Document:

EXHIBIT 4.5

KINTANA,
INC.

1997
EQUITY INCENTIVE PLAN

As
Adopted August 25, 1997 

As Amended June 10, 1999 

As Amended May 2, 2000 

As Amended January 24,2001

1.             PURPOSE.
The purpose of this Plan is to provide incentives to attract, retain and
motivate eligible persons whose present and potential contributions are
important to the success of the Company, its Parent and Subsidiaries, by
offering them an opportunity to participate in the Company’s future performance
through awards of Options and Restricted Stock. Capitalized terms not defined
in the text are defined in Section 22. This Plan is intended to be a written
compensatory benefit plan within the meaning of Rule 701 promulgated under the
Securities Act.

2.             SHARES
SUBJECT TO THE PLAN. 

2.1          Number
of Shares Available. Subject to Sections 2.2 and 17, the
total number of Shares reserved and available for grant and issuance pursuant
to this Plan will be Nine Million One Hundred Sixty Thousand Five Hundred Six
(9,160,506) Shares or such lesser number of Shares as permitted under Section
260.140.45 of Title 10 of the California Code of Regulations. Subject to
Sections 2.2 and 17, Shares that: (a) are subject to issuance upon exercise of
an Option but cease to be subject to such Option for any reason other than exercise
of such Option or (b) are subject to an Award that otherwise terminates without
Shares being issued will again be available for grant and issuance in
connection with future Awards under this Plan. At all times the Company will
reserve and keep available a sufficient number of Shares as will be required to
satisfy the requirements of all Awards granted under this Plan.

2.2          Adjustment
of Shares. In the event that the number of outstanding
Shares is changed by a stock dividend, recapitalization, stock split, reverse
stock split, subdivision, combination, reclassification or similar change in
the capital structure of the Company without consideration, then (a) the number
of Shares reserved for issuance under this Plan, (b) the Exercise Prices of and
number of Shares subject to outstanding Options, and (c) the number of Shares
subject to other outstanding Awards will be proportionately adjusted, subject
to any required action by the Board or the stockholders of the Company and
compliance with applicable securities laws; provided, however,
that fractions of a Share will not be issued but will either be paid in cash at
Fair Market Value of such fraction of a Share or will be rounded up to the
nearest whole Share, as determined by the Committee (as defined in Section 22
below).

3.             ELIGIBILITY.
ISOs (as defined in Section 5 below) may be granted only to employees
(including officers and directors who are also employees) of the Company or of
a Parent or Subsidiary of the Company. All other Awards may be granted to
employees, officers, directors and consultants of the Company or any Parent or
Subsidiary of the Company; provided such consultants render bona fide
services not in connection with the offer and sale of securities in a
capital-raising transaction. A person may be granted more than one Award under
this Plan.

4.             ADMINISTRATION.

4.1          Committee
Authority. This Plan will be administered by the
Committee or the Board acting as the Committee. Subject to the general
purposes, terms and conditions of this Plan, and to the direction of the Board,
the Committee will have full power to implement and carry out this Plan.
Without limitation, the Committee will have the authority to:

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

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

(c)           select
persons to receive Awards; 

(d)           determine
the form and terms of Awards; 

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

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

(g)           grant
waivers of Plan or Award conditions; 

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

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

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

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

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

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

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

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

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5.3          Exercise
Period. Options may
be exercisable immediately (subject to repurchase pursuant to Section 11 of
this Plan) or may be exercisable within the times or upon the events determined
by the Committee as set forth in the Stock Option Agreement governing such
Option; provided, however, that no Option will be exercisable
after the expiration of ten (10) years from the date the Option is granted; and
provided  further that no ISO granted to a person who directly or
by attribution owns more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or of any Parent or Subsidiary of
the Company (“Ten
Percent Stockholder”) will be exercisable after the expiration
of five (5) years from the date the ISO is granted. The Committee also may
provide for Options to become exercisable at one time or from time to time,
periodically or otherwise, in such number of Shares or percentage of Shares as
the Committee determines. Subject to earlier termination of the Option as
provided herein, Participant’s other than officers, directors or consultants of
the Company or of a Parent or Subsidiary of the Company shall have the right to
exercise an Option granted hereunder at the rate of at least twenty percent
(20%) per year over five (5) years from the date such Option is granted.

5.4          Exercise
Price. The Exercise Price of an Option will be determined
by the Committee when the Option is granted and may not be less than 85% of the
Fair Market Value of the Shares on the date of grant; provided that (i) the
Exercise Price of an ISO will not be less than 100% of the Fair Market Value of
the Shares on the date of grant and (ii) the Exercise Price of any Option
granted to a Ten Percent Stockholder will not be less than 110% of the Fair
Market Value of the Shares on the date of grant. Payment for the Shares
purchased must be made in accordance with Section 7 of this Plan.

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

5.6          Termination.
Subject to earlier termination pursuant to Subsection 17.1 and notwithstanding
the exercise periods set forth in the Stock Option Agreement, exercise of an
Option will always be subject to the following: 

(a)           If
the Participant is Terminated for any reason except death, Disability or for
Cause, then the Participant may exercise such Participant’s Options only to the
extent that such Options would have been exercisable upon the Termination Date
no later than three (3) months after the Termination Date (or such shorter time
period, not less than thirty (30) days, as may be specified in the Stock Option
Agreement) or such longer time period not exceeding five (5) years after the
Termination Date as may be determined by the Committee, with any exercise beyond
three (3) months after the Termination Date deemed to be an NQSO, but in any
event, no later than the expiration date of the Options. 

