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Prepared by MERRILL CORPORATION

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Exhibit 10.38    
  

 
 

SILICON COMMUNICATION LAB, INC.    
    
    1999 STOCK OPTION PLAN    
  

    1.  Purposes of the Plan.  The purposes of this Stock Option Plan are to attract and retain the best
available personnel for positions of substantial responsibility, to provide additional incentive to Employees and Consultants of the Company and its Subsidiaries and to promote the success of the
Company's business. Options granted under the Plan may be incentive stock options (as defined under Section 422 of the Code) or nonstatutory stock options, as determined by the Administrator at
the time of grant of an option and subject to the applicable provisions of section 422 of be Code, as amended, and the regulations promulgated thereunder. 

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

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

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

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

    (d) "Committee" means a Committee appointed by the Board of Directors in accordance with Section 4 of the Plan. 

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

    (f)  "Company" means Silicon Communication Lab, Inc., a California corporation. 

    (g) "Consultant" means any person who is engaged by the Company or any Parent or Subsidiary to render consulting or
advisory services and is compensated for such services, and any director of the Company whether compensated for such services or not. If and in the event the Company registers any class of any equity
security pursuant to the Exchange Act, the term Consultant shall thereafter not include directors who are not compensated for their services or are paid only a director's fee by the Company. 

    (h) "Continuous Status as an Employee or Consultant" means that the employment or consulting relationship with the
Company, any Parent or Subsidiary is not interrupted or terminated. Continuous Status as an Employee or Consultant shall not be considered interrupted in the case of (i) any leave of absence
approved by the Company or (ii) transfers between locations of the Company or between the Company, is Parent, any Subsidiary, or any successor. A leave of absence approved by the Company shall
include sick leave, military leave, or any other personal leave. For purposes of Incentive Stock Options, no such leave may exceed 90 days, unless reemployment upon expiration of such leave is
guaranteed by statute or contract, including Company policies. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, on the 91st day of such
leave any Incentive Stock Option held by the Optionee shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option. 

    (i)  "Employee" means any person, including officers and directors, employed by the Company or any Parent or Subsidiary
of the Company. The payment of a director's fee by the Company shall not be sufficient to constitute "employment" by the Company. 

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

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

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

    (ii) If
the Common Stock is quoted on the NASDAQ System (but not on the Nasdaq National Market thereof) or regularly quoted by a recognized securities dealer but
selling prices are not reported, its Fair Market Value shall be the mean between the high bid and low asked prices for the Common Stock on the last market trading day prior to the day of
determination, or; 

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

    (l)  "Incentive Stock Option" means an Option intended to qualify as an incentive stock option within the meaning of
section 422 of the Code. 

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

    (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. 

    (p) "Optioned Stock" the Common Stock subject to an Option. 

    (q) "Optionee" means an Employee, or Consultant who receives an Option. 

    (r) "Parent" means a "parent corporation", whether now or hereafter existing, defined in Section 424(e) of the
Code. 

    (s) "Plan" means this 1999 Stock Option Plan. 

    (t)  "Share" means a share of the Common Stock, as adjusted in accordance with Section 11 below. 

    (u) "Subsidiary" means a "subsidiary corporation", whether now or hereafter existing, as defined in
Section 424(f) of the Code. 

    3.  Stock Subject to the Plan.  Subject to the provisions of the Plan, the maximum aggregate number of
shares which may be optioned and sold under the Plan is three million (3,000,000) shares of Common Stock. The shares may be authorized but unissued, or reacquired Common Stock. 

    If
an Option should expire or become unexercisable for any reason without having been exercised in full, the unpurchased Shares which were subject thereto shall, unless the Plan shall
have been terminated, become available for future grant under the Plan. 

    4.  Administration of the Plan.  

    (a)  Initial Plan Procedure.  Prior to the date, if any, upon which the Company becomes subject to the
Exchange Act, the Plan shall be administered by the Board or a committee appointed by the Board. 

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    (b)  Plan Procedure after the Date, if any, upon which the Company becomes Subject to the Exchange Act.  

    (i)  Administration with Respect to Directors and Officers.  With respect to grants of Options to
Employees who are also officers or directors of the Company, the Plan shall be administered by (A) the Board if the Board may administer the Plan in compliance with
Rule 16b-3 promulgated under the Exchange Act or any successor thereto ("Rule 16b-3") with respect to a plan intended to qualify thereunder as a discretionary
plan, or (B) a committee designated by the Board to administer the Plan which committee shall be constituted in such a manner as to permit the Plan to comply with Rule 16b-3
with respect to a plan intended to qualify thereunder as a discretionary plan. Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board.
From time to time the Board may increase the size of the Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill
vacancies, however caused, and remove all members of the Committee and thereafter directly administer the Plan, all to the extent permitted by Rule 16b-3 with respect to a plan
intended to qualify thereunder as a discretionary plan. 

    (ii)  Multiple Administrative Bodies.  If permitted by Rule 16b-3, the Plan may be
administered by different bodies with respect to directors, non-director officers and Employees who are neither directors nor officers. 

