Document:

Exhibit 4.1

INTERNATIONAL
MICROCIRCUITS, INC.

1997 EQUITY
INCENTIVE PLAN

ADOPTED
NOVEMBER 20, 1997

AS AMENDED
BY THE BOARD OF DIRECTORS ON APRIL 23, 1998

     1.
Purposes.  

	 	     (a)
The purpose of the Plan is to provide a means by which selected Employees and Directors
of and Consultants to the Company, and its Affiliates, may be given an opportunity to
benefit from increases in value of the stock of the Company through the granting of (i) Incentive
Stock Options, (ii) Nonstatutory Stock Options, (iii) stock bonuses, (iv) rights
to purchase restricted stock, and (v) stock appreciation rights, all as defined
below. 

	 	     (b)
The Company, by means of the Plan, seeks to retain the services of persons who are now
Employees or Directors of or Consultants to the Company or its Affiliates, to secure and
retain the services of new Employees, Directors and Consultants, and to provide
incentives for such persons to exert maximum efforts for the success of the Company and
its Affiliates. (c) The Company intends that the Stock Awards issued under the Plan
shall, in the discretion of the Board or any Committee to which responsibility for
administration of the Plan has been delegated pursuant to subsection 3(c), be either
(i) Options granted pursuant to Section 6 hereof, including Incentive Stock
Options and Nonstatutory Stock Options, (ii) stock bonuses or rights to purchase
restricted stock granted pursuant to Section 7 hereof, or (iii) stock
appreciation rights granted pursuant to Section 8 hereof. All Options shall be
separately designated Incentive Stock Options or Nonstatutory Stock Options at the time
of grant, and in such form as issued pursuant to Section 6, and a separate
certificate or certificates will be issued for shares purchased on exercise of each type
of Option. 

     2.
Definitions. 

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

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

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

	 	     (d)
“Committee” means a Committee appointed by the Board in accordance with subsection 3(c)
of the Plan.

	 	     (e)
“Company” means International Microcircuits, Inc., a California corporation.

	

	 	     (f)
“Concurrent Stock Appreciation Right” or “Concurrent Right” means a right granted
pursuant to subsection 8(b)(2) of the Plan.

	 	     (g)
“Consultant” means any person, including an advisor, engaged by the
Company or an Affiliate to render consulting services and who is compensated for such
services, provided that the term “Consultant“shall not include Directors who
are paid only a director’s fee by the Company or who are not compensated by the
Company for their services as Directors. 

	 	     (h)
“Continuous Status (or Continuous Service) as an Employee, Director or Consultant” means
that the service of an individual to the Company or any Affiliate of the Company, whether
as an Employee, Director or Consultant, is not interrupted or terminated. The Board, or
the chief executive officer of the Company may determine, in that party’s sole
discretion, whether Continuous Status as an Employee, Director or Consultant shall be
considered interrupted in the case of: 

	 	     (i) any
leave of absence approved by the Board or the chief executive officer of the Company,
including sick leave, military leave, or any other personal leave; or (ii) transfers
between the Company, Affiliates or their successors. 

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

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

	 	     (k)
“Employee” means any person, including Officers and Directors, employed
by the Company or any Affiliate of the Company. Neither service as a Director nor payment
of a director’s fee by the Company shall be sufficient to constitute “employment” by
the Company. 

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

	 	     (m)
“Fair Market Value” means, as of any date, the value of the common stock
of the Company determined as follows and in each case in a manner consistent with Section 260.140.50
of Title 10 of the California Code of Regulations. 

	 	     (1)
If the common stock is listed on any established stock exchange or traded on the Nasdaq
National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share of common
stock shall be the closing sales price for such stock (or the closing bid, if no sales
were reported) as quoted an such exchange or market (or the exchange or market with the
greatest volume of trading in the Company’s 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. 

	 	     (2)
In the absence of such markets for the common stock, the Fair Market Value shall be
determined in good faith by the Board. 

	

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	 	     (n)
“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. 

	 	     (o)
“Independent Stock Appreciation Right” or “Independent Right” means
a right granted pursuant to subsection 8(b)(3) of the Plan. 

	 	     (p)
“Listing Date” means the first date upon which any security of the
Company is listed (or approved for listing) upon notice of issuance on any securities
exchange, or designated (or approved for designation) upon notice of issuance as a
national market security on an interdealer quotation system if such securities exchange
or interdealer quotation system has been certified in accordance with the provisions of
Section 25100(o) of the California Corporate Securities Law of 1968. 

	 	     (q)
“Non-Employee Director” means a Director who either (i) is not a
current Employee or Officer of the Company or its parent or subsidiary, does not receive
compensation (directly or indirectly) from the Company or its parent or 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” for
purposes of Rule 16b-3. 

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

	 	     (s)
“Officer” means a person who is an officer of the Company within the meaning of Section
16 of the Exchange Act and the rules and regulations promulgated thereunder.

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

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

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

	 	     (w)
“Outside Director” means a Director who either (i) is not a current
employee of the Company or an “affiliated corporation” (within the meaning
of the 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. 

	

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	 	     (x)
“Plan” means this 1997 Equity Incentive Plan. 

	 	     (y)
“Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in
effect with respect to the Company at the time of discretion is being exercised regarding
the Plan.

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

	 	     (aa)
“Stock Appreciation Right” means any of the various types of rights which
may be granted under Section 8 of the Plan. 

	 	     (bb)
“Stock Award” means any right granted under the Plan, including any
Option, any stock bonus, any right to purchase restricted stock, and any Stock
Appreciation Right. 

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

	 	     (dd)
“Tandem Stock Appreciation Right” or “Tandem Right” means a right granted pursuant to
subsection 8(b)(1) of the Plan.

     3.
Administration. 

	 	     (a)
The Plan shall be administered by the Board unless and until the Board delegates
administration to a Committee, as provided in subsection 3(c).

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

	 	     (1)
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; whether a Stock
Award will be an Incentive Stock Option, a Nonstatutory Stock Option, a stock bonus, a
right to purchase restricted stock, a Stock Appreciation Right, or a combination of the
foregoing; 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; whether a person shall be permitted to receive stock upon exercise of an
Independent Stock Appreciation Right; and the number of shares with respect to which a
Stock Award shall be granted to each such person. 

	 	     (2)
To construe and interpret the Plan and Stock Awards granted under it, and to establish,
amend and revoke rules and regulations for its administration. The Board, in the exercise
of this power, may correct any defect, omission or inconsistency in the Plan or in any
Stock Award Agreement, in a manner and to the extent it shall deem necessary or expedient
to make the Plan fully effective. 

	 	     (3)
To amend the Plan or a Stock Award as provided in Section 14. 

