Document:

Exhibit 4.4

HOT JOBS, INC.

STOCK AWARD PLAN

 

1. PURPOSE.

 

The purpose of this Stock Award Plan (the
“Plan”) is to provide to selected officers, directors, employees and
consultants and other non-employee individuals providing or expected to provide
valuable services contributing to the growth and success of Hot Jobs, Inc. (the
“Company”), an opportunity to obtain or increase a proprietary interest in the
Company, or to benefit from the appreciation in the value of the Company’s
Common Stock, par value $0.01 per share (the “Common Stock”), as an incentive
to such persons to continue and to increase their efforts to benefit the
Company and to continue their relationship with the Company.

 

2. ADMINISTRATION.

 

The Plan shall be administered by, and all
decisions and determinations concerning the Plan shall be made solely by, the
Award Committee or any successor committee (the “Committee”) appointed by the
Board of Directors of the Company (the “Board”). The Committee may establish,
modify or rescind any rules or regulations for the conduct of its business and
the administration of the Plan, in any case, not inconsistent with the express
provisions of the Plan, the By-laws or Certificate of Incorporation of the
Company or any resolutions of the Board. Any decision of the Committee in the
administration of the Plan, shall be final, conclusive and binding on all
persons. No member of the Committee shall be liable for any action taken, or
determination made, in good faith.

 

3. ELIGIBILITY AND PARTICIPATION.

 

Officers, directors and employees of the
Company shall be eligible for selection to participate in the Plan.
Non-employee individuals, providing or expected to provide valuable services to
the Company, as the Committee may determine, also shall be eligible for selection
to participate in the Plan. Notwithstanding the foregoing, only persons
employed by the Company (or any subsidiary thereof) shall be eligible to
receive options intended to meet the requirements of Section 422 of the
Internal Revenue Code of 1986, as amended (“Incentive Stock Options” or
“ISOs”), hereunder.

 

4. AWARDS UNDER THE PLAN.

 

(a) “Awards” under the Plan shall mean and
include any one or a combination of ISOs, nonqualified stock options (“NQSOs,”
and together with ISOs, “Options”) and shares of Common Stock subject to
restrictions (“Restricted Stock”). Awards shall be represented by, or issued
pursuant to, agreements in such form as the Committee may from time to time
approve, which agreements need not contain uniform terms and conditions but shall

 

 

comply with and be subject to all the terms,
conditions and restrictions of the Plan (“Award Agreements”).

 

(b) Subject to adjustment as provided in
paragraph 7 below, there may be issued under the Plan pursuant to Awards an
aggregate of not more than 300 shares of Common Stock; PROVIDED, HOWEVER, that
if an Option shall expire or terminate without having been exercised in full,
or if any shares of Restricted Stock shall be forfeited by a recipient thereof,
any shares of Common Stock which were covered by that Award may be added to the
shares otherwise available for Awards to be granted pursuant to the Plan. The
Company hereby reserves 300 shares of Common Stock for issuance under the Plan.

 

(c) A participant who has been awarded an
Option hereunder (an “Optionee”) (and any person succeeding to the Optionee’s
rights pursuant hereto) shall not have any rights as a stockholder with respect
to any shares of Common Stock issuable pursuant to any Option until the date of
the issuance of a stock certificate to the Optionee for the shares. Except as
provided in paragraph 7 below, no adjustment shall be made for dividends,
distributions or other rights (whether ordinary or extraordinary, and whether
in cash, securities or other property) for which the record date is prior to
the date a stock certificate is issued. A participant who has been awarded
Restricted Stock hereunder shall, except for the restrictions on transfer, be
the owner of such Restricted Stock and shall have all the rights of a
stockholder.

 

5. OPTIONS.

 

Each Option granted under the Plan shall
comply with the following terms and conditions:

 

(a) An Option exercise price shall be
determined by the Committee in its sole discretion, but in the case of an ISO,
such exercise price shall be not less than the Fair Market Value, as
hereinafter defined, of the Common Stock on the date of grant.

