Document:

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EXHIBIT 10.42

                        AMENDMENT TO EMPLOYMENT AGREEMENT

         Reference is made to the Employment Agreement, dated on or about May
7th, 2004 ("Original Agreement"), between Markland Technologies Inc. (the
"Company") and Kenneth Ducey, Jr. (the "Employee")

         The Original Agreement is hereby amended as follows: In consideration
of the deletion of section 4(d), with regard to the anti-dilution provision, of
the Original Agreement, the Company has agreed to make the first grant of shares
based on the Company Equity as of May 12th, 2004, the date of the present
Agreement between parties.

         The Original Agreement otherwise remains in full force and effect

THE PARTIES ACKNOWLEDGE THAT EACH HAS READ THIS AMENDMENT TO THE ORIGINAL
AGREEMENT, UNDERSTANDS IT, AND AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS.
FURTHER, THE PARTIES AGREE THAT THE ORIGINAL AGREEMENT AND THIS AMENDMENT TO THE
ORIGINAL AGREEMENT AND ANY EXHIBITS THERETO OR HERETO ARE THE COMPLETE AND
EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES, WHICH SUPERSEDES ALL
PROPOSALS OR ALL PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS
BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF.

ACCEPTED AND AGREED:

MARKLAND TECHNOLOGY, INC.                                 KEN DUCEY

By:  Robert Tarini                                        By:  Ken Ducey
CEO
/s/ Robert Tarini                                         /s/ Kenneth Ducey Jr.

Date: 6/14/2004                                           Date: 6/14/2004<PAGE>

EXHIBIT 10.43

                        AMENDMENT TO CONSULTANT AGREEMENT

         Reference is made to the Consultant Agreement, dated on or about May
7th, 2004 ("Original Agreement"), between Markland Technologies Inc. (the
"Company") and Verdi Consulting.

         The Original Agreement is hereby amended as follows: In consideration
of the deletion of section 4(d), with regard to the anti-dilution provision, of
the Original Agreement, the Company has agreed to make the first grant of shares
based on the Company Equity as of May 12th, 2004, the date of the present
Agreement between parties.

         The Original Agreement otherwise remains in full force and effect

THE PARTIES ACKNOWLEDGE THAT EACH HAS READ THIS AMENDMENT TO THE ORIGINAL
AGREEMENT, UNDERSTANDS IT, AND AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS.
FURTHER, THE PARTIES AGREE THAT THE ORIGINAL AGREEMENT AND THIS AMENDMENT TO THE
ORIGINAL AGREEMENT AND ANY EXHIBITS THERETO OR HERETO ARE THE COMPLETE AND
EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES, WHICH SUPERSEDES ALL
PROPOSALS OR ALL PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS
BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF.

ACCEPTED AND AGREED:

MARKLAND TECHNOLOGY, INC.                                 VERDI CONSULTING

By:  Ken Ducey                                            By:  Chad Verdi
CFO

/s/ Kenneth Ducey Jr.                                     /s/ Chad Verdi

Date: 6/14/2004                                           Date: 6/14/2004Exhibit 10.17  

SENOMYX, INC.  

 1999 EQUITY INCENTIVE PLAN  

Adopted January 30, 1999

Approved By Stockholders February 26, 1999  

 First Amendment Approved by

the Board effective as of September 21, 1999 and

the Stockholders effective as of September 20, 1999  

 Second Amendment Approved by

the Board effective as of August 30, 2000 and

the Stockholders effective as of September 6, 2000  

 Third Amendment Approved by

the Board effective as of December 12, 2000 and

the Stockholders effective as of January 9, 2001  

 Fourth Amendment Approved by

the Board effective as of June 12, 2001 and

the Stockholders effective as of July 5, 2001  

 Fifth Amendment Approved by

the Board effective as of November 12, 2001 and

the Stockholders effective as of November 13, 2001  

 Termination Date: January 29, 2009  

1.     PURPOSES.  

        (a)   Eligible Stock Award Recipients. The persons eligible to receive Stock Awards are the Employees, Directors and
Consultants of the Company and its Affiliates. 

        (b)   Available Stock Awards. The purpose of the Plan is to provide a means by which eligible recipients of Stock Awards may be
given an opportunity to benefit from increases in value of the Common Stock through the granting of the following Stock Awards: (i) Incentive Stock Options, (ii) Nonstatutory Stock
Options, (iii) stock bonuses and (iv) rights to acquire restricted stock. 

        (c)   General Purpose. The Company, by means of the Plan, seeks to retain the services of the group of persons eligible to
receive Stock Awards, to secure and retain the services of new members of this group and to provide incentives for such persons to exert maximum efforts for the success of the Company and its
Affiliates. 

2.     DEFINITIONS.  

        (a)   "Affiliate" means any parent corporation or subsidiary corporation of the Company, whether now or
hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of the Code. 

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

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

        (d)   "Committee" means a committee of one or more members of the Board appointed by the Board in
accordance with subsection 3(c). 

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

        (f)    "Company" means Senomyx, Inc., a Delaware corporation. 

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        (g)   "Consultant" means any person, including an advisor, (i) engaged by the Company or an
Affiliate to render consulting or advisory services and who is compensated for such services or (ii) who is a member of the Board of Directors of an Affiliate. However, the term "Consultant"
shall not include either Directors who are not compensated by the Company for their services as Directors or Directors who are merely paid a director's fee by the Company for their services as
Directors. 

        (h)   "Continuous Service" means that the Participant's service with the Company or an Affiliate,
whether as an Employee, Director or Consultant, is not interrupted or terminated. The Participant's Continuous Service shall not be deemed to have terminated merely because of a change in the capacity
in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service, provided that
there is no interruption or termination of the Participant's Continuous Service. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or a Director will not
constitute an interruption of Continuous Service. The Board or the chief executive officer of the Company, in that party's sole discretion, may determine whether Continuous Service shall be considered
interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal leave. 

        (i)    "Covered Employee" means the chief executive officer and the four (4) other highest
compensated officers of the Company for whom total compensation is required to be reported to stockholders under the Exchange Act, as determined for purposes of Section 162(m) of the Code. 

        (j)    "Director" means a member of the Board of Directors of the Company. 

        (k)   "Disability" means (i) before the Listing Date, the inability of a person, in the opinion
of a qualified physician acceptable to the Company, to perform the major duties of that person's position with the Company or an Affiliate of the Company because of the sickness or injury of the
person and (ii) after the Listing Date, the permanent and total disability of a person within the meaning of Section 22(e)(3) of the Code. 

        (l)    "Employee" means any person employed by the Company or an Affiliate. Mere service as a Director
or payment of a director's fee by the Company or an Affiliate shall not be sufficient to constitute "employment" by the Company or an Affiliate. 

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

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

        (i)    If the Common Stock is listed on any established stock exchange or traded on the Nasdaq National Market or the Nasdaq
SmallCap Market, the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or market
(or the exchange or market with the greatest volume of trading in the Common Stock) on the last market trading day prior to the day of determination, as reported in The Wall
Street Journal or such other source as the Board deems reliable. 

        (ii)   In the absence of such markets for the Common Stock, the Fair Market Value shall be determined in good faith by the
Board. 