	

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	 	(4)
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)
The Board may delegate administration of the Plan to a committee of the Board composed of
not fewer than two (2) members (the “Committee”), all of the members of which
Committee may be, in the discretion of the Board, Non-Employee Directors and/or Outside
Directors. 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 of two (2) or more Outside
Directors 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 such a
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.
Notwithstanding anything in this Section 3 to the contrary, the Board or the
Committee may delegate to a committee of one or more members of the Board the authority
to grant Stock Awards to eligible persons who (1) are not then subject to Section 16
of the Exchange Act and/or (2) are either (i) 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 (ii) not persons with respect to whom the Company wishes
to comply with Section 162(m) of the Code. 

     4.
Shares Subject to the Plan. 

	 	     (a)
Subject to the provisions of Section 13 relating to adjustments upon changes in
stock, the stock that may be issued pursuant to Stock Awards shall not exceed in the
aggregate One Million Four Hundred Ninety-One Thousand (1,491,000) shares of the Company’s
common stock. 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.
Shares subject to Stock Appreciation Rights exercised in accordance with Section 8
of the Plan shall not be available for subsequent issuance under the Plan. 

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

     5.
Eligibility. 

	 	     (a)
Incentive Stock Options and Stock Appreciation Rights appurtenant thereto may be granted
only to Employees. Stock Awards other than Incentive Stock Options and Stock Appreciation
Rights appurtenant thereto may be granted only to Employees, Directors or Consultants.

	 	     (b)
No person shall be eligible for the grant of an Option or an award to purchase restricted
stock if, at the time of grant, such person 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 unless the
exercise price of such Option is at least one hundred ten percent (110%) of the Fair
Market Value of such stock at the date of grant and the Option is not exercisable after
the expiration of five (5) years from the date of grant, or in the case of a restricted
stock purchase award, the purchase price is at least one hundred percent (100%) of the
Fair Market Value of such stock at the date of grant. 

	

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	 	     (c)
Subject to the provisions of Section 13 relating to adjustments upon changes in
stock, no person shall be eligible to be granted Options and Stock Appreciation Rights
covering more than Five Hundred Thousand (500,000) shares of the Company’s common
stock in any twelve (12) month period. This subsection 5(c) shall not apply
prior to the Listing Date and, following the Listing Date, shall not apply until (i) the
earliest of: (A) the first material modification of the Plan (including any increase
to the number of shares reserved for issuance under the Plan in accordance with Section 4;
(B) the issuance of all of the shares of common stock reserved for issuance under
the Plan; (C) the expiration of the Plan; or (D) the first meeting of
shareholders at which directors are to be elected that occurs after the close of the
third calendar year following the calendar year in which occurred the first registration
of an equity security under section 12 of the Exchange Act; or (ii) such other
date required by Section 162(m) of the Code and the rules and regulations
promulgated thereunder. 

	

     6.
Option Provisions. 

     Each
Option shall be in such form and shall contain such terms and conditions as the
Board shall deem appropriate. 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. No Option shall be exercisable after the expiration of ten (10) years from
the date it was granted. 

	 	     (b)
Price. 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; the exercise price of each Nonstatutory Stock Option
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,
an Option (whether an Incentive Stock Option or 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. 

	 	     (c)
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 or
the Committee, at the time of the grant of the Option, (A) by delivery to the
Company of other common stock of the Company, (B) according to a deferred payment or
other arrangement (which may include, without limiting the generality of the foregoing,
the use of other common stock of the Company) with the person to whom the Option is
granted or to whom the Option is transferred pursuant to subsection 6(d), or (c) in
any other form of legal consideration that may be acceptable to the Board. 

	

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     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. 

	 	     (d)
Transferability. An 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 person
to whom the Option is granted only by such person. The person to whom the Option is
granted 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 Optionee, shall
thereafter be entitled to exercise the Option. 

	 	     (e)
Vesting. The total number of shares of stock subject to an Option may, but need
not, be allotted in periodic installments (which may, but need not, be equal). The Option
Agreement may provide that from time to time during each of such installment periods, the
Option may become exercisable (“vest”) with respect to some or all of the
shares allotted to that period, and may be exercised with respect to some or all of the
shares allotted to such period and/or any prior period as to which the Option became
vested but was not fully exercised. 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 but in each case will provide for vesting of at least
twenty percent (20%) per year of the total number of shares subject to the Option. The
provisions of this subsection 6(e) are subject to any Option provisions governing
the minimum number of shares as to which an Option may be exercised. 

	 	     (f)
Termination of Employment or Relationship as a Director or Consultant. In the
event an Optionee’s Continuous Status as an Employee, Director or Consultant
terminates (other than upon the Optionee’s death or disability), the Optionee may
exercise his or her Option (to the extent that the Optionee 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 Optionee’s
Continuous Status as an Employee, Director or Consultant (or such longer or shorter
period, which shall not be less than thirty (30) days, unless such termination is for
cause, specified in the Option Agreement), or (ii) the expiration of the term of the
Option as set forth in the Option Agreement. If, after termination, the Optionee does not
exercise his or her Option within the time specified in the Option Agreement, the Option
shall terminate, and the shares covered by such Option shall revert to and again become
available for issuance under the Plan. 

	

     An
Optionee’s Option Agreement may also provide that if the exercise of the Option
following the termination of the Optionee’s Continuous Status as an Employee,
Director, or Consultant (other than upon the Optionee’s death or disability) would
result in liability under Section 16(b) of the Exchange Act, then the Option shall
terminate on the earlier of (i) the expiration of the term of the Option set forth
in the Option Agreement, or (ii) the tenth (10th) day after the last date on which
such exercise would result in such liability under Section 16(b) of the Exchange
Act. Finally, an Optionee’s Option Agreement may also provide that if the exercise
of the Option following the termination of the Optionee’s Continuous Status as an
Employee, Director or Consultant (other than upon the Optionee’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 the first paragraph of this subsection 6(f), or (ii) the expiration of a
period of three (3) month after the termination of the Optionee’s Continuous
Status as an Employee, Director or Consultant during which the exercise of the Option
would not be in violation of such registration requirements.  

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	 	     (g)
Disability of Optionee. In the event an Optionee’s Continuous Status as an
Employee Director or Consultant terminates as a result of the Optionee’s disability,
the Optionee may exercise his or her Option (to the extent that the Optionee 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, which in no event shall be less than six (6) months,
specified in the Option Agreement), or (ii) the expiration of the term of the Option
as set forth in the Option Agreement. If, at the date of termination, the Optionee is not
entitled to exercise his or her entire Option, the shares covered by the unexercisable
portion of the Option shall revert to and again become available for issuance under the
Plan. If, after termination, the Optionee does not exercise his or her Option within the
time specified herein, the Option shall terminate, and the shares covered by such Option
shall revert to and again become available for issuance under the Plan. 