 

(b) The term of an Option shall be determined
by the Committee, but in no event shall any ISO be exercisable more than ten
years after the date on which it was granted.

 

(c) An Option shall not be transferable by
the Optionee otherwise than by will or the applicable laws of descent and
distribution and shall be exercisable during the Optionee’s lifetime only by
the Optionee.

 

(d) An Option shall not be exercisable:

 

(i) prior to six months from the date it is
granted;

 

(ii) unless payment in full is made for the
shares of Common Stock being acquired thereunder at the time of exercise (A) in
United States dollars by cash or check, (B) by tendering to the Company shares
of Common Stock owned by the person exercising the Option and having a Fair
Market Value equal to the cash price applicable to Option, (C) 

 

2

 

by a combination of United States dollars and
shares of Common Stock as aforesaid, or (D) with the prior approval of the
Committee, by tendering to the Company a promissory note on which such person
exercising the Option is personally liable and which is in a form satisfactory
to the Committee; and

 

(iii) unless the person exercising the Option
fulfills the eligibility and participation requirements in paragraph 3 above at
all times during the period beginning with the date of grant of the Option and
ending on the date of such exercise, except that each Award Agreement with
respect to an Option shall specify the conditions and circumstances under which
an unexercised Option may or may not be exercised in the event that the
relationship between the Company and the Optionee is terminated prior to the
expiration date of the Option.

 

For purposes hereof “Fair Market Value” shall
mean the fair market value per share of the Company’s Common Stock as
determined by the Committee in good faith; PROVIDED, HOWEVER, that if the
Company’s Common Stock is listed or admitted to trading on a securities
exchange registered under the Exchange Act, or as a national market security on
the National Association of Securities Dealers, Inc. Automated Quotations
System (“NASDAQ”) or any similar system then in use, the Fair Market Value per
share shall be the average of the reported high and low sales price on the date
in question (or if there was no reported sale on such date, on the last
preceding date on which any reported sale occurred) on the principal securities
exchange or system on which such share is listed or admitted to trading, or if
a share is not listed or admitted to trading on any such exchange and is not
listed as national market security on NASDAQ but is quoted on NASDAQ or any
similar system then in use, the Fair Market Value per share shall be the
average of the closing high bid and low asked quotations on such system for
such share on the date in question.

 

6. RESTRICTED STOCK.

 

An Award of Restricted Stock hereunder shall
entitle the holder thereof to receive shares of Common Stock which shall be
forfeited if the relationship between the Company and such holder terminates
during the Restricted Period, as defined below, for any reason other than those
set forth in the related Award Agreement. For purposes hereof, “Restricted
Period” shall mean that period as determined by the Committee during which the
shares of Restricted Stock awarded to a participant may be forfeited. The
committee may at any time provide that a Restricted Period shall terminate upon
the attainment of any performance objective established by the Committee. Upon
termination of the Restricted Period, the shares of Restricted Stock shall be
delivered to the recipient free and clear of all such restrictions.

 

7. CERTAIN ADJUSTMENTS.

 

In the event of any change in the outstanding
shares of Common Stock of the Company by reason of any stock split, stock
dividend, recapitalization, merger, consolidation, reorganization, combination
or exchange of shares or other similar event, the number or 

 

3

 

kind of shares issued, or that may be issued
under the Plan pursuant to paragraph 4 above shall be automatically adjusted to
give effect to the occurrence of such event (and, in the case of an Option, the
number or kind of shares subject to, or the Option price per share under, any
outstanding Option shall be automatically adjusted) so that the proportionate
interest of the participant shall be maintained as before the occurrence of
such event. Any adjustment in outstanding Options pursuant to this paragraph 7
shall be made without change in the total Option exercise price applicable to
the unexercised portion of such Options and with a corresponding adjustment in
the Option exercise price per share. No fractional shares of Common Stock shall
be issued pursuant to any adjustment referred to herein, and any fractions
resulting from any such adjustment shall be eliminated in each case by rounding
downward to the nearest whole share. Any adjustment made pursuant to this
paragraph 7 shall be conclusive and binding for all purposes of the Plan.

