Document:

exv10w67

 

Exhibit 10.67

INDEMNITY AGREEMENT

     THIS AGREEMENT is made and entered into as of the 23 day of June 2005 by and between SOLEXA,
INC., a Delaware corporation (the “Corporation”), and JOHN WEST (the “Agent”).

RECITALS

     WHEREAS, Agent will perform a valuable service to the Corporation in her capacity as Chief
Executive Officer of the Corporation;

     WHEREAS, the stockholders of the Corporation have adopted bylaws (the “Bylaws”) providing for
the indemnification of the directors, officers, employees and other agents of the Corporation,
including persons serving at the request of the Corporation in such capacities with other
corporations or enterprises, as authorized by the Delaware General Corporation Law, as amended (the
“Code”);

     WHEREAS, the Bylaws and the Code, by their non-exclusive nature, permit contracts between the
Corporation and its agents, officers, employees and other agents with respect to indemnification of
such persons; and

     WHEREAS, in order to induce Agent to serve as Vice President and, effective once the
Corporation’s annual report on Form 10-K for the year ended December 31, 2004 has been filed with
Securities and Exchange Commission, Chief Executive Officer of the Corporation and in any event no
later than April 30, 2005, and as a precondition for Agent’s service in such capacity, the
Corporation has determined and agreed to enter into this Agreement with Agent;

     NOW, THEREFORE, in consideration of Agent’s service as an officer of the Corporation after the
date hereof, the parties hereto agree as follows:

AGREEMENT

     1. Services to the Corporation. Agent will serve, at the will of the Corporation or under
separate contract, if any such contract exists, as Chief Executive Officer of the Corporation;
provided, however, that Agent may at any time and for any reason resign from such position or any
other position (subject to any contractual obligation that Agent may have assumed apart from this
Agreement) and that the Corporation shall have no obligation under this Agreement to continue Agent
in such position or any other position.

     2. Indemnity of Agent. The Corporation hereby agrees to hold harmless and indemnify Agent to
the fullest extent authorized or permitted by the provisions of the Bylaws and the Code, as the
same may be amended from time to time (but, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than the Bylaws or the Code permitted prior
to adoption of such amendment).

     3. Additional Indemnity. In addition to and not in limitation of the indemnification otherwise
provided for herein, and subject only to the exclusions set forth in Section 4 hereof, the
Corporation hereby further agrees to hold harmless and indemnify Agent:

          (a) from and against any and all Expenses (as defined below) paid or payable by Agent in
connection with or in respect of a Claim (as defined below). “Claim” means any threatened, pending
or completed action, suit, proceeding or alternative dispute resolution mechanism, or any inquiry,
hearing or investigation, whether instituted by the Corporation or any other party, that Agent in
good faith believes might lead to the institution of any such action, suit, proceeding or
alternative dispute resolution

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whether civil, criminal, administrative, investigative or otherwise, each of the foregoing by
reason of the fact that Agent is, was or at any time becomes a director, officer, employee or other
agent of Corporation, or is or was serving or at any time serves at the written request of the
Corporation as a director, officer, employee or other agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise. “Expense” means any and all
expenses (including attorneys’ fees), witness fees, damages, judgments, fines and amounts paid in
settlement and any other amounts paid or incurred by Agent in connection with investigating,
defending, being a witness in or participating in (including on appeal), or preparing to defend, be
a witness in or participate in any Claim; any and all judgments, fines, losses, liabilities,
penalties, and amounts paid in settlement of any such claim; and

          (b) otherwise to the fullest extent as may be provided to Agent by the Corporation under the
non-exclusivity provisions of the Code and Section 42 of the Bylaws.