	 	     (h)
Death of Optionee. In the event of the death of an Optionee during, or within a
period specified in the Option Agreement after the termination of, the Optionee’s
Continuous Status as an Employee, Director or Consultant, the Option may be exercised (to
the extent the Optionee was entitled to exercise the Option as of the date of death) by
the Optionee’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 Optionee’s
death pursuant to subsection 6(d), but only within the period ending on the earlier
of (i) the date eighteen (18) months following the date of death (or such longer or
shorter period, which in no event shall be less than six (6) months, specified in the
Option Agreement), or (ii) the expiration of the term of such Option as set forth in
the Option Agreement. If, at the time of death, the Optionee was not entitled to exercise
his or her entire Option, the shares covered by the unexercisable portion of the Option
shall revert to and again become available for issuance under the Plan. If, after death,
the Option is not exercised within the time specified herein, the Option shall terminate,
and the shares covered by such Option shall revert to and again become available for
issuance under the Plan. 

	 	     (i)
Early Exercise. The Option may, but need not, include a provision whereby the
Optionee may elect at any time while an Employee, Director or Consultant 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. Any unvested shares so purchased shall be subject to a repurchase
right in favor of the Company, with the repurchase price to be equal to the original
purchase price of the stock, or to any other restriction the Board determines to be
appropriate, provided, however, that (i) the right to repurchase at
the original purchase price shall lapse at a minimum rate of twenty percent (20%) per
year over five (5) years from the date the Option was granted, and (ii) such right
shall be exercisable only within (A) the ninety (90) day period following the
termination of employment or the relationship as a Director or Consultant, or (B) such
longer period as may be agreed to by the Company and the Optionee (for example, for
purposes of satisfying the requirements of Section 1202(c)(3) of the Code (regarding
“qualified small business stock”)), and (iii) such right shall be
exercisable only for cash or cancellation of purchase money indebtedness for the shares.
Should the right of repurchase be assigned by the Company, the assignee shall pay the
Company cash equal to the difference between the original purchase price and the stock’s
Fair Market Value if the original purchase price is less than the stock’s Fair
Market Value, 

	

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	 	     (j)
Right of Repurchase. The Option may, but need not, include a provision whereby the
Company may elect, prior to the Listing Date, to repurchase all or any part of the vested
shares exercised pursuant to the Option; provided, however, that (i) such
repurchase right shall be exercisable only within (A) the ninety (90) day period
following the termination of employment or the relationship as a Director or Consultant,
or (B) such longer period as may be agreed to by the Company and the Optionee (for
example, for purposes of satisfying the requirements of Section 1202(c)(3) of the
Code (regarding “qualified small business stock”)), (ii) such repurchase
right shall be exercisable for less than all of the vested shares only with the Optionee’s
consent, and (iii) such right shall be exercisable only for cash or cancellation of
purchase money indebtedness for the shares at a repurchase price equal to the greater of
(A) the stock’s Fair Market Value at the time of such termination or (B) the
original purchase price paid for such shares by the Optionee. Should the right of
repurchase be assigned by the Company, the assignee shall pay the Company cash equal to
the difference between the original purchase price and the stock’s Fair Market Value
if the original purchase price is less than the stock’s Fair Market Value. 

	 	     (k)
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 Optionee of the intent to transfer all or any part
of the shares exercised pursuant to the Option. 

	 	     (l)
Re-Load Options. Without in any way limiting the authority of the Board or
Committee to make or not to make grants of Options hereunder, the Board or Committee
shall have the authority (but not an obligation) to include as part of any Option
Agreement a provision entitling the Optionee to a further Option (a “Re-Load Option”)
in the event the Optionee 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 (i) shall
be for a number of shares equal to the number of shares surrendered as part or all of the
exercise price of such Option; (ii) shall 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) shall 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
which is granted to a 10% shareholder (as described in subsection 5(b), shall have
an exercise price which is equal to one hundred ten percent (110%) of the Fair Market
Value of the stock subject to the Re-Load Option on the date of exercise of the original
Option and shall have a term which is no longer than five (5) years. 

	

     Any
such Re-Load Option may be an Incentive Stock Option or a Nonstatutory Stock
Option, as the Board or Committee may designate at the time of the grant of the
original Option; provided, however, that the designation of any Re-Load
Option as an Incentive Stock Option shall be subject to the one hundred thousand
dollar ($100,000) annual limitation on exercisability of Incentive Stock Options
described in subsection 12(e) of the Plan 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 limits on the grants of Options under
subsection 5(c) and shall be subject to such other terms and conditions as
the Board or Committee may determine which are not inconsistent with the express
provisions of the Plan regarding the terms of Options. 

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     7.
Terms of Stock Bonuses and Purchases of Restricted Stock. 

	 	     Each
stock bonus or restricted stock purchase agreement shall be in such form and shall
contain such terms and conditions as the Board or the Committee shall deem appropriate.
The terms and conditions of stock bonus or restricted stock purchase agreements may
change from time to time, and the terms and conditions of separate agreements need not be
identical, but each stock bonus or 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 as appropriate:

	 	     (a)
Purchase Price. The purchase price under each restricted stock purchase Stock Award
Agreement shall be such amount as the Board or Committee shall determine and designate in
such agreement, but in no event shall the purchase price be less than eighty-five percent
(85%) of the stock’s Fair Market Value on the date such award is made. Notwithstanding
the foregoing, the Board or the Committee may determine that eligible Participants in the
Plan may be awarded stock pursuant to a stock bonus agreement in consideration for past
services actually rendered to the Company or for its benefit.

	 	     (b)
Transferability. Rights under a stock bonus or restricted stock purchase agreement shall
be transferable by the grantee only upon such terms and conditions as are set forth in
the applicable Stock Award Agreement, as the Board or the Committee shall determine in
its discretion, so long as stock awarded under such Stock Award Agreement remains subject
to the terms of the agreement.

	 	     (c)
Consideration. The purchase price of stock acquired pursuant to a stock purchase
agreement shall be paid either: (i) in cash at the time of purchase; (ii) at
the discretion of the Board or the Committee, according to a deferred payment or other
arrangement with the person to whom the stock is sold; or (iii) in any other form of
legal consideration that may be acceptable to the Board or the Committee in its
discretion. Notwithstanding the foregoing, the Board or the Committee to which
administration of the Plan has been delegated may award stock pursuant to a stock bonus
agreement in consideration for past services actually rendered to the Company or for its
benefit. 