 

8. MISCELLANEOUS.

 

(a) No person shall have any claim or right
to be granted an Award under the Plan. Neither the Plan nor any action taken
hereunder shall be construed as giving any person any right to be retained in
any way in the service of the Company.

 

(b) No shares of Common Stock shall be issued
hereunder unless counsel for the Company shall be satisfied, that such issuance
will be in compliance with applicable federal, state and other securities laws.

 

(c) It shall be a condition to the obligation
of the Company to issue shares of Common Stock upon exercise of an Option, or
deliver shares upon termination of a Restricted Period, as the case may be,
that the participant (or any beneficiary or person entitled to act under
paragraph 9 below) pay to the Company, upon its demand, any taxes required to
be withheld.

 

(d) The expenses of the Plan shall be borne
by the Company.

 

(e) By accepting any Award or other benefit
under the Plan, each participant and each person claiming under or through him
shall be conclusively deemed to have indicated his acceptance and ratification
of, and consent to, any action taken under the Plan by the Company or the
Committee.

 

9. TOTAL DISABILITY OR DEATH.

 

(a) Except as otherwise provided in the Award
Agreement, if an employee Optionee terminates employment with the Company as
the result, in the sole judgment of the Committee, of his becoming totally
disabled, the Optionee shall be entitled to exercise any Option to the extent
his right to exercise such Option had accrued at the date of termination of
employment and had not previously been exercised, for a period of three months
after such termination, subject, in any case, to all other provisions of the
Plan.

 

4

 

(b) Except as otherwise provided in the Award
Agreement, if the employee Optionee should die either (i) while employed by the
Company, or (ii) during any period in which the Optionee may exercise the
Option following termination of employment, then the person or persons to whom
the Optionee’s rights under the Option shall pass by will or by the applicable
laws of descent and distribution shall be entitled to exercise the Option to
the extent his right to exercise such Option had accrued at the date of
termination of employment and had not previously been exercised, for a period
of twelve months from the date of such death, subject, in any case, to all
other provisions of the Plan.

 

10. AMENDMENT OR TERMINATION.

 

The Plan may be terminated at any time or
amended at any time or from time to time by the Committee as the Committee
shall deem advisable; PROVIDED, HOWEVER, that except as provided in paragraph 7
above, the Committee may not, without further approval by the stockholders of
the Company, increase the maximum number of shares of Common Stock as to which
Options may be granted, or awarded as Restricted Stock, under the Plan,
materially increase the benefits accruing to participants under the Plan or
change the class of persons eligible to receive Awards under the Plan. No
amendment or termination of the Plan shall materially and adversely affect any
right of any participant with respect to any Award theretofore granted without
such participant’s written consent.

 

11. EFFECTIVENESS.

 

The Plan shall not be effective and no Award
granted hereunder shall have effect unless and until the Plan has been approved
and adopted by a majority in voting power of the stockholders of the Company.

 

Dated as of February 21, 1997

 

5Exhibit 4.5

 

RESUMIX, INC.

1998 EQUITY INCENTIVE PLAN

EFFECTIVE AUGUST 14, 1998

APPROVED BY SHAREHOLDERS AUGUST 13, 1998

TERMINATION DATE: AUGUST 13, 2008

 

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) “CAUSE” means any of the following: (a)
an intentional act which materially injures the Company; (b) an intentional
refusal or failure to follow lawful and reasonable directions of the Board or
an individual to whom Participant reports (as appropriate); (c) a willful and
habitual neglect of duties; or (d) a conviction of a felony involving moral
turpitude which is reasonably likely to inflict or has inflicted material
injury on the Company.

