
      16b-3”
      means
      Rule 16b-3 promulgated under the Exchange Act, as amended from time to time,
      or
      any successor provision.

     

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

     

    (hh) “Stock
      Exchange”
      means
      any stock exchange or consolidated stock price reporting system on which prices
      for the Common Stock are quoted at any given time.

     

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

     

    (jj) “Ten
      Percent Holder”
      means a
      person who 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
      measured as of an Option’s date of grant.

     

    3. Stock
      Subject to the Plan.
      Subject
      to the provisions of Section 13 of the Plan, the maximum aggregate number of
      Shares that may be issued under the Plan is 7,000,000 Shares of Common Stock
      of
      which a maximum of 7,000,000 Shares may be issued under the Plan pursuant to
      Incentive Stock Options. The Shares may be authorized, but unissued, or
      reacquired Common Stock. If an award should expire or become unexercisable
      for
      any reason without having been exercised in full, or is surrendered pursuant
      to
      an Option Exchange Program, the unpurchased Shares that were subject thereto
      shall, unless the Plan shall have been terminated, become available for future
      grant under the Plan. In addition, any Shares of Common Stock which are retained
      by the Company upon exercise of an award in order to satisfy the exercise or
      purchase price for such award or any withholding taxes due with respect to
      such
      exercise or purchase shall be treated as not issued and shall continue to be
      available under the Plan. Shares issued under the Plan and later repurchased
      by
      the Company pursuant to any repurchase right which the Company shall be
      available for future grant under the Plan.

     

    4. Administration
      of the Plan.

     

    (a) General.
      The Plan
      shall be administered by the Board or a Committee, or a combination thereof,
      as
      determined by the Board. The Plan may be administered by different
      administrative bodies with respect to different classes of Participants and,
      if
      permitted by the Applicable Laws, the Board may authorize one or more officers
      to make awards under the Plan.

     

    (b) Committee
      Composition.
      If
      a
      Committee has been appointed pursuant to this Section 4, such Committee shall
      continue to serve in its designated capacity until otherwise directed by the
      Board. From time to time the Board may increase the size of any Committee and
      appoint additional members thereof, remove members (with or without cause)
      and
      appoint new members in substitution therefor, fill vacancies (however caused)
      and remove all members of a Committee and thereafter directly administer the
      Plan, all to the extent permitted by the Applicable Laws and, in the case of
      a
      Committee administering the Plan in accordance with the requirements of Rule
      16b-3 or Section 162(m) of the Code, to the extent permitted or required by
      such
      provisions. The Committee shall in all events conform to any requirements of
      the
      Applicable Laws.

    
      
         

      

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

     

    (i) to
      determine the Fair Market Value of the Common Stock, in accordance with Section
      2 of the Plan, provided that such determination shall be applied consistently
      with respect to Participants under the Plan;

     

    (ii) to
      select
      the Employees and Consultants to whom Options may from time to time be
      granted;

     

    (iii) to
      determine whether and to what extent Options are granted;

     

    (iv) to
      determine the number of Shares of Common Stock to be covered by each award
      granted;

     

    (v) to
      approve the form(s) of agreement(s) used under the Plan;

     

    (vi) to
      determine the terms and conditions, not inconsistent with the terms of the
      Plan,
      of any award granted hereunder, which terms and conditions include but are
      not
      limited to the exercise or purchase price, the time or times when awards may
      be
      exercised (which may be based on performance criteria), any vesting acceleration
      or waiver of forfeiture restrictions, any pro rata adjustment to vesting as
      a
      result of a Participant’s transitioning from full- to part-time service (or vice
      versa), and any restriction or limitation regarding any Option, Optioned Stock
      or restricted stock issued upon exercise of an Option, based in each case on
      such factors as the Administrator, in its sole discretion, shall
      determine;

     

    (vii) to
      determine whether and under what circumstances an Option may be settled in
      cash
      under Section 10(c) instead of Common Stock;

     

    (viii) to
      implement an Option Exchange Program on such terms and conditions as the
      Administrator in its discretion deems appropriate, provided that no amendment
      or
      adjustment to an Option that would materially and adversely affect the rights
      of
      any Optionee shall be made without the prior written consent of the
      Optionee;

     

    (ix) to
      adjust
      the vesting of an Option held by an Employee or Consultant as a result of a
      change in the terms or conditions under which such person is providing services
      to the Company;

     

    (x) to
      construe and interpret the terms of the Plan and awards granted under the Plan,
      which constructions, interpretations and decisions shall be final and binding
      on
      all Participants; and

     

    (xi) in
      order
      to fulfill the purposes of the Plan and without amending the Plan, to modify
      grants of Options to Participants who are foreign nationals or employed outside
      of the United States in order to recognize differences in local law, tax
      policies or customs.

    
      
         

      

      
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    (d) Indemnification.
      To the
      maximum extent permitted by Applicable Laws, each member of the Committee
      (including officers of the Company, if applicable), or of the Board, as
      applicable, shall be indemnified and held harmless by the Company against and
      from (i) any loss, cost, liability, or expense that may be imposed upon or
      reasonably incurred by him or her in connection with or resulting from any
      claim, action, suit, or proceeding to which he or she may be a party or in
      which
      he or she may be involved by reason of any action taken or failure to act under
      the Plan or pursuant to the terms and conditions of any Option except for
      actions taken in bad faith or failures to act in bad faith, and (ii) any and
      all
      amounts paid by him or her in settlement thereof, with the Company’s approval,
      or paid by him or her in satisfaction of any judgment in any such claim, action,
      suit, or proceeding against him or her, provided that such member shall give
      the
      Company an opportunity, at its own expense, to handle and defend any such claim,
      action, suit or proceeding before he or she undertakes to handle and defend
      it
      on his or her own behalf. The foregoing right of indemnification shall not
      be
      exclusive of any other rights of indemnification to which such persons may
      be
      entitled under the Company’s Articles of Incorporation, Certificate of
      Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or
      under
      any other power that the Company may have to indemnify or hold harmless each
      such person.

     

    5. Eligibility.

     

    (a) Recipients
      of Grants.
      Nonstatutory Stock Options may be granted to Employees and Consultants.
      Incentive Stock Options may be granted only to Employees, provided that
      Employees of Affiliates shall not be eligible to receive Incentive Stock
      Options.

     

    (b) Type
      of Option.
      Each
      Option shall be designated in the Option Agreement as either an Incentive Stock
      Option or a Nonstatutory Stock Option.

     

    (c) ISO
      $100,000 Limitation.
      Notwithstanding
      any designation under Section 5(b), to the extent that the aggregate Fair Market
      Value of Shares with respect to which Options designated as Incentive Stock
      Options are exercisable for the first time by any Optionee 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 5(c), Incentive Stock Options shall be taken
      into account in the order in which they were granted, and the Fair Market Value
      of the Shares subject to an Incentive Stock Option shall be determined as of
      the
      date of the grant of such Option.

     

    (d) No
      Employment Rights.
      The
      Plan
      shall not confer upon any Participant any right with respect to continuation
      of
      an employment or consulting relationship with the Company, nor shall it
      interfere in any way with such Participant’s right or the Company’s right to
      terminate the employment or consulting relationship at any time for any
      reason.

     

    6. Term
      of Plan.
      The Plan
      shall become effective upon its adoption by the Board of Directors. It shall
      continue in effect for a term of ten (10) years unless sooner terminated under
      Section 15 of the Plan.

     

    7. Term
      of Option.
      The term
      of each Option shall be the term stated in the Option Agreement; provided that
      the term shall be no more than ten years from the date of grant thereof or
      such shorter term as may be provided in the Option Agreement and provided
      further that, in the case of an Incentive Stock Option granted to a person
      who
      at the time of such grant is a Ten Percent Holder, the term of the Option shall
      be five years from the date of grant thereof or such shorter term as may be
      provided in the Option Agreement.

    
      
         

      

      
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    8. Limitation
      on Grants to Employees.
      Subject
      to adjustment as provided in Section 13 below, the maximum number of Shares
      that
      may be subject to Options granted to any one Employee under this Plan for any
      fiscal year of the Company shall be 1,000,000 provided that this Section 8
      shall
      apply only after such time, if any, as the Common Stock becomes a Listed
      Security.