(b)           If
the Participant is Terminated because of Participant’s death or Disability (or
the Participant dies within three (3) months after a Termination other than
because of Participant’s death or Disability or Cause), then Participant’s
Options may be exercised only to the extent that such Options would have been
exercisable by Participant on the Termination Date and must be exercised by
Participant (or Participant’s legal representative or authorized assignee) no
later than twelve (12) months after the Termination Date (or such shorter time
period, not less than six (6) months, as may be specified in the Stock Option
Agreement) or such longer time period not exceeding five (5) years after the
Termination Date as may be determined by the Committee, with any exercise
beyond (a) three (3) months after the Termination Date when the Termination is
for any reason other than the Participant’s death or disability, within the
meaning of Section 22(e)(3) of the Code, or (b) twelve (12) months after the
Termination Date when the Termination is for Participant’s death or disability,
within the meaning of Section 22(e)(3) of the Code, deemed to be an NQSO, but
in any event no later than the expiration date of the Options. 

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

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

5.8          Limitations
on ISOs. The aggregate Fair Market Value (determined as
of the date of grant) of Shares with respect to which ISOs are exercisable for
the first time by a Participant during any calendar year (under this Plan or
under any other incentive stock option plan of the Company or any Parent or
Subsidiary of the Company) will not exceed $100,000. If the Fair Market Value
of Shares on the date of grant with respect to which ISOs are exercisable for
the first time by a Participant during any calendar year exceeds $100,000, then
the Options for the first $100,000 worth of Shares to become exercisable in
such calendar year will be ISOs and the Options for the amount in excess of
$100,000 that become exercisable in that calendar year will be NQSOs. In the
event that the Code or the regulations promulgated thereunder are amended after
the Effective Date (as defined in Section 18 below) of this Plan to provide for
a different limit on the Fair Market Value of Shares permitted to be subject to
ISOs, then such different limit will be automatically incorporated herein and
will apply to any Options granted after the effective date of such amendment.

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

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

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

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

6.2          Purchase
Price. The Purchase Price of Shares sold pursuant to a
Restricted Stock Award will be determined by the Committee and will be at least
85% of the Fair Market Value of the Shares on the date the Restricted Stock
Award is granted or at the time the purchase is consummated, except in the case
of a sale to a Ten Percent Stockholder, in which case the Purchase Price will
be 100% of the Fair Market Value on the date the Restricted Stock Award is
granted or at the time the purchase is consummated. Payment of the Purchase
Price may be made in accordance with Section 7 of this Plan.

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6.3          Restrictions.
Restricted Stock Awards may be subject to the restrictions set forth in Section
11 of this Plan or such other restrictions not inconsistent with Section
25102(o) of the California Corporations Code.

7.             PAYMENT
FOR SHARE PURCHASES.

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

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

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

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

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

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

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

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

(f)            by
any combination of the foregoing. 

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

8.             WITHHOLDING
TAXES.

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

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

9.             PRIVILEGES
OF STOCK OWNERSHIP.

9.1          Voting
and Dividends. No Participant will have any of the rights
of a stockholder with respect to any Shares until the Shares are issued to the
Participant. After Shares are issued to the Participant, the Participant will
be a stockholder and have all the rights of a stockholder with respect to such
Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that
if such Shares are Restricted Stock, then any new, additional or different
securities the Participant may become entitled to receive with respect to such
Shares by virtue of a stock dividend, stock split or any other change in the
corporate or capital structure of the Company will be subject to the same
restrictions as the Restricted Stock; provided, further, that the Participant
will have no right to retain such stock dividends or stock distributions with
respect to Unvested Shares that are repurchased pursuant to Section 11. The
Company will comply with Section 260.140.1 of Title 10 of the California
Corporations Code with respect to the voting rights of Common Stock.

9.2          Financial
Statements. The Company will provide financial statements
to each Participant prior to such Participant’s purchase of Shares under this
Plan, and to each Participant annually during the period such Participant has
Awards outstanding, or as otherwise required or permitted under Section
260.140.46 of Title 10 of the California Code of Regulations. Notwithstanding
the foregoing, the Company will not be required to provide such financial
statements to Participants whose services in connection with the Company assure
them access to equivalent information.

10.          TRANSFERABILITY.
Awards granted under this Plan, and any interest therein, will not be
transferable or assignable by Participant, and may not be made subject to
execution, attachment or similar process, otherwise than by will or by the laws
of descent and distribution. During the lifetime of the Participant an Award
will be exercisable only by the Participant, and any elections with respect to
an Award, may be made only by the Participant.

11.          RESTRICTIONS
ON SHARES. At the discretion of the Committee, the Company may
reserve to itself and/or its assignee(s) in the Award Agreement (a) a right of
first refusal to purchase all Shares that a Participant (or a subsequent
transferee) may propose to transfer to a third party, unless otherwise not
permitted by Section 25102(o) of the California Corporations Code, provided,
that such right of first refusal terminates when the Company’s securities
become publicly traded and/or (b) a right to repurchase Shares held by a
Participant following such Participant’s Termination at any time within ninety
(90) days after Participant’s Termination Date (or, in the case of securities
issued upon exercise of an Option after the Participant’s Termination Date,
within 90 days after the date of such exercise) for cash and/or cancellation of
purchase money indebtedness, at: (A) with respect to Vested Shares, the Fair
Market Value of such Shares on Participant’s Termination Date, provided,
that such right of repurchase terminates when the Company’s securities become
publicly traded; or (B) with respect to Unvested Shares, the Participant’s
Exercise Price or Purchase Price, as the case may be, provided, that to
the extent the Participant is not an officer, director or consultant of the
Company or of a Parent or Subsidiary of the Company, such right of repurchase
at Exercise Price or Purchase Price, as the case may be, lapses at the rate of
at least twenty percent (20%) per year over five (5) years from: (i) the date
of grant of the Option or (ii) in the case of Restricted Stock, the date the
Participant purchases the Shares.