	 	     (d)
Vesting. Shares of stock sold or awarded under the Plan may, but need not, be
subject to a repurchase option in favor of the Company in accordance with a vesting
schedule to be determined by the Board or the Committee. The applicable agreement shall
provide (i) that the right to repurchase at the original purchase price shall lapse
at a minimum rate of twenty percent (20%) per year over five (5) years from the date the
Stock Award was granted, and (ii) such right shall be exercisable only (A) within
the ninety (90) day period following the termination of employment or the relationship as
a Director or Consultant, or (B) such longer period as may be agreed to by the
Company and the holder of the Stock Award (for example, for purposes of satisfying the
requirements of Section 1202(c)(3) of the Code (regarding “qualified small
business stock”)), and (iii) such right shall be exercisable only for cash or
cancellation of purchase money indebtedness for the shares. 

	

-10- 

	

	 	     (e)
Termination of Employment or Relationship as a Director or Consultant. In the event a
Participant’s Continuous Status as an Employee, Director or Consultant terminates, the
Company may repurchase or otherwise reacquire, subject to the limitations described in
subsection 7(d), any or all of the shares of stock held by that person which have not
vested as of the date of termination under the terms of the stock bonus or restricted
stock purchase agreement between the Company and such person. 

     8.
Stock Appreciation Rights. 

	 	     (a)
The Board or Committee shall have full power and authority, exercisable in its sole
discretion, to grant Stock Appreciation Rights under the Plan to Employees or Directors
of or Consultants to, the Company or its Affiliates. To exercise any outstanding Stock
Appreciation Right, the holder must provide written notice of exercise to the Company in
compliance with the provisions of the Stock Award Agreement evidencing such right. Except
as provided in subsection 5(c), no limitation shall exist on the aggregate amount of
cash payments the Company may make under the Plan in connection with the exercise of a
Stock Appreciation Right. 

	 	     (b)
Three types of Stock Appreciation Rights shall be authorized for issuance under the Plan:

	 	     (1)
Tandem Stock Appreciation Rights. Tandem Stock Appreciation Rights will be granted
appurtenant to an Option, and shall, except as specifically set forth in this Section 8,
be subject to the same terms and conditions applicable to the particular Option grant to
which it pertains. Tandem Stock Appreciation Rights will require the holder to elect
between the exercise of the underlying Option for shares of stock and the surrender, in
whole or in part, of such Option for an appreciation distribution. The appreciation
distribution payable on the exercised Tandem Right shall be in cash (or, if so provided,
in an equivalent number of shares of stock based on Fair Market Value on the date of the
Option surrender) in an amount up to the excess of (A) the Fair Market Value (on the
date of the Option surrender) of the number of shares of stock covered by that portion of
the surrendered Option in which the Optionee is vested over (B) the aggregate
exercise price payable for such vested shares. 

	 	     (2)
Concurrent Stock Appreciation Rights. Concurrent Rights will be granted
appurtenant to an Option and may apply to all or any portion of the shares of stock
subject to the underlying Option and shall, except as specifically set forth in this
Section 8, be subject to the same terms and conditions applicable to the particular
Option grant to which it pertains. A Concurrent Right shall be exercised automatically at
the same time the underlying Option is exercised with respect to the particular shares of
stock to which the Concurrent Right pertains. The appreciation distribution payable on an
exercised Concurrent Right shall be in cash (or, if so provided, in an equivalent number
of shares of stock based on Fair Market Value on the date of the exercise of the
Concurrent Right) in an amount equal to such portion as shall be determined by the Board
or the Committee at the time of the grant of the excess of (A) the aggregate Fair
Market Value (on the date of the exercise of the Concurrent Right) of the vested shares
of stock purchased under the underlying Option which have Concurrent Rights appurtenant
to them over (B) the aggregate exercise price paid for such shares. 

	

-11- 

	

	 	     (3)
Independent Stock Appreciation Rights. Independent Rights will be granted
independently of any Option and shall, except as specifically set forth in this Section 8,
be subject to the same terms and conditions applicable to Nonstatutory Stock Options as
set forth in Section 6. They shall be denominated in share equivalents. The
appreciation distribution payable on the exercised Independent Right shall be not greater
than an amount equal to the excess of (A) the aggregate Fair Market Value (on the
date of the exercise of the Independent Right) of a number of shares of Company stock
equal to the number of share equivalents in which the holder is vested under such
Independent Right, and with respect to which the holder is exercising the Independent
Right on such date, over (B) the aggregate Fair Market Value (on the date of the
grant of the Independent Right) of such number of shares of Company stock. The
appreciation distribution payable on the exercised Independent Right shall be in cash or,
if so provided, in an equivalent number of shares of stock based on Fair Market Value on
the date of the exercise of the Independent Right. 

     9.
Cancellation and Re-Grant of Options. 

	 	     (a)
The Board or the Committee shall have the authority to effect, at any time and from time
to time, (i) the repricing of any outstanding Options and/or any Stock Appreciation
Rights under the Plan and/or (ii) with the consent of the affected holders of
Options and/or Stock Appreciation Rights, the cancellation of any outstanding Options
and/or any Stock Appreciation Rights under the Plan and the grant in substitution
therefor of new Options and/or Stock Appreciation Rights under the Plan covering the same
or different numbers of shares of stock, but having an exercise price per share not less
than eighty-five percent (85%) of the Fair Market Value (one hundred percent (100%) of
the Fair Market Value in the case of an Incentive Stock Option) or, in the case of a 10%
shareholder (as described in subsection 5(b)), not less than one hundred ten percent
(110%) of the Fair Market Value) per share of stock on the new grant date.
Notwithstanding the foregoing, the Board or the Committee may grant an Option and/or
Stock Appreciation Right with an exercise price lower than that set forth above if such
Option and/or Stock Appreciation Right is granted as part of a transaction to which
section 424(a) of the Code applies. 

	 	     (b)
Shares subject to an Option or Stock Appreciation Right canceled under this Section 9
shall continue to be counted against the maximum award of Options and Stock Appreciation
Rights permitted to be granted pursuant to subsection 5(c) of the Plan. The
repricing of an Option and/or Stock Appreciation Right under this Section 9,
resulting in a reduction of the exercise price, shall be deemed to be a cancellation of
the original Option and/or Stock Appreciation Right and the grant of a substitute Option
and/or Stock Appreciation Right; in the event of such repricing, both the original and
the substituted Options and Stock Appreciation Rights shall be counted against the
maximum awards of Options and Stock Appreciation Rights permitted to be granted pursuant
to subsection 5(c) of the Plan. The provisions of this subsection 9(b) shall be
applicable only to the extent required by Section 162(m) of the Code. 

	

-12- 

	

     10.
Covenants of the Company. 

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

	 	     (b)
The Company shall seek to obtain from each regulatory commission or agency having
jurisdiction over the Plan such authority as may be required to issue and sell shares of
stock upon exercise of the Stock Award; provided, however, that this undertaking shall
not require the Company to register under the Securities Act either 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. 