     

    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 such price as is determined by the Administrator and set forth
      in the Option Agreement, but shall be subject to the following:

     

    (i) In
      the
      case of an Incentive Stock Option

     

    (A) granted
      to an Employee who at the time of grant is a Ten Percent Holder, the per Share
      exercise price shall be no less than 110% of the Fair Market Value per Share
      on
      the date of grant; or

     

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

     

    (ii) In
      the
      case of a Nonstatutory Stock Option

     

    (A) granted
      on any date on which the Common Stock is not a Listed Security to a person
      who
      is at the time of grant is a Ten Percent Holder, the per Share exercise price
      shall be no less than 110% of the Fair Market Value per Share on the date of
      grant if required by the Applicable Laws and, if not so required, shall be
      such
      price as is determined by the Administrator;

     

    (B) granted
      on any date on which the Common Stock is not a Listed Security to any other
      eligible person, the per Share exercise price shall be no less than 85% of
      the
      Fair Market Value per Share on the date of grant if required by the Applicable
      Laws and, if not so required, shall be such price as is determined by the
      Administrator; or

     

    (C) granted
      on any date on which the Common Stock is a Listed Security to any eligible
      person, the per Share exercise price shall be such price as determined by the
      Administrator provided that if such eligible person is, at the time of the
      grant
      of such Option, , the per Share exercise price shall be no less than 100% of
      the
      Fair Market Value on the date of grant if such Option is intended to qualify
      as
      performance-based compensation under Section 162(m) of the Code.

     

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

     

    (b) Permissible
      Consideration.
      The
      consideration to be paid for the Shares to be issued upon exercise of an Option,
      including the method of payment, shall be determined by the Administrator (and,
      in the case of an Incentive Stock Option, shall be determined at the time of
      grant) and may consist entirely of (1) cash; (2) check;
      (3) subject to any requirements of the Applicable Laws (including without
      limitation Section 153 of the Delaware General Corporation Law), delivery of
      Optionee’s promissory note having such recourse, interest, security and
      redemption provisions as the Administrator determines to be appropriate after
      taking into account the potential accounting consequences of permitting an
      Optionee to deliver a promissory note; (4) other Shares that have a Fair Market
      Value on the date of surrender equal to the aggregate exercise price of the
      Shares as to which the Option is exercised, provided that in the case of Shares
      acquired, directly or indirectly, from the Company, such Shares must have been
      owned by the Optionee for more than six months on the date of surrender (or
      such
      other period as may be required to avoid the Company’s incurring an adverse
      accounting charge); (5) if, as of the date of exercise of an Option the
      Company then is permitting employees to engage in a “same-day sale” cashless
      brokered exercise program involving one or more brokers, through such a program
      that complies with the Applicable Laws (including without limitation the
      requirements of Regulation T and other applicable regulations promulgated by
      the
      Federal Reserve Board) and that ensures prompt delivery to the company of the
      amount required to pay the exercise price and any applicable withholding taxes;
      or (6) any combination of the foregoing methods of payment. In making its
      determination as to the type of consideration to accept, the Administrator
      shall
      consider if acceptance of such consideration may be reasonably expected to
      benefit the Company and the Administrator may, in its sole discretion, refuse
      to
      accept a particular form of consideration at the time of any Option
      exercise.

    
      
         

      

      
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    10. Exercise
      of Option.

     

    (a) General.

     

    (i) Exercisability.
      Any
      Option granted hereunder shall be exercisable at such times and under such
      conditions as determined by the Administrator, consistent with the term of
      the
      Plan and reflected in the Option Agreement, including vesting requirements
      and/or performance criteria with respect to the Company and/or the Optionee;
      provided however that, if required under Applicable Laws, the Option (or Shares
      issued upon exercise of the Option) shall comply with the requirements of
      Section 260.140.41(f) and (k) of the Rules of the California Corporations
      Commissioner.

     

    (ii) Leave
      of Absence.
       The
      Administrator shall have the discretion to determine whether and to what extent
      the vesting of Options shall be tolled during any unpaid leave of absence;
      provided, however, that in the absence of such determination, vesting of Options
      shall be tolled during any such unpaid leave (unless otherwise required by
      the
      Applicable Laws). In the event of military leave, vesting shall toll during
      any
      unpaid portion of such leave, provided that, upon a Participant’s returning from
      military leave (under conditions that would entitle him or her to protection
      upon such return under the Uniform Services Employment and Reemployment Rights
      Act), he or she shall be given vesting credit with respect to Options to the
      same extent as would have applied had the Participant continued to provide
      services to the Company throughout the leave on the same terms as he or she
      was
      providing services immediately prior to such leave.

     

    (iii) Minimum
      Exercise Requirements.
      An
      Option
      may not be exercised for a fraction of a Share. The Administrator may require
      that an Option be exercised as to a minimum number of Shares, provided that
      such
      requirement shall not prevent an Optionee from exercising the full number of
      Shares as to which the Option is then exercisable.

     

    (iv) Procedures
      for and Results of Exercise.
      An
      Option
      shall be deemed exercised when written notice of such exercise has been given
      to
      the Company in accordance with the terms of the Option by the person entitled
      to
      exercise the Option and the Company has received full payment for the Shares
      with respect to which the Option is exercised and has paid, or made arrangements
      to satisfy, any applicable withholding requirements. 

    
      
         

      

      
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    Exercise
      of an Option in any manner shall result in a decrease in the number of Shares
      that thereafter may be 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.

     

    (v) Rights
      as Shareholder.
      Until
      the
      issuance of the Shares (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.
      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.

     

    (b) Termination
      of Employment or Consulting Relationship.
      Except
      as otherwise set forth in this Section 10(b), the Administrator shall establish
      and set forth in the applicable Option Agreement the terms and conditions upon
      which an Option shall remain exercisable, if at all, following termination
      of an
      Optionee’s Continuous Service Status, which provisions may be waived or modified
      by the Administrator at any time. Unless the Administrator otherwise provides
      in
      the Option Agreement, to the extent that the Optionee is not vested in Optioned
      Stock at the date of termination of his or her Continuous Service Status, or
      if
      the Optionee (or other person entitled to exercise the Option) does not exercise
      the Option to the extent so entitled within the time specified in the Option
      Agreement or below (as applicable), the Option shall terminate and the Optioned
      Stock underlying the unexercised portion of the Option shall revert to the
      Plan.
      In no event may any Option be exercised after the expiration of the Option
      term
      as set forth in the Option Agreement (and subject to Section 7). 

     

    The
      following provisions (1) shall apply to the extent an Option Agreement does
      not
      specify the terms and conditions upon which an Option shall terminate upon
      termination of an Optionee’s Continuous Service Status, and (2) establish the
      minimum post-termination exercise periods that may be set forth in an Option
      Agreement:

     

    (i) Termination
      other than Upon Disability or Death or for Cause.
      In
      the
      event of termination of Optionee’s Continuous Service Status other than under
      the circumstances set forth in subsections (ii) through (iv) below,
      such Optionee may exercise an Option for 30 days following such termination
      to
      the extent the Optionee was vested in the Optioned Stock as of the date of
      such
      termination. No termination shall be deemed to occur and this Section 10(b)(i)
      shall not apply if (i) the Optionee is a Consultant who becomes an Employee,
      or
      (ii) the Optionee is an Employee who becomes a Consultant.

     

    (ii) Disability
      of Optionee.
      In
      the
      event of termination of an Optionee’s Continuous Service Status as a result of
      his or her disability (including a disability within the meaning of Section
      22(e)(3) of the Code), such Optionee may exercise an Option at any time within
      six months following such termination to the extent the Optionee was vested
      in
      the Optioned Stock as of the date of such termination. 

     

    (iii) Death
      of Optionee.
      In the
      event of the death of an Optionee during the period of Continuous Service Status
      since the date of grant of the Option, or within thirty days following
      termination of Optionee’s Continuous Service Status, the Option may be exercised
      by Optionee’s estate or by a person who acquired the right to exercise the
      Option by bequest or inheritance at any time within twelve months following
      the
      date of death, but only to the extent the Optionee was vested in the Optioned
      Stock as of the date of death or, if earlier, the date the Optionee’s Continuous
      Service Status terminated.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    (iv) Termination
      for Cause.
      In the
      event of termination of an Optionee’s Continuous Service Status for Cause, any
      Option (including any exercisable portion thereof) held by such Optionee shall
      immediately terminate in its entirety upon first notification to the Optionee
      of
      termination of the Optionee’s Continuous Service Status. If an Optionee’s
      employment or consulting relationship with the Company is suspended pending
      an
      investigation of whether the Optionee shall be terminated for Cause, all the
      Optionee’s rights under any Option likewise shall be suspended during the
      investigation period and the Optionee shall have no right to exercise any
      Option. This Section 10(b)(iv) shall apply with equal effect to vested Shares
      acquired upon exercise of an Option granted prior to the date, if any, upon
      which the Common Stock becomes a Listed Security to a person other than an
      officer, Director or Consultant, in that the Company shall have the right to
      repurchase such Shares from the Participant upon the following terms: (A) the
      repurchase is made within 90 days of termination of the Participant’s Continuous
      Service Status for Cause at the Fair Market Value of the Shares as of the date
      of termination, (B) consideration for the repurchase consists of cash or
      cancellation of purchase money indebtedness, and (C) the repurchase right
      terminates upon the effective date of the Company’s initial public offering of
      its Common Stock. With respect to vested Shares issued upon exercise of an
      Option granted to any officer, Director or Consultant, the Company’s right to
      repurchase such Shares upon termination of the Participant’s Continuous Service
      Status for Cause shall be made at the Participant’s original cost for the Shares
      and shall be effected pursuant to such terms and conditions, and at such time,
      as the Administrator shall determine. Nothing in this Section 10(b)(iv) shall
      in
      any way limit the Company’s right to purchase unvested Shares issued upon
      exercise of an Option as set forth in the applicable Option
      Agreement.

