Document:

Exhibit 4.8

 

NIKU CORPORATION

 

2000 EQUITY INCENTIVE PLAN

 

As Adopted December 8, 1999

 

As Amended and Restated Effective February 11, 2003

 

1.                                      PURPOSE.  The purpose of this Plan is to provide
incentives to attract, retain and motivate eligible persons whose present and
potential contributions are important to the success of the Company, its Parent
and Subsidiaries, by offering them an opportunity to participate in the Company’s
future performance through awards of Options, Restricted Stock and Stock Bonuses.  Capitalized terms not defined in the text are
defined in Section 23.

 

2.                                      SHARES SUBJECT TO THE PLAN.

 

2.1                                 Number of Shares Available.  Subject to Sections 2.2 and 18, the total
number of Shares reserved and available for grant and issuance pursuant to this
Plan will be 6,000,000 Shares plus Shares that are subject to: (a) issuance
upon exercise of an Option but cease to be subject to such Option for any
reason other than exercise of such Option; (b) an Award granted hereunder
but are forfeited or are repurchased by the Company at the original issue
price; and (c) an Award that otherwise terminates without Shares being
issued.  In addition, any authorized
shares not issued or subject to outstanding grants under the Company’s 1998
Stock Plan (the “Prior Plan”) on the Effective
Date (as defined below) and any shares issued under the Prior Plan that are
forfeited or repurchased by the Company or that are issuable upon exercise of
options granted pursuant to the Prior Plan that expire or become unexercisable
for any reason without having been exercised in full, will no longer be
available for grant and issuance under the Prior Plan, but will be available
for grant and issuance under this Plan. 
In addition, on each January 1, the aggregate number of Shares reserved
and available for grant and issuance pursuant to this Plan will be increased
automatically by a number of Shares equal to 5% of the total outstanding shares
of the Company as of the immediately preceding December 31, provided that
no more than 20,000,000 shares shall be issued as ISOs (as defined in Section 5
below).  At all times the Company shall
reserve and keep available a sufficient number of Shares as shall be required
to satisfy the requirements of all outstanding Options granted under this Plan
and all other outstanding but unvested Awards granted under this Plan.

 

2.2                                 Adjustment of Shares.  In the event that the number of outstanding
shares is changed by a stock dividend, recapitalization, stock split, reverse
stock split, subdivision, combination, reclassification or similar change in
the capital structure of the Company without consideration, then (a) the
number of Shares reserved for issuance under this Plan, (b) the number of
Shares that may be granted pursuant to Sections 3 and 9 below, (c) the
Exercise Prices of and number of Shares subject to outstanding Options, and (d) the
number of Shares subject to other outstanding Awards will be proportionately
adjusted, subject to any required action by the Board or the stockholders of
the Company and compliance with applicable securities laws; provided, however,
that fractions of a Share will not be issued but will either be replaced by a
cash payment equal to the Fair Market Value of such fraction of a Share or will
be rounded up to the nearest whole Share, as determined by the Committee.

 

3.                                      ELIGIBILITY.  ISOs (as defined in Section 5 below) may
be granted only to employees (including officers and directors who are also
employees) of the Company or of a Parent or Subsidiary of the Company.  All other Awards may be granted to employees,
officers, directors, consultants and advisors of the Company or any Parent or
Subsidiary of the Company; provided such consultants and advisors render
bona fide services not in connection with the offer and sale of securities in a
capital-raising transaction.  No person
will be eligible to receive more than 2,000,000 Shares in any calendar year
under this Plan pursuant to the grant of Awards hereunder, other than new
employees of the Company or of a Parent or Subsidiary of the Company (including
new employees who are also officers and directors of the Company or any Parent
or Subsidiary of the Company), who are eligible to receive up to a maximum of
2,500,000 Shares in the calendar year in which they commence their employment.  A person may be granted more than one Award
under this Plan.

 

 

4.                                      ADMINISTRATION.

 

4.1                                 Committee Authority.  This Plan will be administered by the
Committee or by the Board acting as the Committee.  Except for automatic grants to Outside
Directors pursuant to Section 9 hereof, and subject to the general
purposes, terms and conditions of this Plan, and to the direction of the Board,
the Committee will have full power to implement and carry out this Plan.  Except for automatic grants to Outside Directors
pursuant to Section 9 hereof, the Committee will have the authority to:

 

(a)                                  construe
and interpret this Plan, any Award Agreement and any other agreement or
document executed pursuant to this Plan;

 

(b)                                 prescribe,
amend and rescind rules and regulations relating to this Plan or any
Award;

 

(c)                                  select
persons to receive Awards;

 

(d)                                 determine
the form and terms of Awards;

 

(e)                                  determine
the number of Shares or other consideration subject to Awards;

 

(f)                                    determine
whether Awards will be granted singly, in combination with, in tandem with, in
replacement of, or as alternatives to, other Awards under this Plan or any
other incentive or compensation plan of the Company or any Parent or Subsidiary
of the Company;

 

(g)                                 grant
waivers of Plan or Award conditions;

 

(h)                                 determine
the vesting, exercisability and payment of Awards;

 

(i)                                     correct
any defect, supply any omission or reconcile any inconsistency in this Plan,
any Award or any Award Agreement;

 

(j)                                     determine
whether an Award has been earned; and

 

(k)                                  make
all other determinations necessary or advisable for the administration of this
Plan.

 

4.2                                 Committee Discretion.  Except for automatic grants to Outside
Directors pursuant to Section 9 hereof, any determination made by the
Committee with respect to any Award will be made in its sole discretion at the
time of grant of the Award or, unless in contravention of any express term of
this Plan or Award, at any later time, and such determination will be final and
binding on the Company and on all persons having an interest in any Award under
this Plan.  The Committee may delegate to
one or more officers of the Company the authority to grant an Award under this
Plan to Participants who are not Insiders of the Company.

 

5.                                      OPTIONS.  The Committee may grant Options to eligible
persons and will determine whether such Options will be Incentive Stock Options
within the meaning of the Code (“ISO”) or
Nonqualified Stock Options (“NQSOs”),
the number of Shares subject to the Option, the Exercise Price of the Option,
the period during which the Option may be exercised, and all other terms and
conditions of the Option, subject to the following:

 

5.1                                 Form of Option Grant.  Each Option granted under this Plan will be
evidenced by an Award Agreement which will expressly identify the Option as an
ISO or an NQSO (“Stock Option Agreement”),
and, except as otherwise required by the terms of Section 9 hereof, will
be in such form and contain such provisions (which need not be the same for
each Participant) as the Committee may from time to time approve, and which
will comply with and be subject to the terms and conditions of this Plan.

 

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5.2                                 Date of Grant.  The date of grant of an Option will be the
date on which the Committee makes the determination to grant such Option,
unless otherwise specified by the Committee. 
The Stock Option Agreement and a copy of this Plan will be delivered to
the Participant within a reasonable time after the granting of the Option.

 

5.3                                 Exercise Period.  Options may be exercisable within the times
or upon the events determined by the Committee as set forth in the Stock Option
Agreement governing such Option; provided, however, that no
Option will be exercisable after the expiration of ten (10) years from the
date the Option is granted; and provided further that no ISO granted to
a person who directly or by attribution owns more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or of any
Parent or Subsidiary of the Company (“Ten Percent Stockholder”)
will be exercisable after the expiration of five (5) years from the date
the ISO is granted.  The Committee also
may provide for Options to become exercisable at one time or from time to time,
periodically or otherwise, in such number of Shares or percentage of Shares as
the Committee determines; provided, however, if and to the extent required by
applicable law in that State at the time of grant, Options granted to
individuals other than officers, directors or consultants of the Company
residing in the State of California (the “California Options”) shall be
exercisable at the rate of at least 20% per year over five years from the date
of grant.

 

5.4                                 Exercise Price.  The Exercise Price of an Option will be
determined by the Committee when the Option is granted and may be not less than
85% of the Fair Market Value of the Shares on the date of grant; provided that:
(i) the Exercise Price of an ISO will be not less than 100% of the Fair
Market Value of the Shares on the date of grant; and (ii) the Exercise
Price of any ISO granted to a Ten Percent Stockholder will not be less than
110% of the Fair Market Value of the Shares on the date of grant.  Payment for the Shares purchased may be made
in accordance with Section 8 of this Plan.