     4. Limitations on Additional Indemnity.

          (a) No indemnity pursuant to Section 3 hereof shall be paid by the Corporation:

               (i) on account of any claim against Agent for an accounting of profits made from the purchase
or sale by Agent of securities of the Corporation pursuant to the provisions of Section 16(b) of
the Securities Exchange Act of 1934 and amendments thereto (the “Exchange Act”) or similar
provisions of any federal, state or local statutory law;

               (ii) on account of Agent’s conduct that was knowingly fraudulent or deliberately dishonest or
that constituted willful misconduct;

               (iii) on account of Agent’s conduct that constituted a breach of Agent’s duty of loyalty to
the Corporation or resulted in any personal profit or advantage to which Agent was not legally
entitled;

               (iv) for which payment actually has been made to Agent under a valid and collectible insurance
policy or under a valid and enforceable indemnity clause, bylaw or agreement, except in respect of
any excess beyond payment under such insurance, clause, bylaw or agreement;

               (v) if indemnification is not lawful (and, in this respect, both the Corporation and Agent
have been advised that the Securities and Exchange Commission believes that indemnification for
liabilities arising under the federal securities laws is against public policy and is, therefore,
unenforceable and that claims for indemnification should be submitted to appropriate courts for
adjudication); or

               (vi) in connection with any proceeding (or part thereof) initiated by Agent, or any proceeding
by Agent against the Corporation or its directors, officers, employees or other agents, unless (i)
such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by
the Board of Directors of the Corporation, (iii) such indemnification is provided by the
Corporation, in its sole discretion, pursuant to the powers vested in the Corporation under the
Code, or (iv) the proceeding is initiated pursuant to Section 9 hereof.

          (b) Within thirty (30) days of receipt of a notice pursuant to Section 7, the Corporation (or
the Independent Legal Counsel, if applicable) shall make an initial good faith determination of
Agent’s entitlement to indemnification pursuant to this Agreement and shall notify Agent (and the
Corporation, if Independent Legal Counsel is making such determination) promptly of such
determination. If at any time thereafter the Corporation (or the Independent Legal Counsel, as

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applicable) in good faith determines that any indemnification requested pursuant to this Agreement
is prohibited pursuant to Section 4(a), the Corporation shall promptly provide notice of such
determination to Agent (and the Corporation, if applicable). Any determination by the Corporation
pursuant to this Section 4(b) shall be made by the Corporation’s Board of Directors.

     5. Continuation of Indemnity. All agreements and obligations of the Corporation contained
herein shall continue during the period Agent is a director, officer, employee or other agent of
the Corporation (or is or was serving at the written request of the Corporation as a director,
officer, employee or other agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise) and shall continue thereafter so long as Agent shall be
subject to any possible Claim.

     6. Partial Indemnification. Agent shall be entitled under this Agreement to indemnification by
the Corporation for a portion of the Expenses that Agent pays or incurs in connection with Claim
even if Agent is not entitled hereunder to indemnification for the total amount thereof, and the
Corporation shall indemnify Agent for the portion thereof to which Agent is entitled.

     7. Notification and Defense of Claim. Not later than thirty (30) days after receipt by Agent
of notice of any Claim, Agent will, if a claim in respect thereof is to be made against the
Corporation under this Agreement, notify the Corporation of the commencement of such Claim;
provided, however, that no failure to provide such notice shall be deemed to reduce or limit the
obligations of the Corporation under this Agreement unless (and only to the extent that) such
failure materially prejudices the Corporation. The omission so to notify the Corporation will not
relieve it from any liability which it may have to Agent otherwise than under this Agreement. With
respect to any Claim as to which Agent notifies the Corporation of the commencement thereof:

          (a) The Corporation will be entitled to participate therein at its own expense;

          (b) Except as otherwise provided below, the Corporation may, at its option and jointly with
any other indemnifying party similarly notified and electing to assume such defense, assume the
defense thereof, with counsel reasonably satisfactory to Agent. After notice from the Corporation
to Agent of its election to assume the defense thereof, the Corporation will not be liable to Agent
under this Agreement for any legal fees and expenses subsequently incurred by Agent in connection
with the defense thereof except for reasonable costs of investigation or otherwise as provided
below. Agent shall have the right to employ separate counsel in such action, suit or proceeding but
the fees and expenses of such counsel incurred after notice from the Corporation of its assumption
of the defense thereof shall be at the expense of Agent unless (i) the employment of counsel by
Agent has been authorized by the Corporation, (ii) Agent shall have reasonably concluded that there
may be a conflict of interest between the Corporation and Agent in the conduct of the defense of
such action (which conclusion may be made at any time during the pendency of the proceeding) or
(iii) the Corporation shall not in fact have employed or continue to employ counsel to assume the
defense of such action, in each of which cases the fees and expenses of Agent’s separate counsel
shall be at the expense of the Corporation. The Corporation shall not be entitled to assume the
defense of any Claim brought by or on behalf of the Corporation (except for a shareholders’
derivative suit brought nominally in the name of the Corporation) or as to which Agent shall have
made the conclusion provided for in clause (ii) above;