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

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

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

15.          SECURITIES
LAW AND OTHER REGULATORY COMPLIANCE. This Plan is
intended to comply with Section 25102(o) of the California Corporations Code.
Any provision of the Plan which is inconsistent with Section 25102(o) shall,
without further act or amendment by the Company or the Board, be reformed to
comply with the requirements of Section 25102(o). An Award will not be
effective unless such Award is in compliance with all applicable federal and
state securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which the
Shares may then be listed or quoted, as they are in effect on the date of grant
of the Award and also on the date of exercise or other issuance.
Notwithstanding any other provision in this Plan, the Company will have no
obligation to issue or deliver certificates for Shares under this Plan prior to
(a) obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable, and/or (b) compliance with any
exemption, completion of any registration or other qualification of such Shares
under any state or federal law or ruling of any governmental body that the
Company determines to be necessary or advisable. The Company will be under no
obligation to register the Shares with the SEC or to effect compliance with the
exemption, registration, qualification or listing requirements of any state
securities laws, stock exchange or automated quotation system, and the Company
will have no liability for any inability or failure to do so.

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

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17.          CORPORATE
TRANSACTIONS.

17.1        Assumption
or Replacement of Awards by Successor. In the event of
(a) a dissolution or liquidation of the Company, (b) a merger or consolidation
in which the Company is not the surviving corporation (other
than a merger or consolidation with a wholly-owned subsidiary, a
reincorporation of the Company in a different jurisdiction, or other
transaction in which there is no substantial change in the stockholders of the
Company or their relative stock holdings and the Awards granted under this Plan
are assumed, converted or replaced by the successor corporation, which
assumption will be binding on all Participants), (c) a merger in which the
Company is the surviving corporation but after which the stockholders of the
Company immediately prior to such merger (other than any stockholder which
merges, or which owns or controls another corporation which merges, with the
Company in such merger) cease to own their shares or other equity interests in
the Company, or (d) the sale of substantially all of the assets of the Company,
any or all outstanding Awards may be assumed, converted or replaced by the
successor corporation (if any), which assumption, conversion or replacement
will be binding on all Participants. In the alternative, the successor
corporation may substitute equivalent Awards or provide substantially similar
consideration to Participants as was provided to stockholders (after taking
into account the existing provisions of the Awards). The successor corporation
may also issue, in place of outstanding Shares of the Company held by the
Participant, substantially similar shares or other property subject to
repurchase restrictions and other provisions no less favorable to the
Participant than those which applied to such outstanding Shares immediately
prior to such transaction described in this Subsection 17.1. In the event such
successor corporation (if any) refuses to assume or substitute Awards, as
provided above, pursuant to a transaction described in this Subsection 17.1,
then notwithstanding any other provision in this Plan to the contrary, such Awards
will expire on such transaction at such time and on such conditions as the
Board will determine. In the event such successor corporation (if any) refuses
to assume or substitute Awards, as provided above, pursuant to a transaction
described in this Subsection 17.1, then notwithstanding any other provision in
this Plan to the contrary, the vesting of such Awards will accelerate and the
Options will become exercisable in full prior to the consummation of such event
at such times and on such conditions as the Committee determines, and if such
Options are not exercised prior to the consummation of the corporate
transaction, they shall terminate in accordance with the provisions of this
Plan.

17.2        Other
Treatment of Awards. Subject to any greater rights granted
to Participants under the foregoing provisions of this Section 17, in the event
of the occurrence of any transaction described in Section ny outstanding Awards
will be treated as provided in the applicable agreement or plan of merger,
consolidation, dissolution, liquidation or sale of assets.

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

18.          ADOPTION
AND STOCKHOLDER APPROVAL. This Plan will become effective
on the date that it is adopted by the Board (the “Effective Date”). This Plan will be
approved by the stockholders of the Company (excluding Shares issued pursuant
to this Plan), consistent with applicable laws, within twelve (12) months
before or after the Effective Date. Upon the Effective Date, the Board may
grant Awards pursuant to this Plan; provided, however, that no
Option may be exercised prior to stockholder approval of this Plan. In the
event that stockholder approval is not obtained within twelve (12) months
before or after the date this Plan is adopted by the Board, all Awards granted
hereunder will be canceled, any Shares issued pursuant to any Award will be
canceled and any purchase of Shares hereunder will be rescinded.

 8
 

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

20.          AMENDMENT
OR TERMINATION OF PLAN. The Board may at any time
terminate or amend this Plan in any respect, including without limitation
amendment of any form of Award Agreement or instrument to be executed pursuant
to this Plan; provided, however, that the Board will not, without
the approval of the stockholders of the Company, amend this Plan in any manner
that requires such stockholder approval pursuant to the Code or the regulations
promulgated thereunder as such provisions apply to ISO plans.