 

5.5                                 Method of Exercise.  Options may be exercised only by delivery to
the Company of a written stock option exercise agreement  (the “Exercise Agreement”)
in a form approved by the Committee (which need not be the same for each
Participant), stating the number of Shares being purchased, the restrictions
imposed on the Shares purchased under such Exercise Agreement, if any, and such
representations and agreements regarding Participant’s investment intent and
access to information and other matters, if any, as may be required or
desirable by the Company to comply with applicable securities laws, together
with payment in full of the Exercise Price for the number of Shares being
purchased.

 

5.6                                 Termination.  Notwithstanding the exercise periods set forth
in the Stock Option Agreement, exercise of an Option will always be subject to
the following:

 

(a)                                  If
the Participant is Terminated for any reason except death or Disability, then
the Participant may exercise such Participant’s Options only to the extent that
such Options would have been exercisable upon the Termination Date no later
than three (3) months after the Termination Date (or such shorter or
longer time period, which period may not be less than thirty (30) days nor more
than five (5) years as may be determined by the Committee, with any
exercise beyond three (3) months after the Termination Date deemed to be
an NQSO), but in any event, no later than the expiration date of the Options.

 

(b)                                 If
the Participant is Terminated because of Participant’s death or Disability (or
the Participant dies within three (3) months after a Termination other
than for Cause or because of Participant’s Disability), then Participant’s
Options may be exercised only to the extent that such Options would have been
exercisable by Participant on the Termination Date and must be exercised by
Participant (or Participant’s legal representative or authorized assignee) no
later than twelve (12) months after the Termination Date (or such shorter or
longer time period, which period may not be less than six (6) months nor
more than five (5) years as may be determined by the Committee, with any
such exercise beyond (a) three (3) months after the Termination Date
when the Termination is for any reason other than the Participant’s death or
Disability, or (b) twelve (12) months after the Termination

 

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Date
when the Termination is for Participant’s death or Disability, deemed to be an
NQSO), but in any event no later than the expiration date of the Options.

 

(c)                                  Notwithstanding
the provisions in paragraph 5.6(a) above, if a Participant is terminated
for Cause, neither the Participant, the Participant’s estate nor such other
person who may then hold the Option shall be entitled to exercise any Option
with respect to any Shares whatsoever, after termination of service, whether or
not after termination of service the Participant may receive payment from the
Company or Subsidiary for vacation pay, for services rendered prior to
termination, for services rendered for the day on which termination occurs, for
salary in lieu of notice, or for any other benefits.  In making such determination, the Board shall
give the Participant an opportunity to present to the Board evidence on his
behalf.  For the purpose of this
paragraph, termination of service shall be deemed to occur on the date when the
Company dispatches notice or advice to the Participant that his service is
terminated.

 

5.7                                 Limitations on Exercise.  Except with respect to California Options, the
Committee may specify a reasonable minimum number of Shares that may be
purchased on any exercise of an Option, provided that such minimum number will
not prevent Participant from exercising the Option for the full number of
Shares for which it is then exercisable.

 

5.8                                 Limitations on ISO.  The aggregate Fair Market Value (determined
as of the date of grant) of Shares with respect to which ISO are exercisable
for the first time by a Participant during any calendar year (under this Plan
or under any other incentive stock option plan of the Company, Parent or
Subsidiary of the Company) will not exceed $100,000.  If the Fair Market Value of Shares on the
date of grant with respect to which ISO are exercisable for the first time by a
Participant during any calendar year exceeds $100,000, then the Options for the
first $100,000 worth of Shares to become exercisable in such calendar year will
be ISO and the Options for the amount in excess of $100,000 that become
exercisable in that calendar year will be NQSOs.  In the event that the Code or the regulations
promulgated thereunder are amended after the Effective Date of this Plan to
provide for a different limit on the Fair Market Value of Shares permitted to
be subject to ISO, such different limit will be automatically incorporated
herein and will apply to any Options granted after the effective date of such
amendment.

 

5.9                                 Modification, Extension or Renewal.  The Committee may modify, extend or renew
outstanding Options and authorize the grant of new Options in substitution
therefor, provided that any such action may not, without the written consent of
a Participant, impair any of such Participant’s rights under any Option
previously granted.  Any outstanding ISO
that is modified, extended, renewed or otherwise altered will be treated in
accordance with Section 424(h) of the Code.

 

5.10                           No Disqualification.  Notwithstanding any other provision in this
Plan, no term of this Plan relating to ISO will be interpreted, amended or
altered, nor will any discretion or authority granted under this Plan be
exercised, so as to disqualify this Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO under Section 422
of the Code.

 

6.                                      RESTRICTED STOCK.  A Restricted Stock Award is an offer by the
Company to sell to an eligible person Shares that are subject to
restrictions.  To the extent required at
the time of grant by the California “Blue Sky” law, Restricted Stock Awards
shall be granted in accordance with Section 260.140.42 of Title 10 of the
California Code of Regulations.  The
Committee will determine to whom an offer will be made, the number of Shares
the person may purchase, the price to be paid (the “Purchase Price”),
the restrictions to which the Shares will be subject, and all other terms and
conditions of the Restricted Stock Award, subject to the following:

 

6.1                                 Form of Restricted Stock Award.  All purchases under a Restricted Stock Award
made pursuant to this Plan will be evidenced by an Award Agreement (“Restricted Stock Purchase Agreement”)
that will be in such form (which need not be the same for each Participant) as
the Committee will from time to time approve, and will comply with and be
subject to the terms and conditions of this Plan.  The offer of Restricted Stock will be
accepted by the Participant’s execution and delivery of the Restricted Stock
Purchase Agreement and full payment

 

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for the Shares to the
Company within thirty (30) days from the date the Restricted Stock Purchase
Agreement is delivered to the person.  If
such person does not execute and deliver the Restricted Stock Purchase
Agreement along with full payment for the Shares to the Company within thirty
(30) days, then the offer will terminate, unless otherwise determined by the
Committee.

 

6.2                                 Purchase Price.  The Purchase Price of Shares sold pursuant to
a Restricted Stock Award will be determined by the Committee on the date the
Restricted Stock Award is granted, except in the case of a sale to a Ten
Percent Stockholder, in which case the Purchase Price will be 100% of the Fair
Market Value.  Payment of the Purchase
Price may be made in accordance with Section 8 of this Plan.

 

6.3                                 Terms
of Restricted Stock Awards. 
Restricted Stock Awards shall be subject to such restrictions as the
Committee may impose subject to the applicable requirements of California
law.  These restrictions may be based
upon completion of a specified number of years of service with the Company or
upon completion of the performance goals as set out in advance in the
Participant’s individual Restricted Stock Purchase Agreement.  Restricted Stock Awards may vary from
Participant to Participant and between groups of Participants.  Prior to the grant of a Restricted Stock
Award, the Committee shall:  (a) determine
the nature, length and starting date of any Performance Period for the
Restricted Stock Award; (b) select from among the Performance Factors to
be used to measure performance goals, if any; and (c) determine the number
of Shares that may be awarded to the Participant.  Prior to the payment of any Restricted Stock
Award, the Committee shall determine the extent to which such Restricted Stock
Award has been earned.  Performance
Periods may overlap and Participants may participate simultaneously with
respect to Restricted Stock Awards that are subject to different Performance
Periods and having different performance goals and other criteria.

 

6.4                                 Termination During Performance Period.  If a Participant is Terminated during a
Performance Period for any reason, then such Participant will be entitled to
payment (whether in Shares, cash or otherwise) with respect to the Restricted
Stock Award only to the extent earned as of the date of Termination in
accordance with the Restricted Stock Purchase Agreement, unless the Committee
will determine otherwise.

 

7.                                      STOCK BONUSES.

 

7.1                                 Awards of Stock Bonuses.  A Stock Bonus is an award of Shares (which
may consist of Restricted Stock) for services rendered to the Company or any
Parent or Subsidiary of the Company.  A
Stock Bonus may be awarded for past services already rendered to the Company,
or any Parent or Subsidiary of the Company pursuant to an Award Agreement (the “Stock Bonus Agreement”)
that will be in such form (which need not be the same for each Participant) as
the Committee will from time to time approve, and will comply with and be
subject to the terms and conditions of this Plan.  A Stock Bonus may be awarded upon
satisfaction of such performance goals as are set out in advance in the
Participant’s individual Award Agreement (the “Performance
Stock Bonus Agreement”) that will be in such form (which need
not be the same for each Participant) as the Committee will from time to time
approve, and will comply with and be subject to the terms and conditions of
this Plan.  Stock Bonuses may vary from
Participant to Participant and between groups of Participants, and may be based
upon the achievement of the Company, Parent or Subsidiary and/or individual
performance factors or upon such other criteria as the Committee may determine
subject to the applicable requirements of California law.