 

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

 

(e) “COMMITTEE” means a Committee appointed
by the Board in accordance with subsection 3(c).

 

(f) “COMMON STOCK” means the common stock of the Company.

 

(g) “COMPANY” means Resumix, Inc., a Delaware
corporation.

 

 

 

(h) “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 of the Company who are not
compensated by the Company for their services as Directors or Directors of the
Company who are merely paid a director’s fee by the Company for their services
as Directors.

 

(i) “CONTINUOUS SERVICE” means that the
Participant’s service with the Company or an Affiliate, whether as an Employee,
Director or Consultant, is not 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 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 of the
Company will not constitute a termination 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.

 

(j) “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 shareholders
under the Exchange Act, as determined for purposes of Section 162(m) of the
Code.

 

(k) “DIRECTOR” means a member of the Board of
Directors of the Company.

 

(l) “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.

 

(m) “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.

 

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

 

(o) “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, 

 

2

 

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.

 

(p) “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.

 

(q) “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
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.

 

(r) “NON-EMPLOYEE DIRECTOR” means a Director
of the Company 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.

 

(s) “NONSTATUTORY STOCK OPTION” means an
Option not intended to qualify as an Incentive Stock Option.

 

(t) “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.

 

(u) “OPTION” means an Incentive Stock Option or a Nonstatutory Stock
Option granted pursuant to the Plan.

 

3

 

(v) “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.

 

(w) “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.

 

(x) “OUTSIDE DIRECTOR” means a Director of
the Company 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.

 

(y) “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.

 

(z) “PLAN” means this Resumix, Inc. 1998
Equity Incentive Plan.

 

(aa) “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.

 

(bb) “SECURITIES ACT” means the Securities
Act of 1933, as amended.

 

(cc) “STOCK AWARD” means any right granted
under the Plan, including an Option, a stock bonus and a right to acquire
restricted stock.

 

(dd) “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.

 

(ee) “TEN PERCENT SHAREHOLDER” 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).

 

4

 

(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 stock pursuant to
a Stock Award; and the number of shares 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, provided however, that the chief executive
officer of the Company may determine, in that party’s sole discretion, whether
Continuous Service shall be considered terminated in the case of any leave of
absence approved by that party (including sick leave, military leave, or any
other personal leave). 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 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 (i) 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 

 

5

 

either (1) 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 (2) not persons with respect to whom the
Company wishes to comply with Section 162(m) of the Code and/or) (ii) delegate
to a committee of one or more members of the Board who are not 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 stock, the stock that may
be issued pursuant to Stock Awards shall not exceed in the aggregate two
million fifty thousand (2,050,000) 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 stock not acquired under
such Stock Award shall revert to and again become available for issuance under
the Plan. If any Common Stock acquired pursuant to the exercise of a Stock
Award shall for any reason be repurchased by the Company, pursuant to
subsection 6(m), or 6(n) or 7(a)(ii), or 7(b)(iii) of the Plan, the stock so
acquired by the Company shall not revert to and again become available for
issuance under the Plan.

 

(c) SOURCE OF SHARES. The stock subject to
the Plan may be unissued shares or reacquired shares, bought on the market or
otherwise.

 

(d) SHARE RESERVE LIMITATION. Prior to the
Listing Date, at no time shall the total number of shares issuable upon
exercise of all outstanding Stock Awards and the total number of shares provided
for under any stock bonus or similar plan of the Company exceed the applicable
percentage as calculated in accordance with the conditions and exclusions of
Section 260.140.45 of Title 10 of the California Code of Regulations, based on
the shares of the Company which are outstanding at the time the calculation is
made.(1)

 

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 SHAREHOLDERS. No Ten Percent
Shareholder shall be eligible for the grant of 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.