     11.
Use of Proceeds From Stock. 

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

     12. Miscellaneous.  

	 	     (a)
Subject to any applicable provisions of the California Corporate Securities Law of 1968
and related regulations relied upon as a condition of issuing securities pursuant to the
Plan, 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
pursuant to subsection 6(e), 7(d) or 8(b), 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)
Neither an Employee, Director or Consultant nor any person to whom a Stock Award is
transferred under subsection 6(d), 7(b), or 8(b) 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 person has satisfied all requirements for exercise of the
Stock Award pursuant to its terms. 

	 	     (c)
Throughout the term of any Stock Award, the Company shall deliver to the holder of such
Stock Award, not later than one hundred twenty (120) days after the close of each of the
Company’s fiscal years during the term of such Stock Award, a balance sheet and an
income statement. This subsection shall not apply (i) after the Listing Date, or (ii) when
issuance is limited to key employees whose duties in connection with the Company assure
them to access to equivalent information. 

	 	     (d)
Nothing in the Plan or any instrument executed or Stock Award granted pursuant thereto
shall confer upon any Employee, Director, Consultant or other holder of Stock Awards any
right to continue in the employ of the Company or any Affiliate (or to continue acting as
a Director or Consultant) or shall affect the right of the Company or any Affiliate to
terminate the employment of any Employee with or without cause the right of the Company’s
Board of Director’s and/or the Company’s shareholders to remove any Director as
provided in the Company’s By-Laws and the provisions of the California Corporations
Code, or the right to terminate the relationship of any Consultant subject to the terms
of such Consultant’s agreement with the Company or Affiliate. 

	

-13- 

	

	 	     (e)
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 Optionee 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. 

	 	     (f)
The Company may require any person to whom a Stock Award is granted, or any person to
whom a Stock Award is transferred pursuant to subsection 6(d), 7(b) or 8(b), as a
condition of exercising or acquiring stock under any Stock Award, (1) to give
written assurances satisfactory to the Company as to such person’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 (2) to
give written assurances satisfactory to the Company stating that such person is acquiring
the stock subject to the Stock Award for such person’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
inoperative if (i) 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 (ii) 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. 

	 	     (g)
To the extent provided by the terms of a Stock Award Agreement, the person to whom a
Stock Award is granted 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 or by a combination of such means: (1) tendering a cash payment; (2) 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 (3) delivering to the Company owned and unencumbered shares of the common
stock of the Company. 

     13. Adjustments
Upon Changes In Stock.  

	 	     (a)
In the event of: (1) a merger or consolidation in which the Company is not the
surviving corporation; (2) a reverse merger in which the Company is the surviving
corporation but the shares of the Company’s 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; (3) a sale of all or substantially all
of the assets of the Company; or (4) any other capital reorganization in which more
than fifty percent (50%) of the shares of the Company entitled to vote are exchanged,
excluding in each case a capital reorganization in which the sole purpose is to change
the state of incorporation of the Company (in each case, a “Change in Control”),
then: (i) any surviving corporation shall assume any Stock Awards outstanding under
the Plan or shall substitute similar Stock Awards for those outstanding under the Plan,
or (ii) such Stock Awards shall continue in full force and effect. In the event any
surviving corporation refuses to assume or continue such Stock Awards, or to substitute
similar stock awards for those outstanding under the Plan, then, with respect to Stock
Awards held by persons then performing services as Employees, Directors or Consultants
for the Company, the time at which such Stock Awards may first be exercised shall be
accelerated and the Stock Awards terminated if not exercised prior to such event. In the
event of a dissolution or liquidation of the Company, any Stock Awards outstanding under
the Plan shall terminate if not exercised prior to such event.

	

-14- 

	

	 	     (b)
In addition, with respect to any person who was providing Continuous Service as an
Employee, Director or Consultant immediately prior to the consummation of the Change in
Control, any Stock Awards held by such person shall immediately become fully vested and
exercisable (and any repurchase right by the Company with respect to shares acquired by
such person under an Option shall lapse) if such person is Involuntarily Terminated
Without Cause or Constructively Terminated within eighteen (18) months following the
Change in Control. Notwithstanding the preceding sentence, in the event all of the
following occurs: (i) such contemplated Change in Control would occur prior to April 23,
2000 (the date two (2) years following the adoption of this Section 13(b)); (ii) such
potential acceleration of vesting (and exercisability) would by itselfresult in a
contemplated Change in Control that would otherwise be eligible to be accounted for as a
“pooling of interests” accounting transaction to become ineligible for such
accounting treatment; and (iii) the potential acquiror of the Company desires to
account for such contemplated Change in Control 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 itselfwould
result in a contemplated Change in Control to become ineligible to be accounted for as a
“pooling of interests” accounting transaction, then such restrictions shall be
deemed inoperative. Accounting issues shall be determined by the Company’s
independent public accountants applying generally accepted accounting principles. 

	

     For
purposes of the Plan, Constructively Terminated shall mean the voluntary
termination of employment by Stock Award recipient after any of the following
are undertaken without Stock Award recipient’s express written consent:
(a) the assignment to Stock Award recipient of any duties or
responsibilities which result in a material diminution or adverse change of
Stock Award recipient’s position, status or circumstances of employment,
but does not include a mere change in title or reporting relationship;
(b) reduction by the Company in Stock Award recipient’s base salary;
(c) any failure by the Company to continue in effect any benefit plan or
arrangement, including incentive plans or plans to receive securities of the
Company, in which Stock Award recipient is participating (hereinafter referred
to as “Benefit Plans”), or the taking of any action by the Company
which would adversely affect Stock Award recipient’s participation in or
reduce Stock Award recipient’s benefits under any Benefit Plans or deprive
Stock Award recipient of any fringe benefit then enjoyed by Stock Award
recipient, provided, however, that Stock Award recipient’s
termination is not deemed to be Constructively Terminated if the Company offers
a range of benefit plans and programs which, taken as a whole, are comparable to
the Benefit Plans; (d) a relocation of Stock Award recipient or the
Company’s principal business offices to a location more than fifty (50)
miles from the location at which Stock Award recipient performs duties, except
for required travel by Stock Award recipient on the Company’s business to
an extent substantially consistent with Stock Award recipient’s business
travel obligations; (e) any breach by the Company of any material agreement
between Stock Award recipient and the Company concerning Stock Award
recipient’s employment; or (f) any failure by the Company to obtain
the assumption of any material agreement between Stock Award recipient and the
Company concerning Stock Award recipient’s employment by any successor or
assign of the Company. 

-15- 

	

     For
purposes of the Plan, Involuntarily Terminated Without Cause shall mean
dismissal or discharge of Stock Award recipient for any reason other than Cause,
death or Disability. 