    (iii)  Administration With Respect to Consultants and Other Employees.  With respect to grants of Options
to Employees or Consultants who are neither directors nor officers of the Company, the Plan shall be administered by (A) the Board or (B) a committee designated by the Board, which
committee shall be constituted in such a manner as to satisfy the legal requirements relating to the administration of incentive stock option plans, if any, of California corporate and securities
laws, of the Code, and of any applicable stock exchange (the "Applicable Laws"). Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the
Board. From time to time the Board may increase the size of the Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies, however caused, and remove all members of the Committee and thereafter directly administer the Plan, all to the extent permitted by the Applicable Laws. 

    (c)  Powers of the Administrator.  Subject to the provisions of the Plan and, in the case of a Committee,
the specific duties delegated by the Board to such Committee, and subject to the approval of any relevant authorities, including the approval, if required, of any stock exchange upon which the Common
Stock is listed, the Administrator shall have the authority, in its discretion: 

     (i) to
determine the Fair Market Value of the Common Stock, in accordance with Section 2(k) of the Plan; 

    (ii) to
select the Consultants and Employees to whom Options may from time to time be granted hereunder; 

    (iii) to
determine whether and to what extent Options are granted hereunder; 

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

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

    (vi) to
determine the terms and conditions of any award granted hereunder; 

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

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

    (ix) to
construe and interpret the terms of the Plan and awards granted pursuant to the Plan. 

    (d)  Effect of Administrator's Decision.  All decisions, determinations and interpretations of the
Administrator shall be final and binding on all Optionees and any other holders of any Options. 

    5.  Eligibility.  

    (a) Nonstatutory
Stock Options may be granted to Employees and Consultants. Incentive Stock Options may be granted only to Employees. An Employee or Consultant who has
been granted an Option may, if otherwise eligible, be granted additional Options. 

    (b) Each
Option shall be designated in the written option agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such
designations, to the extent that the aggregate Fair Market Value: 

     (i) of
Shares subject to an Optionee's Incentive Stock Options granted by the Company, any Parent or Subsidiary, which 

    (ii) become
exercisable for the first time during any calendar year (under all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such excess Options
shall be treated as Nonstatutory Stock Options. For purposes of this Section 5(b), Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair
Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted. 

    (c) Whenever
shares of Common Stock are to be issued to Optionee in satisfaction of the rights conferred in accordance herein, the Company shall have the right to
require Optionee 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. 

    (d) The
Plan shall not confer upon any Optionee any right with respect to continuation of employment or consulting relationship with the Company, nor shall it interfere
in any way with his or her right or the Company's right to terminate his or her employment or consulting relationship at any time, with or without cause. 

    (e) Upon
the Company or a successor corporation issuing any class of common equity securities required to be registered under Section 12 of the Exchange Act or
upon the Plan being assumed by a corporation having a class of common equity securities required to be registered under Section 12 of the Exchange Act, the following limitations shall apply to
grants of Options to Employees: 

     (i) No
Employee shall be granted, in any fiscal year of the Company, Options to purchase more than 350,000 Shares, 

    (ii) The
foregoing limitations shall be adjusted proportionately in connection with any change in the Company's capitalization as described in Section 11. 

    (iii) If
an Option is canceled in the same fiscal year of the Company in which it was granted (other than in connection with a transaction described in
Section 11), the canceled 

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Option will be counted against the limit set forth in Section 5(e)(i). For this purpose, if the exercise price of an Option is reduced, the transaction will be treated as a cancellation of the
Option and the grant of a new Option. 

    6.  Term of Plan.  The Plan shall become effective upon the earlier to occur of its adoption by the Board
of directors or its approval by the shareholders of the Company, as described in Section 17 of the Plan. It shall continue in effect for a term often (10) years unless sooner terminated
under Section 13 of the Plan. 

    7.  Term of Option.  The term of each Option shall be the term stated in the Option Agreement; provided,
however, that the term shall be no more than ten (10) years from the date of grant thereof. However, in the case of an Incentive Stock Option granted to an Optionee who, at the time the Option
is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Option shall be five
(5) years from the date of grant thereof or such shorter term as may be provided in the Option Agreement. 

    8.  Option Exercise Price and Consideration.  

    (a) The
per share exercise price for the Shares to be issued pursuant to exercise of an Option shall be such price as is determined by the Board, but shall be subject
to the following: 

     (i) In
the case of an Incentive Stock Option. 

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

    (B) granted
to any Employee other than an Employee described in the preceding paragraph, the per Share exercise price shall be no less than 100% of the Fair Market
Value per Share on the date of grant. 

    (ii) In
the case of a Nonstatutory Stock Option. 

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

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

    (b) The
consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Administrator (and,
in the case of an Incentive Stock Option, shall be determined at the time of grant) and may consist entirely of (1) cash, (2) check,
(3) other Shares which (x) in the case of Shares acquired upon exercise of an Option have been owned by the Optionee for more than six months on the date of surrender and (y) have
a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised, (4) delivery of a properly executed exercise notice
together with such other documentation as the Administrator and the broker, if applicable, shall require to effect an exercise of the Option and delivery to the Company of the sale or loan proceeds
required to pay the exercise price, or (5) any combination of the foregoing methods of payment. In making its determination as to the type of consideration to accept, the Board shall consider
if acceptance of such consideration may be reasonably expected to benefit the Company. 