          (c) The Corporation shall not be liable to indemnify Agent under this Agreement for any
amounts paid in settlement of any Claim effected without its written consent, which shall not be
unreasonably withheld. The Corporation shall be permitted to settle any Claim except that it shall
not settle any Claim without Agent’s prior written consent (which may be given or withheld in
Agent’s sole discretion) in any manner which (a) would impose any penalty or limitation on Agent or
(b) would admit any liability or, misconduct by Agent;

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          (d) If there is a Change in Control (as defined below) of the Corporation, then with respect
to all matters thereafter arising concerning the rights of Agent to indemnity expense payments
and/or advances under this Agreement or any other agreement or Corporation Bylaw now or hereafter
in effect, the Corporation shall seek legal advice only from Independent Legal Counsel (defined
below) selected by Agent and approved by the Corporation (which approval shall not be unreasonably
withheld). Such counsel, among other things, shall render its written opinion to the Corporation
and Agent as to whether and to what extent Agent would be permitted to be indemnified under
applicable law. The Corporation shall pay the reasonable fees of such Independent Legal Counsel and
fully indemnify such counsel against any and all expenses (including attorneys’ fees), claims,
liabilities and damages arising out of or relating to this Agreement or its engagement pursuant
hereto;

          (e) For purposes of this Section, a “Change in Control” shall be deemed to have occurred if
(i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than
a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation
or a corporation owned directly or indirectly by the stockholders of the Corporation in
substantially the same proportions as their ownership of the stock of the Corporation, becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing 20% or more of the total voting power represented by the
Corporation’s then outstanding voting securities, (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board of Directors of the
Corporation and any new director whose election by the Board of Directors or nomination for
election by the Corporation’s stockholders was approved by a vote of at least two-thirds (2/3) of
the directors still in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any reason to constitute
a majority thereof, (iii) the stockholders of the Corporation approve a merger or consolidation of
the Corporation with any other corporation, other than a merger or consolidation that would result
in the voting securities of the Corporation outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting securities of the
surviving entity) at least 80% of the total voting power represented by the voting securities of
the Corporation or such surviving entity outstanding immediately after such merger or
consolidation, or (iv) the stockholders or the Corporation approve a plan of complete liquidation
of the Corporation or an agreement for the sale or disposition by the Company of (in one
transaction or a series of transactions) all or substantially all of the Corporation’s assets; and

          (f) For purposes of this Section, “Independent Legal Counsel” shall be defined as an attorney
or firm of attorneys, selected in accordance with this Section, who have not otherwise performed
services for the Corporation or Agent within the last five years (other than as Independent Legal
Counsel under this Agreement or of other agents of the Corporation under similar indemnity
agreements).

     8. Expenses. The Corporation shall advance, promptly following request therefore, all expenses
incurred by Agent in connection with a Claim (an “Expense Advancement”). Notwithstanding the
foregoing, (i) the obligations of Corporation under this Section 8 shall be subject to the
condition that the Corporation (or Independent Legal Counsel, if applicable) shall not have
determined in good faith (in a written opinion, in the case of Independent Legal Counsel) pursuant
to Section 4(b) that Agent would not be permitted to be indemnified under this Agreement, and (ii)
the obligation of the Corporation to make an Expense Advancement shall be subject to the condition
that if, when and to the extent that the Corporation (or Independent Legal Counsel, if applicable)
determines that Agent would not be permitted to be indemnified under this Agreement, the
Corporation shall be entitled to be reimbursed by Agent for all such amounts theretofore paid, and
(iii) the corporation shall have received an undertaking by or on behalf of Agent to repay said
amounts if it shall be determined ultimately that Agent is not entitled to be indemnified under the
provisions of this Agreement, the Bylaws, the Code or otherwise; provided,

