Document:

Exhibit 10-8

	

Exhibit 10(viii) 
Bank Owned Life
Insurance Plan 

TOLLAND BANK

BANK OWNED
LIFE INSURANCE PLAN

EFFECTIVE
DECEMBER 31, 2001

     Tolland
Bank purchases life insurance on certain members of management and directors as
part of a program to provide benefits to those members and to offset any loss
the bank may incur as a result of such member’s death. Persons selected by
the Bank who consent to insurance under the program are eligible for benefits
set forth in a written notice of participation and consent (attached as Exhibit
A) delivered to the individual Participant. The following provisions apply to
all Participants. 

1. Death
Beneficiary. The Participant may designate a Beneficiary to receive payments
at the event of the Participant’s death. The designation shall be in
writing and delivered to the Plan Administrator. The designated Beneficiary may
include one or more persons, trusts or organizations. If no effective written
designation is made, the Participant’s Beneficiary shall be the
Participant’s spouse, if married on the date of death, and if not so
married, shall be the Participant’s estate.  

2. Vesting. If a
Participant terminates employment with the Bank (or an affiliate thereof) before
completing five full Years of Service, then the Participant’s death benefit
shall be determined by multiplying the otherwise applicable benefit by the
percentage set forth below. A Year of Service shall be a 12-month period of
continuous service completed on each anniversary date of the Participant’s
date of hire (or re-hire, as the case may be) if the Participant is still
employed by the Bank on such anniversary. In the event of the death of a
Participant who is currently employed with the Bank with at least one year of
service, the death benefit shall be deemed to be fully vested even if the years
of service are less than five years.  

	  	Years of Service  
	Vested Percentage  

	  	Less than 1	 	0	 
	  	1 	 	20	%
	  	2	 	40	%
	  	3	 	60	%
	  	4	 	80	%
	  	5 or more	 	100	%

	

3. Forfeiture. If
the Plan Administrator determines that a Participant’s involuntary or
voluntary termination of employment was related to a failure of the Participant
to perform satisfactorily for the Bank, or related to any action or inaction the
Plan Administrator determines to be detrimental to the interests of the Bank,
then the Participant shall immediately forfeit all benefits hereunder.  

	

4. Benefits.
Benefits shall be as set forth in the written notice of participation and
consent provided to each Participant. Any such benefit is conditioned on and
limited to not more than the net death benefit the Bank receives under the
policy or policies of insurance, net of any amount carried by the Bank as an
asset related to the insurance policy. Limited by this condition, Paragraphs 2
and 3 above notwithstanding, the minimum benefit will be $10,000, subject to the
other conditions of the Plan.  

5. Plan Administrator.
The Plan Administrator shall have discretion to operate,
interpret, and implement the Plan. The Plan Administrator shall be the Employee
Benefits Committee of the Bank (or such other standing committee as may be
determined by the Board of Directors). The Plan Administrator’s decisions
and determinations (including determinations of the meaning and reference of
terms used in this Plan) shall be conclusive upon all persons. The Human
Resources Director (or other officer as may be determined by the Plan
Administrator) shall act as Plan Coordinator for operating the plan.  

     6.
Alienation of Benefits. Benefits are not subject to alienation, anticipation or
assignment by a Participant or Beneficiary and are not subject to being attached or
reached and applied by any creditor of the Participant or Beneficiary.  

     7.
Withholding. The Bank reserves the right to withhold from payment of benefits such amount
of income, payroll, and other taxes as the Bank determines is advisable.  

8. Source of
Benefits. Benefits shall be paid from the general assets of the Bank and
shall not be funded, by trust or otherwise. No Participant or Beneficiary shall
have a right to a benefit hereunder greater than that of an unsecured general
creditor of the Bank. Nothing herein shall be deemed to create a trust of any
kind or to create any fiduciary relationship whatsoever.  

9. Intent. This Plan
is intended to be an exempt welfare plan under Title I of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”). Benefits
are intended to be taxable to a Participant under the Internal Revenue Code of
1986 as amended (the “Code”) when paid. This Plan shall be construed
and interpreted in a manner consistent with the foregoing intentions.  

10.  Governing Law.
This Plan shall be governed by the law of the State of Connecticut to the extent that it
is not preempted by federal law.  

11. Entire
Agreement. This Plan, including the written notices of participation and
notice sent to eligible employees, constitutes the entire agreement of the Bank
with respect to the subject matter thereof and cannot be modified by any oral
statement or otherwise except as provided in Section 12.  

12. Amendment or
Termination; Tax-Law Changes. Subject to Section 13, below, the Bank
reserves the right to terminate or amend the Plan, in whole or in part, at any
time (including after a Participant’s retirement or other termination of
employment), by a written instrument. In addition, if the tax laws applicable to
bank-owned life insurance change in a manner that the Plan Administrator
determines adversely affects the Bank, then upon the effective date of such
change the benefit provisions of this Plan shall be suspended automatically
unless and until there is an action by the Board of Directors to reinstate such
benefits in whole or in part.  