        (iii) Prior to the Listing Date, the value of the Common Stock shall be determined in a manner consistent with
Section 260.140.50 of Title 10 of the California Code of Regulations. 

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

        (p)   "Listing Date" means the first date upon which any security of the Company is listed (or approved
for listing) upon notice of issuance on any securities exchange or designated (or approved for 

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designation)
upon notice of issuance as a national market security on an interdealer quotation system if such securities exchange or interdealer quotation system has been certified in accordance with
the provisions of Section 25100(o) of the California Corporate Securities Law of 1968. 

        (q)   "Non-Employee Director" means a Director who either (i) is not a current
Employee or Officer of the Company or its parent or a subsidiary, does not receive compensation (directly or indirectly) from the Company or its parent or a subsidiary for services rendered as a
consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to
the Securities Act ("Regulation S-K")), does not possess an interest in any other transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K and is not engaged in a business relationship as to which disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a "non-employee director" for purposes of Rule 16b-3. 

        (r)   "Nonstatutory Stock Option" means an Option not intended to qualify as an Incentive Stock Option. 

        (s)   "Officer" means (i) before the Listing Date, any person designated by the Company as an
officer and (ii) on and after the Listing Date, a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder. 

        (t)    "Option" means an Incentive Stock Option or a Nonstatutory Stock Option granted pursuant to the
Plan. 

        (u)   "Option Agreement" means a written agreement between the Company and an Optionholder evidencing
the terms and conditions of an individual Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan. 

        (v)   "Optionholder" means a person to whom an Option is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Option. 

        (w)  "Outside Director" means a Director who either (i) is not a current employee of the
Company or an "affiliated corporation" (within the meaning of Treasury Regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company or an "affiliated
corporation" receiving compensation for prior services (other than benefits under a tax qualified pension plan), was not an officer of the Company or an "affiliated corporation" at any time and is not
currently receiving direct or indirect remuneration from the Company or an "affiliated corporation" for services in any capacity other than as a Director or (ii) is otherwise considered an
"outside director" for purposes of Section 162(m) of the Code. 

        (x)   "Participant" means a person to whom a Stock Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Stock Award. 

        (y)   "Plan" means this Senomyx, Inc. 1999 Equity Incentive Plan. 

        (z)   "Rule 16b-3" means Rule 16b-3 promulgated under the
Exchange Act or any successor to Rule 16b-3, as in effect from time to time. 

        (aa) "Securities Act" means the Securities Act of 1933, as amended. 

        (bb) "Stock Award" means any right granted under the Plan, including an Option, a stock bonus and a right to
acquire restricted stock. 

        (cc) "Stock Award Agreement" means a written agreement between the Company and a holder of a Stock Award
evidencing the terms and conditions of an individual Stock Award grant. Each Stock Award Agreement shall be subject to the terms and conditions of the Plan. 

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        (dd) "Ten Percent Stockholder" means a person who owns (or is deemed to own pursuant to Section 424(d) of
the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any of its Affiliates. 

3.     ADMINISTRATION.  

        (a)   Administration by Board. The Board shall administer the Plan unless and until the Board delegates administration to a
Committee, as provided in subsection 3(c). Any interpretation of the Plan by the Board and any decision by the Board under the Plan shall be final and binding on all persons. 

        (b)   Powers of Board. The Board shall have the power, subject to, and within the limitations of, the express provisions of the
Plan: 

        (i)    To determine from time to time which of the persons eligible under the Plan shall be granted Stock Awards; when and how
each Stock Award shall be granted; what type or combination of types of Stock Award shall be granted; the provisions of each Stock Award granted (which need not be identical), including the time or
times when a person shall be permitted to receive Common Stock pursuant to a Stock Award; and the number of shares of Common Stock with respect to which a Stock Award shall be granted to each such
person. 

        (ii)   To construe and interpret the Plan and Stock Awards granted under it, and to establish, amend and revoke rules and
regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement, in a manner and to the
extent it shall deem necessary or expedient to make the Plan fully effective. 

        (iii) To amend the Plan or a Stock Award as provided in Section 12. 

        (iv)  Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the
best interests of the Company which are not in conflict with the provisions of the Plan. 

        (c)   Delegation to Committee.  

         (i)    General. The Board may delegate administration of the Plan to a Committee or
Committees of one
(1) or more members of the Board, and the term "Committee" shall apply to any person or persons to whom such authority has been delegated. If administration is delegated to a Committee, the
Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board, including the power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise (and references in this Plan to the Board shall thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent
with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan. 

        (ii)   Committee Composition when Common Stock is Publicly Traded. At such time
as the Common Stock is publicly traded, in the discretion of the Board, a Committee may consist solely of two or more Outside Directors, in accordance with Section 162(m) of the Code, and/or
solely of two or more Non-Employee Directors, in accordance with Rule 16b-3. Within the scope of such authority, the Board or the Committee may (1) delegate to a
committee of one or more members of the Board who are not Outside Directors the authority to grant Stock Awards to eligible persons who are either (a) not then Covered Employees and are not
expected to be Covered Employees at the time of recognition of income resulting from such Stock Award or (b) not persons with respect to whom the Company wishes to comply with
Section 162(m) of the Code and/or) (2) delegate to a committee of one or more members of the Board who are not 

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Non-Employee
Directors the authority to grant Stock Awards to eligible persons who are not then subject to Section 16 of the Exchange Act. 

4.     SHARES SUBJECT TO THE PLAN.  

        (a)   Share Reserve. Subject to the provisions of Section 11 relating to adjustments upon changes in Common Stock, the
Common Stock that may be issued pursuant to Stock Awards shall not exceed in the aggregate Three Million Seven Hundred Ninety Thousand (3,790,000) shares of Common Stock. 

        (b)   Reversion of Shares to the Share Reserve. If any Stock Award shall for any reason expire or otherwise terminate, in whole
or in part, without having been exercised in full, the shares of Common Stock not acquired under such Stock Award shall revert to and again become available for issuance under the Plan. 

        (c)   Source of Shares. The shares of Common Stock subject to the Plan may be unissued shares or reacquired shares, bought on
the market or otherwise. 

5.     ELIGIBILITY.  

        (a)   Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to Employees. Stock Awards other than
Incentive Stock Options may be granted to Employees, Directors and Consultants. 

        (b)   Ten Percent Stockholders.  

         (i)    A Ten Percent Stockholder shall not be granted an Incentive Stock Option unless the exercise price of such Option is at least one
hundred ten
percent (110%) of the Fair Market Value of the Common Stock at the date of grant and the Option is not exercisable after the expiration of five (5) years from the date of grant. 

        (ii)   Prior to the Listing Date, a Ten Percent Stockholder shall not be granted a Nonstatutory Stock Option unless the
exercise price of such Option is at least (i) one hundred ten percent (110%) of the Fair Market Value of the Common Stock at the date of grant or (ii) such lower percentage of the Fair
Market Value of the Common Stock at the date of grant as is permitted by Section 260.140.41 of Title 10 of the California Code of Regulations at the time of the grant of the Option. 

        (iii) Prior to the Listing Date, a Ten Percent Stockholder shall not be granted a restricted stock award unless the purchase
price of the restricted stock is at least (i) one hundred percent (100%) of the Fair Market Value of the Common Stock at the date of grant or (ii) such lower percentage of the Fair
Market Value of the Common Stock at the date of grant as is permitted by Section 260.140.41 of Title 10 of the California Code of Regulations at the time of the grant of the Option. 