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however, that if Agent has commenced or thereafter commences a legal proceeding in a court of
competent jurisdiction to secure a determination that Agent should be indemnified under this
Agreement, any determination made by the Corporation (or Independent Legal Counsel, if applicable)
that Agent should not be indemnified under this Agreement shall not be binding, the Corporation
shall pay the Expenses or Expense Advancement for which Agent seeks payment in such legal
proceeding (subject to potential reimbursement by Agent) and Agent shall not be required to
reimburse the Corporation for any Expenses or Expense Advancement until a final judicial
determination is made with respect thereto. Agent’s obligation to reimburse the Corporation for
any Expense Advancement shall be unsecured and no interest shall be charged thereon.

     9. Enforcement. Any right to indemnification or advances granted by this Agreement to Agent
shall be enforceable by or on behalf of Agent in any court of competent jurisdiction if (i) the
claim for indemnification or advances is denied, in whole or in part, or (ii) no disposition of
such claim is made within ninety (90) days of request therefore. It shall be a defense to any
action for which a claim for indemnification is made under Section 3 hereof (other than an action
brought to enforce a claim for expenses pursuant to Section 8 hereof, provided that the required
undertaking has been tendered to the Corporation) that Agent is not entitled to indemnification
because of the limitations set forth in Section 4 hereof. Neither the failure of the Corporation
(including its Board of Directors or its stockholders) to have made a determination prior to the
commencement of such enforcement action that indemnification of Agent is proper in the
circumstances, nor an actual determination by the Corporation (including its Board of Directors or
its stockholders) that such indemnification is improper shall be a defense to the action or create
a presumption that Agent is not entitled to indemnification under this Agreement or otherwise. For
purposes of this Agreement, the termination of any Claim, by judgment, order, settlement (whether
with or without court approval) or conviction, or upon a plea of nolo contendere,
or its equivalent, shall not create a presumption that Agent did not meet any particular standard
of conduct or have any particular belief or that a court has determined that indemnification is not
permitted by applicable law.

     10. Subrogation. In the event of payment under this Agreement, the Corporation shall be
subrogated to the extent of such payment to all of the rights of recovery of Agent, who shall
execute all documents required and shall do all acts that may be necessary to secure such rights
and to enable the Corporation effectively to bring suit to enforce such rights.

     11. Indemnification for Additional Expenses. In the event that any action is instituted (i)
by Agent pursuant to Section 9; (ii) by the Corporation for recovery of any Expense Advancement by
the Corporation to Agent, or (iii) by or in the name of the Corporation under this Agreement to
enforce or interpret any of the terms of this Agreement, Agent shall be entitled to be paid all
expenses (including, without limitation, attorneys’ and expert witness’ fees and all other costs,
expenses and obligations paid or incurred in connection with such matter) incurred by Agent with
respect to such action and Agent shall be entitled to the advancement of expenses with respect to
such action. Agent hereby undertakes to repay such amounts advanced if, and to the extent that, it
shall ultimately be determined that Agent is not entitled to be indemnified by the Company as
authorized by this Agreement, consistent with the terms of Sections 6 and 8.

     12. Non-Exclusivity of Rights. The rights conferred on Agent by this Agreement shall not be
exclusive of any other right which Agent may have or hereafter acquire under any statute, provision
of the Corporation’s Certificate of Incorporation or Bylaws, agreement, vote of stockholders or
directors, or otherwise, both as to action in her official capacity and as to action in another
capacity while holding office. To the extent that a change in the applicable law (whether by
statute or judicial decision) permits greater indemnification by agreement than would be afforded
currently under any applicable Bylaws or this Agreement, it is the intent of the parties hereto
that Agent shall enjoy by this Agreement the greater benefits so afforded by such change.

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     13. Survival of Rights.

          (a) The rights conferred on Agent by this Agreement shall continue after Agent has ceased to
be a director, officer, employee or other agent of the Corporation or to serve at the request of
the Corporation as a director, officer, employee or other agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise and shall inure to the
benefit of Agent’s heirs, executors and administrators.