-2- 

	

13. Successors; Change
of Control. This Plan shall be binding on any successor-in-interest of the
Bank, and no agreement with respect to sale or transfer of substantially all of
the assets of the Bank shall be effective unless the successor agrees to assume
all liabilities hereunder. Moreover, after a Change of Control of the Bank (as
defined below), the Plan may not be amended so as to reduce benefits with
respect to any Participant without the consent of the affected Participant
(which consent shall be binding on any Beneficiary of that Participant). Change
of Control shall be as defined to be a change in control of a nature that would
be required to be reported in response to Item 5(f) of Schedule 14A of
Regulation 14a promulgated under the Securities Exchange Act of 1934, as amended
(“Exchange Act”); provided that, without limitation, such a change in
control shall be deemed to have occurred if:  

     (1)
any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Bank representing 25% or more of the
combined voting power of the Bank’s then-outstanding securities; 

     (2)
during any period of twelve consecutive months, individuals who at the beginning of such
period constitute the Board cease for any reason to constitute a majority thereof unless
the election, or the nomination for election by the Bank’s shareowners, of each new
director was approved by a vote of at least two-thirds of the directors then still in
office who were directors at the beginning of the period. 

     14. No
Contract of Employment. This Plan shall not constitute an express or implied contract of
employment between the Bank and any Participant.  

15. Receipts and
Release. Any payment to any Beneficiary in accordance with the provisions of
the Plan shall, to the extent thereof, be in full satisfaction of all claims
against the Bank (and any affiliate thereof) and the Plan Administrator may
require such Beneficiary, as a condition precedent to such payment, to execute a
receipt and release to such effect. If any Beneficiary is determined by the Plan
Administrator to be incompetent by reason of age or physical or mental
disability to give a valid receipt and release, the Plan Administrator may cause
the payment or payments becoming due to such person to be made to another person
for his or her benefit upon execution of such a receipt and release, but without
responsibility on the part of the Plan Administrator or the Bank to follow the
application of such funds.  

     16.
Claims and Review. All inquiries and claims respecting the Plan shall be in writing and
shall be directed to the Plan Administrator at such address as may be specified from time
to time.  

     (a)
Claims. In the case of a claim respecting a benefit under the Plan, a
written determination allowing or denying the claim shall be furnished by the
Plan Administrator to the claimant promptly upon receipt of the claim. A denial
or partial denial of a claim shall be dated and signed by the Plan Administrator
and shall clearly set forth: (1) the specific reason or reasons for the denial;
(2) specific reference to pertinent Plan provisions on which the denial is
based; (3) a description of any additional material or information necessary for
the claimant to perfect the claim and an explanation of why such material or
information is necessary; and (4) an explanation of the review procedure set
forth below.  

-3- 

	

     If no
written determination is furnished to the claimant within thirty (30) days after receipt
of the claim, then the claim shall be deemed denied and the thirtieth (30th) day after
such receipt shall be the determination date. 

     (b)
Review. A claimant may obtain review of an adverse determination by
filing a written notice of appeal with the Plan Administrator within sixty (60)
days after the determination date or, if later, within sixty (60) days after the
receipt of a written notice denying the claim. Thereupon the Personnel Committee
of the Bank (or such other standing committee as may be determined by the Board
of Directors) (the “Committee”) shall appoint one or more persons who
shall conduct a full and fair review, which shall include the right: (1) to be
represented by a spokesman; (2) to present a written statement of facts and of
the claimant’s interpretation of any pertinent document, statute or
regulation; and (3) to receive a prompt written decision clearly setting forth
findings of fact and the specific reasons for the decision written in a manner
calculated to be understood by the claimant and containing specific references
to pertinent Plan provisions on which the decision is based. A decision shall be
rendered no more than sixty (60) days after the request for review, except that
such period may be extended for an additional sixty (60) days if the person or
persons reviewing the claim determine that special circumstances, including the
advisability of a hearing, require such extension. The Committee may appoint
itself, one or more of its members, or any other person or persons whether or
not connected with the Bank to review a claim.  

-4- 

	

EXHIBIT A1

TOLLAND BANK

BANK OWNED
LIFE INSURANCE PLAN

NOTICE OF
PARTICIPATION AND CONSENT

FOR DIRECTOR
AND SENIOR OFFICER PARTICIPANTS

This notice provides a
description of the benefit program which is a component of the Bank Owned Life
Insurance (“BOLI”) Plan and establishes written consent to
participate. This notice is an Exhibit to the Plan. 

     Under
the BOLI program, the Bank will purchase life insurance contracts on the lives
of selected employees and directors. This is a voluntary program, intended to
provide a benefit to participants and the Bank. Under this BOLI program, the
bank will purchase life insurance policies on the eligible employees, and will
receive future earnings credits on the premiums that it pays. The Bank will
receive life insurance proceeds at the time of the participant’s death and
out of the net amount of these proceeds make payments to beneficiaries as
described below. Throughout the life of the policies, the Bank will pay all
premiums and will be the sole owner and beneficiary of the policies. The
policies will continue in force even after participants leave the Bank. 

     The
program is expected to provide a death benefit to participants and it allows the
Bank to fund cost effectively a portion of the expense associated with its
various benefit programs, including this program. Many banks have adopted BOLI
programs over the last several years. This program is designed to be implemented
in accordance with regulatory requirements. The BOLI program will have no impact
on group life insurance through the Bank. 

     Participation
in the BOLI program is voluntary. There will be no impact on eligible employees
who choose not to participate. To receive this additional employee benefit,
participants may do so by signing this notice and consent form. No co-payment or
financial obligation is required for participation. Participants also have to
complete insurance applications with our insurers and a confidential
questionnaire — no physicals or other medical records are normally expected
to be required. 

     Under
the BOLI Plan, and limited to the conditions of the Plan, the Bank would pay the
participant’s beneficiary the full amount of the net death benefit received
by the Bank from the insurance policy, net of any amount carried by the Bank as
an asset related to the insurance policy. The benefit is paid directly by the
Bank and will constitute taxable income to the beneficiary. Payment is
conditioned on the Bank receiving a net death benefit payment from its
insurer(s). It is not a guarantee of payment. 