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    9.  Exercise of Option.  

    (a)  Procedure for Exercise: Rights as a Shareholder.  Any Option granted hereunder shall be exercisable
at such times and under such conditions as determined by the Board, including performance criteria with respect to the Company and/or the Optionee, and as shall be permissible under the terms of the
Plan. 

    An
Option may not be exercised for a fraction of a Share. 

    An
Option shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Option by the person entitled to
exercise the Option and full payment for the Shares with respect to which the Option is exercised has been received by the Company. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such stock certificate promptly upon exercise of the Option. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 11 of the Plan. 

    Exercise
of an Option in any manner shall result in a decrease in the number of Shares which thereafter may be available, both for purposes of the Plan and for sale under the Option,
by the number of Shares as to which the Option is exercised. 

    (b)  Termination of Employment or Consulting Relationship.  In the event that an Optionee's Continuous
Status as an Employee or Consultant terminates (but not in the event of a change of laws from Employee to Consultant (in which case an Employee's Incentive Stock option shall automatically
convert to a Nonstatutory Stock Option on the ninety-first (91st) day following such change of status) or from Consultant to Employee), other than upon the Optionee's death or disability, the Optionee
may exercise his or her Option, but only within such period of time but not less than thirty (30) days, as is determined by the Administrator, and only to the extent that the Optionee was
entitled to exercise it at the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Notice of Grant). 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 the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 

    (c)  Disability of Optionee.  In the event of termination of an Optionee's consulting relationship or
Continuous Status as an Employee as a result of his or her disability, Optionee may, but only with six (6) months from the date of such termination (and in no event later than the expiration
date of the term of such Option as set forth in the Option Agreement), exercise the Option to the extent otherwise entitled to exercise it at the date of such termination; provided, however, that if
such disability is not a "disability" as such term is defined in Section 22(c)(3) of the Code, in the case of an Incentive Stock Option such Incentive Stock Option shall automatically convert
to a Nonstatutory Stock Option on the day three months and one day following such termination. To the extent that Optionee is not entitled to exercise the Option at the date of termination, or if
Optionee does not exercise such Option to the extent so entitled within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 

    (d)  Death of Optionee.  In the event of the death of an Optionee, the Option may be exercised at any
time within twelve (12) months following the date of death (but in no event later 

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than the expiration of the term of such Option as set forth in the Notice of Grant), by the Optionees estate or by a person who acquired the right to exercise the Option by bequest or inheritance, but
only to the extent that the Optionee was entitled to exercise the Option at the date of death. 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 immediately revert to the Plan. If, after death, the Optionee's estate or a person who acquired the right to exercise the Option by bequest or
inheritance does not exercise the Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 

    (e)  Rule 16b-3.  Options granted to persons subject to Section 16(b) of the
Exchange Act must comply with Rule 16b-3 and shall contain such additional conditions or restrictions as may be required thereunder to qualify for the maximum exemption from
Section 16 of the Exchange Act with respect to Plan transactions. 

    (f)  Buyout Provisions.  The Administrator may at any time offer to buy out for a payment in cash or
Shares, an Option previously granted, based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made. 

    10.  Non-Transferability of Options.  Options may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee. 

    11.  Adjustments Upon Changes in Capitalization or Merger.  

    (a)  Changes in Capitalization.  Subject to any required action by the shareholders of the Company, the
number of shares of Common Stock covered by each outstanding option, and the number of shares of Common Stock which have been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or expiration of an Option, as well as the price per share of Common Stock covered by each such outstanding option, shall be
proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification
of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been effected without receipt of consideration. Such adjustment shall be made by the Board, whose determination in that respect
shall be final binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Option. 

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

    (c)  Merger.  In the event of a merger of the Company with or into another corporation, the Option shall
be assumed or an equivalent option shall be substituted by such successor corporation or a parent or subsidiary of such successor corporation. If, in such event, the Option is not assumed or
substituted, the Option shall terminate as of the date of the closing of the merger. For the purposes of this paragraph, the Option shall be considered assumed if, following the merger, the option
confers the right to purchase, for each Share of Optioned Stock subject to the Option immediately prior to the merger, the consideration (whether stock, cash, or other securities or 

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property) received in the merger by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger was not solely common stock of the successor
corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option for each Share of Optioned
Stock subject to the Option to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the
merger. 

    (d)  Accelerated Vesting of Previously Unvested Options.  Notwithstanding anything to the contrary
contained within this Section 11, the Board shall have the discretion to provide, at any time before the Option would have otherwise terminated as provided herein, accelerated vesting of
previously unvested options upon a merger, consolidation or other change in control of the Company. 

    12.  Time of Granting Option.  The date of grant of an Option shall, for all purposes, be the date on
which the Administrator makes the determination granting such Option, or such other date as is determined by the Board. Notice of the determination shall be given to each Employee or Consultant to
whom an Option is so granted within a reasonable time after the date of such grant. 