     For
purposes of the Plan, Cause shall mean 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.  

     14. Amendment
of the Plan and Stock Awards.  

	 	     (a)
The Board at any time, and from time to time, may amend the Plan. However, except as
provided in Section 13 relating to adjustments upon changes in stock, no amendment
shall be effective unless approved by the shareholders of the Company within twelve (12)
months before or after the adoption of the amendment, where the amendment will: 

	 	     (1)
Increase the number of shares reserved for Stock Awards under the Plan; 

	 	     (2)
Modify the requirements as to eligibility for participation in the Plan (to the extent
such modification requires shareholder approval in order for the Plan to satisfy the
requirements of Section 422 of the Code); or 

	 	     (3)
Modify the Plan in any other way if such modification requires shareholder approval in
order for the Plan to satisfy the requirements of Section 422 of the Code or to
comply with the requirements of Rule 16b-3. 

	 	     (b)
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
promulgated thereunder regarding the exclusion of performance-based compensation from the
limit on corporate deductibility of compensation paid to certain executive officers. 

	 	     (c)
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)
Rights and obligations 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 person to whom the Stock Award was granted and (ii) such person
consents in writing. 

	

-16- 

	

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

     15. Termination
or Suspension of The Plan. 

	 	     (a)
The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the
Plan shall terminate on November 19, 2007, which shall be within ten (10) years from
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)
Rights and obligations under any Stock Award granted while the Plan is in affect shall
not be impaired by suspension or termination of the Plan, except with the written consent
of the person to whom the Stock Award was granted. 

	

     16. Effective
Date of Plan.  

     The
Plan shall become effective as determined by the Board, but no Stock Awards granted under
the Plan shall be exercised 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.  

-17-Exhibit 4.2

INTERNATIONAL
MICROCIRCUITS, INC.

2000
NONSTATUTORY STOCK OPTION PLAN

(Adopted
December 21, 2000)

     1.
Purposes. 

	 	     (a)
The purpose of the Plan is to provide a means by which selected Employees and Directors
of and Consultants to the Company and is Affiliates may be given an opportunity to
benefit from increases in value of the stock of the Company through the granting of
Nonstatutory Stock Options, as defined below. 

	 	     (b)
The Company, by means of the Plan, seeks to retain the services of persons who are now
Employees of Directors of or Consultants to the Company or its Affiliates, to secure and
retain the services of new Employees, Directors and Consultants, 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, whether now or
hereafter existing, as those terms are defined in Sections 424(e) and (f) respectively,
of the Code.

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

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

	 	     (d)
“Committee” means a Committee appointed by the Board in accordance with subsection 3(c)
of the Plan.

	 	     (e)
“Company” means International Microcircuits, Inc., a California corporation, and any
successor corporation thereto.

	 	     (f)
“Consultant” means any person, including an advisor, engaged by the
Company or an Affiliate to render consulting services and who is compensated for such
services, provided that the term “Consultant” shall not include Directors who
are paid only a director’s fee by the Company or who are not compensated by the
Company for their services as Directors. 

	 	     (g)
“Continuous Status as an Employee, Director or Consultant” means that the
service of an individual to the Company or any Affiliate of the Company, whether as an
Employee, Director or Consultant, is not interrupted or terminated. The Board, or the
chief executive officer of the Company may determine, in that party’s sole
discretion, whether Continuous Status as an Employee, Director or Consultant shall be
considered interrupted in the case of: (i) any leave of absence approved by the
Board or the chief executive officer of the Company, including sick leave, military
leave, or any other personal leave; or (ii) transfers between the Company,
Affiliates or their successors. 

	

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

	 	     (i)
“Employee” means any person, including Officers and Directors, employed
by the Company or any Affiliate of the Company. Neither service as a Director nor payment
of a director’s fee by the Company shall be sufficient to constitute “employment” by
the Company. 

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

	 	     (k)
“Fair Market Value” means, as of any date, the value of the common stock
of the Company 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 sale price for such stock (or the closing bid, if no sales
were reported) as quoted on such exchange or market (or the exchange or market with
the greatest volume of trading in the Company’s 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. 

	 	     (l)
“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 25200(o) of the California Corporate Securities Law
of 1968. 

	 	     (m)
“Nonstatutory Stock Option” means an Option not intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulaged thereunder. 

	 	     (n)
“Officer” means 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. 

	 	     (o)
“Option” means a stock option granted pursuant to the Plan. All Options shall be
Nonstatutory Stock Options.

	 	     (p)
“Option Agreement” means a written agreement between the Company and an Optionee
evidencing the terms and conditions of an individual Option grant. Each Option Agreement
shall be subject to the terms and conditions of the Plan.

	

-2- 

	

	 	     (q)
“Optionee” means a person to whom an Option is granted pursuant to the plan or, if
applicable, such other person who holds an outstanding Option.

	 	     (r)
“Plan” means this 2000 Nonstatutory Stock Option Plan.

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

     3.
Administration. 

	 	     (a)
The Plan shall be administered by the Board unless and until the Board delegates
administration to a Committee, as provided in subsection 3(c).

	 	     (b)
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 Options; when and how each Option shall be granted; the provisions of each Option
granted (which need not be identical), including the time or times when a person shall be
permitted to receive stock pursuant to an Option; and the number of shares with respect
to which an Option shall be granted to each such person. 

	 	(ii)
To construe and interpret the Plan and Options granted under it, and to establish, amend
and revoke rules and regulations for its administration. The Board, in the exercise of
this power, may correct any defect, omission or inconsistency in the Plan or in any
Option 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 an Option as provided in Section 11.

	 	(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)
The Board may delegate administration of the Plan to a committee of the Board composed of
not fewer than two (2) members (the “Committee”). If administration is
delegated to a Committee, the Committee shall have, in connection with the administration
of the Plan, the powers therefore possessed by the Board (and references in this Plan to
the Board shall thereafter be to the Committee), 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. 

     4.
Shares Subject to the Plan. 

	 	     (a)
Subject to the provisions of Section 10 relating to adjustments upon changes in
stock, the stock that may be issued pursuant to Options shall not exceed in the aggregate
two million six hundred twenty-five thousand (2,625,000) shares1of the
Company’s common stock. If any Option 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 Option shall revert and again become available for issuance under the
Plan. 

	

-3- 

	

	 	     (b)
The stock to the Plan may be unissued shares or reacquired shares.

     5.
Eligibility. 

	 	     Options
may be granted only to Employees, Directors or Consultants.

	

     6.
Option Provisions. 

     Each
Option shall be in such form and shall contain such terms and conditions as the
Board shall Deem appropriate. 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. No Option shall be exercisable after the expiration of ten (10) years
from the date it was granted. 