-5- 

	

     Also,
the net death benefit available to the Bank will change as each participant
ages. The amount of the net death benefit that the Bank receives and pays to the
beneficiary may be higher in early years of the policy but will decline the
longer particpants live. The death benefit could decline to a nominal amount in
the event that the participant lives to an advanced age. 

     Once
made, these policies are in place until the participant’s death. To
continue to offer this benefit, the Bank will need to periodically keep track of
the participant’s whereabouts. Participation is subject to vesting and
termination clauses, but this benefit is not otherwise specifically conditional
on continued employment at Tolland Bank. 

     Again,
it is important to note that there is no guarantee of any payment to
participants’ beneficiaries. The insurance policies are owned by the Bank
and not endorsed to participants or otherwise pledged. If the Bank does not
receive proceeds due to failure of the insurance company or for some other
reason, there would be no proceeds to share and no payment would be made. Also,
this sharing is based on current tax law, and the amount of sharing could be
reduced in the unforeseen event of an adverse change to the Bank in the tax
treatment of these life insurance contracts and this program. The Board also has
the right to amend or terminate the Plan anytime in the future. 

     This
notice is an exhibit to the BOLI plan. This program provides benefits to both
the Bank and the pool of participants. Participation is conditional and not
effective until the final issuance of the policies by the insurers. 

Consent to Participate: 

 

Participant
Name:____________________________________ 

Participant
Signature:_________________________________ 

Date:______________________________________________ 

-6- 

	

EXHIBIT A2

TOLLAND BANK

BANK OWNED
LIFE INSURANCE PLAN

NOTICE OF
PARTICIPATION AND CONSENT

FOR
PARTICIPANTS OTHER THAN DIRECTORS AND SENIOR OFFICERS

This notice provides a
description of the benefit program which is a component of the Bank Owned Life
Insurance (“BOLI”) Plan and establishes written consent to
participate. This notice is an Exhibit to the Plan. 

     Under
the BOLI program, the Bank will purchase life insurance contracts on the lives
of selected employees and directors. This is a voluntary program, intended to
provide a benefit to participants and the Bank. Under this BOLI program, the
bank will purchase life insurance policies on the eligible employees, and will
receive future earnings credits on the premiums that it pays. The Bank will
receive life insurance proceeds at the time of the participant’s death and
out of the net amount of these proceeds make payments to beneficiaries as
described below. Throughout the life of the policies, the Bank will pay all
premiums and will be the sole owner and beneficiary of the policies. The
policies will continue in force even after participants leave the Bank. 

     The
program is expected to provide a death benefit to participants and it allows the
Bank to fund cost effectively a portion of the expense associated with its
various benefit programs, including this program. Many banks have adopted BOLI
programs over the last several years. This program is designed to be implemented
in accordance with regulatory requirements. The BOLI program will have no impact
on group life insurance through the Bank. 

     Participation
in the BOLI program is voluntary. There will be no impact on eligible employees
who choose not to participate. To receive this additional employee benefit,
participants may do so by signing this notice and consent form. No co-payment or
financial obligation is required for participation. Participants also have to
complete insurance applications with our insurers and a confidential
questionnaire — no physicals or other medical records are normally expected
to be required. 

     Under
the BOLI Plan, and limited to the conditions of the Plan and to a maximum amount
of $100,000, the Bank would pay the participant’s beneficiary the amount of
the net death benefit received by the Bank from the insurance policy, net of any
amount carried by the Bank as an asset related to the insurance policy. The
benefit is paid directly by the Bank and will constitute taxable income to the
beneficiary. Payment is conditioned on the Bank receiving a net death benefit
payment from its insurer(s). It is not a guarantee of payment. 

-7- 

	

     Also,
the net death benefit available to the Bank will change as each participant
ages. The amount of the net death benefit that the Bank receives and pays to the
beneficiary may be higher in early years of the policy but will decline the
longer particpants live. The death benefit could decline to a nominal amount in
the event that the participant lives to an advanced age. 

     Once
made, these policies are in place until the participant’s death. To
continue to offer this benefit, the Bank will need to periodically keep track of
the participant’s whereabouts. Participation is subject to vesting and
termination clauses, but this benefit is not otherwise specifically conditional
on continued employment at Tolland Bank. The purchase of the life insurance
policies is irrevocable, once made. 

     Again,
it is important to note that there is no guarantee of any payment to
participants’ beneficiaries. The insurance policies are owned by the Bank
and not endorsed to participants or otherwise pledged. If the Bank does not
receive proceeds due to failure of the insurance company or for some other
reason, there would be no proceeds to share and no payment would be made. Also,
this sharing is based on current tax law, and the amount of sharing could be
reduced in the unforeseen event of an adverse change to the Bank in the tax
treatment of these life insurance contracts and this program. The Board also has
the right to amend or terminate the Plan anytime in the future. 

     This
notice is an exhibit to the BOLI plan. This program provides benefits to both
the Bank and the pool of participants. Participation is conditional and not
effective until the final issuance of the policies by the insurers. 

Consent to Participate: 

Participant
Name:____________________________________ 

Participant
Signature:_________________________________ 

Date:______________________________________________ 

-8-Exhibit 4.02

	

     EXHIBIT
4.01

ELANTEC
SEMICONDUCTOR, INC.