 

6

 

(1) Section 260.140.45 generally provides that the total number of
shares issuable upon exercise of all outstanding options (exclusive of certain
rights) and the total number of shares called for under any stock bonus or
similar plan shall not exceed a number of shares which is equal to 30% of the
then outstanding shares of the issuer (convertible preferred or convertible
senior common shares counted on an as if converted basis), exclusive of shares
subject to promotional waivers under Section 260.141, unless a percentage
higher than 30% is approved by at least two-thirds of the outstanding shares
entitled to vote.

 

Prior to the Listing Date, no Ten Percent Shareholder shall be eligible
for the grant of a Nonstatutory 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.

 

Prior to the Listing Date, no Ten Percent
Shareholder shall be eligible for a restricted stock award unless the purchase
price of the restricted stock is at least one hundred percent (100%) of the
Fair Market Value of the Common Stock at the date of grant.

 

(c) SECTION 162(m) LIMITATION. Subject to the
provisions of Section 11 relating to adjustments upon changes in stock, no
employee shall be eligible to be granted Options covering more than one million
(1,000,000) shares of the 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 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 shareholders at which Directors of the Company 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.

 

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 a separate certificate or certificates
will be issued for shares 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 Shareholders, no Option shall be
exercisable after the expiration of ten (10) years from the date it was
granted.

 

7

 

(b) EXERCISE PRICE OF AN INCENTIVE STOCK
OPTION. Subject to the provisions of subsection 5(b) regarding Ten Percent
Shareholders, the exercise price of each Incentive Stock Option shall be not
less than one hundred percent (100%) of the Fair Market Value of the 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
Shareholders, 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 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 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
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) by (1)
delivery to the Company of other Common Stock, (2) according to a deferred
payment or other arrangement (which may include, without limiting the
generality of the foregoing, the use of other Common Stock) with the
Participant 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.

 

In the case of any deferred payment
arrangement, interest shall be compounded at least annually and shall be
charged at the minimum rate of interest necessary to avoid the treatment as
interest, under any applicable provisions of the Code, of any amounts other
than amounts stated to be interest under the deferred payment arrangement.

 

(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 provisions of this subsection 6(e), 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.

 

8

 

(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
shall be exercisable during the lifetime of the Optionholder only by the
Optionholder. 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 provisions
of this subsection 6(f), 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 which 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 as to which an
Option may be exercised.

 

(h) MINIMUM VESTING PRIOR TO THE LISTING
DATE. Notwithstanding the foregoing subsection 6(g), Options granted prior to
the Listing Date shall provide for vesting of the total number of shares 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. However, in the case of such Options granted to Officers, Directors
or Consultants, the Option may become fully exercisable, subject to reasonable
conditions such as continued employment, at any time or during any period
established by the Company; for example, the Option Agreement may provide for
vesting of less than twenty percent (20%) per year of the total number of
shares subject to the Option.

 

(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 it 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, for Options granted prior to the Listing Date,
shall not be less than thirty (30) days, 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 

 

9

 

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 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 (or such longer or shorter
period specified in the Option Agreement in accordance with the other
provisions of this Section 6) during which the exercise of the Option would not
be in violation of such registration requirements.

 

(k) DISABILITY OF OPTIONHOLDER. In the event
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 it 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, for Options granted
prior to the Listing Date, shall not be less than six (6) months) 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 vesting date or dates of the Option
shall be advanced by six (6) months, and the Option may be exercised (to the
extent the Optionholder was entitled to exercise the 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, for an Option granted prior to
the Listing Date, shall not be less than six (6) months) 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 subject to the Option prior to the full vesting
of the Option. Subject to the “Repurchase Limitation” in subsection 10(h), any
unvested shares so purchased may be subject to an unvested share 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 

 

10

 

elect, prior to the Listing Date, to
repurchase all or any part of the vested shares 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
exercised pursuant to the Option. Such right of first refusal shall 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 equal to the number of shares 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 dollars ($100,000) annual limitation on
exercisability of Incentive Stock Options described 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 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:

 

11

 

(i) CONSIDERATION. A stock bonus shall be
awarded in consideration for past services actually rendered to the Company 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 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 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 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 Shareholders, 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 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 stock’s
Fair Market Value on the date such award is made or at the time the purchase is
consummated.