 

7.2                                 Terms of Stock Bonuses.  The Committee will determine the number of
Shares to be awarded to the Participant. 
If the Stock Bonus is being earned upon the satisfaction of performance
goals pursuant to a Performance Stock Bonus Agreement, then the Committee will:
(a)  determine the nature, length and starting date of any Performance
Period for each Stock Bonus; (b) select from among the Performance Factors
to be used to measure the performance, if any; and (c) determine the
number of Shares that may be awarded to the Participant.  Prior to the payment of any Stock Bonus, the
Committee shall determine the extent to which such Stock Bonuses have been earned.  Performance Periods may overlap and
Participants may participate simultaneously with respect to Stock Bonuses that
are subject to different Performance Periods and different performance goals
and other criteria.  The number of Shares
may be fixed or may vary in accordance with such performance goals and criteria
as may be determined by the Committee. 
The Committee may adjust the performance goals applicable to the Stock
Bonuses to take into account changes in law and accounting or tax rules and
to make such adjustments as the Committee deems

 

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necessary or appropriate
to reflect the impact of extraordinary or unusual items, events or
circumstances to avoid windfalls or hardships.

 

7.3                                 Form of Payment.
 The earned portion of a Stock Bonus may
be paid currently or on a deferred basis with such interest or dividend
equivalent, if any, as the Committee may determine.  Payment may be made in the form of cash or
whole Shares or a combination thereof, either in a lump sum payment or in
installments, all as the Committee will determine.

 

8.                                      PAYMENT FOR SHARE PURCHASES.

 

8.1                                 Payment.  Payment for Shares purchased pursuant to this
Plan may be made in cash (by check) or, where expressly approved for the
Participant by the Committee and where permitted by law:

 

(a)                                  by
cancellation of indebtedness of the Company to the Participant;

 

(b)                                 by
surrender of shares that either:  (1) have
been owned by Participant for more than six (6) months and have been paid
for within the meaning of SEC Rule 144 (and, if such shares were purchased
from the Company by use of a promissory note, such note has been fully paid
with respect to such shares); or (2) were obtained by Participant in the
public market;

 

(c)                                  by
tender of a full recourse promissory note having such terms as may be approved
by the Committee and bearing interest at a rate sufficient to avoid imputation
of income under Sections 483 and 1274 of the Code; provided, however,
that Participants who are not employees or directors of the Company will not be
entitled to purchase Shares with a promissory note unless the note is
adequately secured by collateral other than the Shares;

 

(d)                                 by
waiver of compensation due or accrued to the Participant for services rendered;

 

(e)                                  with
respect only to purchases upon exercise of an Option, and provided that a
public market for the Company’s stock exists:

 

(1)                                  through
a “same day sale” commitment from the Participant and a broker-dealer that is a
member of the National Association of Securities Dealers (an “NASD Dealer”) whereby the
Participant irrevocably elects to exercise the Option and to sell a portion of
the Shares so purchased to pay for the Exercise Price, and whereby the NASD
Dealer irrevocably commits upon receipt of such Shares to forward the Exercise
Price directly to the Company; or

 

(2)                                  through
a “margin” commitment from the Participant and a NASD Dealer whereby the
Participant irrevocably elects to exercise the Option and to pledge the Shares
so purchased to the NASD Dealer in a margin account as security for a loan from
the NASD Dealer in the amount of the Exercise Price, and whereby the NASD
Dealer irrevocably commits upon receipt of such Shares to forward the Exercise
Price directly to the Company; or

 

(f)                                    by
any combination of the foregoing.

 

8.2                                 Loan Guarantees.  The Committee may help the Participant pay
for Shares purchased under this Plan by authorizing a guarantee by the Company
of a third-party loan to the Participant.

 

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9.                                      AUTOMATIC
GRANTS TO OUTSIDE DIRECTORS.

 

9.1                                 Types
of Options and Shares.  Options
granted under this Plan and subject to this Section 9 shall be NQSOs.

 

9.2                                 Eligibility.  Options subject to this Section 9 shall
be granted only to Outside Directors.

 

9.3                                 Initial
Grant.  Each Outside Director who
first becomes a member of the Board on or after the Effective Date will
automatically be granted an Option for 50,000 Shares (an “Initial
Grant”) on the date such Outside Director first becomes a member
of the Board, unless such Outside Director received a grant of Options before
the Effective Date.  Each Outside
Director who became a member of the Board prior to the Effective Date and who
did not receive a prior Option grant will receive an Initial Grant immediately
following the Effective Date.

 

9.4                                 Succeeding
Grant.  Immediately following each
Annual Meeting of stockholders, each Outside Director will automatically be
granted an Option for 25,000 Shares (a “Succeeding Grant”),
provided the Outside Director is a member of the Board on such date and has
served continuously as a member of the Board for a period of at least one year
since the date of such Outside Director’s Initial Grant.  Notwithstanding anything in this Section 9.4
to the contrary, the Board may make discretionary supplemental grants to an
Outside Director who has served for less than one year from the date of such
Outside Director’s Initial Grant, provided that no Outside Director may
receive more than 75,000 Shares in any calendar year pursuant to this Section 9.

 

9.5                                 Vesting.  The date an Outside Director receives an
Initial Grant or a Succeeding Grant is referred to in this Plan as the “Start Date” for such Option.

 

(a)                                  Initial
Grants.  Each Initial Grant will vest
as to 2.778% of the Shares on each monthly anniversary of the Start Date, so
long as the Outside Director continuously remains a director or a consultant of
the Company.

 

(b)                                 Succeeding
Grants.  Each Succeeding Grant will
vest as to 2.778% of the Shares on each monthly anniversary of the Start Date,
so long as the Outside Director continuously remains a director or a consultant
of the Company.

 

Notwithstanding any
provision to the contrary, in the event of a Corporate Transaction described in
Section 18.1, the vesting of all options granted to Outside Directors
pursuant to this Section 9 will accelerate and such options will become
exercisable in full prior to the consummation of such event at such times and
on such conditions as the Committee determines, and must be exercised, if at
all, within three months of the consummation of said event.  Any options not exercised within such
three-month period shall expire.

 

9.6                                 Exercise Price.  The exercise price of an Option pursuant to
an Initial Grant and Succeeding Grant shall be the Fair Market Value of the
Shares, at the time that the Option is granted.

 

10.                               WITHHOLDING TAXES.

 

10.1                           Withholding Generally.  Whenever Shares are to be issued in
satisfaction of Awards granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. 
Whenever, under this Plan, payments in satisfaction of Awards are to be
made in cash, such payment will be net of an amount sufficient to satisfy
federal, state, and local withholding tax requirements.

 

10.2                           Stock Withholding.  When, under applicable tax laws, a
Participant incurs tax liability in connection with the exercise or vesting of
any Award that is subject to tax withholding and the Participant is obligated
to pay the Company the amount required to be withheld, the Committee may in its
sole discretion allow the Participant to satisfy the minimum withholding tax
obligation by electing to have the Company withhold from the Shares to be
issued that number of Shares having a Fair Market Value equal to the minimum
amount required to be

 

7

 

withheld, determined on
the date that the amount of tax to be withheld is to be determined.  All elections by a Participant to have Shares
withheld for this purpose will be made in accordance with the requirements
established by the Committee and be in writing in a form acceptable to the
Committee.

 

11.                               TRANSFERABILITY.

 

11.1                           Except
as otherwise provided in this Section 11, Awards granted under this Plan,
and any interest therein, will not be transferable or assignable by
Participant, and may not be made subject to execution, attachment or similar
process, otherwise than by will or by the laws of descent and distribution or
as determined by the Committee and set forth in the Award Agreement with
respect to Awards that are not ISOs.

 

11.2                           All
Awards other than NQSO’s.  All Awards
other than NQSO’s shall be exercisable: (i) during the Participant’s
lifetime, only by (A) the Participant, or (B) the Participant’s
guardian or legal representative; and (ii) after Participant’s death, by
the legal representative of the Participant’s heirs or legatees.

 

11.3                           NQSOs.  Unless otherwise restricted by the Committee,
an NQSO shall be exercisable: (i) during the Participant’s lifetime only
by (A) the Participant, (B) the Participant’s guardian or legal
representative, (C) a Family Member of the Participant who has acquired
the NQSO by “permitted transfer;” and (ii) after Participant’s death, by
the legal representative of the Participant’s heirs or legatees.  “Permitted transfer” means, as authorized by
this Plan and the Committee in an NQSO, any transfer effected by the Participant
during the Participant’s lifetime of an interest in such NQSO but only such
transfers which are by gift or domestic relations order.  A permitted transfer does not include any
transfer for value and neither of the following are transfers for value:  (a) a transfer of under a domestic
relations order in settlement of marital property rights or (b) a transfer
to an entity in which more than fifty percent of the voting interests are owned
by Family Members or the Participant in exchange for an interest in that
entity.