        (c)   Section 162(m) Limitation. Subject to the provisions of Section 11 relating to adjustments upon changes in
the shares of Common Stock, no Employee shall be eligible to be granted Options covering more than two million (2,000,000) shares of Common Stock during any calendar year. This subsection 5(c) shall
not apply prior to the Listing Date and, following the Listing Date, this subsection 5(c) shall not apply until (i) the earliest of: (1) the first material modification of the Plan
(including any increase in the number of shares of Common Stock reserved for issuance under the Plan in accordance with Section 4); (2) the issuance of all of the shares of Common Stock
reserved for issuance under the Plan; (3) the expiration of the Plan; or (4) the first meeting of stockholders at which Directors are to be elected that occurs after the close of the
third calendar year following the calendar year in which occurred the first registration of an equity security under Section 12 of the Exchange Act; or (ii) such other date required by
Section 162(m) of the Code and the rules and regulations promulgated thereunder. 

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6.     OPTION PROVISIONS.  

        Each Option shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. All Options shall be separately designated
Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased
on exercise of each type of Option. The provisions of separate Options need not be identical, but each Option shall include (through incorporation of provisions hereof by reference in the Option or
otherwise) the substance of each of the following provisions: 

        (a)   Term. Subject to the provisions of subsection 5(b) regarding Ten Percent Stockholders, no Option shall be exercisable
after the expiration of ten (10) years from the date it was granted. 

        (b)   Exercise Price of an Incentive Stock Option. Subject to the provisions of subsection 5(b) regarding Ten Percent
Stockholders, the exercise price of each Incentive Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the date the
Option is granted. Notwithstanding the foregoing, an Incentive Stock Option may be granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant
to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code. 

        (c)   Exercise Price of a Nonstatutory Stock Option. Subject to the provisions of subsection 5(b) regarding Ten Percent
Stockholders, the exercise price of each Nonstatutory Stock Option granted prior to the Listing Date shall be not less than eighty-five percent (85%) of the Fair Market Value of the Common
Stock subject to the Option on the date the Option is granted. The exercise price of each Nonstatutory Stock Option granted on or after the Listing Date shall be not less than eighty-five
percent (85%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, a Nonstatutory Stock Option may be granted with an
exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of
Section 424(a) of the Code. 

        (d)   Consideration. The purchase price of Common Stock acquired pursuant to an Option shall be paid, to the extent permitted
by applicable statutes and regulations, either (i) in cash at the time the Option is exercised or (ii) at the discretion of the Board at the time of the grant of the Option (or
subsequently in the case of a Nonstatutory Stock Option) (1) by delivery to the Company of other Common Stock, (2) according to a deferred payment or other similar arrangement with the
Optionholder or (3) in any other form of legal consideration that may be acceptable to the Board; provided, however, that at any time that the Company is incorporated in Delaware, payment of
the Common Stock's "par value," as defined in the Delaware General Corporation Law, shall not be made by deferred payment. 

        (e)   Transferability of an Incentive Stock Option. An Incentive Stock Option shall not be transferable except by will or by
the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by delivering
written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option. 

        (f)    Transferability of a Nonstatutory Stock Option. A Nonstatutory Stock Option granted prior to the Listing Date shall not
be transferable except by will or by the laws of descent and distribution and, to the extent provided in the Option Agreement, to such further extent as permitted by Section 260.140.41(d) of
Title 10 of the California Code of Regulations at the time of the grant of the Option, and shall be exercisable during the lifetime of the Optionholder only by the Optionholder. 

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A
Nonstatutory Stock Option granted on or after the Listing Date shall be transferable to the extent provided in the Option Agreement. If the Nonstatutory Stock Option does not provide for
transferability, then the Nonstatutory Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder
only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the
event of the death of the Optionholder, shall thereafter be entitled to exercise the Option. 

        (g)   Vesting Generally. The total number of shares of Common Stock subject to an Option may, but need not, vest and therefore
become exercisable in periodic installments that may, but need not, be equal. The Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be
based on performance or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options may vary. The provisions of this subsection 6(g) are subject to any Option
provisions governing the minimum number of shares of Common Stock as to which an Option may be exercised. 

        (h)   Minimum Vesting Prior to the Listing Date. Notwithstanding the foregoing subsection 6(g), to the extent that the
following restrictions on vesting are required by Section 260.140.41(f) of Title 10 of the California Code of Regulations at the time of the grant of the Option, then: 

        (i)    Options granted prior to the Listing Date to an Employee who is not an Officer, Director or Consultant shall provide for
vesting of the total number of shares of Common Stock at a rate of at least twenty percent (20%) per year over five (5) years from the date the Option was granted, subject to reasonable
conditions such as continued employment; and 

        (ii)   Options granted prior to the Listing Date to Officers, Directors or Consultants may be made fully exercisable, subject
to reasonable conditions such as continued employment, at any time or during any period established by the Company. 

        (i)    Termination of Continuous Service. In the event an Optionholder's Continuous Service terminates (other than upon the
Optionholder's death or Disability), the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination) but only
within such period of time ending on the earlier of (i) the date three (3) months following the termination of the Optionholder's Continuous Service (or such longer or shorter period
specified in the Option Agreement, which period shall not be less than thirty (30) days for Options granted prior to the Listing Date unless such termination is for cause), or (ii) the
expiration of the term of the Option as set forth in the Option Agreement. If, after termination, the Optionholder does not exercise his or her Option within the time specified in the Option
Agreement, the Option shall terminate. 

        (j)    Extension of Termination Date. An Optionholder's Option Agreement may also provide that if the exercise of the Option
following the termination of the Optionholder's Continuous Service (other than upon the Optionholder's death or Disability) would be prohibited at any time solely because the issuance of shares of
Common Stock would violate the registration requirements under the Securities Act, then the Option shall terminate on the earlier of (i) the expiration of the term of the Option set forth in
subsection 6(a) or (ii) the expiration of a period of three (3) months after the termination of the Optionholder's Continuous Service during which the exercise of the Option would not be
in violation of such registration requirements. 

        (k)   Disability of Optionholder. In the event that an Optionholder's Continuous Service terminates as a result of the
Optionholder's Disability, the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination), but only within
such period of time ending on the earlier of (i) the date twelve (12) months following such termination (or such longer or shorter period specified in the Option Agreement, which period
shall 

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not
be less than six (6) months for Options granted prior to the Listing Date) or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after
termination, the Optionholder does not exercise his or her Option within the time specified herein, the Option shall terminate. 

        (l)    Death of Optionholder. In the event (i) an Optionholder's Continuous Service terminates as a result of the
Optionholder's death or (ii) the Optionholder dies within the period (if any) specified in the Option Agreement after the termination of the Optionholder's Continuous Service for a reason other
than death, then the Option may be exercised (to the extent the Optionholder was entitled to exercise such Option as of the date of death) by the Optionholder's estate, by a person who acquired the
right to exercise the Option by bequest or inheritance or by a person designated to exercise the option upon the Optionholder's death pursuant to subsection 6(e) or 6(f), but only within the period
ending on the earlier of (1) the date eighteen (18) months following the date of death (or such longer or shorter period specified in the Option Agreement, which period shall not be less
than six (6) months for Options granted prior to the Listing Date) or (2) the expiration of the term of such Option as set forth in the Option Agreement. If, after death, the Option is
not exercised within the time specified herein, the Option shall terminate. 