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

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

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

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

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

“Cause”
means Termination because of (i) any willful material violation by the
Participant of any law or regulation applicable to the business of the Company
or a Parent or Subsidiary of the Company, the Participant’s conviction for, or
guilty plea to, a felony or a crime involving moral turpitude, any willful
perpetration by the Participant of a common law fraud or any unlawful use by
the Participant of drugs or other controlled substances, (ii) the Participant’s
commission of an act of personal dishonesty which involves personal profit in
connection with the Company or any other entity having a business relationship
with the Company, (iii) any material breach by the Participant of any provision
of any agreement or understanding between the Company and the Participant
regarding the terms of the Participant’s service as an employee, director,
consultant, independent contractor or adviser to the Company or a Parent or
Subsidiary of the Company, including without limitation, the willful and
continued failure or refusal of the Participant to perform the material duties
required of such Participant as an employee, director, consultant, independent
contractor or adviser of the Company or a Parent or Subsidiary of the Company,
other than as a result of having a Disability, or a breach of any applicable
invention assignment and confidentiality agreement or similar agreement between
the Company and the Participant, (iv) Participant’s disregard of the policies
of the Company so as to cause loss, damage or injury to the property,
reputation or employees of the Company or a Parent or Subsidiary of the
Company, or (v) any other misconduct by the Participant which is materially
injurious to the financial condition or business reputation of, or is otherwise
materially injurious to, the Company or a Parent or Subsidiary of the Company.

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

“Committee”
means the committee appointed by the Board to administer this Plan, or if no
committee is appointed, the Board.

“Company”
means Kintana, Inc., or any successor corporation.

 9
 

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

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

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

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

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

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

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

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

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

“Option”
means an award of an option to purchase Shares pursuant to Section 5.

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

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

“Plan”
means this Kintana, Inc. 1997 Equity Incentive Plan, as amended from time to
time.

“Purchase Price”
the price at which a Participant may purchase Restricted Stock.

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

“SEC”
means the Securities and Exchange Commission.

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

 10
 

“Shares”
means shares of the Company’s Common Stock reserved for issuance under this
Plan, as adjusted pursuant to Sections 2 and 17, and any successor security.

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

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

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

 

 11EXHIBIT 4.6

PERFORMANT, INC.

2000 STOCK OPTION/RESTRICTED STOCK PLAN

EFFECTIVE AS OF OCTOBER 30, 2000

1.   INTRODUCTION

The Company’s Board of Directors adopted the
Performant, Inc. 2000 Stock Option/Restricted Stock Plan on August 15, 2000,
subject to approval by the Company’s stockholders.

The purpose of the Plan is to promote the long-term
success of the Company and the creation of shareholder value by offering Key
Employees an opportunity to acquire a proprietary interest in the success of
the Company, or to increase such interest, and to encourage such selected
persons to continue to provide services to the Company and to attract new
individuals with outstanding qualifications.

The Plan seeks to achieve this purpose by providing
for Options (which may constitute Incentive Stock Options or Nonstatutory Stock
Options) and Awards of Restricted Stock.

The Plan shall be governed by, and construed in
accordance with, the laws of the State of Washington (except its choice-of-law
provisions). Capitalized terms shall have the meaning provided in Section 2
unless otherwise provided in this Plan or Stock Option Agreement or Restricted
Stock Agreement.

2.   DEFINITIONS

(a)           “AFFILIATE”
means any entity other than a Subsidiary, if the Company and/or one or more
Subsidiaries own not less than 50% of such entity. For purposes of determining
an individual’s “Service,” this definition shall include any entity other than
a Subsidiary, if the Company, a Parent and/or one or more Subsidiaries own not
less than 50% of such entity.

(b)           “AWARD”
means any award of an Option or Restricted Stock under the Plan.

(c)           “BOARD”
means the Board of Directors of the Company, as constituted from time to time.

(d)           “CHANGE
IN CONTROL” except as may otherwise be provided in the Stock Option Agreement,
means:

Any merger or
consolidation of the Company into or with another corporation or other entity,
or the sale, transfer or other disposition of all or substantially all of the
assets or capital stock of the Company, or any reorganization, recapitalization
or like transaction or series of related transactions having substantially
equivalent effect and purpose, at the conclusion of which such merger,
consolidation, sale, transfer, disposition, reorganization, recapitalization or
like transaction the holders of the capital stock of the Company entitled to
vote for the election of directors or similar governing body immediately prior
to such transaction or series of related transactions own less than a majority
of the capital stock entitled to vote for the election of directors or similar
governing body of the acquiring entity or entity surviving or resulting from
such transaction or series of related transactions immediately thereafter;
provided that a merger effected exclusively for the purpose of changing the
domicile of the Company shall not be deemed to constitute a “Change in Control”.

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

 1
 

(f)            “COMMITTEE”
means a committee consisting of one or more members of the Board that is
appointed by the Board (as described in Section 3) to administer the Plan.

(g)           “COMMON
STOCK” means the Company’s common stock.

(h)           “COMPANY”
means Performant, Inc., a Delaware corporation.

(i)            “CONSULTANT”
means an individual who performs bona fide services to the Company, a Parent, a
Subsidiary or an Affiliate other than as an Employee or Director or
Non-Employee Director.

(j)            “DIRECTOR”
means a member of the Board who is also an Employee.

(k)           “DISABILITY”
means that the Key Employee is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than 12 months.