2001 EQUITY INCENTIVE PLAN

As Adopted November 2,
2000 

and Amended May 2, 2001
and February 15, 2002 

     1.
PURPOSE. The purpose of this Plan is to provide incentives to attract,
retain and motivate eligible persons whose present and potential contributions
are important to the success of the Company, its Parent and Subsidiaries, by
offering them an opportunity to participate in the Company’s future
performance through awards of Options, Restricted Stock and Stock Bonuses.
Capitalized terms not defined in the text are defined in Section 24. 

     2.
SHARES SUBJECT TO THE PLAN. 

	 	     2.1
Number of Shares Available. Subject to Sections 2.2 and 19, the total number of Shares
reserved and available for grant and issuance pursuant to this Plan will be 2,050,000
Shares plus Shares that are subject to: (a) issuance upon exercise of an Option but cease
to be subject to such Option for any reason other than exercise of such Option; (b) an
Award granted hereunder but are forfeited or are repurchased by the Company at the
original issue price; and (c) an Award that otherwise terminates without Shares being
issued. At all times the Company shall reserve and keep available a sufficient number of
Shares as shall be required to satisfy the requirements of all outstanding Options
granted under this Plan and all other outstanding but unvested Awards granted under this
Plan.

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

	

     3.
ELIGIBILITY. ISOs (as defined in Section 5 below) may be granted only to
employees (including officers and directors who are also employees) of the
Company or of a Parent or Subsidiary of the Company. All other Awards may be
granted to employees, officers, directors, consultants, independent contractors
and advisors of the Company or any Parent or Subsidiary of the Company; provided
such consultants, contractors and advisors render bona fide services not in
connection with the offer and sale of securities in a capital-raising
transaction. No person will be eligible to receive more than 200,000 Shares in
any calendar year under this Plan pursuant to the grant of Awards hereunder,
other than new employees of the Company or of a Parent or Subsidiary of the
Company (including new employees who are also officers and directors of the
Company or any Parent or Subsidiary of the Company), who are eligible to receive
up to a maximum of 800,000 Shares in the calendar year in which they commence
their employment. A person may be granted more than one Award under this Plan. 

     4.
ADMINISTRATION. 

	 	     4.1
Committee Authority. This Plan will be administered by the Committee or by the Board
acting as the Committee. Subject to the general purposes, terms and conditions of this
Plan, and to the direction of the Board, the Committee will have full power to implement
and carry out this Plan. The Committee will have the authority to:

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

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

	

			(c) 		select
persons to receive Awards;

			(d) 		determine
the form and terms of Awards;

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

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

			(g) 		grant
waivers of Plan or Award conditions;

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

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

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

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

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

	

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

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

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

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

	

	 	     5.4
Exercise Price. The Exercise Price of an Option will be determined by the Committee when
the Option is granted but may not be less than 100% of the Fair Market Value of the
Shares on the date of grant except that the exercise price may be reduced to no less than
85% of the Fair Market Value of the Shares on the date of grant if the discount is
expressly made in lieu of a reasonable amount of salary or cash bonus, as determined in
the good faith discretion of the Committee. Notwithstanding the foregoing: (i) the
Exercise Price of an ISO will be not less than 100% of the Fair Market Value of the
Shares on the date of grant; and (ii) the Exercise Price of any ISO granted to a Ten
Percent Stockholder will not be less than 110% of the Fair Market Value of the Shares on
the date of grant. Payment for the Shares purchased may be made in accordance with
Section 8 of this Plan.

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

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

			(a) 		If
the Participant is Terminated for any reason except death or Disability, then the
Participant may exercise such Participant’s Options only to the extent that such
Options would have been exercisable upon the Termination Date no later than three (3)
months after the Termination Date (or such shorter or longer time period not exceeding
five (5) years as may be determined by the Committee, with any exercise beyond three (3)
months after the Termination Date deemed to be an NQSO), but in any event, no later than
the expiration date of the Options.

			(b) 		If
the Participant is Terminated because of Participant’s death or Disability (or the
Participant dies within three (3) months after a Termination other than for Cause or
because of Participant’s Disability), then Participant’s Options may be
exercised only to the extent that such Options would have been exercisable by Participant
on the Termination Date and must be exercised by Participant (or Participant’s legal
representative or authorized assignee) no later than twelve (12) months after the
Termination Date (or such shorter or longer time period not exceeding five (5) years as
may be determined by the Committee, with any such exercise beyond (a) three (3) months
after the Termination Date when the Termination is for any reason other than the
Participant’s death or disability, within the meaning of Section 22(e)(3) of the
Code, or (ii) twelve (12) months after the Termination Date when the Termination is for
Participant’s disability, within the meaning of Section 22(e)(3) of the Code, deemed
to be an NQSO), but in any event no later than the expiration date of the Options.

			(c) 		If
the Participant is terminated for Cause, then Participant’s Options shall expire on
such Participant’s Termination Date, or at such later time and on such conditions as
are determined by the Committee.

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

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

	

	 	     5.9
Modification, Extension or Renewal. Subject to the provisions of Section 22, the
Committee may modify, extend or renew outstanding Options and authorize the grant of new
Options in substitution therefor, provided that any such action may not, without the
written consent of a Participant, impair any of such Participant’s rights under any
Option previously granted. Any outstanding ISO that is modified, extended, renewed or
otherwise altered will be treated in accordance with Section 424(h) of the Code. The
Committee may reduce the Exercise Price of outstanding Options without the consent of
Participants affected by a written notice to them; provided, however, that the Exercise
Price may not be reduced below the minimum Exercise Price that would be permitted under
Section 5.4 of this Plan for Options granted on the date the action is taken to reduce
the Exercise Price and provided further that the Exercise Price may not be reduced
without the prior approval of the Company’s shareholders.