 

12.                               PRIVILEGES OF STOCK OWNERSHIP;
RESTRICTIONS ON SHARES..

 

12.1                           Voting and Dividends.  No Participant will have any of the rights of
a stockholder with respect to any Shares until the Shares are issued to the
Participant.  After Shares are issued to
the Participant, the Participant will be a stockholder and have all the rights
of a stockholder with respect to such Shares, including the right to vote and
receive all dividends or other distributions made or paid with respect to such
Shares; provided, that if such Shares are Restricted Stock, then any
new, additional or different securities the Participant may become entitled to
receive with respect to such Shares by virtue of a stock dividend, stock split
or any other change in the corporate or capital structure of the Company will
be subject to the same restrictions as the Restricted Stock; provided, further,
that the Participant will have no right to retain such stock dividends or stock
distributions with respect to Shares that are repurchased at the Participant’s
Purchase Price or Exercise Price pursuant to Section 12.

 

12.2                           Financial Statements.  The Company will provide financial statements
to each Participant prior to such Participant’s purchase of Shares under this
Plan, and to each Participant annually during the period such Participant has
Awards outstanding; provided, however, the Company will not be
required to provide such financial statements to Participants whose services in
connection with the Company assure them access to equivalent information.  Additionally, to the extent required,
pursuant to the provisions of Section 260.140.46 of Title 10 of the
California Code of Regulations, the Company shall provide to each Participant
and to each individual who acquires Shares pursuant to the Plan, not less
frequently than annually during the period such Participant or purchaser has
one or more outstanding Awards, and, in the case of an individual who acquires
Shares pursuant to the Plan, during the period such individual owns such Shares,
copies of the Company’s annual financial statements.  The Company shall not be required to provide
such statements to key employees of the Company whose duties in connection with
the Company assure their access to equivalent information.

 

12.3                           Restrictions
on Shares.  At the discretion of the
Committee, the Company may reserve to itself and/or its assignee(s) in the
Award Agreement a right to repurchase (the “Repurchase Right”) a portion of or
all Unvested Shares held by a Participant following such Participant’s
Termination at any time within ninety (90) days after the later of Participant’s
Termination Date and the date Participant purchases Shares under this Plan, for
cash

 

8

 

and/or cancellation of
purchase money indebtedness, at the Participant’s Exercise Price or Purchase
Price, as the case may be; provided, however, that the repurchase price of any
Repurchase Right reserved in an Award subject to California law at the time of
grant shall comply with the provisions of Section 260.140.41(k) of Title
10 of the California Code of Regulations to the extent required.

 

13.                               CERTIFICATES.  All certificates for Shares or other
securities delivered under this Plan will be subject to such stock transfer
orders, legends and other restrictions as the Committee may deem necessary or
advisable, including restrictions under any applicable federal, state or
foreign securities law, or any rules, regulations and other requirements of the
SEC or any stock exchange or automated quotation system upon which the Shares
may be listed or quoted.

 

14.                               ESCROW; PLEDGE OF SHARES.  To enforce any restrictions on a Participant’s
Shares, the Committee may require the Participant to deposit all certificates
representing Shares, together with stock powers or other instruments of
transfer approved by the Committee, appropriately endorsed in blank, with the
Company or an agent designated by the Company to hold in escrow until such
restrictions have lapsed or terminated, and the Committee may cause a legend or
legends referencing such restrictions to be placed on the certificates.  Any Participant who is permitted to execute a
promissory note as partial or full consideration for the purchase of Shares
under this Plan will be required to pledge and deposit with the Company all or
part of the Shares so purchased as collateral to secure the payment of
Participant’s obligation to the Company under the promissory note; provided,
however, that the Committee may require or accept other or additional
forms of collateral to secure the payment of such obligation and, in any event,
the Company will have full recourse against the Participant under the
promissory note notwithstanding any pledge of the Participant’s Shares or other
collateral.  In connection with any
pledge of the Shares, Participant will be required to execute and deliver a
written pledge agreement in such form as the Committee will from time to time
approve.  The Shares purchased with the
promissory note may be released from the pledge on a pro rata basis as the
promissory note is paid.

 

15.                               EXCHANGE AND BUYOUT OF AWARDS.  The Committee may, at any time or from time
to time, authorize the Company, with the consent of the respective
Participants, to issue new Awards in exchange for the surrender and
cancellation of any or all outstanding Awards. 
The Committee may at any time buy from a Participant an Award previously
granted with payment in cash, Shares (including Restricted Stock) or other
consideration, based on such terms and conditions as the Committee and the
Participant may agree.

 

16.                               SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.  An Award will not be effective unless such
Award is in compliance with all applicable federal and state securities laws, rules and
regulations of any governmental body, and the requirements of any stock
exchange or automated quotation system upon which the Shares may then be listed
or quoted, as they are in effect on the date of grant of the Award and also on
the date of exercise or other issuance. 
Notwithstanding any other provision in this Plan, the Company will have
no obligation to issue or deliver certificates for Shares under this Plan prior
to:  (a) obtaining any approvals
from governmental agencies that the Company determines are necessary or
advisable; and/or (b) completion of any registration or other
qualification of such Shares under any state or federal law or ruling of any
governmental body that the Company determines to be necessary or
advisable.  The Company will be under no
obligation to register the Shares with the SEC or to effect compliance with the
registration, qualification or listing requirements of any state securities
laws, stock exchange or automated quotation system, and the Company will have
no liability for any inability or failure to do so.

 

17.                               NO OBLIGATION TO EMPLOY.  Nothing in this Plan or any Award granted
under this Plan will confer or be deemed to confer on any Participant any right
to continue in the employ of, or to continue any other relationship with, the
Company or any Parent or Subsidiary of the Company or limit in any way the
right of the Company or any Parent or Subsidiary of the Company to terminate
Participant’s employment or other relationship at any time, with or without
cause.

 

9

 

18.                               CORPORATE TRANSACTIONS.

 

18.1                           Assumption or Replacement of Awards by Successor.  Except for automatic grants to Outside
Directors pursuant to Section 9 hereof, in the event of (a) a
dissolution or liquidation of the Company, (b) a merger or consolidation
in which the Company is not the surviving corporation (other than a merger or
consolidation with a wholly-owned subsidiary, a reincorporation of the Company
in a different jurisdiction, or other transaction in which there is no
substantial change in the stockholders of the Company or their relative stock
holdings and the Awards granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on all
Participants), (c) a merger in which the Company is the surviving
corporation but after which the stockholders of the Company immediately prior
to such merger (other than any stockholder that merges, or which owns or
controls another corporation that merges, with the Company in such merger) cease
to own their shares or other equity interest in the Company, (d) the sale
of substantially all of the assets of the Company, or (e) the acquisition,
sale, or transfer of more than 50% of the outstanding shares of the Company by
tender offer or similar transaction (each, a “Corporate Transaction”), (i) the
vesting of all outstanding Awards will accelerate as to an additional 25% of
the Shares that are unvested on the date of the Corporate Transaction and, (ii) thereafter,
unless otherwise set forth below, all unvested shares subject to outstanding
Awards will continue to vest in equal monthly installments over the remaining
original vesting term as set forth in the Award Agreement.  Upon a Corporate Transaction, all outstanding
Awards shall be assumed by the successor or acquiring corporation (if any),
which assumption will be binding on all Participants.  In the alternative, the successor or
acquiring corporation may substitute equivalent Awards or provide substantially
similar consideration to Participants as was provided to shareholders (after
taking into account the existing provisions of the Awards).  The successor corporation may also issue, in
place of outstanding unvested Shares of the Company held by the Participants,
substantially similar shares or other property subject to repurchase
restrictions no less favorable to the Participant.  In the event such successor corporation (if
any) refuses to assume or substitute Awards, as provided above, pursuant to a
Corporate Transaction described in this Subsection 18.1, such Awards will
expire on such Corporate Transaction at such time and on such conditions as the
Committee will determine. 
Notwithstanding anything in this Plan to the contrary, the Committee
may, in its sole discretion, provide that the vesting of any or all Awards
granted pursuant to this Plan will accelerate upon a Corporate Transaction
described in this Section 18.  If
the Committee exercises such discretion with respect to Options, such Options
will become exercisable in full prior to the consummation of such event at such
time and on such conditions as the Committee determines, and if such Options
are not exercised prior to the consummation of the Corporate Transaction, they
shall terminate at such time as determined by the Committee.