        (m)  Early Exercise. The Option may, but need not, include a provision whereby the Optionholder may elect at any time before
the Optionholder's Continuous Service terminates to exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior to the full vesting of the Option. Subject to
the "Repurchase Limitation" in subsection 10(h), any unvested shares of Common Stock so purchased may be subject to a repurchase option in favor of the Company or to any other restriction the Board
determines to be appropriate. 

        (n)   Right of Repurchase. Subject to the "Repurchase Limitation" in subsection 10(h), the Option may, but need not, include a
provision whereby the Company may elect, prior to the Listing Date, to repurchase all or any part of the vested shares of Common Stock acquired by the Optionholder pursuant to the exercise of the
Option. 

        (o)   Right of First Refusal. The Option may, but need not, include a provision whereby the Company may elect, prior to the
Listing Date, to exercise a right of first refusal following receipt of notice from the Optionholder of the intent to transfer all or any part of the shares of Common Stock received upon the exercise
of the Option. Except as expressly provided in this subsection 6(o), such right of first refusal shall otherwise comply with any applicable provisions of the Bylaws of the Company. 

        (p)   Re-Load Options. Without in any way limiting the authority of the Board to make or not to make grants of
Options hereunder, the Board shall have the authority (but not an obligation) to include as part of any Option Agreement a provision entitling the Optionholder to a further Option (a
"Re-Load Option") in the event the Optionholder exercises the Option evidenced by the Option Agreement, in whole or in part, by surrendering other shares of Common Stock in accordance with
this Plan and the terms and conditions of the Option Agreement. Any such Re-Load Option shall (i) provide for a number of shares of Common Stock equal to the number of shares of
Common Stock surrendered as part or all of the exercise price of such Option; (ii) have an expiration date which is the same as the expiration date of the Option the exercise of which gave rise
to such Re-Load Option; and (iii) have an exercise price which is equal to one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Re-Load
Option on the date of exercise of the original Option. Notwithstanding the foregoing, a Re-Load Option shall be subject to the same exercise price and term provisions heretofore described
for Options under the Plan. 

        Any
such Re-Load Option may be an Incentive Stock Option or a Nonstatutory Stock Option, as the Board may designate at the time of the grant of the original Option; provided,
however, that the designation of any Re-Load Option as an Incentive Stock Option shall be subject to the one hundred thousand dollar ($100,000) annual limitation on the exercisability of
Incentive Stock Options described 

8

 

in
subsection 10(d) and in Section 422(d) of the Code. There shall be no Re-Load Options on a Re-Load Option. Any such Re-Load Option shall be subject to the
availability of sufficient shares of Common Stock under subsection 4(a) and the "Section 162(m) Limitation" on the grants of Options under subsection 5(c) and shall be subject to such other
terms and conditions as the Board may determine which are not inconsistent with the express provisions of the Plan regarding the terms of Options. 

7.     PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.  

        (a)   Stock Bonus Awards. Each stock bonus agreement shall be in such form and shall contain such terms and conditions as the
Board shall deem appropriate. The terms and conditions of stock bonus agreements may change from time to time, and the terms and conditions of separate stock bonus agreements need not be identical,
but each stock bonus agreement shall include (through incorporation of provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions: 

        (i)    Consideration. A stock bonus may be awarded in consideration for past
services actually rendered to the Company or an Affiliate for its benefit. 

        (ii)   Vesting. Subject to the "Repurchase Limitation" in subsection 10(h),
shares of Common Stock awarded under the stock bonus agreement may, but need not, be subject to a share repurchase option in favor of the Company in accordance with a vesting schedule to be determined
by the Board. 

        (iii) Termination of Participant's Continuous Service. Subject to the
"Repurchase Limitation" in subsection 10(h), in the event a Participant's Continuous Service terminates, the Company may reacquire any or all of the shares of Common Stock held by the Participant
which have not vested as of the date of termination under the terms of the stock bonus agreement. 

        (iv)  Transferability. For a stock bonus award made before the Listing Date,
rights to acquire shares of Common Stock under the stock bonus agreement shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the
lifetime of the Participant only by the Participant. For a stock bonus award made on or after the Listing Date, rights to acquire shares of Common Stock under the stock bonus agreement shall be
transferable by the Participant only upon such terms and conditions as are set forth in the stock bonus agreement, as the Board shall determine in its discretion, so long as Common Stock awarded under
the stock bonus agreement remains subject to the terms of the stock bonus agreement. 

        (b)   Restricted Stock Awards. Each restricted stock purchase agreement shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The terms and conditions of the restricted stock purchase agreements may change from time to time, and the terms and conditions of separate restricted
stock purchase agreements need not be identical, but each restricted stock purchase agreement shall include (through incorporation of provisions hereof by reference in the agreement or otherwise) the
substance of each of the following provisions: 

        (i)    Purchase Price. Subject to the provisions of subsection 5(b) regarding
Ten Percent Stockholders, the purchase price under each restricted stock purchase agreement shall be such amount as the Board shall determine and designate in such restricted stock purchase agreement.
For restricted stock awards made prior to the Listing Date, the purchase price shall not be less than eighty-five percent (85%) of the Common Stock's Fair Market Value on the date such
award is made or at the time the purchase is consummated. For restricted stock awards made on or after the Listing Date, the purchase price shall not be less than eighty-five percent (85%)
of the Common Stock's Fair Market Value on the date such award is made or at the time the purchase is consummated. 

9

 

        (ii)   Consideration. The purchase price of Common Stock acquired pursuant to
the restricted stock purchase agreement shall be paid either: (i) in cash at the time of purchase; (ii) at the discretion of the Board, according to a deferred payment or other similar
arrangement with the Participant; or (iii) in any other form of legal consideration that may be acceptable to the Board in its discretion; provided, however, that at any time that the Company
is incorporated in Delaware, then payment of the Common Stock's "par value," as defined in the Delaware General Corporation Law, shall not be made by deferred payment. 

        (iii) Vesting. Subject to the "Repurchase Limitation" in subsection 10(h),
shares of Common Stock acquired under the restricted stock purchase agreement may, but need not, be subject to a share repurchase option in favor of the Company in accordance with a vesting schedule
to be determined by the Board. 

        (iv)  Termination of Participant's Continuous Service. Subject to the
"Repurchase Limitation" in subsection 10(h), in the event a Participant's Continuous Service terminates, the Company may repurchase or otherwise reacquire any or all of the shares of Common Stock held
by the Participant which have not vested as of the date of termination under the terms of the restricted stock purchase agreement. 

        (v)   Transferability. For a restricted stock award made before the Listing
Date, rights to acquire shares of Common Stock under the restricted stock purchase agreement shall not be transferable except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Participant only by the Participant. For a restricted stock award made on or after the Listing Date, rights to acquire shares of Common Stock under the
restricted stock purchase agreement shall be transferable by the Participant only upon such terms and conditions as are set forth in the restricted stock purchase agreement, as the Board shall
determine in its discretion, so long as Common Stock awarded under the restricted stock purchase agreement remains subject to the terms of the restricted stock purchase agreement. 