     

    (c) Buyout
      Provisions.
      The
      Administrator may at any time offer to buy out for a payment in cash or Shares
      an Option previously granted under the Plan 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. Taxes.

     

    (a) As
      a
      condition of the grant, vesting or exercise of an Option granted under the
      Plan,
      the Participant (or in the case of the Participant’s death, the person
      exercising the Option) shall make such arrangements as the Administrator may
      require for the satisfaction of any applicable federal, state, local or foreign
      withholding tax obligations that may arise in connection with such grant,
      vesting or exercise of the Option or the issuance of Shares. The Company shall
      not be required to issue any Shares under the Plan until such obligations are
      satisfied. If the Administrator allows the withholding or surrender of Shares
      to
      satisfy a Participant’s tax withholding obligations under this Section 11
      (whether pursuant to Section 11(c), (d) or (e), or otherwise), the Administrator
      shall not allow Shares to be withheld in an amount that exceeds the minimum
      statutory withholding rates for federal and state tax purposes, including
      payroll taxes.

     

    (b) In
      the
      case of an Employee and in the absence of any other arrangement, the Employee
      shall be deemed to have directed the Company to withhold or collect from his
      or
      her compensation an amount sufficient to satisfy such tax obligations from
      the
      next payroll payment otherwise payable after the date of an exercise of the
      Option. 

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    (c) This
      Section 11(c) shall apply only after the date, if any, upon which the Common
      Stock becomes a Listed Security. In the case of Participant other than an
      Employee (or in the case of an Employee where the next payroll payment is not
      sufficient to satisfy such tax obligations, with respect to any remaining tax
      obligations), in the absence of any other arrangement and to the extent
      permitted under the Applicable Laws, the Participant shall be deemed to have
      elected to have the Company withhold from the Shares to be issued upon exercise
      of the Option that number of Shares having a Fair Market Value determined as
      of
      the applicable Tax Date (as defined below) equal to the amount required to
      be
      withheld. For purposes of this Section 11, 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 under the Applicable Laws (the “Tax
      Date”).

     

    (d) If
      permitted by the Administrator, in its discretion, a Participant may satisfy
      his
      or her tax withholding obligations upon exercise of an Option by surrendering
      to
      the Company Shares that have a Fair Market Value determined as of the applicable
      Tax Date equal to the amount required to be withheld. In the case of shares
      previously acquired from the Company that are surrendered under this Section
      11(d), such Shares must have been owned by the Participant for more than six
      (6)
      months on the date of surrender (or such other period of time as is required
      for
      the Company to avoid adverse accounting charges).

     

    (e) Any
      election or deemed election by a Participant to have Shares withheld to satisfy
      tax withholding obligations under Section 11(c) or (d) above shall be
      irrevocable as to the particular Shares as to which the election is made and
      shall be subject to the consent or disapproval of the Administrator. Any
      election by a Participant under Section 11(d) above must be made on or prior
      to
      the applicable Tax Date.

     

    (f) In
      the
      event an election to have Shares withheld is made by a Participant and the
      Tax
      Date is deferred under Section 83 of the Code because no election is filed
      under
      Section 83(b) of the Code, the Participant shall receive the full number of
      Shares with respect to which the Option is exercised but such Participant shall
      be unconditionally obligated to tender back to the Company the proper number of
      Shares on the Tax Date.

     

    12. Non-Transferability
      of Options.

     

    (a) General.
      Except
      as set forth in this Section 12, Options 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. The designation of a beneficiary by an
      Optionee will not constitute a transfer. An Option may be exercised, during
      the
      lifetime of the holder of an Option, only by such holder or a transferee
      permitted by this Section 12.

     

    (b) Limited
      Transferability Rights.
      Notwithstanding anything else in this Section 12, the Administrator may in
      its
      discretion grant Nonstatutory Stock Options that may be transferred by
      instrument to an inter vivos or testamentary trust in which the Options are
      to
      be passed to beneficiaries upon the death of the trustor (settlor) or by gift
      or
      pursuant to domestic relations orders to any "Immediate Family Member" (as
      defined below) of the Optionee. "Immediate
      Family Member"
      means
      any child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
      former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
      daughter-in-law, brother-in-law, or sister-in-law (including adoptive
      relationships), any person sharing the Optionee’s household (other than a tenant
      or employee), a trust in which these persons have more than fifty percent of
      the
      beneficial interest, a foundation in which these persons (or the Optionee)
      control the management of assets, and any other entity in which these persons
      (or the Optionee) own more than fifty percent of the voting
      interests.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    13. Adjustments
      Upon Changes in Capitalization, Merger or Certain Other
      Transactions.

     

    (a) Changes
      in Capitalization.
      Subject
      to any action required under Applicable Laws by the shareholders of the Company,
      the number of Shares of Common Stock covered by each outstanding Option, the
      numbers of Shares set forth in Sections 3 and 8 above, and the number of Shares
      of Common Stock that have been authorized for issuance under the Plan but as
      to
      which no Options have yet been granted or that have been returned to the Plan
      upon cancellation or expiration of an Option, as well as the price per Share
      of
      Common Stock covered by each such outstanding Option, 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, recapitalization 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 Administrator, 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.

     

    (b) Dissolution
      or Liquidation.
      In the
      event of the dissolution or liquidation of the Company, each Option will
      terminate immediately prior to the consummation of such action, unless otherwise
      determined by the Administrator.

     

    (c) Corporate
      Transaction.
      In the
      event of a Corporate Transaction (including without limitation a Change of
      Control), each outstanding Option shall be assumed or an equivalent option
      or
      right shall be substituted by such successor corporation or a parent or
      subsidiary of such successor corporation (the “Successor
      Corporation”),
      unless the Successor Corporation does not agree to assume the award or to
      substitute an equivalent option or right, in which case such Option shall
      terminate upon the consummation of the transaction.

     

    For
      purposes of this Section 13(c), an Option shall be considered assumed, without
      limitation, if, at the time of issuance of the stock or other consideration
      upon
      a Corporate Transaction or a Change of Control, as the case may be, each holder
      of an Option would be entitled to receive upon exercise of the award the same
      number and kind of shares of stock or the same amount of property, cash or
      securities as such holder would have been entitled to receive upon the
      occurrence of the transaction if the holder had been, immediately prior to
      such
      transaction, the holder of the number of Shares of Common Stock covered by
      the
      award at such time (after giving effect to any adjustments in the number of
      Shares covered by the Option as provided for in this Section 13); provided
      that if such consideration received in the transaction is not solely common
      stock of the Successor Corporation, the Administrator may, with the consent
      of
      the Successor Corporation, provide for the consideration to be received upon
      exercise of the award to be solely common stock of the Successor Corporation
      equal to the Fair Market Value of the per Share consideration received by
      holders of Common Stock in the transaction.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    (d) Certain
      Distributions.
      In the
      event of any distribution to the Company’s shareholders of securities of any
      other entity or other assets (other than dividends payable in cash or stock
      of
      the Company) without receipt of consideration by the Company, the Administrator
      may, in its discretion, appropriately adjust the price per Share of Common
      Stock
      covered by each outstanding Option to reflect the effect of such
      distribution.

     

    14. Time
      of Granting Options.
      The date
      of grant of an Option shall, for all purposes, be the date on which the
      Administrator makes the determination granting such Option, or such other date
      as is determined by the Administrator, provided that in the case of any
      Incentive Stock Option, the grant date shall be the later of the date on which
      the Administrator makes the determination granting such Incentive Stock Option
      or the date of commencement of the Optionee’s employment relationship with the
      Company. Notice of the determination shall be given to each Employee or
      Consultant to whom an Option is so granted within a reasonable time after the
      date of such grant.