 

18.2                           Other Treatment of Awards.  Subject to any greater rights granted to
Participants under the foregoing provisions of this Section 18, in the
event of the occurrence of any Corporate Transaction described in Section 18.1,
any outstanding Awards will be treated as provided in the applicable agreement
or plan of merger, consolidation, dissolution, liquidation, or sale of assets.

 

18.3                           Assumption of Awards by the Company.  The Company, from time to time, also may
substitute or assume outstanding awards granted by another company, whether in
connection with an acquisition of such other company or otherwise, by either; (a) granting
an Award under this Plan in substitution of such other company’s award; or (b) assuming
such award as if it had been granted under this Plan if the terms of such
assumed award could be applied to an Award granted under this Plan.  Such substitution or assumption will be
permissible if the holder of the substituted or assumed award would have been
eligible to be granted an Award under this Plan if the other company had
applied the rules of this Plan to such grant.  In the event the Company assumes an award
granted by another company, the terms and conditions of such award will remain
unchanged (except that the exercise price and the number and nature of
Shares issuable upon exercise of any such option will be adjusted appropriately
pursuant to Section 424(a) of the Code).  In the event the Company elects to grant a
new Option rather than assuming an existing option, such new Option may be
granted with a similarly adjusted Exercise Price.

 

19.                               ADOPTION AND STOCKHOLDER APPROVAL.  This Plan will become effective upon the
first date on which grants are made of Shares reserved under the Plan (the “Effective Date”).  This Plan shall be approved by the
stockholders of the Company (excluding Shares issued pursuant to this Plan),
consistent with applicable laws, within twelve (12) months before or after the
date this Plan is adopted by the Board. 
Upon the Effective Date, the Committee may grant Awards pursuant to this
Plan; provided, however, that: (a) no Option may be
exercised prior to initial stockholder approval of this Plan; (b) no
Option granted pursuant to an increase in the number of Shares subject to this
Plan approved by the Board will be exercised prior to the time such increase
has

 

10

 

been approved by the
stockholders of the Company; (c) in the event that initial stockholder
approval is not obtained within the time period provided herein, all Awards
granted hereunder shall be cancelled, any Shares issued pursuant to any Awards
shall be cancelled and any purchase of Shares issued hereunder shall be
rescinded; and (d) in the event that stockholder approval of such increase
is not obtained within the time period provided herein, all Awards granted
pursuant to such increase will be cancelled, any Shares issued pursuant to any
Award granted pursuant to such increase will be cancelled, and any purchase of
Shares pursuant to such increase will be rescinded.

 

20.                               TERM OF PLAN/GOVERNING
LAW.  Unless earlier terminated
as provided herein, this Plan will terminate ten (10) years from the date
this Plan is adopted by the Board or, if earlier, the date of stockholder
approval.  This Plan and all agreements
thereunder shall be governed by and construed in accordance with the laws of
the State of California.

 

21.                               AMENDMENT OR TERMINATION OF PLAN.  The Board may at any time terminate or amend
this Plan in any respect, including without limitation amendment of any form of
Award Agreement or instrument to be executed pursuant to this Plan; provided,
however, that the Board will not, without the approval of the
stockholders of the Company, amend this Plan in any manner that requires such
stockholder approval.

 

22.                               NONEXCLUSIVITY OF THE PLAN.  Neither the adoption of this Plan by the
Board, the submission of this Plan to the stockholders of the Company for
approval, nor any provision of this Plan will be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under this Plan, and such
arrangements may be either generally applicable or applicable only in specific
cases.

 

23.                               DEFINITIONS.  As used in this Plan, the following terms
will have the following meanings:

 

“Award” means any award under this
Plan, including any Option, Restricted Stock or Stock Bonus.

 

“Award Agreement” means, with
respect to each Award, the signed written agreement between the Company and the
Participant setting forth the terms and conditions of the Award.

 

“Board” means the Board of Directors
of the Company.

 

“Cause” means the commission of an
act of theft, embezzlement, fraud, dishonesty or a breach of fiduciary duty to
the Company or a Parent or Subsidiary of the Company.

 

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

 

“Committee” means the Compensation
Committee of the Board.

 

“Company” means NIKU Corporation or
any successor corporation.

 

“Disability” means a disability,
whether temporary or permanent, partial or total, as determined by the
Committee.

 

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

 

“Exercise Price” means the price
at which a holder of an Option may purchase the Shares issuable upon exercise
of the Option.

 

“Fair Market Value” means
the value of a share of the Company’s Common Stock determined as follows:

 

(a)                                  if
such Common Stock is then quoted on the Nasdaq National Market, its closing
price on the Nasdaq National Market as reported in The Wall Street Journal;

 

11

 

(b)                                 if
such Common Stock is publicly traded and is then listed on a national
securities exchange, its closing price on the principal national securities
exchange on which the Common Stock is listed or admitted to trading as reported
in The Wall Street Journal;

 

(c)                                  if
such Common Stock is publicly traded but is not quoted on the Nasdaq National
Market nor listed or admitted to trading on a national securities exchange, the
average of the closing bid and asked prices as reported in The Wall Street
Journal;

 

(d)                                 in
the case of an Award made on the Effective Date, the price per share at which
shares of the Company’s Common Stock are initially offered for sale to the
public by the Company’s underwriters in the initial public offering of the
Company’s Common Stock pursuant to a registration statement filed with the SEC
under the Securities Act;  or

 

(e)                                  if
none of the foregoing is applicable, by the Committee in good faith.

 

“Family Member” includes any of the
following:

 

(a)                                  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 of the Participant, including
any such person with such relationship to the Participant by adoption;

 

(b)                                 any
person (other than a tenant or employee) sharing the Participant’s household;

 

(c)                                  a
trust in which the persons in (a) and (b) have more than fifty
percent of the beneficial interest;

 

(d)                                 a
foundation in which the persons in (a) and (b) or the Participant
control the management of assets; or

 

(e)                                  any
other entity in which the persons in (a) and (b) or the Participant
own more than fifty percent of the voting interest.

 

“Insider” means an officer or
director of the Company or any other person whose transactions in the Company’s
Common Stock are subject to Section 16 of the Exchange Act.

 

“Option” means an award of an option
to purchase Shares pursuant to Section 5.

 

“Outside Director” means a member of
the Board who is not an employee of the Company or any Parent, Subsidiary or
Affiliate of the Company.

 

“Parent” means any corporation (other
than the Company) in an unbroken chain of corporations ending with the Company
if each of such corporations other than the Company owns stock possessing 50%
or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.

 

“Participant” means a person who
receives an Award under this Plan.

 

“Performance Factors” means the
factors selected by the Committee from among the following measures to
determine whether the performance goals established by the Committee and
applicable to Awards have been satisfied:

 

(a)                                  Net
revenue and/or net revenue growth;

 

(b)                                 Earnings
before income taxes and amortization and/or earnings before income taxes and
amortization growth;

 

(c)                                  Operating
income and/or operating income growth;

 

12

 

(d)                                 Net
income and/or net income growth;

 

(e)                                  Earnings
per share and/or earnings per share growth;

 

(f)                                    Total
stockholder return and/or total stockholder return growth;

 

(g)                                 Return
on equity;

 

(h)                                 Operating
cash flow return on income;

 

(i)                                     Adjusted
operating cash flow return on income;

 

(j)                                     Economic
value added; and

 

(k)                                  Individual
confidential business objectives.

 

“Performance Period” means the period
of service determined by the Committee, not to exceed five (5) years,
during which years of service or performance is to be measured for Restricted
Stock Awards or Stock Bonuses.

 

“Plan” means this NIKU Corporation
2000 Equity Incentive Plan, as amended from time to time.

 

“Restricted Stock Award”
means an award of Shares pursuant to Section 6.

 

“SEC” means the Securities and
Exchange Commission.

 

“Securities Act” means the
Securities Act of 1933, as amended.

 

“Shares” means shares of the Company’s
Common Stock reserved for issuance under this Plan, as adjusted pursuant to
Sections 2 and 18, and any successor security.

 

“Stock Bonus” means an award of
Shares, or cash in lieu of Shares, pursuant to Section 7.

 

“Subsidiary” means any corporation
(other than the Company) in an unbroken chain of corporations beginning with
the Company if each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.