8.     COVENANTS OF THE COMPANY.  

        (a)   Availability of Shares. During the terms of the Stock Awards, the Company shall keep available at all times the number of
shares of Common Stock required to satisfy such Stock Awards. 

        (b)   Securities Law Compliance. The Company shall seek to obtain from each regulatory commission or agency having jurisdiction
over the Plan such authority as may be required to grant Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards; provided, however, that this undertaking shall not
require the Company to register under the Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts, the Company is
unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company
shall be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and until such authority is obtained. 

9.     USE OF PROCEEDS FROM STOCK.  

        Proceeds from the sale of Common Stock pursuant to Stock Awards shall constitute general funds of the Company. 

10.   MISCELLANEOUS.  

        (a)   Acceleration of Exercisability and Vesting. The Board shall have the power to accelerate the time at which a Stock Award
may first be exercised or the time during which a Stock Award or any 

10

 

part
thereof will vest in accordance with the Plan, notwithstanding the provisions in the Stock Award stating the time at which it may first be exercised or the time during which it will vest. 

        (b)   Stockholder Rights. No Participant shall be deemed to be the holder of, or to have any of the rights of a holder with
respect to, any shares of Common Stock subject to such Stock Award unless and until such Participant has satisfied all requirements for exercise of the Stock Award pursuant to its terms. 

        (c)   No Employment or other Service Rights. Nothing in the Plan or any instrument executed or Stock Award granted pursuant
thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Stock Award was granted or shall affect the right of the
Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such
Consultant's agreement with the Company or an Affiliate or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate
law of the state in which the Company or the Affiliate is incorporated, as the case may be. 

        (d)   Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of
grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and its Affiliates)
exceeds one hundred thousand dollars ($100,000), the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as Nonstatutory Stock
Options. 

        (e)   Investment Assurances. The Company may require a Participant, as a condition of exercising or acquiring Common Stock
under any Stock Award, (i) to give written assurances satisfactory to the Company as to the Participant's knowledge and experience in financial and business matters and/or to employ a purchaser
representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or together with the
purchaser representative, the merits and risks of exercising the Stock Award; and (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring Common
Stock subject to the Stock Award for the Participant's own account and not with any present intention of selling or otherwise distributing the Common Stock. The foregoing requirements, and any
assurances given pursuant to such requirements, shall be inoperative if (1) the issuance of the shares of Common Stock upon the exercise or acquisition of Common Stock under the Stock Award has
been registered under a then currently effective registration statement under the Securities Act or (2) as to any particular requirement, a determination is made by counsel for the Company that
such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued
under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common Stock. 

        (f)    Withholding Obligations. To the extent provided by the terms of a Stock Award Agreement, the Participant may satisfy any
federal, state or local tax withholding obligation relating to the exercise or acquisition of Common Stock under a Stock Award by any of the following means (in addition to the Company's right to
withhold from any compensation paid to the Participant by the Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the Company to withhold shares of
Common Stock from the shares of Common Stock otherwise issuable to the participant as a result of the exercise or acquisition of Common Stock under the Stock Award; or (iii) delivering to the
Company owned and unencumbered shares of Common Stock. 

        (g)   Information Obligation. Prior to the Listing Date, to the extent required by Section 260.140.46 of Title 10 of the
California Code of Regulations, the Company shall deliver financial statements to 

11

 

Participants
at least annually. This subsection 10(g) shall not apply to key Employees whose duties in connection with the Company assure them access to equivalent information. 

        (h)   Repurchase Limitation. The terms of any repurchase option shall be specified in the Stock Award and may be either at Fair
Market Value at the time of repurchase or at not less than the original purchase price. To the extent required by Section 260.140.41 and Section 260.140.42 of Title 10 of the California
Code of Regulations at the time a Stock Award is made, any repurchase option contained in a Stock Award granted prior to the Listing Date to a person who is not an Officer, Director or Consultant
shall be upon the terms described below: 

        (i)    Fair Market Value. If the repurchase option gives the Company the right to repurchase the shares of Common Stock upon
termination of employment at not less than the Fair Market Value of the shares of Common Stock to be purchased on the date of termination of Continuous Service, then (i) the right to repurchase
shall be exercised for cash or cancellation of purchase money indebtedness for the shares of Common Stock within ninety (90) days of termination of Continuous Service (or in the case of shares
of Common Stock issued upon exercise of Stock Awards after such date of termination, within ninety (90) days after the date of the exercise) or such longer period as may be agreed to by the
Company and the Participant (for example, for purposes of satisfying the requirements of Section 1202(c)(3) of the Code regarding "qualified small business stock") and (ii) the right
terminates when the shares of Common Stock become publicly traded. 

        (ii)   Original Purchase Price. If the repurchase option gives the Company the
right to repurchase the shares of Common Stock upon termination of Continuous Service at the original purchase price, then (i) the right to repurchase at the original purchase price shall lapse
at the rate of at least twenty percent (20%) of the shares of Common Stock per year over five (5) years from the date the Stock Award is granted (without respect to the date the Stock Award was
exercised or became exercisable) and (ii) the right to repurchase shall be exercised for cash or cancellation of purchase money indebtedness for the shares of Common Stock within ninety
(90) days of termination of Continuous Service (or in the case of shares of Common Stock issued upon exercise of Options after such date of termination, within ninety (90) days after the
date of the exercise) or such longer period as may be agreed to by the Company and the Participant (for example, for purposes of satisfying the requirements of Section 1202(c)(3) of the Code
regarding "qualified small business stock"). 

11.   ADJUSTMENTS UPON CHANGES IN STOCK.  

        (a)   Capitalization Adjustments. If any change is made in the Common Stock subject to the Plan, or subject to any Stock Award,
without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan will be
appropriately adjusted in the class(es) and maximum number of securities subject to the Plan pursuant to subsection 4(a) and the maximum number of securities subject to award to any person pursuant to
subsection 5(c), and the outstanding Stock Awards will be appropriately adjusted in the class(es) and number of securities and price per share of Common Stock subject to such outstanding Stock Awards.
The Board shall make such adjustments, and its determination shall be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a transaction
"without receipt of consideration" by the Company.) 

        (b)   Dissolution or Liquidation. In the event of a dissolution or liquidation of the Company, then all outstanding Stock
Awards shall terminate immediately prior to such event. 

12

 

        (c)   Asset Sale, Merger, Consolidation or Reverse Merger. In the event of (i) a sale, lease or other disposition of all
or substantially all of the assets of the Company, (ii) a merger or consolidation in which the Company is not the surviving corporation or (iii) a reverse merger in which the Company is
the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash
or otherwise (individually, a "Corporate Transaction"), then any surviving corporation or acquiring corporation shall assume any Stock Awards outstanding under the Plan or shall substitute similar
stock awards (including an award to acquire the same consideration paid to the stockholders in the Corporate Transaction) for those outstanding under the Plan. In the event any surviving corporation
or acquiring corporation refuses to assume such Stock Awards or to substitute similar stock awards for those outstanding under the Plan, then with respect to Stock Awards held by Participants whose
Continuous Service has not terminated, the vesting of such Stock Awards (and, if applicable, the time during which such Stock Awards may be exercised) shall be accelerated in full, and the Stock
Awards shall terminate if not exercised (if applicable) at or prior to the Corporate Transaction. With respect to any other Stock Awards outstanding under the Plan, such Stock Awards shall terminate
if not exercised (if applicable) prior to the Corporate Transaction. 