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

	

     6.
RESTRICTED STOCK. A Restricted Stock Award is an offer by the
Company to sell to an eligible person Shares that are subject to restrictions.
The Committee will determine to whom an offer will be made, the number of Shares
the person may purchase, the price to be paid (the
“Purchase Price”), the restrictions to which
the Shares will be subject, and all other terms and conditions of the Restricted
Stock Award, subject to the following: 

	 	     6.1
Form of Restricted Stock Award. All purchases under a Restricted Stock Award made
pursuant to this Plan will be evidenced by an Award Agreement (“Restricted Stock
Purchase Agreement”) that will be in such form (which need not be the same for each
Participant) as the Committee will from time to time approve, and will comply with and be
subject to the terms and conditions of this Plan. The offer of Restricted Stock will be
accepted by the Participant’s execution and delivery of the Restricted Stock
Purchase Agreement and full payment for the Shares to the Company within thirty (30) days
from the date the Restricted Stock Purchase Agreement is delivered to the person. If such
person does not execute and deliver the Restricted Stock Purchase Agreement along with
full payment for the Shares to the Company within thirty (30) days, then the offer will
terminate, unless otherwise determined by the Committee.

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

	 	     6.3
Terms of Restricted Stock Awards. Restricted Stock Awards shall be subject to such
restrictions as the Committee may impose. These restrictions may be based upon completion
of a specified number of years of service with the Company or upon completion of the
performance goals as set out in advance in the Participant’s individual Restricted
Stock Purchase Agreement. Restricted Stock Awards may vary from Participant to
Participant and between groups of Participants. Prior to the grant of a Restricted Stock
Award, the Committee shall: (a) determine the nature, length and starting date of any
Performance Period for the Restricted Stock Award; (b) select from among the Performance
Factors to be used to measure performance goals, if any; and (c) determine the number of
Shares that may be awarded to the Participant. Prior to the payment of any Restricted
Stock Award, the Committee shall determine the extent to which such Restricted Stock
Award has been earned. Performance Periods may overlap and Participants may participate
simultaneously with respect to Restricted Stock Awards that are subject to different
Performance Periods and having different performance goals and other criteria.
Notwithstanding the foregoing, Restricted Stock Awards may not vest any faster than
33-1/3% per year unless the vesting is performance based. In the case of performance
vesting, Restricted Stock Awards shall nonetheless be subject to one-year cliff vesting
in the event the performance criteria are satisfied prior to one year from the date of
grant.

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

	

     7.
STOCK BONUSES. 

	 	     7.1
Awards of Stock Bonuses. A Stock Bonus is an award of Shares (which may consist of
Restricted Stock) for services rendered to the Company or any Parent or Subsidiary of the
Company. A Stock Bonus may be in lieu of a reasonable amount of salary or cash bonus, as
determined in the good faith discretion of the Committee, pursuant to an Award Agreement
(the “Stock Bonus Agreement”) that will be in such form (which need not be the
same for each Participant) as the Committee will from time to time approve, and will
comply with and be subject to the terms and conditions of this Plan. Also, a Stock Bonus
may be awarded upon satisfaction of such performance goals over at least a twelve month
period as are set out in advance in the Participant’s individual Award Agreement
(the “Performance Stock Bonus Agreement”) that will be in such form (which need
not be the same for each Participant) as the Committee will from time to time approve,
and will comply with and be subject to the terms and conditions of this Plan. Stock
Bonuses may vary from Participant to Participant and between groups of Participants, and
may be based upon the achievement of the Company, Parent or Subsidiary and/or individual
performance factors or upon such other criteria as the Committee may determine.
Notwithstanding anything in this Section 7.1 to the contrary, a Stock Bonus shall only be
granted to an officer or a director of the Company only in lieu of a reasonable amount of
salary or cash bonus, or such Stock Bonus shall be awarded upon satisfaction of
performance goals over at least a twelve month period, both as determined in the good
faith discretion of the Committee.

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

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

     8.
PAYMENT FOR SHARE PURCHASES. 

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

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

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

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

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

	

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

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

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

			(f) 		by
any combination of the foregoing.

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

	

     9.
RESTRICTIONS ON SHARES. At the discretion of the Committee, the Company
may reserve to itself and/or its assignee(s) in the Award Agreement a right to
repurchase a portion of or all Unvested Shares held by a Participant following
such Participant’s Termination at any time within ninety (90) days after
the later of Participant’s Termination Date and the date Participant
purchases Shares under this Plan, for cash and/or cancellation of purchase money
indebtedness, at the Participant’s Exercise Price or Purchase Price, as the
case may be. 

     10.
GRANTS TO NON-EMPLOYEE DIRECTORS. 

     The
Committee may grant Options to each Non-Employee Director and will determine the number
of Shares subject to the Option, the Exercise Price of the Option and all other terms and
conditions of the Option, subject to the following: 

	 	     10.1
Form of Option Grant. Each Option granted under this Plan will be evidenced by a Stock
Option Agreement which will expressly identify the Option as an NQSO, and will be in such
form and contain such provisions (which need not be the same for each Non-Employee
Director) as the Committee may from time to time approve, and which will comply with and
be subject to the terms and conditions of this Plan.

	 	     10.2
Initial Grant. The Committee will grant to each Non-Employee Director who becomes a
director of the Company, an NQSO to purchase 40,000 Shares on the date such person joins
the Board.