     

    15. Amendment
      and Termination of the Plan.

     

    (a) Authority
      to Amend or Terminate.
      The
      Board may at any time amend, alter, suspend or discontinue the Plan, but no
      amendment, alteration, suspension or discontinuation (other than an adjustment
      pursuant to Section 13 above) shall be made that would materially and adversely
      affect the rights of any Optionee under any outstanding grant, without his
      or
      her consent. In addition, to the extent necessary and desirable to comply with
      the Applicable Laws, the Company shall obtain shareholder approval of any Plan
      amendment in such a manner and to such a degree as required.

     

    (b) Effect
      of Amendment or Termination.
      Except
      as to amendments which the Administrator has the authority under the Plan to
      make unilaterally, no amendment or termination of the Plan shall materially
      and
      adversely affect Options already granted, unless mutually agreed otherwise
      between the Optionee and the Administrator, which agreement must be in writing
      and signed by the Optionee or holder and the Company.

     

    16. Conditions
      Upon Issuance of Shares.
      Notwithstanding any other provision of the Plan or any agreement entered into
      by
      the Company pursuant to the Plan, the Company shall not be obligated, and shall
      have no liability for failure, to issue or deliver any Shares under the Plan
      unless such issuance or delivery would comply with the Applicable Laws, with
      such compliance determined by the Company in consultation with its legal
      counsel. As a condition to the exercise of an Option, the Company may require
      the person exercising the award 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 by law. Shares issued
      upon exercise of Options granted prior to the date on which the Common Stock
      becomes a Listed Security shall be subject to a right of first refusal in favor
      of the Company pursuant to which the Participant will be required to offer
      Shares to the Company before selling or transferring them to any third party
      on
      such terms and subject to such conditions as is reflected in the applicable
      Option Agreement.

     

    17. Agreements.
      Options
      shall be evidenced by Option Agreements in such form(s) as the Administrator
      shall from time to time approve.

     

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

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    19. Information
      and Documents to Optionees.
      Prior to
      the date, if any, upon which the Common Stock becomes a Listed Security and
      if
      required by the Applicable Laws, the Company shall provide financial statements
      at least annually to each Optionee and to each individual who acquired Shares
      pursuant to the Plan, during the period such Optionee or purchaser has one
      or
      more Options outstanding, and in the case of an individual who acquired Shares
      pursuant to the Plan, during the period such individual owns such Shares. The
      Company shall not be required to provide such information if the issuance of
      Options under the Plan is limited to key employees whose duties in connection
      with the Company assure their access to equivalent information.

    
      
         

      

      
        14EXHIBIT
      4.3

    

    AURIGA
      LABORATORIES,
      INC.

     

    2005
      STOCK OPTION PLAN

    

    1.  Purposes
      of this Plan.
      The
      purposes of this 2005 Stock Option Plan are to attract and retain the best
      available personnel, to provide additional incentive to the
      Employees
      of
      Auriga Laboratories, Inc. (the “Company”) and any of its Subsidiaries, to
      promote the success of the Company’s business and to enable the Employees to
      share in the growth and prosperity of the Company by providing them with an
      opportunity to purchase stock in the Company.

    

    Options
      granted hereunder may be either Incentive Stock Options or Nonstatutory Stock
      Options, at the discretion of the Board and as reflected in the terms of the
      written stock option agreement.

    

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

    

    (a) “Board”
      shall mean the Board of Directors of the Company.

    

    (b) “Code”
      shall mean the Internal Revenue Code of the 1986, as amended.

    

    (c) “Common
      Stock” shall mean the Common Stock of the Company.

    

    (d) “Company”
      shall mean Auriga Laboratories, Inc., a corporation duly organized under the
      laws of the State of Delaware.

    

    (e) “Committee”
      shall mean the Committee appointed by the Board in accordance with Section
      4 of
      this Plan, if one is appointed.

    

    (f)
      “Continuous Employment” or “Continuous Status as an Employee” shall mean the
      absence of any interruption or termination of employment or service as an
      Employee, Director or Consultant by or to the Company or any Parent or
      Subsidiary of the Company which now exists or is hereafter organized or acquired
      by or acquires the Company. Continuous Employment shall not be considered
      interrupted in the case of sick leave, military leave or any other leave of
      absence approved by the Board or in the event of transfers between locations
      of
      the Company or between the Company, its Parent, any of its Subsidiaries or
      its
      successors.

    

    (g)
      “Corporate Change” shall mean one of the following events: (i) the merger,
      consolidation or other reorganization of the Company in which the outstanding
      Common Stock is converted into or exchanged for a different class of securities
      of the Company, a class of securities of any other issuer (except a Parent
      or
      Subsidiary of the Company), cash or other property (ii) the sale, lease or
      exchange of all or substantially all of the assets of the Company to any other
      corporation or entity (except a Parent or Subsidiary of the Company); or (iii)
      the adoption by shareholders of the Company of a plan of liquidation or
      dissolution. The following events are not defined as a “Corporate Change”: (i) a
      merger, consolidation or reorganization of the
      Company which would result in the voting stock 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), in combination with the ownership of any trustee or other fiduciary
      holding securities under an employee benefit plan of the Company, at least
      sixty
      percent (60%) of the combined voting power of the voting stock of the Company
      or
      such surviving entity outstanding immediately after such merger, consolidation
      or reorganization of the Company, or (ii) merger, consolidation or
      reorganization of the Company effected to implement a recapitalization of the
      Company (or similar transaction) in which no person acquires more than
      forty-nine percent {49%) of the combined voting power of the Company’s then
      outstanding stock;

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

       

    

    (h) “Employee”
      shall mean any person, including officers and directors, employed by the
      Company, its Parent, any of its Subsidiaries or its successors; or, for purposes
      of eligibility for Nonstatutory Stock Options, any person employed by the
      Company, including officers and directors, or any consultant to, or director
      of,
      the Company, or any Parent or Subsidiary of the Company, whether or not such
      consultant or director is an employee of such entities.

    

    (i) “Exchange
      Act” shall mean the Securities Exchange Act of 1934, as amended, or any
      successor legislation.

    

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

    

    (k) “Non-Employee
      Director” shall mean a director who is a “Non-Employee Director,” as such term
      is defined under Rule 16b-3(b)(3)(i) promulgated pursuant to the Exchange Act
      and any applicable releases and opinions or the Securities and Exchange
      Commission.

    

    (1) “Nonstatutory
      Stock Option” shall mean an Option which is not an Incentive Stock
      Option.

    

    (m) “Option”
      shall mean a stock option granted pursuant to this Plan.

    

    (n) “Option
      Agreement” shall mean a written agreement in such form or forms as the Board
      (subject to the terms and conditions of this Plan) may from time to time
      approve, evidencing an Option.

    

    (o) “Optioned
      Stock” shall mean the Common Stock subject to an Option.

    

    (p) “Optionee”
      shall mean an Employee who is granted an Option.

    

      (q) “Parent”
        shall mean a “parent corporation,” whether now or hereafter existing, as defined
        in Sections 424(e) and (g) of the Code.

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (r) “Plan”
      shall mean this 2005 Stock Option Plan.

    

    (s) “Registration
      Date”
      shall
      mean the effective date of the first registration statement which is filed
      by
      the Company and declared effective pursuant to Section 12(g) of the Exchange
      Act, with respect to any class of the Company’s securities.

    

    (t) “Securities
      Act” shall mean the Securities Act of 1933, as amended, or any successor
      legislation.

    

    (u) “Share”
      or “Shares” shall mean the Common Stock, as adjusted in accordance with Section
      11 of this Plan.

    

    (v) “Stock
      Purchase Agreement” shall mean an agreement in such form or forms as the Board
      (subject to the terms and conditions of this Plan) may from time to time
      approve, which is to be executed as a condition of purchasing Optioned Stock
      upon exercise of an Option.

    

    (w) “Subsidiary”
      or “Subsidiaries” shall mean one or more subsidiary corporations, whether now or
      hereafter existing, as defined in Sections 424(f) and (g) of the
      Code.

    

    3.
      Stock Subject to this Plan.
      Subject
      to the provisions of Section 11 of this Plan, the maximum number of Shares
      which
      may be optioned and sold under this Plan is Five Million Shares. The Shares
      may
      be authorized, but unissued or reacquired Shares other than reacquired Shares
      delivered pursuant to Section 7(c)(iv) hereof as payment of consideration in
      the
      exercise of an option.