        (d)   Change in Control. If (i) a Change in Control occurs and (ii) at any time or from time to time during the
period beginning one (1) month prior to the date of such Change in Control and ending eighteen (18) months after the date of such Change in Control the Continuous Service of a
Participant terminates due to an involuntary termination (not including death or Disability) without Cause (defined below) or due to a Constructive Termination (defined below), then with respect to
Stock Awards held by such Participant, the vesting of Stock Awards held by such Participant (and, if applicable, the time during which such Stock Awards may be exercised) shall be accelerated in full;  provided, however,
 that to the extent such potential acceleration would cause a contemplated Change in Control transaction that would otherwise be
eligible to be accounted for as a "pooling-of-interests" transaction to become ineligible for such accounting treatment under generally accepted accounting principles as
determined in good faith by the Accountants prior to such Change of Control, such acceleration and/or exercisability shall not occur. 

        For
purposes of this Section 11, the following terms shall have the meanings set forth below: 

        "Accountants"
means the Company's independent accounting firm then engaged by the Company. 

        "Cause"
means the occurrence of any of the following (and only the following): (i) conviction of any felony involving fraud or act of dishonesty against the Company or its
Affiliates; (ii) conduct which, based upon good faith and reasonable factual investigation and determination of the Company (or, if the terminated Participant is an Officer, of the Board),
demonstrates gross unfitness to serve; or (iii) intentional, material violation by the terminated Participant of any statutory or fiduciary duty of the terminated Participant to the Company or
its Affiliates. In addition, if the terminated Participant is not an Officer, Cause also shall include poor performance of the terminated Participant's services for the Company or its Affiliates as
determined by the Company following (A) written notice to the Participant describing the nature of such deficiency and (b) the Participant's failure to cure such deficiency within thirty
(30) days following receipt of the such written notice. 

        "Change
in Control" means: (i) a dissolution or liquidation of the Company; (ii) a sale of all or substantially all of the assets of the Company; (iii) a merger or
consolidation in which the Company is not the surviving corporation and in which beneficial ownership of securities of the Company representing at least fifty percent (50%) of the combined voting
power entitled to vote in the election of Directors has changed; (iv) a reverse merger in which the Company is the surviving corporation but the shares of Common Stock outstanding immediately
preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise, and in which beneficial ownership of securities of the Company
representing at least fifty percent (50%) of the 

13

 

combined
voting power entitled to vote in the election of Directors has changed; (v) an acquisition by any person, entity or group within the meaning of Section 13(d) or 14(d) of the
Exchange Act, or any comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored or maintained by the Company or subsidiary of the Company or other entity
controlled by the Company) of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable successor rule) of securities of the
Company representing at least fifty percent (50%) of the combined voting power entitled to vote in the election of Directors; or (vi) in the event that the individuals who, as of the date of
adoption of the Plan, are members of the Company's Board (the "Incumbent Board"), cease for any reason to constitute at least fifty percent (50%) of the Board. (If the election, or nomination for
election by the Company's stockholders, of any new Director is approved by a vote of at least fifty percent (50%) of the Incumbent Board, such new Director shall be considered to be a member of the
Incumbent Board in the future.) 

        "Constructive
Termination" means the occurrence of any of the following events or conditions: (i) (A) a change in the Participant's status, title, position or responsibilities
(including reporting responsibilities) which represents an adverse change from the Participant's status, title, position or responsibilities as in effect at any time within ninety (90) days
preceding the date of a Change in Control or at any time thereafter; (B) the assignment to the Participant of any duties or responsibilities which are inconsistent with the Participant's
status, title, position or responsibilities as in effect at any time within ninety (90) days preceding the date of a Change in Control or at any time thereafter; or (C) any removal of
the Participant from or failure to reappoint or reelect the Participant to any of such offices or positions (unless such removal or failure to reappoint or reelect is (1) in connection with the
termination of the Participant's Continuous Service for Cause, (2) as a result of the Participant's Disability or death, or (3) by the Participant other than as a result of Constructive
Termination); (ii) a reduction in the Participant's annual base compensation; or (iii) the Company's requiring the Participant to relocate to any place outside a fifty (50) mile
radius of the Participant's current work site, excluding in any event reasonably required travel on the business of the Company or its Affiliates. 

        (e)   Parachute Payments. In the event that any acceleration of vesting and/or exercisability of Stock Awards provided for in
subsections 11(d) or 11(e) and benefits otherwise payable to a Participant (i) constitute "parachute payments" within the meaning of Section 280G of the Code, or any comparable successor
provisions, and (ii) but for this subsection would be subject to the excise tax imposed by Section 4999 of the Code, or any comparable successor provisions (the "Excise Tax"), then such
Participant's benefits hereunder shall be either 

        (i)    provided to such Participant in full, or 

        (ii)   provided to such Participant as to such lesser extent which would result in no portion of such benefits being subject to
the Excise Tax, 

whichever
of the foregoing amounts, when taking into account applicable federal, state, local and foreign income and employment taxes, the Excise Tax, and any other applicable taxes, results in the
receipt by such Participant, on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under the Excise Tax.
Unless the Company and such Participant otherwise agree in writing, any determination required under this subsection shall be made in writing in good faith by the Accountants. In the event of a
reduction of benefits hereunder, the Participant shall be given the choice of which benefits to reduce. For purposes of making the calculations required by this subsection, the Accountants may make
reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of the Code, and other applicable legal
authority. The Company and the Participant shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this
subsection. The Company shall bear all 

14

 

costs
the Accountants may reasonably incur in connection with any calculations contemplated by this subsection. 

        If,
notwithstanding any reduction described in this subsection, the IRS determines that the Participant is liable for the Excise Tax as a result of the receipt of the payment of benefits
as described above, then the Participant shall be obligated to pay back to the Company, within thirty (30) days after a final IRS determination or in the event that the Participant challenges
the final IRS determination, a final judicial determination, a portion of the payment equal to the "Repayment Amount." The Repayment Amount with respect to the payment of benefits shall be the
smallest such amount, if any, as shall be required to be paid to the Company so that the Participant's net after-tax proceeds with respect to any payment of benefits (after taking into
account the payment of the Excise Tax and all other applicable taxes imposed on such payment) shall be maximized. The Repayment Amount with respect to the payment of benefits shall be zero if a
Repayment Amount of more than zero would not result in the Participant's net after-tax proceeds with respect to the payment of such benefits being maximized. If the Excise Tax is not
eliminated pursuant to this paragraph, the Participant shall pay the Excise Tax. 

        Notwithstanding
any other provision of this subsection 11(f), if (i) there is a reduction in the payment of benefits as described in this subsection, (ii) the IRS later
determines that the Participant is liable for the Excise Tax, the payment of which would result in the maximization of the Participant's net after-tax proceeds (calculated as if the
Participant's benefits had not previously been reduced), and (iii) the Participant pays the Excise Tax, then the Company shall pay to the Participant those benefits which were reduced pursuant
to this subsection contemporaneously or as soon as
administratively possible after the Participant pays the Excise Tax so that the Participant's net after-tax proceeds with respect to the payment of benefits is maximized. 