(l)            “EMPLOYEE”
means any individual who is a common-law employee of the Company, a Parent, a
Subsidiary or an Affiliate.

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

(n)           “EXERCISE
PRICE” means the amount for which a Share may be purchased upon exercise of
such Option, as specified in the applicable Stock Option Agreement.

(o)           “FAIR
MARKET VALUE” means the market price of Shares, determined by the Committee as
follows: 

(i)            If
the Shares were traded over-the-counter on the date in question but were not
classified as a national market issue, then the Fair Market Value shall be
equal to the mean between the last reported representative bid and asked prices
quoted by the NASDAQ system for such date; 

(ii)           If
the Shares were traded over-the-counter on the date in question and were
classified as a national market issue, then the Fair Market Value shall be
equal to the last-transaction price quoted by the NASDAQ system for such date; 

(iii)          If
the Shares were traded on a stock exchange on the date in question, then the
Fair Market Value shall be equal to the closing price reported by the
applicable composite transactions report for such date; and 

(iv)          If
none of the foregoing provisions is applicable, then the Fair Market Value
shall be determined by the Committee in good faith on such basis as it deems
appropriate. 

Whenever possible,
the determination of Fair Market Value by the Committee shall be based on the
prices reported in the Wall Street Journal. Such determination shall be
conclusive and binding on all persons.

(p)           “GRANT”
means any grant of an Option under the Plan.

(q)           “INCENTIVE
STOCK OPTION” or “ISO” means an incentive stock option described in Code
section 422(b).

 2
 

(r)            “KEY
EMPLOYEE” means an Employee, Director, Non-Employee Director or Consultant who
has been selected by the Committee to receive an Award under the Plan.

(s)           “NON-EMPLOYEE
DIRECTOR” means a member of the Board who is not an Employee.

(t)            “NONSTATUTORY
STOCK OPTION” or “NSO” means a stock option that is not an ISO.

(u)           “OPTION”
means an ISO or NSO granted under the Plan entitling the Optionee to purchase
Shares.

(v)           “OPTIONEE”
means an individual, estate or other entity that holds an Option.

(w)          “PARENT”
means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, if each of the corporations other than
the Company owns stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain. A corporation that attains the status of a Parent on a date after the
adoption of the Plan shall be considered a Parent commencing as of such date.

(x)            “PARTICIPANT”
means an individual or estate or other entity that holds an Award.

(y)           “PLAN”
means this Performant Inc. 2000 Stock Option/Restricted Stock Plan as it may be
amended from time to time.

(z)            ”RESTRICTED
STOCK” means a Share awarded under the Plan.

(aa)         “RESTRICTED
STOCK AGREEMENT” means the agreement described in Section 8 evidencing each
Award of Restricted Stock.

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

(cc)         “SERVICE”
means service as an Employee, Director, Non-Employee Director or Consultant.

(dd)         “SHARE”
means one share of Common Stock.

(ee)         “STOCK
OPTION AGREEMENT” means the agreement described in Section 6 evidencing each
Grant of an Option.

(ff)           “SUBSIDIARY”
means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company, if each of the corporations other than
the last corporation in the unbroken chain owns stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain. A corporation that attains the status
of a Subsidiary on a date after the adoption of the Plan shall be considered a
Subsidiary commencing as of such date.

(gg)         “10-PERCENT
SHAREHOLDER” means an individual who owns more than ten percent (10%) of the
total combined voting power of all classes of outstanding stock of the Company,
its Parent or any of its subsidiaries. In determining stock ownership, the
attribution rules of Section 424(d) of the Code shall be applied.

 3
 

3.   ADMINISTRATION

(a)           COMMITTEE
COMPOSITION

A Committee appointed by the Board shall administer
the Plan. The Board shall designate one of the members of the Committee as
chairperson. If no Committee has been approved, the entire Board shall
constitute the Committee. Members of the Committee shall serve for such period
of time as the Board may determine and shall be subject to removal by the Board
at any time. The Board may also at any time terminate the functions of the
Committee and reassume all powers and authority previously delegated to the
Committee.

Effective with the Company’s initial public offering,
the Committee shall consist either (i) of those individuals who shall satisfy
the requirements of Rule 16b-3 (or its successor) under the Exchange Act with
respect to Options to persons who are officers or directors of the Company
under Section 16 of the Exchange Act or (ii) of the Board itself.

The Board may also
appoint one or more separate committees of the Board, each composed of one or
more directors of the Company who need not qualify under Rule 16b-3, who may
administer the Plan with respect to Key Employees who are not considered
officers or directors of the Company under Section 16 of the Exchange Act, may
grant Awards under the Plan to such Key Employees and may determine all terms
of such Awards.

(b)           AUTHORITY
OF THE COMMITTEE

Subject to the
provisions of the Plan, the Committee shall have full authority and discretion
to take any actions it deems necessary or advisable for the administration of the
Plan. Such actions shall include: 

(i)            selecting
Key Employees who are to receive Awards under the Plan; 

(ii)           determining
the type, number, vesting requirements and other features and conditions of
such Awards; 

(iii)          interpreting
the Plan; and 

(iv)          making
all other decisions relating to the operation of the Plan. 

The Committee may
adopt such rules or guidelines, as it deems appropriate to implement the Plan.
The Committee’s determinations under the Plan shall be final and binding on all
persons.