 

“Termination” or “Terminated” means, for purposes of
this Plan with respect to a Participant, that the Participant has for any
reason ceased to provide services as an employee, officer, director, consultant
or advisor to the Company or a Parent or Subsidiary of the Company.  An employee will not be deemed to have ceased
to provide services in the case of (i) sick leave, (ii) military
leave, or (iii) any other leave of absence approved by the Committee,
provided, that such leave is for a period of not more than 90 days, unless
reemployment upon the expiration of such leave is guaranteed by contract or
statute or unless provided otherwise pursuant to formal policy adopted from
time to time by the Company and issued and promulgated to employees in writing.  In the case of any employee on an approved
leave of absence, the Committee may make such provisions respecting suspension
of vesting of the Award while on leave from the employ of the Company or a
Subsidiary as it may deem appropriate, except that in no event may an Option be
exercised after the expiration of the term set forth in the Option
agreement.  The Committee will have sole
discretion to determine whether a Participant has ceased to provide services
and the effective date on which the Participant ceased to provide services (the
“Termination Date”).

 

“Unvested Shares” means “Unvested
Shares” as defined in the Award Agreement.

 

“Vested Shares” means “Vested Shares”
as defined in the Award Agreement.

 

13Exhibit 4.9

 

NIKU CORPORATION

1998 STOCK PLAN

 

1.                                      PURPOSES
OF THE PLAN.  The purposes of this
1998 Stock Plan are to attract and retain the best available personnel for
positions of substantial responsibility, to provide additional incentive to
Employees and Consultants of the Company and its Subsidiaries and to promote
the success of the Company’s business. Options granted under the Plan may be
Incentive Stock Options (as defined under Section 422 of the Code) 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, as amended, and the regulations promulgated thereunder. Stock
purchase rights may also be granted under the Plan.

 

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

 

(a)                                  ADMINISTRATOR”
means the Board or any of its Committees appointed pursuant to Section 4
of the Plan.

 

(b)                                 “BOARD”
means the Board of Directors of the Company.

 

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

 

(d)                                 “COMMITTEE”
means the Committee appointed by the Board of Directors in accordance with Section 4(a) and
(b) of the Plan.

 

(e)                                  “COMMON
STOCK” means the Common Stock of the Company.

 

(f)                                    “COMPANY”
means Niku Corporation, a Delaware corporation.

 

(g)                                 “CONSULTANT”
means any person, including an advisor, who is engaged by the Company or any
Parent or Subsidiary to render services and is compensated for such services,
and any director of the Company whether compensated for such services or not.

 

(h)                                 “CONTINUOUS
STATUS AS AN EMPLOYEE OR CONSULTANT” means the absence of any interruption or
termination of service as an Employee or Consultant. Continuous 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
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 Subsidiaries or their
respective successors. For purposes of this Plan, a change in status from an
Employee to a Consultant or from a Consultant to an Employee will not
constitute an interruption of Continuous Status as an Employee or Consultant.

 

 

(i)                                     “EMPLOYEE”
means any person, including officers and directors, employed by the Company or
any Parent or Subsidiary of the Company, with the status of employment
determined based upon such minimum number of hours or periods worked as shall
be determined by the Administrator in its discretion, subject to any
requirements of the Code. 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.

 

(j)                                     “EXCHANGE
ACT” means the Securities Exchange Act of 1934, as amended.

 

(k)                                  “FAIR
MARKET VALUE” means, as of any date, the fair market value of Common Stock
determined as follows:

 

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

 

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

 

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

 

(l)                                     “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 written Option Agreement.

 

(m)                               “NONSTATUTORY
STOCK OPTION” means an Option not intended to qualify as an Incentive Stock
Option, as designated in the applicable written Option Agreement.

 

(n)                                 “OPTION”
means a stock option granted pursuant to the Plan.

 

(o)                                 “OPTION
AGREEMENT” means a written agreement between an Optionee and the Company
reflecting the terms of an Option granted under the Plan and

 

 

includes any documents
attached to such Option Agreement, including, but not limited to, a notice of
stock option grant and a form of exercise notice.

 

(p)                                 “OPTIONED
STOCK” means the Common Stock subject to an Option or a Stock Purchase Right.

 

(q)                                 “OPTIONEE”
means an Employee or Consultant who receives an Option or a Stock Purchase
Right.

 

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

 

(s)                                  “PLAN”
means this 1998 Stock Plan.

 

(t)                                    “REPORTING
PERSON” means an officer, director, or greater than 10% stockholder 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.

 

(u)                                 “RESTRICTED
STOCK” means shares of Common Stock acquired pursuant to a grant of a Stock
Purchase Right under Section 10 below.

 

(v)                                 “RESTRICTED
STOCK PURCHASE AGREEMENT” means a written agreement between a holder of a Stock
Purchase Right and the Company reflecting the terms of a Stock Purchase Right
granted under the Plan and includes any documents attached to such agreement.

 

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

 

(x)                                   “SHARE”
means a share of the Common Stock, as adjusted in accordance with Section 12
of the Plan.

 

(y)                                 “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.

 

(z)                                   “STOCK
PURCHASE RIGHT” means the right to purchase Common Stock pursuant to Section 10
below.

 

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

 

3.                                      STOCK
SUBJECT TO THE PLAN.  Subject to the
provisions of Section 12 of the Plan, the maximum aggregate number of
Shares that may be optioned

 

 

and sold under the Plan
is 5,000,000 shares of Common Stock. The Shares may be authorized, but
unissued, or reacquired Common Stock. If an Option should expire or become
unexercisable for any reason without having been exercised in full, 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 Option or Stock Purchase Right in order to satisfy the exercise or purchase
price for such Option or Stock Purchase Right or any withholding taxes due with
respect to such exercise shall be treated as not issued and shall continue to
be available under the Plan. Shares repurchased by the Company pursuant to any
repurchase right which the Company may have shall not be available for future
grant under the Plan.

 

4.                                      ADMINISTRATION
OF THE PLAN.

 

(a)                                  INITIAL
PLAN PROCEDURE. Prior to the date, if any, upon which the Company becomes
subject to the Exchange Act, the Plan shall be administered by the Board or a
Committee appointed by the Board.

 

(b)                                 PLAN
PROCEDURE AFTER THE DATE, IF ANY, UPON WHICH THE COMPANY BECOMES SUBJECT TO THE
EXCHANGE ACT.

 

(i)                                     MULTIPLE
ADMINISTRATIVE BODIES. If permitted by Rule 16b-3, grants under the
Plan may be made by different bodies with respect to directors, non-director
officers and Employees or Consultants who are not Reporting Persons.

 

(ii)                                  ADMINISTRATION
WITH RESPECT TO REPORTING PERSONS. With respect to grants of Options or Stock
Purchase Rights to Employees who are Reporting Persons, such grants shall be
made by (A) the Board if the Board may make grants to Reporting Persons
under the Plan in compliance with Rule 16b-3, or (B) a Committee
designated by the Board to make grants to Reporting Persons under the Plan,
which Committee shall be constituted in such a manner as to permit grants under
the Plan to comply with Rule 16b-3. Once appointed, 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 the 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 the Committee and thereafter directly make
grants to Reporting Persons under the Plan, all to the extent permitted by Rule 16b-3.

 

(iii)                               ADMINISTRATION WITH
RESPECT TO CONSULTANTS AND OTHER EMPLOYEES. With respect to grants of Options
or Stock Purchase Rights to Employees or Consultants who are not Reporting
Persons, the Plan shall be administered by (A) the Board or (B) a
Committee designated by the  Board, which
Committee shall be constituted in such a manner as to satisfy the legal requirements
relating to the administration of Incentive Stock Option plans, if any, of

 

 

applicable corporate and
securities laws, of the Code and of any applicable Stock Exchange (the “Applicable
Laws”). Once appointed, 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 the 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 the Committee and thereafter directly administer the Plan, all to the extent
permitted by the Applicable Laws.

 

(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, and
subject to the approval of any relevant authorities, including the approval, if
required, of any Stock Exchange, 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(k)
of the Plan;

 

(ii)                                  to
select the Consultants and Employees to whom Options and Stock Purchase Rights
or any combination thereof may from time to time be granted hereunder;

 

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

 

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

 

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

 

(vi)                              to
determine the terms and conditions, not inconsistent with the terms of the
Plan, of any award granted hereunder;

 

(vii)                           to determine whether and
under what circumstances an Option may be settled in cash under Section 9(f) instead
of Common Stock;

 

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

 

(ix)                                to
determine the terms and restrictions applicable to Stock Purchase Rights and
the Restricted Stock purchased by exercising such Stock Purchase Rights; and

 

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

 

 

(xi)                                in
order to fulfill the purposes of the Plan and without amending the Plan, to
modify grants of Options or Stock Purchase Rights 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.