        If
the Participant either (i) brings any action to enforce rights pursuant to this subsection 11(e), or (ii) defend any legal challenge to his or her rights hereunder, the
Participant shall be entitled to recover attorneys' fees and costs incurred in connection with such action, regardless of the outcome of such action; provided, however, that in the event such action
is commenced by the Participant, the court finds the claim was brought in good faith. 

12.   AMENDMENT OF THE PLAN AND STOCK AWARDS.  

        (a)   Amendment of Plan. The Board at any time, and from time to time, may amend the Plan. However, except as provided in
Section 11 relating to adjustments upon changes in Common Stock, no amendment shall be effective unless approved by the stockholders of the Company to the extent stockholder approval is
necessary to satisfy the requirements of Section 422 of the Code, Rule 16b-3 or any Nasdaq or securities exchange listing requirements. 

        (b)   Stockholder Approval. The Board may, in its sole discretion, submit any other amendment to the Plan for stockholder
approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of Section 162(m) of the Code and the regulations thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of compensation paid to certain executive officers. 

        (c)   Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan in any respect the Board deems
necessary or advisable to provide eligible Employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to
Incentive Stock Options and/or to bring the Plan and/or Incentive Stock Options granted under it into compliance therewith. 

15

 

        (d)   No Impairment of Rights. Rights under any Stock Award granted before amendment of the Plan shall not be impaired by any
amendment of the Plan unless (i) the Company requests the consent of the Participant and (ii) the Participant consents in writing. 

        (e)   Amendment of Stock Awards. The Board at any time, and from time to time, may amend the terms of any one or more Stock
Awards; provided, however, that the rights under any Stock Award shall not be impaired by any such amendment unless (i) the Company requests the consent of the Participant and (ii) the
Participant consents in writing. 

13.   TERMINATION OR SUSPENSION OF THE PLAN.  

        (a)   Plan Term. The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate on
the day before the tenth (10th) anniversary of the date the Plan is adopted by the Board or approved by the stockholders of the Company, whichever is earlier. No Stock Awards may be granted under the
Plan while the Plan is suspended or after it is terminated. 

        (b)   No Impairment of Rights. Suspension or termination of the Plan shall not impair rights and obligations under any Stock
Award granted while the Plan is in effect except with the written consent of the Participant. 

14.   EFFECTIVE DATE OF PLAN.  

        The Plan shall become effective as determined by the Board, but no Stock Award shall be exercised (or, in the case of a stock bonus, shall be granted) unless and
until the Plan has been approved by the stockholders of the Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by the Board. 

15.   CHOICE OF LAW.  

        The law of the State of California shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to such
state's conflict of laws rules. 

16

   SENOMYX, INC.

1999 EQUITY INCENTIVE PLAN  

 STOCK OPTION AGREEMENT
  (INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)  

        Pursuant
to your Stock Option Grant Notice ("Grant Notice") and this Stock Option Agreement, Senomyx, Inc. (the "Company") has granted you an option under its 1999 Equity
Incentive Plan (the "Plan") to purchase the number of shares of the Company's Common Stock indicated in your Grant Notice at the exercise price indicated in your Grant Notice. Defined terms not
explicitly defined in this Stock Option Agreement but defined in the Plan shall have the same definitions as in the Plan. 

        The
details of your option are as follows: 

        1.     VESTING. Subject to the limitations contained herein, your option will vest as provided in your Grant Notice, provided
that vesting will cease upon the termination of your Continuous Service. 

        2.     NUMBER OF SHARES AND EXERCISE PRICE. The number of shares of Common Stock subject to your option and your exercise price
per share referenced in your Grant Notice may be adjusted from time to time for Capitalization Adjustments, as provided in the Plan. 

        3.     EXERCISE PRIOR TO VESTING ("EARLY EXERCISE"). If permitted in your Grant Notice (i.e., the "Exercise Schedule" indicates
that "Early Exercise" of your option is permitted) and subject to the provisions of your option, you may elect at any time that is both (i) during the period of your Continuous Service and
(ii) during the term of your option, to exercise all or part of your option, including the nonvested portion of your option; provided, however, that: 

        (a)   a partial exercise of your option shall be deemed to cover first vested shares of Common Stock and then the earliest
vesting installment of unvested shares of Common Stock; 

        (b)   any shares of Common Stock so purchased from installments that have not vested as of the date of exercise shall be
subject to the purchase option in favor of the Company as described in the Company's form of Early Exercise Stock Purchase Agreement; 

        (c)   you shall enter into the Company's form of Early Exercise Stock Purchase Agreement with a vesting schedule that will
result in the same vesting as if no early exercise had occurred; and 

        (d)   if your option is an incentive stock option, then, as provided in the Plan, to the extent that the aggregate Fair Market
Value (determined at the time of grant) of the shares of Common Stock with respect to which your option plus all other incentive stock options you hold are exercisable for the first time by you during
any calendar year (under all plans of the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), your option(s) or portions thereof that exceed such limit (according to the order
in which they were granted) shall be treated as nonstatutory stock options. 

        4.     METHOD OF PAYMENT. Payment of the exercise price is due in full upon exercise of all or any part of your option. You may
elect to make payment of the exercise price in cash or by check or in any other manner permitted by your Grant Notice, which may include one or more of
the following: 

        (a)   In the Company's sole discretion at the time your option is exercised and provided that at the time of exercise the
Common Stock is publicly traded and quoted regularly in The Wall Street Journal, pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay
the aggregate exercise price to the Company from the sales proceeds. 

1

 

        (b)   Provided that at the time of exercise the Common Stock is publicly traded and quoted regularly in  The Wall Street Journal, by delivery of
already-owned shares of Common Stock either that you have held for the period required to avoid a charge to the
Company's reported earnings (generally six months) or that you did not acquire, directly or indirectly from the Company, that are owned free and clear of any liens, claims, encumbrances or security
interests, and that are valued at Fair Market Value on the date of exercise. "Delivery" for these purposes, in the sole discretion of the Company at the time you exercise your option, shall include
delivery to the Company of your attestation of ownership of such shares of Common Stock in a form approved by the Company. Notwithstanding the foregoing, you may not exercise your option by tender to
the Company of Common Stock to the extent such
tender would violate the provisions of any law, regulation or agreement restricting the redemption of the Company's stock. 

        (c)   Pursuant to the following deferred payment alternative: 

        (i)    Not less than one hundred percent (100%) of the aggregate exercise price, plus accrued interest, shall be due four
(4) years from date of exercise or, at the Company's election, upon termination of your Continuous Service. 

        (ii)   Interest shall be compounded at least annually and shall be charged at a rate of interest to be determined by the Board. 

        (iii) At any time that the Company is incorporated in Delaware, payment of the Common Stock's "par value," as defined in the
Delaware General Corporation Law, shall be made in cash and not by deferred payment. 