(c)           INDEMNIFICATION

Each member of the
Committee, or of the Board, shall be indemnified and held harmless by the
Company against and from (i) any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under the Plan or any Stock Option Agreement or any Restricted
Stock Agreement, and (ii) from any and all amounts paid by him or her in
settlement thereof, with the Company’s approval, or paid by him or her in
satisfaction of any judgment in any such claim, action, suit, or proceeding
against him or her, provided he or she shall give the Company an opportunity,
at its own expense, to handle and defend the same before he or she undertakes
to handle and defend it on his or her own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification
to which such persons may be entitled under the Company’s Certificate of
Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or
under any power that the Company may have to indemnify them or hold them
harmless.

 4
 

(d)           FINANCIAL
REPORTS

To the extent required by applicable law, the Company
shall furnish to Participants the Company’s summary financial information
including a balance sheet regarding the Company’s financial condition and
results of operations, unless such Participants have duties with the Company
that assure them access to equivalent information. Such financial statements
need not be audited.

4.   ELIGIBILITY

(a)           GENERAL
RULES

Only Employees,
Directors, Non-Employee Directors and Consultants shall be eligible for
designation as Key Employees by the Committee.

(b)           INCENTIVE
STOCK OPTIONS

Only Key Employees who are common-law employees of the
Company, a Parent or a Subsidiary shall be eligible for the grant of ISOs. In
addition, a Key Employee who is a 10-Percent Shareholder shall not be eligible
for the grant of an ISO unless the requirements set forth in Section 422(c)(5)
of the Code are satisfied.

5.   SHARES SUBJECT TO
PLAN

(a)           BASIC
LIMITATION

The stock issuable
under the Plan shall be authorized but unissued Shares or treasury Shares. The
aggregate number of Shares reserved for Awards under the Plan shall not exceed
3,456,000 Shares on a fully diluted basis, subject to adjustment pursuant to
Section 9.

(b)           ADDITIONAL
SHARES

If Awards are
forfeited or terminate for any other reason before being exercised, then the
Shares underlying such Awards shall again become available for Awards under the
Plan.

(c)           DIVIDEND
EQUIVALENTS

Any dividend equivalents distributed under the Plan
shall not be applied against the number of Shares available for Awards.

6.   TERMS AND
CONDITIONS OF OPTIONS

(a)           STOCK
OPTION AGREEMENT

Each Grant under
the Plan shall be evidenced by a Stock Option Agreement between the Optionee
and the Company. Such Option shall be subject to all applicable terms and
conditions of the Plan and may be subject to any other terms and conditions
that are not inconsistent with the Plan and that the Committee deems
appropriate for inclusion in a Stock Option Agreement. The provisions of the
various Stock Option Agreements entered into under the Plan need not be
identical. A Stock Option Agreement may provide that new Options will be
granted automatically to the Optionee when he or she exercises the prior
Options. The Stock Option Agreement shall also specify whether the Option is an
ISO or an NSO.

 5
 

(b)           NUMBER
OF SHARES

Each Stock Option
Agreement shall specify the number of Shares that are subject to the Option and
shall provide for the adjustment of such number in accordance with Section 9.

(c)           EXERCISE
PRICE

An Option’s
Exercise Price shall be established by the Committee and set forth in a Stock
Option Agreement. To the extent required by applicable law the Exercise Price
of an ISO shall not be less than 100% of the Fair Market Value (110% for
10-Percent Shareholders) of a Share on the date of Grant. In the case of an
NSO, a Stock Option Agreement may specify an Exercise Price that varies in
accordance with a predetermined formula while the NSO is outstanding. To the
extent required by applicable law, the Exercise Price for an NSO shall not be
less than 85% of the Fair Market Value (110% for 10-Percent Shareholders) of a
Share on the date of Grant.

(d)           EXERCISABILITY
AND TERM

Each Stock Option
Agreement shall specify the date when all or any installment of the Option is
to become exercisable. To the extent required by applicable law, Options shall
vest at least as rapidly as 20% annually over a five-year period. The Stock
Option Agreement shall also specify the term of the Option; provided that the
term of an ISO, and to the extent required by applicable law a NSO, shall in no
event exceed ten (10) years from the date of Grant. An ISO that is granted to a
10-Percent Shareholder shall have a maximum term of five (5) years. To the
extent required by applicable law, vested Options shall be exercisable for a minimum
period of six (6) months following termination of employment due to death or
Disability and thirty (30) days following termination of employment (other than
terminations for cause, as defined in the Company’s personnel policies).
Notwithstanding the previous sentence, no Option can be exercised after the
expiration date provided in the applicable Stock Option Agreement. A Stock
Option Agreement may provide for accelerated exercisability in the event of the
Optionee’s death, disability or retirement or other events and may provide for
expiration prior to the end of its term in the event of the termination of the
Optionee’s service. A Stock Option Agreement may permit an Optionee to exercise
an Option before it is vested, subject to the Company’s right of repurchase
over any Shares acquired under the unvested portion of the Option (an “early
exercise”), which right of repurchase shall lapse at the same rate the Option
would have vested had there been no early exercise. In no event shall the
Company be required to issue fractional Shares upon the exercise of an Option.

(e)           MODIFICATIONS
OR ASSUMPTION OF OPTIONS

Within the
limitations of the Plan, the Committee may modify, extend or assume outstanding
options or may accept the cancellation of outstanding options (whether granted
by the Company or by another issuer) in return for the grant of new Options for
the same or a different number of Shares and at the same or a different
Exercise Price. The foregoing notwithstanding, no modification of an Option shall,
without the consent of the Optionee, alter or impair his or her rights or
obligations under such Option.