 

(d)                                 EFFECT
OF ADMINISTRATOR’S DECISION. All decisions, determinations and interpretations
of the Administrator shall be final and binding on all holders of Options or
Stock Purchase Rights.

 

5.                                      ELIGIBILITY.

 

(a)                                  RECIPIENTS
OF GRANTS. Nonstatutory Stock Options and Stock Purchase Rights may be granted
to Employees and Consultants. Incentive Stock Options may be granted only to
Employees. An Employee or Consultant who has been granted an Option or Stock
Purchase Right may, if he or she is otherwise eligible, be granted additional
Options or Stock Purchase Rights.

 

(b)                                 TYPE
OF OPTION. Each Option shall be designated in the Option Agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option.  However, notwithstanding such designations,
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(b), 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.

 

(c)                                  The
Plan shall not confer upon the holder of any Option or Stock Purchase Right any
right with respect to continuation of employment or consulting relationship
with the Company, nor shall it interfere in any way with such holder’s right or
the Company’s right to terminate his or her employment or consulting
relationship at any time, with or without cause.

 

6.                                      TERM
OF PLAN.  The Plan shall become
effective upon the earlier to occur of its adoption by the Board of Directors
or its approval by the stockholders of the Company as described in Section 19
of the Plan. It shall continue in effect for a term of ten 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, however, 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 an Optionee who, at
the time the Option is granted, owns stock representing more than 10% of the
total combined voting power of all classes of stock of the Company or any

 

 

Parent or Subsidiary, 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.

 

8.                                      OPTION
EXERCISE PRICE AND CONSIDERATION.

 

(a)                                  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 Board and set forth in the
applicable agreement, but shall be subject to the following:

 

(i)                                     In
the case of an Incentive Stock Option that is:

 

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

 

(B)                                granted
to any 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 that is:

 

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

 

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

 

(b)                                 The
consideration to be paid for the Shares to be issued upon exercise of an
Option, including the method of payment, shall be determined by the
Administrator (and, in the case of an Incentive Stock Option, shall be determined
at the time of grant) and may consist entirely of (1) cash, (2) check,
(3) promissory note (subject to the provisions of Section 153 of the Delaware
General Corporation Law), (4) other Shares that (x) in the case of Shares
acquired upon exercise of an Option, have been owned by the Optionee for more
than six months on the date of surrender or such other period as may be required
to avoid a charge to the Company’s earnings, and (y) have a Fair Market Value
on the date of surrender equal to the aggregate exercise price of the Shares as
to which such Option shall be exercised, (5) authorization for the Company
to retain from the total number of Shares as to which the Option is exercised
that number of Shares having a Fair Market Value on the date of exercise equal
to the exercise price for the total number of Shares as to which the Option is
exercised, (6) delivery of a properly executed exercise notice together
with such other documentation as the Administrator

 

 

and the broker, if applicable,
shall require to effect an exercise of the Option and delivery to the Company
of the sale or loan proceeds required to pay the exercise price and any
applicable income or employment taxes, (7) delivery of an irrevocable subscription
agreement for the Shares that irrevocably obligates the option holder to take
and pay for the Shares not more than twelve months after the date of delivery
of the subscription agreement, (8) any combination of the foregoing methods
of payment, or (9) such other consideration and method of payment for the
issuance of Shares to the extent permitted under the Applicable Laws. 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.

 

9.                                      EXERCISE
OF OPTION.

 

(a)                                  PROCEDURE
FOR EXERCISE; RIGHTS AS A STOCKHOLDER. Any Option granted hereunder shall be
exercisable at such times and under such conditions as determined by the
Administrator and reflected in the Option Agreement, which may include vesting
requirements and/or performance criteria with respect to the Company and/or the
Optionee; provided, however, that such Option shall become exercisable at the rate
of at least 20% per year over five years from the date the Option is granted.
In the event that any of the Shares issued upon exercise of an Option should be
subject to a right of repurchase in the Company’s favor, such repurchase right
shall lapse at the rate of at least 20% per year over five years from the date
the Option is granted. Notwithstanding the above, in the case of an Option
granted to an officer, director or Consultant of the Company or any Parent or
Subsidiary of the Company, the Option may become fully exercisable, and a
repurchase right, if any, in favor of the Company shall lapse, at any time or
during any period established by the Administrator.

 

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 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. Full payment may, as authorized by the Board, consist of
any consideration and method of payment allowable under Section 8(b) of
the Plan.

 

Until the issuance (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company) of the stock certificate evidencing such Shares, no right to vote or
receive dividends or any other rights as a stockholder shall exist with respect
to the Optioned Stock, not withstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such stock certificate promptly upon
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 12 of the Plan.

 

 

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.

 

(b)                                 TERMINATION
OF EMPLOYMENT OR CONSULTING RELATIONSHIP. Subject to Section 9(c) below,
in the event of termination of an Optionee’s Continuous Status as an Employee
or Consultant with the Company, such Optionee may, but only within three months
(or such other period of time not less than 30 days as is determined by the
Administrator, with such determination in the case of an Incentive Stock Option
being made at the time of grant of the Option and not exceeding three months)
after the date of such termination (but in no event later than the expiration
date of the term of such Option as set forth in the Option Agreement), exercise
his or her Option to the extent that the Optionee was entitled to exercise it
at the date of such termination. To the extent that the Optionee was not
entitled to exercise the Option at the date of such termination, or if the
Optionee does not exercise such Option to the extent so entitled within the
time specified herein, the Option shall terminate. No termination shall be
deemed to occur and this Section 9(b) 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.

 

(c)                                  DISABILITY
OF OPTIONEE.

 

(i)                                     Notwithstanding
Section 9(b) above, in the event of termination of an Optionee’s
Continuous Status as an Employee or Consultant as a result of his or her total
and permanent disability (within the meaning of Section 22(e)(3) of
the Code), such Optionee may, but only within twelve months from the date of
such termination (but in no event later than the expiration date of the term of
such Option as set forth in the Option Agreement), exercise the Option to the
extent otherwise entitled to exercise it at the date of such termination. To
the extent that the Optionee was not entitled to exercise the Option at the
date of termination, or if the Optionee does not exercise such Option to the
extent so entitled within the time specified herein, the Option shall
terminate.

 

(ii)                                  In
the event of termination of an Optionee’s Continuous Status as an Employee or
Consultant as a result of a disability which does not fall within the meaning
of total and permanent disability (as set forth in Section 22(e)(3) of
the Code), such Optionee may, but only within six months from the date of such
termination (but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise the Option to the extent
otherwise entitled to exercise it at the date of such termination. However, to
the extent that such Optionee fails to exercise an Option which is an Incentive
Stock Option (“ISO”) (within the meaning of Section 422 of the Code)
within three months of the date of such termination, the Option will not
qualify for ISO treatment under the Code. To the extent that the Optionee was
not entitled to exercise the Option at the date of termination, or if the
Optionee does not exercise such

 

 

Option to the extent so
entitled within six months from the date of termination, the Option shall
terminate.

 

(d)                                 DEATH
OF OPTIONEE. In the event of the death of an Optionee during the period of
Continuous Status as an Employee or Consultant since the date of grant of the
Option, or within 30 days following termination of the Optionee’s Continuous
Status as an Employee or Consultant, the Option may be exercised, at any time
within six months following the date of death (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), by such Optionee’s estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent of the
right to exercise that had accrued at the date of death or, if earlier, the
date of termination of the Optionee’s Continuous Status as an Employee or Consultant.
To the extent that the Optionee was not entitled to exercise the Option at the
date of death or termination, as the case may be, or if the Optionee does not
exercise such Option to the extent so entitled within the time specified
herein, the Option shall terminate.

 

(i)                                     RULE
16b-3. Options granted to Reporting Persons shall comply with Rule 16b-3
and shall contain such additional conditions or restrictions as may be required
thereunder to qualify for the maximum exemption for Plan transactions.