	 	     (b)
Price. The exercise price of each Option shall be determined by the Board, in its
discretion, on the date the Option is granted, and such price may be greater than, equal
to or less than the Fair Market Value of the Stock subject to the Option. 

	 	     (c)
Consideration. The purchase price of stock acquired pursuant to an Option shall be
paid, to the extent permitted by applicable statues and regulations, either (i) in
cash at the time the Option is exercised, or (ii) at the discretion of the Board or
the Committee, (A) by delivery to the Company of other common stock of the Company,
(B) according to a deferred payment or other arrangement (which may include, without
limiting the generality of the foregoing, the use of other common stock of the Company) with
the person to whom, the Option is granted or to whom the Option is transferred pursuant
to subsection 6(d), (C) by delivery of a properly executed notice together with
irrevocable instructions to a broker providing for the assignment to the Company of the
proceeds of a sale or loan with respect to some or all of the shares being acquired upon
the exercise of the Option (including without limitation, through an exercise complying
with the provisions of Regulation T as promulgated from time to time by the Board if
Governors of the Federal Reserve System), or (D) in any other form of legal
consideration that may be acceptable to the Board. 

	

     In
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.  

	(1)		
Reflects original shares reserve of 1,750,000 shares proportionally adjusted for
the three-for-two Common Stock split effective December 29, 2000. 

	

-4- 

	

	 	     (d)
Transferability. An Option not be transferable except by will or by the laws of
descent and distribution and shall be exercisable during the lifetime of the person to
whom the Option is granted only by such person. The person to whom the Option is granted
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 Optionee, shall thereafter
be entitled to exercise the Option. 

	 	     (e)
Vesting. The total number of shares of stock to an Option may, but need not, be
allotted in periodic installments (which may, but need not, be equal). The Option
Agreement may provide that from time to time during each o such installment periods, the
Option may become exercisable (“vest”) with respect to some or all of the
shares allotted to that period and may be exercised with respect to some or all of the
shares allotted to such period and/or any prior period as to which the Option became
vested but was not fully exercised. The Option may 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 provisions of
this subsection 6(e) are subject to any Option provisions governing the minimum
numbers of shares as to which an Option may be exercised. 

	 	     (f)
Termination of Employment or Relationship as a Director or Consultant. In the
event an Optionee’s Continuous Status as an Employee, Director or Consultant
terminates (other than upon the Optionee’s death or disability), the Optionee may
exercise his or her Option (to the extent that the Optionee 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) moths following the termination of the
Optionee’s Continuous Status as an Employee, Director or Consultant (or such longer
or shorter period, which shall not be less than thirty (30) days. Unless such
termination is for cause, specified in the Option Agreement. If, at the date of
termination, the Optionee is not entitled to exercise his or her entire Option, the
shares covered by the unexercisable portion of the Option shall revert to and again
become available for isssuance under the Plan. If, after termination, the Optionee does
not exercise his or her Option within the time specified in the Option Agreement, the
Option shall terminate, and the shares covered by such Option shall revert to and again
become available for issuance under the Plan. 

	

     An
Optionee’s Option Agreement may also provided that if a sale of shares acquired upon
the exercise of the Option within the applicable time periods following the termination
of the Optionee’s Continuous Status as an Employee, Director, or Consultant (other
than upon the Optionee’s death or disability) would result in liability under
Section 16(b) of the Exchange Act, then the Option shall terminate on the
earlier of (i) the expiration of the terms of the Option set forth in the Option
Agreement, or (ii) the tenth (10th) day after the last date on which such sale
would result in such liability under Section 16(b) of the Exchange Act.
Finally, an Optionee’s Option Agreement may also provide that if the exercise of the
Option following the termination of the Optionee’s Continuous Status as an Employee,
Director or Consultant (other than upon the Optionee’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 the first
paragraph of this subsection 6, or (ii) the expiration of a period of three (3) months
after the termination of the Optionee’s Continuous Status as an Employee, Director
or Consultant during which the exercise of the Option would not be in violation of such
registration requirements.  

-5- 

	

	 	     (g)
Disability of Optionee. In the event an Optionee’s Continuous Status as an
Employee, Director or Consultant terminates as a result of the Optionee’s
disability, the Optionee may exercise his or her Option ( to the extent that the Optionee
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 longer or shorter period, which in no event be less than six (6) months,
specified in the Option Agreement), or (ii) the expiration of the term of the Option
as set forth in the Option Agreement. If, at the date of termination, the Optionee is not
entitled to exercise his or her entire )Option, the shares covered by the unexercisable
portion of the Option shall revert to an again become available for issuance under the
Plan. If, after termination, the Optionee does not exercise his or her Option within the
specified herein, the Option shall terminate, and the shares covered by such Option shall
revert to and again become available for issuance under the Plan. 

	 	     (h)
Death of Optionee. In the event of the death of an Optionee during, or within a
period specified in the Option Agreement after the termination of, the Optionee’s
Continuous Status as an Employee, Director or Consultant, the Option may be exercised (to
the extent the Options was entitled to exercise the Option as of the date of death) by
the Optionee’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 Optionee’s
death pursuant to subsection 6(d), but only within in the period ending on the
earlier of (i) the date eighteen (18) months following the date of death (or
such longer or shorter period, which in no event shall be less than six (6) months,
specified in the Option Agreement), or (ii) the expiration of the term of such
Option as set forth in the Option Agreement. If, at the time of death, the Optionee was
not entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option is not exercised within the time specified herein,
the Option shall terminate, and the shares covered by such Option shall revert to and
again become available for issuance under the Plan. 

	 	     (i)
Early Exercise. The option may, but need not, include a provision whereby the
Optionee may elect at any time while an Employee Director or Consultant 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. Any unvested shares so purchased shall be subject to a repurchase
right in favor of the Company, with the repurchase price to be equal to the original
purchase price of the stock, or to any other restricted Board determines to be
appropriate; provides however, that (i) the right to repurchase at the original
purchase price shall lapse at a rate determined by the Board i its discretion, and (ii) such
right shall be exercisable only within (A) the ninety (90) day period following
the termination of employment or relationship as a Director or Consultant, or (B) such
longer period as may be agreed to by the Company and the Optionee, and (iii) such
right shall be exercisable only for cash or cancellation of purchase money indebtedness
for the shares. Should the right of repurchase be assigned by the Company, the assignee
shall pay the Company cash equal to the difference between the original purchase price
and the stock’s Fair Market Value if the original purchase price is less than the
stock’s Fair Market Value. 