(f)            TRANSFERABILITY
OF OPTIONS

Except as
otherwise provided in the applicable Stock Option Agreement and then only to
the extent permitted by applicable law, no Option shall be transferable by the
Optionee other than by will or by the laws of descent and distribution. Except
as otherwise provided in the applicable Stock Option Agreement, an Option may
be exercised during the lifetime of the Optionee only or by the guardian or
legal representative of the Optionee. No Option or interest therein may be
assigned, pledged or hypothecated by the Optionee during his lifetime, whether
by operation of law or otherwise, or be made subject to execution, attachment
or similar process.

 6
 

(g)           NO
RIGHTS AS A STOCKHOLDER

An Optionee, or a
transferee of an Optionee, shall have no rights as a stockholder with respect
to any Common Stock covered by an Option until such person becomes entitled to
receive such Common Stock by filing a notice of exercise and paying the
Exercise Price pursuant to the terms of such Option.

(h)           RESTRICTIONS
ON TRANSFER

Any Shares issued upon exercise of an Option shall be
subject to such rights of repurchase, rights of first refusal and other transfer
restrictions as the Committee may determine. Such restrictions shall apply in
addition to any restrictions that may apply to holders of Shares generally and
shall also comply to the extent necessary with applicable law.

7.    PAYMENT FOR OPTION
SHARES

(a)           GENERAL
RULE

The entire
Exercise Price of Shares issued upon exercise of Options shall be payable in
cash at the time when such Shares are purchased, except as follows: 

(i)            In
the case of an ISO granted under the Plan, payment shall be made only pursuant
to the express provisions of the applicable Stock Option Agreement. The Stock
Option Agreement may specify that payment may be made in any form(s) described
in this Section 7. 

(ii)           In
the case of an NSO granted under the Plan, the Committee may in its discretion,
at any time accept payment in any form(s) described in this Section 7. 

(b)           SURRENDER
OF STOCK

To the extent that
this Section 7(b) is applicable, payment for all or any part of the Exercise
Price may be made with Shares which have already been owned by the Optionee for
such duration as shall be specified by the Committee. Such Shares shall be
valued at their Fair Market Value on the date when the new Shares are purchased
under the Plan.

(c)           PROMISSORY
NOTE

To the extent that
this Section 7(c) is applicable, payment for all or any part of the Exercise
Price may be made with a full-recourse promissory note.

(d)           OTHER
FORMS OF PAYMENT

To the extent that this Section 7(d) is applicable,
payment may be made in any other form that is consistent with applicable laws,
regulations and rules.

 7
 

8.   TERMS AND
CONDITIONS FOR AWARDS OF RESTRICTED STOCK

(a)           TIME,
AMOUNT AND FORM OF AWARDS

Awards under the
Plan may be granted in the form of Restricted Stock.

(b)           RESTRICTED
STOCK AGREEMENT

Each Award of
Restricted Stock under the Plan shall be evidenced by a Restricted Stock
Agreement between the Participant and the Company. Such Award shall be subject
to all applicable terms and conditions of the Plan and may be subject to any
other terms and conditions that are not inconsistent with the Plan and that the
Committee deems appropriate for inclusion in a Restricted Stock Agreement. The
provisions of the various Restricted Stock Agreements entered into under the
Plan need not be identical.

(c)           PAYMENT
FOR RESTRICTED STOCKS

Restricted Stock
may be issued with or without cash consideration under the Plan.

(d)           VESTING
CONDITIONS

Each Award of
Restricted Stock shall become vested, in full or in installments, upon
satisfaction of the conditions specified in the Restricted Stock Agreement. A
Restricted Stock Agreement may provide for accelerated vesting in the event of
the Participant’s death, Disability or retirement or other events.

(e)           ASSIGNMENT
OR TRANSFER OF RESTRICTED STOCKS

Except as provided
in Section 12, or in a Restricted Stock Agreement, or as required by applicable
law, a Restricted Stock granted under the Plan shall not be anticipated,
assigned, attached, garnished, optioned, transferred or made subject to any
creditor’s process, whether voluntarily, involuntarily or by operation of law.
Any act in violation of this Section 8(e) shall be void. However, this Section
8(e) shall not preclude a Participant from designating a beneficiary who will
receive any outstanding Restricted Stocks in the event of the Participant’s
death, nor shall it preclude a transfer of Restricted Stocks by will or by the
laws of descent and distribution.

(f)            TRUSTS

Neither this
Section 8 nor any other provision of the Plan shall preclude a Participant from
transferring or assigning Restricted Stock to (a) the trustee of a trust that
is revocable by such Participant alone, both at the time of the transfer or
assignment and at all times thereafter prior to such Participant’s death, or
(b) the trustee of any other trust to the extent approved in advance by the
Committee in writing. A transfer or assignment of Restricted Stock from such
trustee to any person other than such Participant shall be permitted only to
the extent approved in advance by the Committee in writing, and Restricted
Stock held by such trustee shall be subject to all of the conditions and
restrictions set forth in the Plan and in the applicable Restricted Stock
Agreement, as if such trustee were a party to such Agreement.