 

(ii) CONSIDERATION. The purchase price of
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 arrangement with the
Participant; or (iii) in any other form of legal consideration that may be
acceptable to 

 

12

 

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 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 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
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 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 stock under the Plan, the Company shall be relieved from any
liability for failure to issue and sell stock upon exercise of such Stock
Awards unless and until such authority is obtained.

 

9. USE OF PROCEEDS FROM STOCK.

 

13

 

Proceeds from the sale of 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 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) SHAREHOLDER 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 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 or other holder of Stock Awards 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 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 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 the stock subject to the Stock Award for the
Participant’s own account and not with any present intention of selling or
otherwise distributing the stock. The foregoing requirements, and any
assurances given pursuant to such requirements, shall be 

 

14

 

inoperative if (iii) the issuance of the
shares upon the exercise or acquisition of stock under the Stock Award has been
registered under a then currently effective registration statement under the
Securities Act or (iv) 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 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 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 from the shares
of the Common Stock otherwise issuable to the participant as a result of the
exercise or acquisition of stock under the Stock Award; or (iii) delivering to
the Company owned and unencumbered shares of the 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 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, 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 upon termination of
employment at not less than the Fair Market Value of the shares 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 within ninety (90) days of termination of
Continuous Service (or in the case of shares 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 become publicly traded.

 

(ii) ORIGINAL PURCHASE PRICE. If the repurchase
option gives the Company the right to repurchase the shares upon termination of
Continuous Service at the original purchase price, then (i) the right to
repurchase at the original purchase price shall lapse at 

 

15

 

the rate of at least twenty percent (20%) of
the shares 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 within ninety (90)
days of termination of Continuous Service (or in the case of shares 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 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 stock
subject to such outstanding Stock Awards. The Board, the determination of which
shall be final, binding and conclusive, shall make such adjustments. (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 such Stock Awards shall be
terminated if not exercised (if applicable) prior to such event.

 

(c) CHANGE IN CONTROL—ASSET SALE, MERGER, CONSOLIDATION OR REVERSE
MERGER. In the event of (i) a sale of 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, 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 shareholders in the transaction
described in this subsection 11(c)) 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 

 

16

 

shall terminate if not exercised (if applicable) at or prior to such
event. With respect to any other Stock Awards outstanding under the Plan, such
Stock Awards shall terminate if not exercised (if applicable) prior to such
event.

 

(d) Notwithstanding other provisions of the
Plan, or an Option Agreement: if potential acceleration of vesting (and
exercisability) would BY ITSELF result in a transaction that would otherwise be
eligible to be accounted for as a “pooling of interests” accounting transaction
becoming ineligible for such accounting treatment; and the potential acquiring
or surviving corporation of the transaction desires to account for such
transaction as a “pooling of interests” transaction, then such acceleration
shall not occur. Additionally, in the event that the restrictions upon
acceleration provided for in the immediately preceding sentence BY ITSELF would
result in the transaction becoming ineligible to be accounted for as a “pooling
of interests” accounting transaction, then such restrictions (and such
acceleration) shall be deemed inoperative. Accounting issues shall be determined
by the Company’s independent public accountants applying generally accepted
accounting principles.

 

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 stock, no amendment shall be
effective unless approved by the shareholders of the Company to the extent
shareholder 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) SHAREHOLDER APPROVAL. The Board may, in
its sole discretion, submit any other amendment to the Plan for shareholder
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.

 

(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.

 

17

 

(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 shareholders 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
shareholders of the Company, which approval shall be within twelve (12) months
before or after the date the Plan is adopted by the Board.

 

18

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00034-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00034-of-00352.parquet"}]]