    13.  Amendment and Termination of the Plan.  

    (a)  Amendment and Termination.  The Board may at any time amend, alter, suspend or discontinue the Plan,
but no amendment, alteration, suspension or discontinuation shall be made which would impair the rights of any Optionee under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Rule 16b-3 under the Exchange Act or with Section 422 of the Code (or any other applicable law or regulation, including the
requirements of the NASD or an established stock exchange), the Company shall obtain shareholder approval of any Plan amendment in such a manner and to such a degree as required. 

    (b)  Effect of Amendment or Termination.  Any such amendment or termination of the Plan shall not affect
Options already granted, and such Options shall remain in full force and effect as if this Plan had not been amended or terminated, unless mutually agreed otherwise between the Optionee and the Board,
which agreement must be in writing and signed by the Optionee and the Company. 

    14.  Conditions Upon Issuance of Shares.  Shares shall not be issued pursuant to the exercise of an
Option unless the exercise of such Option and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities
Act of 1933, as amended, the Exchange Act the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the Shares may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such compliance. 

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

    15.  Reservation of Shares.  The Company, during the term of this Plan, will all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. 

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    The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been
obtained. 

    16.  Agreements.  Options shall be evidenced by written agreements in such form as the Board shall
approve from time to time. 

    17.  Shareholder Approval.  Continuance of the Plan shall be subject to approval by the shareholders of
the Company within twelve (12) months before or after the date the Plan is adopted. Such shareholder approval shall be obtained in the degree and manner required under applicable state and
federal law and the rules of any stock exchange upon which the Common Stock is listed. 

    18.  Information to Optionees and Purchasers.  The Company shall provide to each Optionee, not less
frequently than annually, copies of annual financial statements. The Company shall also provide such statements to each individual who acquires Shares pursuant to the Plan while such individual owns
such Shares. The Company shall not be required to provide such statements to key employees whose duties in connection with the Company assure their access to equivalent information. 

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SILICON COMMUNICATION LAB, INC.    
    
    1999 STOCK OPTION PLAN    
    
    STOCK OPTION AGREEMENT    
  

    Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Option Agreement. 

I. NOTICE OF STOCK OPTION GRANT  

	Optionee's Name and Address	 	 
	 	 	

	

 	
 	

	

 	
 	

    You
have been granted an option to purchase Common Stock of the Company, subject to the terms and conditions of the Plan and this Option Agreement, as follows: 

	Date of Grant	 	 
	 	 	

	

Vesting Commencement Date	
 	

 
	 	 	

	

Exercise Price Per Share	
 	

 
	 	 	

	

Total Number of Shares Granted	
 	

 
	 	 	

	

Total Exercise Price	
 	

 
	 	 	

	Type of Option:	 	          Incentive Stock Option
	

 	
 	

          Nonstatutory Stock Option
	

Terms/Expiration Date	
 	

 
	 	 	

 Vesting Schedule:  

    This Option may be exercised, in whole or in part, in accordance with the following schedule: 

    [25%
of the Shares subject to the Option shall vest on the first anniversary of the Vesting Commencement Date, and 1/48 of the Shares subject to the Option
shall vest each one-month period thereafter.] 

 Termination Period  

    This Option may be exercised for 30 days after termination of employment or consulting relationship, or such longer period as may be applicable upon
death or disability of Optionee as provided in the Plan, but in no event later than the Term/Expiration Date as provided above. 

II. AGREEMENT  

    1.  Grant of Option.  Silicon Communication Lab, Inc., a California corporation (the "Company"),
hereby grants to the Optionee named in the Notice of Grant (the "Optionee"), an option (the "Option") to purchase the total number of shares of Common Stock (the "Shares") set forth in the Notice of
Grant,
at the exercise price per share set forth in the Notice of Grant (the "Exercise Price") subject to the terms, definitions and provisions of the 1997 Stock Option Plan (the "Plan") adopted by 

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the Company, which is incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Option. 

    If
designated in the Notice of Grant as an Incentive Stock Option ("ISO"), this Option is intended to qualify as an Incentive Stock Option as defined in Section 422 of the
Code. However, if this Option is intended to be an Incentive Stock Option, to the extent that it exceeds the $100,000 rule of Code Section 422(d) it shall be treated as a Nonstatutory Stock
Option ("NSO"). 

    2.  Exercise of Option.  This Option shall be exercisable during its term in accordance with the Vesting
Schedule set out in the Notice of Grant and with the provisions of Section 9 of the Plan as follows: 

     (i) Right to Exercise,

    (a) This
Option may not be exercised for a fraction of a Share. 

    (b) In
the event of Optionee's death, disability or other termination of the employment or consulting relationship, the exercisability of the Option is governed by
Sections 6, 7 and 8 below, subject to the limitation contained in subsection 2(i)(c). 

    (c) In
no event may this Option be exercised after the date of expiration of the term of this Option as set forth in the Notice of Grant. 

    (ii)  Method of Exercise.  This Option shall be exercisable by written notice (in the form attached as
Exhibit A) which shall state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised, and such other representations and agreements as to the
holder's investment intent with respect to such shares of Common Stock as may be required by the Company pursuant to the provisions of the Plan. Such written notice shall be signed by the Optionee and
shall be delivered in person or by certified mail to the Secretary of the Company. The written notice shall be accompanied by payment of the Exercise Price. This Option shall be deemed to be exercised
upon receipt by the Company of such written notice accompanied by the Exercise Price. 