(g)           VOTING
AND DIVIDEND RIGHTS

The holders of Restricted Stock awarded under the Plan
shall have the same voting, dividend and other rights as the Company’s other
stockholders. A Restricted Stock Agreement, however, may require that the
holders of Restricted Stock invest any cash dividends received in additional
Restricted Stock. Such additional Restricted Stock shall be subject to the same
conditions and restrictions as the Award with respect to which the dividends
were paid. Such additional Restricted Stock shall not reduce the number of
Shares available under Section 5.

 8
 

9.   PROTECTION AGAINST
DILUTION

(a)           ADJUSTMENTS

In the event of a
subdivision of the outstanding Shares, a declaration of a dividend payable in
Shares, a declaration of a dividend payable in a form other than Shares in an
amount that has a material effect on the price of Shares, a combination or
consolidation of the outstanding Shares (by reclassification or otherwise) into
a lesser number of Shares, a recapitalization, a spin-off or a similar
occurrence, the Committee shall make such adjustments as it, in its sole
discretion, deems appropriate in one or more of: 

(i)            the
number of Shares available for future Awards under Section 5; 

(ii)           the
number of Shares covered by each outstanding Award; or 

(iii)          the
Exercise Price under each outstanding Option. 

(b)           PARTICIPANT
RIGHTS

Except as provided in this Section 9, a Participant
shall have no rights by reason of any issue by the Company of stock of any
class or securities convertible into stock of any class, any subdivision or
consolidation of shares of stock of any class, the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of
any class.

10.   EFFECT OF A CHANGE
IN CONTROL

(a)           MERGER
OR REORGANIZATION

In the event that
the Company is a party to a merger or other reorganization, outstanding Awards
shall be subject to the agreement of merger or reorganization. Such agreement
may provide, without limitation, for the assumption of outstanding Awards by
the surviving corporation or its parent, for their continuation by the Company
(if the Company is a surviving corporation), for accelerated vesting or for
their cancellation with or without consideration, in all cases without the
consent of the Participant.

(b)           ACCELERATION

The Committee may determine, at the time of granting
an Award or thereafter, that such Award shall become fully vested as to all
Shares subject to such Award in the event that a Change in Control occurs with
respect to the Company.

11.   LIMITATIONS ON
RIGHTS

(a)           RETENTION
RIGHTS

Neither the Plan
nor any Award granted under the Plan shall be deemed to give any individual a
right to remain an employee, consultant or director of the Company, a Parent, a
Subsidiary or an Affiliate. The Company and its Parents and Subsidiaries and
Affiliates reserve the right to terminate the Service of any person at any
time, and for any reason, subject to applicable laws, the Company’s Certificate
of Incorporation and Bylaws and a written employment agreement (if any).

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(b)           STOCKHOLDERS’
RIGHTS

A Participant
shall have no dividend rights, voting rights or other rights as a stockholder
with respect to any Shares covered by his or her Award prior to the issuance of
a stock certificate for such Shares. No adjustment shall be made for cash
dividends or other rights for which the record date is prior to the date when
such certificate is issued, except as expressly provided in Section 9.

(c)           REGULATORY
REQUIREMENTS

Any other provision of the Plan notwithstanding, the
obligation of the Company to issue Shares under the Plan shall be subject to
all applicable laws, rules and regulations and such approval by any regulatory
body as may be required. The Company reserves the right to restrict, in whole
or in part, the delivery of Shares pursuant to any Award prior to the
satisfaction of all legal requirements relating to the issuance of such Shares,
to their registration, qualification or listing or to an exemption from
registration, qualification or listing.

12.   WITHHOLDING TAXES

(a)           GENERAL

A Participant
shall make arrangements satisfactory to the Company for the satisfaction of any
withholding tax obligations that arise in connection with his or her Award. The
Company shall not be required to issue any Shares or make any cash payment
under the Plan until such obligations are satisfied.

(b)           SHARE
WITHHOLDING

If a public market for the Company’s Shares exists,
the Committee may permit a Participant to satisfy all or part of his or her
withholding or income tax obligations by having the Company withhold all or a
portion of any Shares that otherwise would be issued to him or her or by
surrendering all or a portion of any Shares that he or she previously acquired.
Such Shares shall be valued at their Fair Market Value on the date when taxes
otherwise would be withheld in cash. Any payment of taxes by assigning Shares
to the Company may be subject to restrictions, including, but not limited to,
any restrictions required by rules of the Securities and Exchange Commission.

13.   DURATION AND
AMENDMENTS

(a)           TERM
OF THE PLAN

The Plan, as set
forth herein, shall become effective on the date of its adoption by the Board,
subject to the approval of the Company’s stockholders. No Options shall be
exercisable until such stockholder approval is obtained. In the event that the
stockholders fail to approve the Plan within twelve (12) months after its
adoption by the Board, any Awards made shall be null and void and no additional
Awards shall be made. The Plan shall terminate on the date that is ten (10)
years after its adoption by the Board and may be terminated on any earlier date
pursuant to Section 13(b).

(b)           RIGHT
TO AMEND OR TERMINATE THE PLAN

The Board may amend or terminate the Plan at any time
and for any reason. The termination of the Plan, or any amendment thereof,
shall not affect any Award previously granted under the Plan. No Awards shall
be granted under the Plan after the Plan’s termination. An amendment of the
Plan shall be subject to the approval of the Company’s stockholders only to the
extent required by applicable laws, regulations or rules.

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14.   EXECUTION

To record the adoption of the Plan by the Board, the
Company has caused its duly authorized officer to execute this Plan on behalf
of the Company. 

	
  

  	
  PERFORMANT,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
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