    

    If
      (a) an
      Option should expire or become unexercisable for any reason without having
      been
      exercised in full or (b) if the Company repurchases Shares from the Optionee
      pursuant to the terms of a Stock Purchase Agreement (provided that the Optionee
      did not receive benefits of ownership,
      such as dividends, which would destroy the exemption from the provisions of
      Section
      16(b) of
      the Exchange Act provided by Rule 16b-3 promulgated pursuant to the Exchange
      Act), the unpurchased Shares or repurchased Shares, respectively, which were
      subject thereto shall, unless this Plan shall have been terminated, return
      to
      this Plan and become available for other Options under this Plan.

    

    The
      Company intends that as long as it is not subject to the reporting requirements
      of Section 13 or 15(d) of the Exchange Act, and is not an investment company
      registered or required to be registered under the Investment Company Act of
      1940, as amended, all offers and sales of Options and Common Stock issuable
      upon
      exercise of any Option shall be exempt from registration under the provisions
      of
      Section 5 of the Securities Act, and this Plan shall be administered in such
      a
      manner so as to preserve such exemption.

    

    The
      Company intends for this Plan to constitute a written compensatory benefit
      plan
      within the meaning of Rule 701(b) of 17 CFR Section 230.701 (“Rule 701”)
      promulgated by the Securities
      and Exchange Commission pursuant to the Securities Act. Unless otherwise
designated
      by the Committee at the time an Option is granted, all options granted under
      this Plan
      by the
      Company, and the issuance of any Shares upon exercise thereof, are intended
      to
      be granted in reliance on Rule 701.

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    4. Administration
      of this Plan.

    

    (a) Procedure.
      This
      Plan shall be administered by the Board. The Board may appoint a Committee
      consisting of two (2) or more members of the Board (or such greater number
      as is
      required to qualify for the exemption from the provisions of Section 16(b)
      of
      the Exchange Act provided by Rule 16b-3 promulgated pursuant to the Exchange
      Act) to administer this Plan on behalf of the Board, subject to such terms
      and
      conditions as the Board may prescribe. Once appointed, the Committee shall
      continue to serve until otherwise directed by the Board. From time to time,
      the
      Board may increase the size of the Committee and appoint additional members
      of
      the Board thereto, remove members (with or without cause) and appoint new
      members of the Board in substitution therefor, fill vacancies, however caused,
      and remove all members of the Committee and, thereafter, directly administer
      this Plan. Members of the Board or Committee who are either eligible for Options
      or have been granted Options may vote on any matters affecting the
      administration of this Plan or the grant of Options pursuant to this Plan,
      except that no such member shall act upon the granting of an Option to such
      person nor shall any such member’s presence at a meeting of the Board of
      Directors establish the existence of a quorum at any meeting of the Board or
      the
      Committee during which action is taken with respect to the granting of an Option
      to him.

    

    (b) Procedure
      After Registration Date.
      Notwithstanding the provisions of Section 4(a) above, after the Registration
      Date this Plan shall be administered either by: (i) the full Board, provided
      that at all times each member of the Board is a Non-Employee Director; or (ii)
      a
      Committee which at all times consists solely of Board members who are
      Non-Employee Directors. After the Registration Date, the Board shall take all
      action necessary to administer this Plan in accordance with the then-effective
      provisions of Rule 16b-3 promulgated under the Exchange Act, provided that
      any
      amendment to this Plan required for compliance with such provisions shall be
      made in accordance with Section 13 of this Plan.

    

    (c) Powers
      of the Board and/or Committee.
      Subject
      to the provisions of this Plan,
      the
      Committee or the Board, as appropriate, shall have the authority, in its
      discretion: (i) to grant
      Incentive Stock Options and Nonstatutory Stock Options; (ii) to determine,
      upon
      review of
      relevant
      information and in accordance with Section 7 of this Plan, the fair market
      value
      per Share; (iii) to determine the exercise price of the Options, which exercise
      price and type of consideration
      shall be determined in accordance with Section 7 of this Plan; (iv) to determine
      the Employees
      to whom, and the time or times at which, Options shall be granted, and the
      number of
      Shares
      to be subject to each Option; (v) to prescribe, amend and rescind rules and
      regulations relating to this Plan; (vi) to determine the terms and provisions
      of
      each Option Agreement and each Stock Purchase Agreement (each of which need
      not
      be identical with the terms of other Option
      Agreements and Stock Purchase Agreements) and, with the consent of the holder
      thereof,
      to
      modify or amend each Option Agreement and Stock Purchase Agreement; (vii) to
      determine whether
      a
      stock repurchase agreement or other agreement will be required to be executed
      by
      any Employee as a condition to the exercise of an Option, and to determine
      the
      terms and provisions of any such agreement (which need not be identical with
      the
      terms of any other such agreement) and, with the consent of the Optionee, to
      amend any such agreement; (viii) to interpret this Plan, the Option Agreements,
      the Stock Purchase Agreements or any agreement entered into with respect to
      the
      grant or exercise of Options; (ix) to authorize any person to execute on behalf
      of the Company any instrument required to effectuate the grant of an Option
      previously granted by the Board or to take such other actions as may be
      necessary or appropriate with respect to the Company’s rights pursuant to
      Options or agreements relating to the grant or exercise thereof; and (x) to
      make
      such other determinations and establish such other procedures as it deems
      necessary or advisable for the administration of this Plan.

    

    
      
         

      

      
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    (d) Effect of
      the
      Board’s or Committee’s Decision. All
      decisions, determinations and interpretations of the Board or the Committee
      shall be final and binding on all Optionees and any other holders of
      Options.

    

    5.  Eligibility.
      Options
      may be granted only to Employees, which, as defined herein, includes
      consultants. An Employee who has been granted an Option may, if such Employee
      is
      otherwise eligible, be granted additional Options.

    

    6.  Term
      of Plan.
      This
      Plan shall become effective upon the earlier to occur of its adoption by the
      Board or its approval by vote of a majority of the outstanding shares of the
      Company’s capital stock entitled to vote on the adoption of this Plan. This Plan
      shall continue in effect for a term of ten (10) years unless sooner terminated
      in accordance with the terms and provisions of this Plan.

    

    7.  Option
      Price and Consideration.

    

    (a) Exercise
      Price.
      The
      exercise price per Share for the Shares to be issued pursuant
      to the exercise of an Option shall be such price as is determined by the
      Board; provided, however,
      that
      such price shall in no event be less than eighty-five percent (85%) with respect
      to Nonstatutory Stock Options, and one hundred percent (100%) with respect
      to
      Incentive Stock Options,
      of the fair market value per Share on the date of grant. In the case of an
      Option granted to
      an
      Employee who, at the time the Option is granted, owns stock (as determined
      under
      Section 424(d)
      of
      the Code) constituting more than ten percent (10%) of the total combined voting
      power
      of all
      classes of stock of the Company or its Parent or Subsidiaries, the exercise
      price per Share shall be no less than one hundred ten percent (110%) of the
      fair
      market value per Share on the date of grant.

    

    (b) Fair
      Market Value.
      The fair
      market value per Share on the date of grant shall be determined by the Board
      in
      its sole discretion, exercised in good faith and consistent with the laws of
      The
      State of Delaware; provided, however,
      that
      where there is a public market for the Common Stock, the fair market value
      per
      Share shall be the average of the closing bid and asked prices of the Common
      Stock on the date of grant, as reported in The
      Wall Street Journal (or,
      if
      not so reported, as otherwise reported by the National Association of Securities
      Dealers
      Automated Quotations (“NASDAQ”)
      System), or, in the event the Common Stock is listed on a stock exchange or
      on
      the NASDAQ System, the fair market value per Share shall be the closing price
      on
      the exchange or on the NASDAQ System as of
      the
      date
of
      grant
      of
      the Option, as reported in The
      Wall Street Journal.

    

    
      
         

      

      
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    (c)
      Payment
      of Consideration.
      The
      consideration to be paid for the Shares to be issued upon exercise of an Option,
      including the method of payment, shall be determined by the
      Board
      and may consist entirely of cash, check, promissory notes, Shares held by the
      Optionec
      for the
      requisite period necessary to avoid a charge to the Company’s earnings for
      financial reporting purposes which 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, or any combination of such methods of payment. Subject
      to
      subparagraphs (i) through (iv) hereto, utilization of Shares as the method
      of
      payment may be completed by either (a) the tender of Shares then held by the
      Optionee, or (b) the withholding of Shares which would otherwise be issued
      pursuant to an Option pursuant to a broker-dealer sale and remittance procedure
      described in subparagraph (iii) hereto. In making its determination as to the
      type of consideration to accept, the Board shall consider if acceptance of
      such
      consideration is deemed to be such as may be reasonably expected to benefit
      the
      Company.