	 	     10.3
Succeeding Grant. The Committee will grant to each Non-Employee Director on the date of
the Company’s annual meeting of stockholders, an NQSO to purchase 20,000 Shares.

	 	     10.4
Vesting and Exercisability. Options for Shares granted to a Non-Employee Director will be
exercisable as the Options vest and will vest as to one forty-eighth (1/48th) of the
Shares on the last day of the month following the initial grant date and will vest an
additional one forty-eighth (1/48th) of the Shares on the last day of each month
thereafter, so long as the Non-Employee Director continuously remains a member of the
Board.

	 	     10.5
Acceleration. Options for Shares granted to a Non-Employee Director will accelerate in
the event of a dissolution or liquidation of the Company; a merger or consolidation in
which the Company is not the surviving corporation (other than a merger or consolidation
with a wholly owned subsidiary, a reincorporation of the Company in a different
jurisdiction, or other transaction in which there is no substantial change in the
stockholders of the Company or their relative stock holdings and the Options granted
under this Plan are assumed, converted or replaced by the successor corporation, which
assumption will be binding on all Non-Employee Directors who are optionees); a merger in
which the Company is the surviving corporation but after which the stockholders of the
Company (other than any stockholder which merges (or which owns or controls another
corporation which merges) with the Company in such merger) cease to own their shares or
other equity interests in the Company; the sale of substantially all of the assets of the
Company; or any other transaction which qualifies as a “corporate transaction” under
Section 424(a) of the Code wherein the stockholders of the Company give up all of their
equity interests in the Company (except for the acquisition, sale or transfer of all or
substantially all of the outstanding shares of the Company from or by the stockholders of
the Company), the vesting of all Options granted pursuant to this Plan will accelerate
and the Options will become exercisable in full prior to the consummation of such event
at such times and on such conditions as the Committee determines, and if such options are
not exercised prior to the consummation of the corporate transaction, they will terminate
in accordance with the provisions of this Plan.

	

	 	     10.6
Incorporation of Certain Provisions From Section 5. Except as set forth in this Section
10, all other terms and conditions for the granting of NQSOs set forth in Section 5 of
this Plan are incorporated by reference herein in their entirety as if such terms and
conditions are set forth in this Section 10.

     11.
WITHHOLDING TAXES. 

	 	     11.1
Withholding Generally. Whenever Shares are to be issued in satisfaction of Awards granted
under this Plan, the Company may require the Participant to remit to the Company an
amount sufficient to satisfy federal, state and local withholding tax requirements prior
to the delivery of any certificate or certificates for such Shares. Whenever, under this
Plan, payments in satisfaction of Awards are to be made in cash, such payment will be net
of an amount sufficient to satisfy federal, state, and local withholding tax requirements.

	 	     11.2
Stock Withholding. When, under applicable tax laws, a Participant incurs tax liability in
connection with the exercise or vesting of any Award that is subject to tax withholding
and the Participant is obligated to pay the Company the amount required to be withheld,
the Committee may in its sole discretion allow the Participant to satisfy the minimum
withholding tax obligation by electing to have the Company withhold from the Shares to be
issued that number of Shares having a Fair Market Value equal to the minimum amount
required to be withheld, determined on the date that the amount of tax to be withheld is
to be determined. All elections by a Participant to have Shares withheld for this purpose
will be made in accordance with the requirements established by the Committee and be in
writing in a form acceptable to the Committee.

     12.
TRANSFERABILITY. 

	 	     12.1
Except as otherwise provided in this Section 12, Awards granted under this Plan, and any
interest therein, will not be transferable or assignable by Participant, and may not be
made subject to execution, attachment or similar process, otherwise than by will or by
the laws of descent and distribution or as determined by the Committee and set forth in
the Award Agreement with respect to Awards that are not ISOs.

	 	     12.2
All Awards other than NQSO’s. All Awards other than NQSO’s shall be
exercisable: (i) during the Participant’s lifetime, only by (A) the Participant, or
(B) the Participant’s guardian or legal representative; and (ii) after Participant’s
death, by the legal representative of the Participant’s heirs or legatees.

	 	     12.3
NQSOs. Unless otherwise restricted by the Committee, an NQSO shall be exercisable: (i)
during the Participant’s lifetime only by (A) the Participant, (B) the Participant’s
guardian or legal representative, (C) a Family Member of the Participant who has acquired
the NQSO by “permitted transfer;” and (ii) after Participant’s death, by
the legal representative of the Participant’s heirs or legatees. “Permitted
transfer” means, as authorized by this Plan and the Committee in an NQSO, any
transfer effected by the Participant during the Participant’s lifetime of an
interest in such NQSO but only such transfers which are by gift or domestic relations
order. A permitted transfer does not include any transfer for value and neither of the
following are transfers for value: (a) a transfer of under a domestic relations order in
settlement of marital property rights or (b) a transfer to an entity in which more than
fifty percent of the voting interests are owned by Family Members or the Participant in
exchange for an interest in that entity.

     13.
PRIVILEGES OF STOCK OWNERSHIP. 

	 	     13.1
Voting and Dividends. No Participant will have any of the rights of a stockholder with
respect to any Shares until the Shares are issued to the Participant. After Shares are
issued to the Participant, the Participant will be a stockholder and have all the rights
of a stockholder with respect to such Shares, including the right to vote and receive all
dividends or other distributions made or paid with respect to such Shares; provided, that
if such Shares are Restricted Stock, then any new, additional or different securities the
Participant may become entitled to receive with respect to such Shares by virtue of a
stock dividend, stock split or any other change in the corporate or capital structure of
the Company will be subject to the same restrictions as the Restricted Stock; provided,
further, that the Participant will have no right to retain such stock dividends or stock
distributions with respect to Shares that are repurchased at the Participant’s
Purchase Price or Exercise Price pursuant to Section 13.