	

-6- 

	

	 	     (j)
Right of Repurchase. The option may, but need not, include a provision whereby the
Company may elect, prior to the Listing Date, to repurchase all or any part of the vested
shares exercised pursuant to the Option; provided however, that (i) such repurchase
right shall be exercisable only with (A) the ninety (90) day period following
the terminations of employment or the relationship as a Director or Consultant, or (B) such
longer period as may be agreed to by the Company and the Optionee, (ii) such
repurchase right shall be exercisable for less than all of the vested shares only with
Optionee’s consent, and (iii) such right shall be exercisable only for cash or
cancellation of purchase money indebtedness for the shares at a repurchase price equal to
the greater of (A) the stock’s Fair Market Value at the time of such
termination or (B) the original purchase price paid for such shares by the Optionee.
Should the right of repurchase be assigned by the Company, the asignee shall pay the
Company cash equal to the difference between the original purchase price and the stock’s
Fair Market Value if the original purchase price is less than the stock’s Fair
Market Value. 

	 	     (k)
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 the receipt of notice from the Optionee of the intent to transfer all or any
part of the shares exercised pursuant to the Option.

     7.
Covenants of the Company. 

	 	     (a)
During the terms of the Options, the Company shall keep available at all times the number
of shares of stock required to satisfy such Options. 

	 	     (b)
The Company shall seek to obtain from each regulatory commission or agency having
jurisdiction over the Plan such authority as may be required to issue and sell shares of
stock upon exercise of the Option; provided, however, that this undertaking shall not
require the Company to register under the Securities Act wither the Plan, any Option or
any stock issued or issuable pursuant to any such Option. 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 Options unless and until such authority is
obtained. 

     8. Use
of Proceeds From Stock.  

     Proceeds
from the sale of stock pursuant to Options shall constitute general funds of the Company.  

     9. Miscellaneous.  

	 	     (a)
Neither an Employee, Director or Consultant nor any person to whom an Option is
transferred under subsection 6(d) 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 Option
unless and until such person has satisfied all requirements for exercise of the Option
pursuant to its terms. 

	

-7- 

	

	 	     (b)
Throughout the term of any Option, the Company shall deliver to the holder of such
Option, not later than one hundred twenty (120) days after the close of each of the
Company’s fiscal years during the term of such Option, a balance sheet and an income
statement. This subsection shall not apply (i) after the Listing Date or (ii) when
issuance is limited to key employees whose duties in connection with the Company assure
them access to equivalent information. 

	 	     (c)
Nothing in the Plan or any instrument executed or Option granted pursuant thereto shall
confer upon any Employee, Director, Consultant or other holder of Options any right to
continue in the employ of the Company or any Affiliate (or to continue acting as Director
or Consultant) or shall affect the right of the Company or any Affiliate to
terminate the employment of any Employee with or without cause, the right of the Company’s
Board of Directors and/or the Company’s shareholders to remove any director as
provided in the Company’s By-Laws and the provisions of the California Corporations
Code, or the right to terminate the relationship of any Consultant subject to the terms
of such Consultant’s agreement with the Company or Affiliate. 

	 	     (d)
The Company may require any person to whom an Option is granted, or any person to whom an
Option is transferred pursuant to subsection 6(d), as a condition of exercising or
acquiring stock under any Option, (1) to give written assurances satisfactory to the
Company as to such person’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 Option; and (2) to give written assurances
satisfactory to the Company stating that such person is acquiring the stock subject to
the Option for such person’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 inoperative if (i) the
issuance of the shares upon the exercise or acquisition of stock under the Option has
been registered under a then currently effective registration statement under the
Securities Act, or (ii) 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 stock. 

	 	     (e)
To the extent provided by the terms of an Option Agreement the person to whom an Option
is granted may satisfy any federal, state or local tax withholding obligation relating to
the exercise of an Option by any of the following means or by a combination of such
means: (1) tendering a cash payment; (2) authorizing the Company to withhold
shares from the shares of the common stock otherwise issuable to the participant as a
result of the exercise of the Option (but not in excess of any amount whose Fair Market
Value equals the amount determined by the applicable minimum statutory withholding
rates); or (3) delivering to the Company owned and unencumbered shares of the common
stock of the Company. 

	

-8- 

	

     10.
Adjustments Upon Changes in Stock. 

	 	     (a)
In the event of any change in the stock subject to the Plan through merger,
consolidation, reorganization, reincorporation, recapitalization, reclassification, stock
dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of
shares, exchange of shares or similar change in the capital structure of the Company, or
in the event of payment of a dividend or distribution to the shareholders of the Company
in a form other than common stock (excepting normal cash dividends) that has a
material effect on the Fair Market Value of shares of the common stock of the Company,
appropriate adjustments shall be made in the number and class of shares subject to the
Plan and to any outstanding Options and in the exercise price per share of any
outstanding Options in order to prevent dilution or enlargement of Optionees’rights
under the Plan. Notwithstanding the foregoing, any fractional share resulting from an
adjustment pursuant to this subsection shall be rounded down to the nearest whole
number, and in no event may the exercise price of any Option be decreased to an amount
less than the par value, if any, of the stock subject to the Option. The adjustments
determined by the Board pursuant to this subsection shall be final, binding and
conclusive. 

	 	     (b)
In the event of (1) a dissolution or liquidation of the Company; (2) a merger
or consolidation in which the Company is not the surviving corporation; (3) a
reverse merger in which the Company is the surviving corporation but the shares of the
Company’s 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; or (4) any other capital reorganization in which more than fifty percent
(50%) of the shares of the Company entitled to vote are exchanged, excluding in each
case a capital reorganization in which the sole purpose is to change the state of
incorporation of the Company, then the surviving, continuing, successor or purchasing
corporation or other business entity or parent thereof, as the case may be (the “Acquiring
Corporation”), may, without the consent of the Optionee, either assume the
Company’s rights and obligations under outstanding Options or substitute for
outstanding Options substantially equivalent options for the Acquiring Corporation’s
stock. Any Options which are neither assumed by the Acquiring Corporation in connection
with such event nor exercised as of the date of such event shall terminate and cease to
be outstanding effective as of the date of such event. 

     11.
Amendment of the Plan and Options. 

	 	     (a)
The Board at any time, and from time to time, may amend the Plan.

	 	     (b)
The Board at any time, and from time to time, may amend the terms of any one or more
Option; provided, however, that the rights and obligations under any Option shall not be
impaired by any such amendment unless (i) the Company requests the consent of the
person to whom the Option was granted and (ii) such person consents in writing. 

	

     12. Termination
or Suspension of the Plan.  

	 	     (a)
The Board may suspend or terminate the Plan at any time. No Options may be granted under
the Plan while the Plan is suspended or after it is terminated.

	

-9- 

	

	 	     (b)
Rights and obligations under any Option granted while the Plan is effect shall not be
impaired by suspension or termination of the Plan, except with the written consent of the
person to whom the Option was granted.

	

     13.
Effective Date of Plan. 

     The
Plan shall become effective as determined by the Board. 

-10-

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