    

    (i) If
      the
      consideration for the exercise of an Option is a promissory note, it shall
      be a
      full recourse promissory note executed by the Optionee, bearing interest at
      a
      rate which shall be sufficient to preclude the imputation of interest under
      the
      applicable provisions of the Code. Until such time as the promissory note has
      been paid in full, the Company may retain the Shares purchased upon exercise
      of
      the Option in escrow as security for payment of the promissory
      note.

    

    (ii) If
      the
      consideration for the exercise of an Option is the surrender
      of
      previously acquired and owned Shares, the Optionee will be required to make
      representations and warranties satisfactory to the Company regarding his or
      her
      title to the Shares used to effect the purchase, including, without limitation,
      representations and warranties
      that the Optionee has good and marketable title to such Shares free and clear
      of
      any and all liens, encumbrances, charges, equities, claims, security interests,
      options or restrictions and has full power to deliver such Shares without
      obtaining the consent or approval of any person or governmental authority other
      than those which have already given consent or approval in a form satisfactory
      to the Company. The value of the Shares used to effect the purchase shall be
      the
      fair market value of those Shares as determined by the Board in its sole
      discretion, exercised in good faith.

    

    (iii) If
      the
      consideration for the exercise of an Option is to be paid through
      a
      broker-dealer sale and remittance procedure, the Optionee shall provide (1)
      irrevocable
      written
      instructions to a designated brokerage firm to effect the immediate sale of
      the
      purchased shares and to remit to the Company, out of the sale proceeds available
      on the settlement date, sufficient funds to cover the aggregate option price
      payable for the purchased Shares plus all applicable Federal and State income
      and employment taxes required to be withheld by the Company in connection with
      such purchase and (2) written instructions to the Company to deliver
      the certificates for the purchased Shares directly to such brokerage firm in
      order to complete the sale transaction.

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    (iv)
      If
      an Optionee is permitted to exercise an Option by delivering shares of the
      Company’s Common Stock, the option agreement covering such Option may include
      provisions authorizing the Optionee to exercise the Option, in whole or in
      part,
      by: (1) delivering whole shares of the Company’s Common Stock previously owned
      by such Optionee (whether or not acquired through the prior exercise of a stock
      option) having a fair market value equal to the option price; and/or (2)
      directing the Company to withhold from the Shares that would
      otherwise be issued upon exercise of the Option that number of whole Shares
      having a fair
      market
      value equal to the option price. Shares of the Company’s Common Stock so
      delivered or withheld shall be valued at their fair market value on the date
      of
      exercise of the Option, as determined by the Committee and/or the Board, as
      appropriate. Any balance of the exercise price
      shall be paid in cash or by check or a promissory note, each in accordance
      with
      the terms of
      this
      Section 7. Any Shares delivered or withheld in accordance with this provision
      shall again become available for purposes of this Plan and for Options
      subsequently granted thereunder to the extent permissible pursuant to Section
      3
      of this Plan.

    

    8. Options.

    

    (a) Terms
      and Provisions of Options.
      As
      provided in Section 4 of this Plan and subject to any limitations specified
      herein, the Board and/or Committee shall have the authority to determine the
      terms and provisions of any Option granted under this Plan or any agreement
      required to be executed in connection with the grant or exercise of an Option.
      Each Option granted pursuant to this Plan shall be evidenced by an Option
      Agreement. Options granted
      pursuant to this Plan are conditioned upon the Company obtaining any required
      permit or
      order
      from appropriate governmental agencies authorizing the Company to issue such
      Options and Shares issuable upon exercise thereof.

    

    (b) Term
      of Option.
      The term
      of each Option may be up to ten (10) years from the date of grant thereof as
      determined by the Board upon the grant of the Option and specified in the Option
      Agreement, except that the term of an Option granted to an Employee who, at
      the
      time the Option is granted, owns stock comprising more than ten percent (10%)
      of
      the total combined voting power of all classes of stock of the Company or its
      Parent or Subsidiaries, shall be five (5) years from the date of grant thereof
      or such shorter term as may be provided in the Option Agreement.

    

    (c) Exercise
      of Option.

    

    (i)
      Procedure
      for Exercise; Rights as a Shareholder.
      Any
      Option shall be exercisable at such times, in such installments and under such
      conditions as may be detenmined by the Board and specified in the Option
      Agreement, including performance criteria with
      respect to the Company and/or the Optionee, and as shall be permissible under
      the terms of
      this
      Plan.

     

    
      
         

      

      
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    An
      Option
      may be exercised in accordance with the provisions of this Plan as to all or
      any
      portion of the Shares then exercisable under an Option, from time to time during
      the term of the Option. An Option may not be exercised for a fraction of a
      Share.

    

    An
      Option
      shall be deemed to be exercised when written notice of such exercise has been
      given to the Company at its principal business office in accordance with the
      terms of the Option Agreement by the person entitled to exercise the Option
      and,
      except when the broker-dealer sale and remittance procedure described in Section
      7(c)(iii) hereto is used, full payment for the Shares with respect to which
      the
      Option is exercised has been received by the Company, accompanied by an executed
      Stock Purchase Agreement and any other agreements required by the terms of
      this
      Plan and/or the Option Agreement. Full payment may consist of such consideration
      and method of payment allowable under Section 7 of this Plan. Until the Option
      is properly exercised in accordance with the terms of this paragraph, no right
      to vote or receive dividends or any other rights as a stockholder exist with
      respect to the Optioned Stock. No adjustment shall be made for a dividend or
      other right for which the record date is prior to the date the Option is
      exercised, except as provided in Section 11 of this Plan.

    

    As
      soon
      as practicable after any proper exercise of an Option in accordance with the
      provisions of this Plan, the Company shall, without transfer or issue tax to
      the
      Optionee, deliver to the Optionee at the principal executive office of the
      Company or such other place as shall be mutually agreed upon between the Company
      and the Optionee, a certificate or certificates representing the Shares for
      which the Option shall have been exercised. The time of issuance and delivery
      of
      the certificate(s) representing the Shares for which the Option shall have
      been
      exercised may be postponed by the Company for such period as may be required
      by
      the Company, with reasonable diligence, to comply with any applicable listing
      requirements of any national or regional securities exchange or any law or
      regulation applicable to the issuance or delivery of such Shares. No Option
      may
      be exercised unless this Plan has been duly approved by the shareholders of
      the
      Company in accordance with applicable law. Notwithstanding anything to the
      contrary herein, the terms of a Stock Purchase Agreement required to be executed
      and delivered in connection with the exercise of an Option may require the
      certificate or certificates representing the Shares purchased upon exercise
      of
      an Option to be delivered and deposited with the Company as security for the
      Optionee’s faithful performance of the terms of his Stock Purchase
      Agreement.

     

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

    

    (ii)
      Termination
      of Status as an Employee.
      If an
      Optionee ceases to serve as an Employee for any reason other than death or
      disability and thereby terminates his or her
      Continuous Status as an Employee, such Optionec shall have the right to exercise
      the Option
      at any
      time within thirty (30) days (or such other period of time not exceeding three
      (3) months as is determined by the Board at the time of granting the Option),
      following the date such Optionee ceases his or her Continuous Status as an
      Employee of the Company to the extent that such Optionee was entitled to
      exercise the Option at the date of such termination; provided,
      however,
      that no
      Option shall be exercisable after the expiration of the term set forth in the
      Option Agreement. To the extent that such Optionee was not entitled to exercise
      the Option at the date of such termination, or if such Optionee does not
      exercise such Option (which such Optionee was entitled to exercise) within
      the
      time specified herein, the Option shall terminate.

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    (iii) Death
      or Disability of Optionee.
      If an
      Optionee ceases to serve as an Employee due to death or disability and thereby
      terminates his or her Continuous Status as an Employee, the Option may be
      exercised at any time within six (6) months following the date of death or
      termination of employment due to disability, in the case of death, by the
      Optionee’s estate or by a person who acquired the right to exercise the Option
      by bequest or inheritance, or, in the case of disability, by the Optionee,
      but
      in any case only to the extent the Optionee was entitled to exercise the Option
      at the date of his or her termination of employment by death or disability;
      provided, however,
      that no
      Option shall be exercisable after the expiration of the Option
      term set forth in the Option Agreement. To the extent that such Optionee was
      not
      entitled to
      exercise such Option at the date of his or her termination of employment by
      death or disability
      or if
      such Option is not exercised (to the extent it could be exercised) within the
      time specified herein, the Option shall terminate.