    No
Shares will be issued pursuant to the exercise of an Option unless such issuance and such exercise shall comply with all relevant provisions of law and the requirements of any
stock exchange upon which the Shares may then be listed. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to the Optionee on the date on which the Option is
exercised with respect to such Shares. 

    3.  Optionee's Representations.  In the event the Shares purchasable pursuant to the exercise of this
Option have not been registered under the Securities Act of 1933, as amended, at the time this Option is exercised, Optionee shall, if required by the Company, concurrently with the exercise of all or
any portion of this Option, deliver to the Company his or her Investment Representation Statement in the form attached hereto as Exhibit B, and shall read the applicable rules of the
Commissioner of Corporations attached to such Investment Representation Statement. 

    4.  Method of Payment.  Payment of the Exercise Price shall be by any of the following, or a combination
thereof, at the election of the Optionee. 

     (i) cash;
or 

    (ii) check;
or 

    (iii) surrender
of other shares of Common Stock of the Company which (A) in the case of Shares acquired pursuant to the exercise of a Company option, have been
owned by the Optionee for more than six (6) months on the date of surrender, and (B) have a Fair Market 

2

 

Value on the date of surrender equal to the Exercise Price of the Shares as to which the Option is being exercised, or 

    (iv) delivery
of a properly executed exercise notice together with such other documentation as the Administrator and the broker, if applicable, shall require to effect
an exercise of the Option and delivery to the Company of the sale or loan proceeds required to pay the Exercise Price. 

    5.  Restrictions on Exercise.  This Option may not be exercised until such time as the Plan has been
approved by the shareholders of the Company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any
applicable
federal or state securities or other law or regulation, including any rule under Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as promulgated by the Federal Reserve
Board. As a condition to the exercise of this Option, the Company may require Optionee to make any representation and warranty to the Company as may be required by any applicable law or regulation. 

    6.  Termination of Relationship.  In the event an Optionee's Continuous Status as an Employee or
Consultant terminates, Optionee may, to the extent otherwise so entitled at the date of such termination (the "Termination Date"), exercise this Option during the Termination Period set out in the
Notice of Grant. To the extent that Optionee was not entitled to exercise this Option at the date of such termination, or if Optionee does not exercise this Option within the time specified herein,
the Option shall terminate. 

    7.  Disability of Optionee.  Notwithstanding the provisions of Section 6 above, in the event of
termination of an Optionee's consulting relationship or Continuous Status as an Employee as a result of his or her disability, Optionee may, but only within six (6) months from the date of such
termination (and in no event later than the expiration date of the term of such Option as set forth in the Option Agreement), exercise the Option to the extent otherwise entitled to exercise it at the
date of such termination, provided, however, that if such disability is not a "disability" as such term is defined in Section 22(e)(3) of the Code, in the case of an Incentive Stock Option such
Incentive Stock Option shall automatically convert to a Nonstatutory Stock Option on the day three months and one day following such termination. To the extent that Optionee was not entitled to
exercise the Option at the date of termination, or if Optionee does not exercise such Option to the extent so entitled within the time specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan. 

    8.  Death of Optionee.  In the event of termination of Optionee's Continuous Status as an Employee or
Consultant as a result of the death of Optionee, the Option may be exercised at any time within twelve (12) months following the date of death (but in no event later than the date of expiration
of the term of this Option as set forth in Section 10 below), by Optionee's estate or by a person who acquired the right to exercise the Option by bequest or inheritance, but only to the extent
the Optionee could exercise the Option at the date of death. 

    9.  Non-Transferability of Option.  This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by Optionee. The terms of this Option shall be binding up on the executors,
administrators, heirs, successors and assigns of the Optionee. 

    10.  Term of Option.  This Option may be exercised only within the term set out in the Notice of Grant,
and may be exercised during such term only in accordance with the Plan and the terms of this Option. The limitations set out in Section 7 of the Plan regarding Options designated as Incentive
Stock Options and Options granted to more than ten percent (10%) shareholders shall apply to this Option. 

3

 

    11.  Taxation on Exercise of Option.  Optionee understands that, upon exercising a Nonstatutory Option,
he or she will recognize income for tax purposes in an amount equal to the excess of the then Fair Market Value of the Shares over the exercise price. However, the timing of this income recognition
may be deferred for up to six months, if Optionee is subject to Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). If the Optionee is an Employee, the Company
will be required to withhold from Optionee's compensation, or collect from Optionee and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income.
Additionally, the Optionee may at some point be required to satisfy tax withholding obligations with respect to the disqualifying disposition of an Incentive Stock Option. The Optionee shall satisfy
his or her tax withholding obligation arising upon the exercise of this Option out of Optionee's compensation or by payment to the Company. 

    12.  Tax Consequences.  Set forth below is a brief summary as of the date of this Option of some of the
federal and State of California tax consequences of exercise of this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO
CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES. 

    (i)  Exercise of ISO.  If this Option qualifies as an ISO, there will be no regular federal income tax
liability or State of California income tax liability upon the exercise of the Option, although the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise
Price will be treated as an adjustment to the alternative minimum tax for federal tax purposes and may subject the Optionee to the alternative minimum tax in the year of exercise. 