 

10.                               STOCK
PURCHASE RIGHTS.

 

(a)                                  RIGHTS
TO PURCHASE. Stock Purchase Rights may be issued either alone, in addition to,
or in tandem with other awards granted under the Plan and/or cash awards made
outside of the Plan. After the Administrator determines that it will offer
Stock Purchase Rights under the Plan, it shall advise the offeree in writing of
the terms, conditions and restrictions related to the offer, including the
number of Shares that such person shall be entitled to purchase, the price to
be paid (which price shall not be less than 85% of the Fair Market Value of the
Shares as of the date of the offer, or, in the case of a person owning stock
representing more than 10% of the total combined voting power of all classes of
stock of the Company or any Parent or Subsidiary, the price shall not be less
than 100% of the Fair Market Value of the Shares as of the date of the offer),
and the time within which such person must accept such offer, which shall in no
event exceed 30 days from the date upon which the Administrator made the
determination to grant the Stock Purchase Right. The offer shall be accepted by
execution of a Restricted Stock Purchase Agreement in the form determined by
the Administrator.

 

(b)                                 REPURCHASE
OPTION. Unless the Administrator determines otherwise, the Restricted Stock
Purchase Agreement shall grant the Company a repurchase option exercisable upon
the voluntary or involuntary termination of the purchaser’s employment with the
Company for any reason (including death or disability). The purchase price for
Shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be
the original purchase price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The
repurchase option

 

 

shall lapse at such rate
as the Administrator may determine; provided, however, that with respect to an
Optionee who is not an officer, director or Consultant of the Company or of any
Parent or Subsidiary of the Company, it shall lapse at a minimum rate of 20%
per year.

 

(c)                                  OTHER
PROVISIONS. The Restricted Stock Purchase Agreement shall contain such other
terms, provisions and conditions not inconsistent with the Plan as may be
determined by the Administrator in its sole discretion. In addition, the
provisions of Restricted Stock Purchase Agreements need not be the same with
respect to each purchaser.

 

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

 

11.                               STOCK
WITHHOLDING TO SATISFY WITHHOLDING TAX OBLIGATIONS. At the discretion of
the Administrator, Optionees may satisfy withholding obligations as provided in
this paragraph. When an Optionee incurs tax liability in connection with an
Option or Stock Purchase Right, which tax liability is subject to tax
withholding under applicable tax laws, and the Optionee is obligated to pay the
Company an amount required to be withheld under applicable tax laws, the
Optionee may satisfy the withholding tax obligation by one or some combination
of the following methods: (a) by cash or check payment, or (b) out of
the Optionee’s current compensation, (c) if permitted by the
Administrator, in its discretion, by surrendering to the Company Shares that (i) in
the case of Shares previously acquired from the Company, have been owned by the
Optionee for more than six months on the date of surrender, and (ii) have
a fair market value on the date of surrender equal to or less than the Optionee’s
marginal tax rate times the ordinary income recognized, or (d) by electing
to have the Company withhold from the Shares to be issued upon exercise of the
Option, or the Shares to be issued in connection with the Stock Purchase Right,
if any, that number of Shares having a fair market value equal to the amount
required to be withheld.  For this
purpose, the fair market value of the Shares to be withheld shall be determined
on the date that the amount of tax to be withheld is to be determined (the “Tax
Date”).

 

Any surrender by a Reporting Person of previously
owned Shares to satisfy tax withholding obligations arising upon exercise of
this Option must comply with the applicable provisions of Rule 16b-3.

 

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

 

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

 

 

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

 

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

 

In the event the election to have Shares withheld is
made by an Optionee 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 Optionee shall receive the full number of Shares with respect to which the
Option or Stock Purchase Right is exercised but such Optionee shall be
unconditionally obligated to tender back to the Company the proper number of
Shares on the Tax Date.

 

12.                               ADJUSTMENTS
UPON CHANGES IN CAPITALIZATION, MERGER OR CERTAIN OTHER TRANSACTIONS.

 

(a)                                  CHANGES
IN CAPITALIZATION. Subject to any required action by the stockholders of the
Company, the number of shares of Common Stock covered by each outstanding
Option or Stock Purchase Right, and the number of shares of Common Stock that
have been authorized for issuance under the Plan but as to which no Options or
Stock Purchase Rights have yet been granted or that have been returned to the
Plan upon cancellation or expiration of an Option or Stock Purchase Right, as
well as the price per share of Common Stock covered by each such outstanding
Option or Stock Purchase Right, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination,
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 Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option
or Stock Purchase Right.

 

(b)                                 DISSOLUTION
OR LIQUIDATION. In the event of the proposed dissolution or liquidation of the
Company, the Board shall notify the Optionee at least 15 days prior to such
proposed action. To the extent it has not been previously exercised, the Option
or Stock Purchase Right will terminate immediately prior to the consummation of
such proposed action.

 

(c)                                  MERGER
OR SALE OF ASSETS. In the event of a proposed sale of all or substantially all
of the Company’s assets or a merger of the Company with or into another
corporation where the successor corporation issues its securities to the
Company’s stockholders, each outstanding Option or Stock Purchase Right 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, unless the successor corporation
does not agree to assume the Option or Stock Purchase Right or to substitute an
equivalent option or right, in which case such Option or Stock Purchase Right
shall terminate upon the consummation of the merger or sale of assets. For
purposes of this Section 12(c), an Option or a Stock Purchase Right shall
be considered assumed, without limitation, if, at the time of issuance of the
stock or other consideration upon such merger or sale of assets, each holder of
an Option or a Stock Purchase Right would be entitled to receive upon exercise
of the Option or Stock Purchase Right 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 such transaction if the
holder had been, immediately prior to such transaction, the holder of the
number of Shares of Common Stock covered by the Option or the Stock Purchase
Right at such time (after giving effect to any adjustments in the number of
Shares covered by the Option or Stock Purchase Right as provided for in this Section 12).

 

(d)                                 CERTAIN
DISTRIBUTIONS. In the event of any distribution to the Company’s stockholders
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 or Stock
Purchase Right to reflect the effect of such distribution.

 

13.                               NON-TRANSFERABILITY
OF OPTIONS AND STOCK PURCHASE RIGHTS. Options and Stock Purchase Rights may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in
any manner other than by will or by the laws of descent or distribution and may
be exercised or purchased during the lifetime of the Optionee or Stock Purchase
Rights Holder only by the Optionee or Stock Purchase Rights Holder.

 

14.                               TIME
OF GRANTING OPTIONS AND STOCK  PURCHASE
RIGHTS. The date of grant of an Option or Stock Purchase Right shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option or Stock Purchase Right, or such other date as is
determined by the Board; provided, however, 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 or Stock Purchase Right 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 shall be made that would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Rule 16b-3 or with
Section 422 of the Code (or any other applicable law or regulation,
including the requirements of any Stock Exchange), the Company shall obtain
stockholder approval of any Plan amendment in such a manner and to such a
degree as required.

 

(b)                                 EFFECT
OF AMENDMENT OR TERMINATION. No amendment or termination of the Plan shall
adversely affect Options already granted, unless mutually agreed otherwise
between the Optionee and the Board, which agreement must be in writing and
signed by the Optionee and the Company.

 

16.                               CONDITIONS
UPON ISSUANCE OF SHARES. Shares shall not be issued pursuant to the
exercise of an Option or Stock Purchase Right unless the exercise of such
Option or Stock Purchase Right and the issuance and delivery of such Shares
pursuant thereto shall comply with all relevant provisions of law, including,
without limitation, the Securities Act of 1933, as amended, the Exchange Act,
the rules and regulations promulgated thereunder, and the requirements of
any Stock Exchange.

 

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

 

17.                               RESERVATION
OF SHARES. The Company, during the term of this Plan, will at all times
reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

 

18.                               AGREEMENTS.
Options and Stock Purchase Rights shall be evidenced by written Option
Agreements and Restricted Stock Purchase Agreements, respectively, in such
form(s) as the Administrator shall approve from time to time.

 

19.                               STOCKHOLDER
APPROVAL. Continuance of the Plan shall be subject to approval by the
stockholders of the Company within twelve months before or after the date the
Plan is adopted. Such stockholder approval shall be obtained in the degree and
manner required under applicable state and federal law and the rules of
any Stock Exchange upon which the Common Stock is listed. All Options and Stock
Purchase Rights issued under the Plan shall become void in the event such approval
is not obtained.

 

 

20.                               INFORMATION
AND DOCUMENTS TO OPTIONEES AND PURCHASERS. 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 or Stock Purchase Rights 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 or Stock Purchase Rights
under the Plan is limited to key employees whose duties in connection with the
Company assure their access to equivalent information. In addition, at the time
of issuance of any securities under the Plan, the Company shall provide to the
Optionee or the Purchaser a copy of the Plan and any agreement(s) pursuant to
which securities granted under the Plan are issued.

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