	

	 	     13.2
Financial Statements. The Company will provide financial statements to each Participant
prior to such Participant’s purchase of Shares under this Plan, and to each
Participant annually during the period such Participant has Awards outstanding; provided,
however, the Company will not be required to provide such financial statements to
Participants whose services in connection with the Company assure them access to
equivalent information.

	

     14.
CERTIFICATES. All certificates for Shares or other securities delivered
under this Plan will be subject to such stock transfer orders, legends and other
restrictions as the Committee may deem necessary or advisable, including
restrictions under any applicable federal, state or foreign securities law, or
any rules, regulations and other requirements of the SEC or any stock exchange
or automated quotation system upon which the Shares may be listed or quoted. 

     15.
ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a
Participant’s Shares, the Committee may require the Participant to deposit
all certificates representing Shares, together with stock powers or other
instruments of transfer approved by the Committee, appropriately endorsed in
blank, with the Company or an agent designated by the Company to hold in escrow
until such restrictions have lapsed or terminated, and the Committee may cause a
legend or legends referencing such restrictions to be placed on the
certificates. Any Participant who is permitted to execute a promissory note as
partial or full consideration for the purchase of Shares under this Plan will be
required to pledge and deposit with the Company all or part of the Shares so
purchased as collateral to secure the payment of Participant’s obligation
to the Company under the promissory note; provided, however, that the Committee
may require or accept other or additional forms of collateral to secure the
payment of such obligation and, in any event, the Company will have full
recourse against the Participant under the promissory note notwithstanding any
pledge of the Participant’s Shares or other collateral. In connection with
any pledge of the Shares, Participant will be required to execute and deliver a
written pledge agreement in such form as the Committee will from time to time
approve. The Shares purchased with the promissory note may be released from the
pledge on a pro rata basis as the promissory note is paid. 

     16.
EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at
any time or from time to time, authorize the Company, with the consent of the
respective Participants, to issue new Awards in exchange for the surrender and
cancellation of any or all outstanding Awards. The Committee may at any time buy
from a Participant an Award previously granted with payment in cash, Shares
(including Restricted Stock) or other consideration, based on such terms and
conditions as the Committee and the Participant may agree. 

     17.
SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.
An Award will not be effective unless such Award is in compliance with all
applicable federal and state securities laws, rules and regulations of any
governmental body, and the requirements of any stock exchange or automated
quotation system upon which the Shares may then be listed or quoted, as they are
in effect on the date of grant of the Award and also on the date of exercise or
other issuance. Notwithstanding any other provision in this Plan, the Company
will have no obligation to issue or deliver certificates for Shares under this
Plan prior to: (a) obtaining any approvals from governmental agencies that the
Company determines are necessary or advisable; and/or (b) completion of any
registration or other qualification of such Shares under any state or federal
law or ruling of any governmental body that the Company determines to be
necessary or advisable. The Company will be under no obligation to register the
Shares with the SEC or to effect compliance with the registration, qualification
or listing requirements of any state securities laws, stock exchange or
automated quotation system, and the Company will have no liability for any
inability or failure to do so. 

     18.
NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award
granted under this Plan will confer or be deemed to confer on any Participant
any right to continue in the employ of, or to continue any other relationship
with, the Company or any Parent or Subsidiary of the Company or limit in any way
the right of the Company or any Parent or Subsidiary of the Company to terminate
Participant’s employment or other relationship at any time, with or without
cause. 

	

     19.
CORPORATE TRANSACTIONS. 

	 	     19.1
Assumption or Replacement of Awards by Successor. Except for grants to Non-Employee
Directors pursuant to Section 10 hereof, in the event of (a) a dissolution or liquidation
of the Company, (b) a merger or consolidation in which the Company is not the surviving
corporation (other than a merger or consolidation with a wholly-owned subsidiary, a
reincorporation of the Company in a different jurisdiction, or other transaction in which
there is no substantial change in the stockholders of the Company or their relative stock
holdings and the Awards granted under this Plan are assumed, converted or replaced by the
successor corporation, which assumption will be binding on all Participants), (c) a
merger in which the Company is the surviving corporation but after which the stockholders
of the Company (other than any stockholder which merges (or which owns or controls
another corporation which merges) with the Company in such merger) cease to own their
shares or other equity interests in the Company, (d) the sale of substantially all of the
assets of the Company, or (e) any other transaction which qualifies as a “corporate
transaction” under Section 424(a) of the Code wherein the stockholders of the Company
give up all of their equity interest in the Company (except for the acquisition, sale or
transfer of all or substantially all of the outstanding shares of the Company from or by
the stockholders of the Company), any or all outstanding Awards may be assumed, converted
or replaced by the successor corporation (if any), which assumption, conversion or
replacement will be binding on all Participants. In the alternative, the successor
corporation may substitute equivalent Awards or provide substantially similar
consideration to Participants as was provided to stockholders (after taking into account
the existing provisions of the Awards). The successor corporation may also issue, in
place of outstanding Shares of the Company held by the Participant, substantially similar
shares or other property subject to repurchase restrictions no less favorable to the
Participant. In the event such successor corporation (if any) refuses to assume or
substitute Options, as provided above, pursuant to a transaction described in this
Subsection 19.1, such Options will expire on such transaction at such time and on such
conditions as the Board will determine.