    (ii)  Exercise of ISO Following Disability.  If the Optionee's Continuous Status as an Employee or
Consultant terminates as a result of disability that is not total and permanent disability as defined in Section 22(e)(3) of the Code, to the extent permitted on the date of termination, the
Optionee must exercise an ISO within 90 days of such termination for the ISO to be qualified as an ISO. 

    (iii)  Exercise of Nonstatutory Stock Option.  There may be a regular federal income tax liability and
State of California income tax liability upon the exercise of a Nonstatutory Stock Option. The Optionee will be treated as having received compensation income (taxable at ordinary income tax rates)
equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. If Optionee is an Employee or a former Employee, the Company will be required to
withhold from Optionee's compensation or collect from Optionee and pay to the applicable taxing authorities an amount in cash equal to a percentage of this compensation income at the time of exercise,
and may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise. 

    (iv)  Disposition of Shares.  In the case of an NSO, if Shares are held for at least one year, any gain
realized on disposition of the Shares will be treated as long-term capital gain for federal and State of California income tax purposes. In the case of an ISO, if Shares transferred
pursuant to the Option are held for at least one year after exercise and are disposed of at least two years after the Date of Grant, any gain realized on disposition of the Shares will also be treated
as long-term capital gain for federal and State of California income tax purposes. If Shares purchased under an ISO are disposed of within such one-year period or within two
years after the Date of Grant, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the difference between the Exercise
Price and the lesser of (1) the Fair Market Value of the Shares on the date of exercise, or (2) the sale price of the Shares. 

4

 

    (v)  Notice of Disqualifying Disposition of ISO Shares.  If the Option granted to Optionee herein is an
ISO, and if Optionee sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (1) the date two years after the Date of Grant, or (2) the
date one year after the date of exercise, the Optionee shall immediately notify the Company in writing of such disposition. Optionee agrees that Optionee may be subject to income tax withholding by
the Company on the compensation income recognized by the Optionee. 

    13.  First Right For Refusal.  At the discretion of the Company, Shares issued pursuant to the exercise
of an option may be subject to a requirement that if an Optionee proposes to sell, pledge, or otherwise transfer any Shares acquired pursuant to exercise of an option, or any interest in such Shares,
to any person or entity, the Company shall have a right of first refusal (the "Right of First Refusal") with respect to such Shares. Any Optionee desiring to transfer Shares subject to the Right of
First Refusal shall give a written notice (the "Transfer Notice") to the Company describing fully the proposed transfer, including the number of shares proposed to be transferred, the proposed
transfer price, and the name and address of the proposed transferee. The Transfer Notice shall be signed both by the Optionee and the proposed transferee and must constitute a binding commitment of
both parties to the transfer of the Shares. The Company shall have the right to purchase the Shares subject to the Transfer Notice on the terms of the proposal referred to in the Transfer Notice by
delivery of a notice of exercise of the Right of First Refusal within 30 days after the date the Transfer Notice is received by the Company. The Company's rights under this Section 13
shall be freely assignable, in whole or in part. 

    If
the Company fails to exercise the Right of First Refusal within 30 days after the date on which it receives the Transfer Notice, the Optionee may, not later than six
(6) months following receipt of the Transfer Notice by Company, consummate a transfer of the Shares subject to the Transfer Notice on the terms and conditions described in the Transfer Notice.
Any proposed transfer on terms and conditions different from those described in the Transfer Notice, as well as any subsequent proposed transfer by the Optionee, shall again be subject to the Right of
First Refusal and shall again require compliance with the procedure described in this Section 13. If the Company exercises its Right of First Refusal, the Optionee shall immediately endorse and
deliver to the Company every stock certificate representing the Shares being purchased, and the Company shall then promptly pay the purchase price in accordance with the terms set forth in the
Transfer Notice. The Company's Right of First Refusal shall inure to the benefit of its successors and assigns and shall be binding upon any transferee of the
Shares, other than a transferee acquiring Shares in a transaction with respect to which the Company failed to exercise its Right of First Refusal (a "Free Transferee") or a transferee of a Free
Transferee. Notwithstanding any other provision of this Section 13, if the common stock of the Company is listed on any United states securities exchange or traded on any formal
over-the-counter market in general use in the United States at the time the Optionee desires to transfer his or her Shares, the Company shall no longer have the Right of First
refusal, and the Optionee shall have no obligation to comply with this Section 13. 

    14.  "Market Stand-Off' Agreement.  Optionee hereby agrees that he or she shall not, to the extent
reasonably requested by the Company and an underwriter of Common Stock (or other securities) of the Company, sell or otherwise transfer or dispose (other than to donees who agree to be similarly
bound) of any Shares during the one hundred eighty (180)-day period following the effective date of a registration statement of the Company filed under the Securities Act; provided,
however, that: (i) all officers and directors of the Company and all other persons with registration rights enter into similar agreements; and (ii) such agreement shall be applicable
only to the first such registration statement of the Company which covers shares (or securities) to be sold on its behalf to the public in an underwritten offering. Such agreement shall be in writing
in a form satisfactory to the Company and such underwriter. In order to enforce the foregoing covenant, the Company may impose stop-transfer 

5

 

instructions with respect to the Shares of each Shareholder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such one hundred eighty
(180)-day period. 