    

    (iv) Extension
      of Time to Exercise.
      Notwithstanding anything to the contrary in this Section 8, the Board may at
      any
      time and from time to time prior to the termination
      of a Nonstatutory Stock Option, with the consent of the Optionee, extend the
      period
      of time
      during which the Optionee may exercise his or her Nonstatutory Stock Option
      following the date the Optionee. ceases such Optionee’s Continuous Status as an
      Employee; provided, however,
      that (1)
      the maximum period of time during which a Nonstatutory Stock Option shall be
      exercisable following such termination date shall not exceed an aggregate of
      six
      (6) months, (2) the Nonstatutory Stock Option shall not become exercisable
      after
      the expiration of the term of such Option as set forth in the Option Agreement
      as a result of such extension, and (3) notwithstanding any extension of time
      during which the Nonstatutory Stock Option may be exercised, such Option, unless
      otherwise amended by the Board, shall only be exercisable to the extent to
      which
      the Optionee was entitled to exercise it on the date Optionee ceased Continuous
      Status as an Employee. To the extent that such Optionee was not entitled to
      exercise the Option at
      the
      date of such termination, or if such Optionee does not exercise an Option which
      Optionee
      was
      entitled to exercise within the time specified herein, the Option shall
      terminate.

    

    9.
      Limit
      on Incentive Stock Options.
      The
      aggregate fair market value (determined at the time an Incentive Stock Option
      is
      granted) of the Shares which may be acquired upon exercise of Incentive Stock
      Options for the first time by an Optionee during any calendar year under all
      incentive stock option plans of the Company, its Parents or its Subsidiaries,
      if
      any, cannot exceed One Hundred Thousand Dollars ($100,000). Incentive Stock
      Options which exceed this limit must be treated as Nonstatutory Stock Options,
      The Board shall determine, in accordance
      with the Code, which of an Optionee’s Incentive Stock Options will not be
      treated as
      Incentive Stock Options as a result of such limitation and will so notify the
      Optionee as soon as practicable following such determination.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    10.  Nontransferability
      of Options.
      Options
      granted under this Plan may not be sold, pledged, assigned, hypothecated,
      gifted, transferred or disposed of in any manner, either voluntarily or
      involuntarily by operation of law, other than by will or by the laws of descent
      or distribution, and may be exercised during the lifetime of the Optionee only
      by such Optionee.

     

    11.  Adjustments
      Upon Changes in Capitalization or Corporate Change.

     

    (a) Subject
      to any required action by the shareholders of the Company, the number of Shares
      covered by each outstanding Option, and the number of Shares which have
been
      authorized for issuance under this Plan but as to which no Options have yet
      been
      granted or which
      have been returned to this Plan upon cancellation or expiration of an Option
      or
      repurchase of
      shares
      from an Optionee upon termination of employment or service, as well as the
      exercise or
      purchase
      price per Share covered by each such outstanding Option, shall be
      proportionately adjusted for any increase or decrease in the number of issued
      Shares resulting from a stock split, reverse stock split, combination or
      reclassification of the Common Stock, or the payment of a stock dividend (but
      only on 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 (other than stock bonuses to Employees, including, without limitation,
      officers and directors); provided, however,
      that the
      conversion of any convertible securities of the Company shall not be deemed
      to
      have been effected without the 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 issue 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 subject to this Plan
      or
      an Option.

     

    (b) In
      the
      event of a Corporate Change effected by a transaction in which the consideration
      therefor consists only of stock of another issuer, then the Plan, all Options
      and Option
      Agreements in force at the date of the Corporate Change shall continue to be
      in
      full force
      and
      effect and shall be assumed by the merging or acquiring entity.

     

    (c) In
      the
      event of a Corporate Change effected by a transaction in which the consideration
      therefor does not consist solely of the stock of another issuer (e.g., an all
      cash or part
      cash
      and part stock transaction), then all Options which are not vested and
      exercisable at that
      date
      shall terminate immediately.

     

    (d) No
      fractional shares of Common Stock shall be issuable on account of any action
      described in this Section, and the aggregate number of shares into which Shares
      then covered by the Option, when changed as the result of such action, shall
      be
      reduced to the largest number of whole shares resulting from such action, unless
      the Board, in its sole discretion, shall determine to issue scrip certificates
      in respect to any fractional shares, which scrip certificates, in such event,
      shall be in a form and have such terms and conditions as the Board in its
      discretion shall prescribe.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    12.
      Time
      of Granting 0 tU
      ions.
      The date
      of grant of an Option shall be the date on which the Board makes the
      determination granting such Option; provided, however,
      that if
      the Board determines that such grant shall be as of some future date, the date
      of grant shall be such future date. Notice of the determination shall be given
      to each Employee to whom an Option is so granted within a reasonable time after
      the date of such grant.

    

    13.Amendment
      and Termination of this Plan.

    

    (a)
      Amendment
      and Termination.
      The
      Board may amend or terminate this Plan from time to time in such respects as
      the
      Board may deem advisable and shall make any amendments
      which may be required so that Options intended to be Incentive Stock Options
      shall
      at all
      times continue to be Incentive Stock Options for the purpose of the Code, except
      that, without approval of the holders of a majority of the outstanding shares
      of
      the Company’s capital stock, no such revision or amendment shall:

    

    (i) Increase
      the number of Shares subject to this Plan, other than in connection with an
      adjustment under Section 11 of this Plan;

    

    (ii) Materially
      change the designation of the class of Employees eligible to be granted
      Options;

     

    
      (iii)
        Remove the administration of this Plan from the Board (other than to the
        Committee);

       

      (iv)
        Materially increase the benefits accruing to
        participants under this Plan;
        or

       

      
        (v)
Extend
          the term of this Plan.

      

    

     

    (b)
      Effect
      of Amendment or Termination.
      Except
      as otherwise provided in Section 11, any amendment or termination of this Plan
      shall not affect Options already granted and such Options shall remain in full
      force and effect as if this Plan had not been amended or terminated, unless
      mutually agreed otherwise between the Optionee and the Company, which agreement
      must be in writing and signed by the Optionee and the Company.

    

    14. Conditions
      Upon Issuance of Shares.

    

    (a)
      Shares shall not be issued pursuant to the exercise of an Option unless the
      exercise of such Option and the issuance and delivery of such Shares pursuant
      thereto shall comply with all relevant provisions of law, including, without
      limitation, the Securities Act, the Exchange Act, applicable state securities
      laws, the rules and regulations promulgated thereunder, and the requirement
      of
      any stock exchange upon which the Shares may then be listed, and shall be
      further subject to the approval of counsel for the Company with respect to
      such
      compliance.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    (b)
      As a
      condition to the exercise of an Option, the Board may require the person
      exercising such Option to execute an agreement with, and/or may require the
      person exercising such Option to make any representation and warranty
      to,
      the Company as may in the judgment of counsel to the Company be required under
      applicable law or regulation, including but not limited to a representation
      and
      warranty 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 appropriate under any of the
      aforementioned relevant provisions of law.

    

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

    

    The
      Company, during the term of this Plan, shall use diligent efforts to seek to
      obtain from appropriate regulatory agencies any requisite authorization in
      order
      to issue and sell such number of Shares as shall be sufficient to satisfy the
      requirements of this Plan. The inability of the Company to obtain the requisite
      authorization(s) deemed by the Company’s counsel to be necessary for the lawful
      issuance and sale of any Shares hereunder, or the inability of the Company
      to
      confirm to its satisfaction that any issuance and sale of any Shares hereunder
      will meet applicable legal requirements, shall relieve the Company of any
      liability in respect to the failure to issue or sell such Shares as to which
      such requisite authority shall not have been obtained.

    

    16.  Stock
      Option and Stock Purchase Agreements.
      Options
      shall be evidenced by written stock option agreements in such form or forms
      as
      the Board shall approve from time to time. Upon the exercise of an Option,
      the
      Optionee shall sign and deliver to the Company a Stock Purchase Agreement (if
      required to be executed and delivered to the Company by an Optionee as a
      condition to the exercise of an Option) in such form or forms as the Board
      shall
      approve from time to time.

    

    17.  Shareholder
      Approval.
      Continuance of this Plan shall be subject to approval by the shareholders of
      the
      Company within twelve (12) months before or after the date this Plan is adopted
      by the Board. If such shareholder approval is obtained at a duly held
      shareholders’ meeting, it may be obtained by the affirmative vote of the holders
      of a majority of the outstanding shares of the Company entitled to vote thereon.
      All Options granted prior to shareholder approval of this Plan are subject
      to
      such approval, and if such approval is not obtained within twelve (12) months
      before or after the date this Plan is adopted by the Board all such Options
      shall expire and shall be of no further force or effect.