        (iv)  In order to elect the deferred payment alternative, you must, as a part of your written notice of exercise, give notice
of the election of this payment alternative and, in order to secure the payment of the deferred exercise price to the Company hereunder, if the Company so requests, you must tender to the Company a
promissory note and a security agreement covering the purchased shares of Common Stock, both in form and substance satisfactory to the Company, or such other or additional documentation as the Company
may request. 

        5.     WHOLE SHARES. You may exercise your option only for whole shares of Common Stock. 

        6.     SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary contained herein, you may not exercise your option
unless the shares of Common Stock issuable upon such exercise are then registered under the Securities Act or, if such shares of Common Stock are not then so registered, the Company has determined
that such exercise and issuance would be exempt from the registration requirements of the Securities Act. The exercise of your option must also comply with other applicable laws and regulations
governing your option, and you may not exercise your option if the Company determines that such exercise would not be in material compliance with such laws and regulations. 

        7.     TERM. You may not exercise your option before the commencement of its term or after its term expires. The term of your
option commences on the Date of Grant and expires upon the earliest of the following: 

        (a)   three (3) months after the termination of your Continuous Service for any reason other than your Disability or
death, provided that if during any part of such three- (3-) month period your option is not exercisable solely because of the condition set forth in the preceding paragraph relating to
"Securities Law Compliance," your option shall not expire until the earlier of the Expiration Date or until it shall have been exercisable for an aggregate period of three (3) months after the
termination of your Continuous Service; 

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        (b)   twelve (12) months after the termination of your Continuous Service due to your Disability; 

        (c)   eighteen (18) months after your death if you die either during your Continuous Service or within three
(3) months after your Continuous Service terminates; 

        (d)   the Expiration Date indicated in your Grant Notice; or 

        (e)   the day before the tenth (10th) anniversary of the Date of Grant. 

        If
your option is an incentive stock option, note that, to obtain the federal income tax advantages associated with an "incentive stock option," the Code requires that at all times
beginning on the date of grant of your option and ending on the day three (3) months before the date of your option's exercise, you must be an employee of the Company or an Affiliate, except in
the event of your death or Disability. The Company has provided for extended exercisability of your option under certain circumstances for your benefit but cannot guarantee that your option will
necessarily be treated as an "incentive stock option" if you continue to provide services to the Company or an Affiliate as a Consultant or Director after your employment terminates or if you
otherwise exercise your option more than three (3) months after the date your employment terminates. 

        8.     EXERCISE.  

         (a)   You may exercise the vested portion of your option (and the unvested portion of your option if your Grant Notice so permits) during its
term by
delivering a Notice of Exercise (in a form designated by the Company) together with the exercise price to the Secretary of the Company, or to such other person as the Company may designate, during
regular business hours, together with such additional documents as the Company may then require. 

        (b)   By exercising your option you agree that, as a condition to any exercise of your option, the Company may require you to
enter into an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of your option, (2) the
lapse of any substantial risk of forfeiture to which the shares of Common Stock are subject at the time of exercise, or (3) the disposition of shares of Common Stock acquired upon such
exercise. 

        (c)   If your option is an incentive stock option, by exercising your option you agree that you will notify the Company in
writing within fifteen (15) days after the date of any disposition of any of the shares of the Common Stock issued upon exercise of your option that occurs within two (2) years after the
date of your option grant or within one (1) year after such shares of Common Stock are transferred upon exercise of your option. 

        (d)   By exercising your option you agree that the Company (or a representative of the underwriter(s)) may, in connection with
the first underwritten registration of the offering of any securities of the Company under the Securities Act, require that you not sell, dispose of, transfer, make any short sale of, grant any option
for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any shares of Common Stock or other securities of the Company held by you, for a period
of time specified by the underwriter(s) (not to exceed one hundred eighty (180) days) following the effective date of the registration statement of the Company filed under the Securities Act.
You further agree to execute and deliver such other agreements as may be reasonably requested by the Company and/or the underwriter(s) that are consistent with the foregoing or that are necessary to
give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to your shares of Common Stock until the end of such
period. The underwriters of the Company's stock are intended third party beneficiaries of this Section 8(d) and shall have the right, power and authority to enforce the provisions hereof as
though they were a party hereto. 

3

 

        9.     TRANSFERABILITY. Your option is not transferable, except by will or by the laws of descent and distribution, and is
exercisable during your life only by you. Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you may designate a third party who, in the
event of your death, shall thereafter be entitled to exercise your option. 

        10.   RIGHT OF FIRST REFUSAL. Shares of Common Stock that you acquire upon exercise of your option are subject to any right of
first refusal that may be described in the Company's bylaws in effect at such time the Company elects to exercise its right. The Company's right of first refusal shall expire on the Listing Date. 

        11.   RIGHT OF REPURCHASE. To the extent provided in the Company's bylaws as amended from time to time, the Company shall have
the right to repurchase all or any part of the shares of Common Stock you acquire pursuant to the exercise of your option. 

        12.   OPTION NOT A SERVICE CONTRACT. Your option is not an employment or service contract, and nothing in your option shall be
deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate, or of the Company or an Affiliate to continue your employment. In addition,
nothing in your option shall obligate the Company or an Affiliate, their respective stockholders, Boards of Directors, Officers or Employees to continue any relationship that you might have as a
Director or Consultant for the Company or an Affiliate. 

        13.   WITHHOLDING OBLIGATIONS.  

         (a)   At the time you exercise your option, in whole or in part, or at any time thereafter as requested by the Company, you hereby authorize
withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by means of a "cashless exercise" pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations
of the Company or an Affiliate, if any, which arise in connection with your option. 

        (b)   Upon your request and subject to approval by the Company, in its sole discretion, and compliance with any applicable
conditions or restrictions of law, the Company may withhold from fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a number of whole shares of Common Stock
having a Fair Market Value, determined by the Company as of the date of exercise, not in excess of the minimum amount of tax required to be withheld by law. If the date of determination of any tax
withholding obligation is deferred to a date later than the date of exercise of your option, share withholding pursuant to the preceding sentence shall not be permitted unless you make a proper and
timely election under Section 83(b) of the Code, covering the aggregate number of shares of Common Stock acquired upon such exercise with respect to which such determination is otherwise
deferred, to accelerate the determination of such tax withholding obligation to the date of exercise of your option. Notwithstanding the filing of such election, shares of Common Stock shall be
withheld solely from fully vested shares of Common Stock determined as of the date of exercise of your option that are otherwise issuable to you upon such exercise. Any adverse consequences to you
arising in connection with such share withholding procedure shall be your sole responsibility. 

        (c)   You may not exercise your option unless the tax withholding obligations of the Company and/or any Affiliate are
satisfied. Accordingly, you may not be able to exercise your option when desired even though your option is vested, and the Company shall have no obligation to issue a certificate for such shares of
Common Stock or release such shares of Common Stock from any escrow provided for herein. 

        14.   NOTICES. Any notices provided for in your option or the Plan shall be given in writing and shall be deemed effectively
given upon receipt or, in the case of notices delivered by mail by the 

4

 

Company
to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. 

        15.   GOVERNING PLAN DOCUMENT. Your option is subject to all the provisions of the Plan, the provisions of which are hereby
made a part of your option, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event
of any conflict between the provisions of your option and those of the Plan, the provisions of the Plan shall control. 

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