    15.  Binding Effect.  This Agreement shall inure to the benefit of the Company and its successors and
assigns and, subject to the restrictions on transfer set forth herein, be binding upon Optionee, his permitted transferees, heirs, legatees, executors, administrators and legal successors, who shall
hold the Shares subject to the terms hereof. 

    16.  Severability.  If any provision of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remaining provisions shall nevertheless continue in full force and effect without being impaired or invalidated in any way and shall be construed in accordance with
the purposes and tenor and effect of this Agreement. 

    17.  Entire Agreement Governing Law.  The Plan is incorporated herein by reference to the Option
Agreement. The Plan and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the laws of the State or California except for that body of law pertaining to conflict of laws. 

	 	 	SILICON COMMUNICATION LAB, INC.

a California corporation
	

 	
 	

By:	
 	

 
	 	 	 	 	
 Don Yuh, President

    OPTIONEE
ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE OPTION HEREOF IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE WILL OF THE COMPANY (NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHAPES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY'S STOCK OPTION
PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH
OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT CAUSE. 

    Optionee
acknowledges receipt of a copy of the Plan and represents that he is familiar with the terms and provisions thereof, hereby accepts this Option subject to all of the terms
and provisions thereof. Optionee has reviewed the Plan and this Option in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option and fully understands
all provisions of the Option. Optionee hereby Agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or this
Option. Optionee further agrees to notify the Company upon any change in the residence address indicated below. 

	Dated:	 	 	 	Signed:	 	 
	 	 	
	 	 	 	

	 	 	 	 	Residence Address:
	

 	
 	

 	
 	

6

 
 

CONSENT OF SPOUSE    
  

    I,                   , spouse of the Optionee who executed the foregoing Agreement, hereby agree that my spouse's
interest in the shares of Common Stock
subject to said Agreement shall be irrevocably bound by the Agreement's terms. I further agree that my community property interest in such shares, if any, shall similarly be bound by said Agreement
and that such consent is binding upon my executors, administrators, heirs and assigns. I agree to execute and deliver such documents as may be necessary to carry out the intent of said Agreement and
this consent. 

	Dated:	 	 	 	, 200 	 	 
	 	 	
	 	 	 	 
	

 	
 	

 	
 	

 	
 	

  

 
 

NOTICE OF EXERCISE OF STOCK OPTION    
  

SILICON
COMMUNICATION LAB, INC.

846 N. Hillview Dr.

Milphas, CA 95035 

    Attention:
Secretary 

    The
undersigned hereby elects to exercise the option indicated below with respect to the number of shares of Common Stock of              (the "Company") set forth: 

	Option Grant Date:	 	 
	 	 	

	

Type of Option:	
 	

         Incentive Stock Option
	

 	
 	

         Nonstatutory Stock Option
	

Number of Shares Being Exercised:                          Shares
	

Exercise Price Per Shares: $                        
	

Total Exercise Price: $                        
	

Method of Payment: (  ) Cash or (  ) Check

    Enclosed
herewith is payment in full of the total exercise price, a copy of the Option Agreement and an executed copy of an Investment Representation Statement (Exhibit B to
the Option Agreement). 

    My
exact name, address and social security number for purposes of the stock certificates to be issued and the shareholder list of the Company are: 

	Name:	 	 
	 	 	

	

Address:	
 	

 
	 	 	

	

Social Security Number:	
 	

 
	 	 	

	 	 	 	 	Sincerely,
	

Dated:	
 	

 	
 	

 
	 	 	
	 	

	 	 	 	 	(Employee's Signature)
	

 	
 	

 	
 	

 (Employee's Printed Name)

1

QuickLinks

Exhibit 10.38

SILICON COMMUNICATION LAB, INC. 1999 STOCK OPTION PLAN

SILICON COMMUNICATION LAB, INC. 1999 STOCK OPTION PLAN STOCK OPTION AGREEMENT

CONSENT OF SPOUSE

NOTICE OF EXERCISE OF STOCK OPTIONPrepared by MERRILL CORPORATION

Tumbleweed® Communications Corp.  

     

  

Exhibit 10.1  

June 8,
2001 

Ms. Elizabeth
Davis Jordan

7 Farm Road

Los Altos, California 

Dear
Betsy, 

    I
am pleased to confirm the offer extended to you to join Tumbleweed Communications Corp. in the position of Senior Vice President-Finance and Chief Financial Officer, reporting to
me, and subject to confirmation by our Board of Directors. 

    Salary and Bonus.  Your starting salary will be $9,166.66 per semi-monthly pay period, which is equivalent
to $220,000.00 on an annualized basis. You will also be eligible for a quarterly performance bonus of up to $20,000.00, which is $80,000.00 on an annualized basis, based on mutually agreed objectives
we will establish after your start date. You will receive minimum non-refundable quarterly bonus payments of $10,000.00 that will be credited against your performance bonus during the
first year of employment. All salary and bonus payments are subject to normal withholdings. 