	 	     19.2
Other Treatment of Awards. Subject to any greater rights granted to Participants under
the foregoing provisions of this Section 19, in the event of the occurrence of any
transaction described in Section 19.1, any outstanding Awards will be treated as provided
in the applicable agreement or plan of merger, consolidation, dissolution, liquidation,
sale of assets or other “corporate transaction.”

	 	     19.3
Assumption of Awards by the Company. The Company, from time to time, also may substitute
or assume outstanding awards granted by another company, whether in connection with an
acquisition of such other company or otherwise, by either: (a) granting an Award under
this Plan in substitution of such other company’s award; or (b) assuming such award
as if it had been granted under this Plan if the terms of such assumed award could be
applied to an Award granted under this Plan. Such substitution or assumption will be
permissible if the holder of the substituted or assumed award would have been eligible to
be granted an Award under this Plan if the other company had applied the rules of this
Plan to such grant. In the event the Company assumes an award granted by another company,
the terms and conditions of such award will remain unchanged (except that the exercise
price and the number and nature of Shares issuable upon exercise of any such option will
be adjusted appropriately pursuant to Section 424(a) of the Code). In the event the
Company elects to grant a new Option rather than assuming an existing option, such new
Option may be granted with a similarly adjusted Exercise Price.

	

     20.
ADOPTION AND STOCKHOLDER APPROVAL. This Plan will become
effective on the date this Plan is adopted by the Board (the
“Effective Date”). This Plan shall be approved by
the stockholders of the Company (excluding Shares issued pursuant to this Plan),
consistent with applicable laws, within twelve (12) months before or after the
date this Plan is adopted by the Board. Upon the Effective Date, the Committee
may grant Awards pursuant to this Plan; provided, however, that: (a) no Option
may be exercised prior to initial stockholder approval of this Plan; (b) no
Option granted pursuant to an increase in the number of Shares subject to this
Plan approved by the Board will be exercised prior to the time such increase has
been approved by the stockholders of the Company; (c) in the event that initial
stockholder approval is not obtained within the time period provided herein, all
Awards granted hereunder shall be cancelled, any Shares issued pursuant to any
Awards shall be cancelled and any purchase of Shares issued hereunder shall be
rescinded; (d) in the event that stockholder approval of such increase is not
obtained within the time period provided herein, all Awards granted pursuant to
such increase will be cancelled, any Shares issued pursuant to any Award granted
pursuant to such increase will be cancelled, and any purchase of Shares pursuant
to such increase will be rescinded; and (e) in no event may the Board reprice an
Option without prior approval of the stockholders of the Company. 

     21.
TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as
provided herein, this Plan will terminate ten (10) years from the date this Plan
is adopted by the Board or, if earlier, the date of stockholder approval. This
Plan and all agreements thereunder shall be governed by and construed in
accordance with the laws of the State of California. 

	

     22.
AMENDMENT OR TERMINATION OF PLAN. The Board may at
any time terminate or amend this Plan in any respect, including without
limitation amendment of any form of Award Agreement or instrument to be executed
pursuant to this Plan; provided, however, that the Board will not, without the
approval of the stockholders of the Company, amend this Plan in any manner that
requires such stockholder approval. Notwithstanding the foregoing, the Board or
the Committee may grant waivers of Plan or Award provisions only under
extraordinary conditions, such as, death, disability, change of corporate
control, as determined in the good faith discretion of the Board or the
Committee, as the case may be. 

     23.
NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this
Plan by the Board, the submission of this Plan to the stockholders of the
Company for approval, nor any provision of this Plan will be construed as
creating any limitations on the power of the Board to adopt such additional
compensation arrangements as it may deem desirable, including, without
limitation, the granting of stock options and bonuses otherwise than under this
Plan, and such arrangements may be either generally applicable or applicable
only in specific cases. 

     24.
DEFINITIONS. As used in this Plan, the following terms will have the following meanings: 

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

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

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

     “Cause” means
(i) the commission of an act of theft, embezzlement, fraud, dishonesty, (b) a breach of
fiduciary duty to the Company or a Parent or Subsidiary of the Company or (c) a failure
to materially perform the customary duties of employee’s employment. 

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

     “Committee” means
the Compensation Committee of the Board. 

     “Company” means
Elantec Semiconductor, Inc. or any successor corporation. 

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

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

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

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

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

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

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

	

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

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

     “Family
Member” includes any of the following: 

			(a) 		child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law,
or sister-in-law of the Participant, including any such person with such relationship to
the Participant by adoption;

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

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

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

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

	

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

     “Non-Employee
Director” means a director who is not an employee of the Company or any Parent,
Subsidiary or affiliate of the Company. 

     “Option” means
an award of an option to purchase Shares pursuant to Sections 5 and 10. 

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

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

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

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

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

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

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

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

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

			(g) 		Return
on equity;

			(h) 		Operating
cash flow return on income;

	

			(i) 		Adjusted
operating cash flow return on income;

			(j) 		Economic
value added; and

			(k) 		Individual
confidential business objectives.

	

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

     “Plan” means
this Elantec Semiconductor, Inc. 2001 Equity Incentive Plan, as amended from time to time. 

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

     “SEC” means
the Securities and Exchange Commission. 

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

     “Shares” means
shares of the Company’s Common Stock reserved for issuance under this Plan, as
adjusted pursuant to Sections 2 and 19, and any successor security. 

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

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

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

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

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

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