    

    18.  Taxes,
      Fees, Expenses and Withholding of Taxes.

    

    (a)
      The
      Company shall pay all original issue and transfer taxes (but not income taxes,
      if any) with respect to the grant of Options and/or the issue and transfer
      of
      Shares pursuant to the exercise thereof, and all other fees and expenses
      necessarily incurred by the Company in connection therewith, and will from
      time
      to time use diligent efforts to comply with all
      laws
      and regulations which, in the opinion of counsel for the Company, shall be
      applicable thereto.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    (b) The
      grant
      of Options hereunder and the issuance of Shares pursuant to the exercise thereof
      is conditioned upon the Company’s reservation of the right to withhold, in
      accordance with any applicable law, from any compensation payable to thc
      Optionee any taxes required to be withheld by federal, state or local law as
      a
      result of the grant or exercise of such Option
      or
      thc sale of the Shares issued upon exercise thereof. To the extent that
      compensation or
      other
      amounts, if any, payable to the Optionce arc insufficient to pay any taxes
      required to be so withheld, the Company may, in its sole discretion, require
      the
      Optionee, as a condition of the exercise of an Option, to pay in cash to the
      Company an amount sufficient to cover such tax liability or otherwise to make
      adequate provision for the Company’s satisfaction of its withholding obligations
      under federal and state law.

     

    (c) The
      Board
      or the Committee may, in its discretion and upon such terms and conditions
      as it
      may deem appropriate (including the applicable safe-harbor provisions of SEC
      Rule 16b-3 and interpretations thereof by the staff of the Securities and
      Exchange Commission) provide any or all holders of outstanding option grants
      under this Plan with the election to have the Company withhold, from the shares
      of Common Stock otherwise issuable upon the exercise of such options, one or
      more of such shares with an aggregate fair market value equal to the designated
      percentage (any multiple of 5%, specified by the optionee) of the Federal and
      State income taxes (“Taxes”) incurred in connection with the acquisition of such
      Shares. In lieu of such direct withholding, one or more optionees may also
      be
      granted the right to deliver shares of Common Stock to the Company in
      satisfaction of such Taxes. The withheld or delivered shares shall be valued
      at
      the Fair Market Value on the applicable determination date for such Taxes or
      such other date required by the applicable safe-harbor provisions of SEC Rule
      16b-3.

     

    19.  Liability
      of Company.
      The
      Company, its Parent or any Subsidiary which is in existence
      or hereafter comes into existence shall not be liable to an Optionee or other
      person if it
      is
      determined for any reason by the Internal Revenue Service or any court having
      jurisdiction that any Options intended to be Incentive Stock Options granted
      hereunder do not qualify as incentive stock options within the meaning of
      Section 422 of the Code.

     

    20.  Information
      to Optionee.
      The
      Company shall provide without charge at least annually
      to each Optionee during the period his or her Option is outstanding a balance
      sheet and
      income
      statement of the Company. In the event that the Company provides annual reports
      or periodic reports to its shareholders during the period in which an Optionee’s
      Option is outstanding, the Company shall provide to each Optionee a copy of
      each
      such report.

     

    21.  Notices.
      Any
      notice required or permitted hereunder shall be given in writing and shall
      be
      deemed effectively given upon personal delivery or upon deposit in the United
      States mail, as first class, registered or certified mail, with postage and
      fees
      prepaid and addressed (i) if to the Company, at its principal place of business,
      attention: Secretary, or (ii) if to the Optionee at
      his or
      her address as set forth on the signature page of his or her Option Agreement,
      or at such other
      address as either party may from time to time designate in writing to other.
      It
      shall be the obligation of each Optionee and each transferee holding Shares
      purchased upon exercise of an Option to provide the Secretary of the Company,
      by
      letter mailed as provided hereinabove, with written notice of his or her direct
      mailing address.

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    22.  No Enlargement of Employee Rights.
      This
      Plan is purely voluntary on the part of the Company, and the continuance of
      this
      Plan shall not be deemed to constitute a contract between the Company and any
      Employee, or to be consideration for or a condition of the employment or service
      of any Employee. Nothing contained in
      this
      Plan
      shall be deemed to give any Employee the right to be retained in the employ
      or
      service of the Company, its Parent, Subsidiary or a successor corporation,
      or to
      interfere with the right of the Company or any such corporations to discharge
      or
      retire any Employee at any time with or without cause and with or without
      notice. No Employee shall have any right to or interest in Options authorized
      hereunder prior
      to
      the grant thereof to such Employee, and upon such grant such Employee shall
      have
      only
      such
      rights and interests as are expressly provided herein, subject, however, to
      all
      applicable provisions of the Company’s Articles of Incorporation, as the sane
      may be amended from time to time.

    

    23.  Legends
      on Certificates.

    

    (a) Federal
      Law.
      Unless
      an appropriate registration statement is filed pursuant to the Securities Act
      of
      1933 with respect to the Options and Shares issuable under this Plan,
      each document or certificate representing such Options or Shares shall be
      endorsed thereon
      with a
      legend substantially as follows:

     

    “THIS
      OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS SECURITY
      HAVE NOT
      BEEN
      REGISTERED UNDER THE SECURITIES ACT OF
      1933, AS
      AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
      CONNECTION WITH., THE SALE OR DISTRIBUTION THEREOF. NO SALE, TRANSFER OR
      DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
      RELATING THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
      SUCH
      REGISTRATION IS NOT REQUIRED.”

    

    (b) California
      Legend.
      If
      required by the California Commissioner of Corporations,
      each document or certificate representing the Options or Shares issuable under
      this
      Plan
      shall be endorsed thereon with a legend substantially as follows:

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    “IT
      IS
      UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS OPTION AND THE SECURITIES
      WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION, OR ANY INTEREST THEREIN,
      OR
      TO RECEIVE ANY
      CONSIDERATION THEREFOR, WITHOUT THE PRIOR
      WRITTEN
      CONSENT OF THE COMMISSIONER OF CORPORATIONS
      OF THE STATE OF CALIFORNIA, EXCEPT
      AS
      PERMITTED TN THE COMMISSIONER’S RULES.”

    

    (c)
      Additional
      Legends.
      Each
      document or certificate representing the Options or Shares issuable under this
      Plan shall also contain the legends as may be required under California law
      or
      other applicable state or federal securities laws or by any Stock Purchase
      Agreement
      or other agreement the execution of which is a condition to the exercise of
      an
      Option
      under
      this Plan including a legend substantially as follows:

    

    “THIS
      OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION,
      OR ANY INTEREST THEREIN, ARE SUBJECT TO CERTAIN RESTRICTIONS, INCLUDING A RIGHT
      OF FIRST REFUSAL OF THE COMPANY, AND MAY BE TRANSFERRED ONLY IN
      ACCORDANCE WITH THE TERMS OF AN AGREEMENT
      BETWEEN
      THE COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY
      OF THE COMPANY.”

    

    24.  Availability
      of Plan.
      A copy
      of this Plan shall be delivered to the Secretary of the Company and shall be
      shown by him to any eligible person making reasonable inquiry concerning
      it.

    

    25.  Compliance
      with Exchange Act Rule 16b-3.
      With
      respect to persons subject to Section 16 of the Exchange Act, transactions
      under
      this Plan are intended to comply with all applicable conditions of Rule 16b-3,
      promulgated pursuant to the Exchange Act, or its successors. To the extent
      any
      provision of this Plan or action by the Board or any Committee fails so to
      comply, it shall be deemed null and void to the extent permitted by law and
      deemed advisable by the Board or any Committee.

    

    26.  Invalid
      Provisions.
      In the
      event that any provision of this Plan is found to be invalid or otherwise
      unenforceable under any applicable law, such invalidity or unenforceability
      shall not be construed as rendering any other provisions contained herein as
      invalid or unenforceable, and all such other provisions shall be given full
      force and effect to the same extent as though the invalid or unenforceable
      provision was not contained herein.

    

    27.  Applicable
      Law.
      This
      Plan shall be governed by and construed in accordance with the laws of The
      State
      of Delaware.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    As
      adopted by the Board of Directors on June 1, 2005.

    

    AURIGA
      LABORATORIES, INC. By:

    

    Name:
      Glynn Wilson Title: President

     

    

    
      
         

      

      
        16

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