    Stock Options.  As part of your compensation package, you will be granted stock options to purchase 300,000 shares of
Tumbleweed common stock. The stock options are subject to a vesting schedule, whereby 25% of the options vest upon completion of one year of employment at Tumbleweed, and the remaining options vest
monthly thereafter over a three-year period, for a total vesting period of four years. 

    Termination.  If Tumbleweed terminates your employment for any reason other than Cause, or in the case of a Constructive
Termination, you will be entitled to receive as severance payment of an amount equal to six months of your base salary, paid in accordance with Tumbleweed's payroll practices. In the event of
termination for Cause, you will not be entitled to such severance payment, or any additional payments, salary, bonus, or benefits. 

    Definition of Cause.  For purposes of this agreement, "Cause" means only: the commission of a felony by the Executive
and intended to result in your substantial personal enrichment at Tumbleweed's expense, conviction of a crime involving moral turpitude, or willful failure to perform your duties to Tumbleweed, which
failure is deliberate, results in injury to Tumbleweed, and continues for more than 15 days after written notice is given to you. For purposes of this definition, no act or omission is
considered to have been "willful" unless it was not in good faith and you had knowledge at the time that the act or omission was not in the best interests of Tumbleweed. 

    Definition of Constructive Termination.  For purposes of this agreement, "Constructive Termination" consists of
reduction of base salary, diminution of duties, change in title or reporting relationship, change in office location by more than ten (10) miles, or the failure of any successor to the assets
or business through any Change of Ownership Control to fully assume all obligations of Tumbleweed under this agreement. 

    Change of Ownership Control.  If a Change of Ownership Control occurs, followed by your involuntary termination or
Constructive Termination within six months of the Change of Ownership Control, upon such termination, the vesting of two years worth of your outstanding stock options immediately will be accelerated.
"Change of Ownership Control" means any sale of all or substantially all of Tumbleweed's assets, or any merger, consolidation, or stock sales that results in the holders of Tumbleweed's capital stock
immediately prior to such transaction owning less than 50% of the voting power of Tumbleweed's capital stock immediately after such transaction. 

    Benefits Package.  Beginning on the first of the month following full time employment start date, you and your eligible
dependents will be able to participate in a comprehensive benefits program including medical, dental and vision insurance. 

    Additionally,
beginning on the first of the month following full time employment start date, you will also be able to participate in other benefit programs, including: Life and AD&D
insurance; Short and Long-Term Disability
insurance; and an Employee Assistance Program. Insurance premiums for employee coverage in benefit plans are paid 100% by Tumbleweed. Medical insurance premiums for eligible dependents are paid
approximately 80% by Tumbleweed. Vision and Dental Insurance premiums for eligible dependents are paid 100% by Tumbleweed. 

    You
will also be eligible to participate in a 401(k) Plan and Pre-Tax Flexible Benefits Plan. Tumbleweed matches employee contributions to the 401(k) at 100% up to 4% of
base salary. Furthermore, you will be entitled to fifteen (15) days of paid time off during your first year, accruing at the rate of 10 hours per month from your date of hire, as well
other paid holidays. Additionally, you will be eligible to participate in the Tumbleweed Employee Stock Purchase Plan and the Company Revenue Target Bonus Program. Dates of eligibility for these
programs are set forth in the documents governing such plans. 

    Proprietary Information.  As a condition of employment, you will be required to sign a Proprietary Information and
Inventions Agreement. You should also note that, in accordance with federal law, you will be required to demonstrate employment eligibility, which includes verification of your identity and of your
authorization to work in the United States. 

    Tumbleweed
requests that you provide documentation on your first day at work and in any event it must be provided to Tumbleweed no later than three (3) business days of your
date of hire. 

    At-Will Employment.  If you choose to accept this offer, please understand your employment is voluntarily
entered into and is for no specific period. As a result, you are free to resign at any time, for any reason, or for no reason. Similarly, Tumbleweed is free to conclude its at-will
employment relationship with you at any time, with or without cause. 

    Betsy,
we hope you agree that you have a great contribution to make to Tumbleweed, and that you will find working here a rewarding experience. We look forward to a favorable reply and
the opportunity of working with you to create a successful company. 

    To
indicate your acceptance of this offer of employment, please sign and date this confirmation form and return it to Tumbleweed. This letter, along with the Tumbleweed Communications
Employee Manual and the Plan Documents governing the health and welfare benefit plans, which you will receive shortly, sets forth the terms of your employment with Tumbleweed and supersedes any prior
representations or agreements, whether written or oral. The terms and conditions in the Employee Manual and the Plan Documents are subject to change at any time by Tumbleweed, subject to requirements
of federal, state or local law. This letter may only be modified by a written agreement signed by you and an officer of Tumbleweed. 

    This
offer will terminate at midnight on June 11, 2001. 

	/s/ JEFFREY C. SMITH   
 Jeffrey C. Smith

Chief Executive Officer

Tumbleweed Communications Corp.	 	 

Please indicate acceptance of this offer by returning this form with your signature.  

    I agree to and accept the enclosed offer of employment with Tumbleweed Communications. My start date will be June 27, 2001.

	/s/ ELIZABETH D. JORDAN   
 Elizabeth D. Jordan	 	June 10, 2001
 Date

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