          (b) The Corporation shall require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business or assets of the
Corporation, expressly to assume and agree to perform this Agreement in the same manner and to the
same extent that the Corporation would be required to perform if no such succession had taken
place.

     14. Separability. Each of the provisions of this Agreement is a separate and distinct
agreement and independent of the others, so that if any provision hereof shall be held to be
invalid for any reason, such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof. Furthermore, if this Agreement shall be invalidated
in its entirety on any ground, then the Corporation shall nevertheless indemnify Agent to the
fullest extent provided by the Bylaws, the Code or any other applicable law.

     15. Governing Law. This Agreement shall be interpreted and enforced in accordance with the
laws of the State of Delaware.

     16. Amendment and Termination. No amendment, modification, termination or cancellation of this
Agreement shall be effective unless in writing signed by both parties hereto.

     17. Entire Agreement; Identical Counterparts. This Agreement constitutes the entire Agreement
and supersedes all prior agreements and understandings, both written and oral, between the parties
with respect to the subject matter hereof. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original but all of which
together shall constitute but one and the same Agreement. Only a counterpart signed by Agent need
be produced to evidence the existence of this Agreement.

     18. Headings. The headings of the sections of this Agreement are inserted for convenience only
and shall not be deemed to constitute part of this Agreement or to affect the construction hereof.

     19. Notices. All notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given (i) upon delivery if delivered by hand to the
party to whom such communication was directed; (ii) upon the third business day after the date on
which such communication was mailed if mailed by certified or registered mail with postage prepaid;
(ii) the following business day if sent by overnight delivery using a nationally recognized courier
service, such as Federal Express or UPS :

     (a) If to Agent, at the address indicated on the signature page hereof.

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     (b) If to the Corporation, to:

Solexa Inc.

25861 Industrial Blvd.

Hayward, CA 94545

or to such other address as a party may have been given notice by the other party in accordance
with this Section 19, but no such notice shall have been deemed given until actually received by
the party sought to be charged with the contents.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and
year first above written.

	 	 	 	 	 
	 	 	SOLEXA INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Craig C. Taylor
	 

	 	 	 	 
	 

	 	 	 	   Craig C. Taylor
	 
	 	 	 	 
	 

	 	Title:
	 	Chairman of the Board
	 

	 	 	 	 
	 

	 	 	 	          (Title)
	 
	 	 	 	 
	 

	 	AGENT:	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ John West
	 

	 	 	 	 
	 

	 	 	 	   John West
	 
	 	 	 	 
	 	 	Address:
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 

Page 7 of 7Ex-10.1 3rd Amended & Restated 2002 Equity Incenti

 

Exhibit 10.1

CYBERKINETICS NEUROTECHNOLOGY SYSTEMS, INC.

THIRD AMENDED AND RESTATED 2002 EQUITY INCENTIVE PLAN

Initially adopted: effective as of August 12, 2002

Approved by stockholders: effective as of August 12,
2002

First amendment and restatement: as of June 20, 2003

Amendment approved by stockholders: as of June 20,
2003

Second amendment and restatement: as of April 30,
2004

Amendment approved by stockholders: as of April 30,
2004

Third amendment and restatement: as of March 30, 2005

Amendment approved by stockholders: as
of June 23,
2005

Termination date: August 12, 2012

Section 1.     General.

     
(a) Purpose of the Plan. Cyberkinetics
Neurotechnology Systems, Inc. (the “Company”),
by means of the Plan, seeks to retain the services of eligible
recipients and to provide incentives for eligible recipients to
exert efforts for the success of the Company and its Affiliates.

     
(b) Eligible Stock Award Recipients. The
persons eligible to receive Stock Awards are the Employees,
Directors and Consultants of the Company and its Affiliates.

     
(c) Available Stock Awards. The purpose of
the Plan is to provide a means by which Participants may be
given an opportunity to benefit from increases in the value of
the Common Stock through the granting of the following Stock
Awards: (i) Incentive Stock Options,
(ii) Nonstatutory Stock Options,
(iii) stock bonuses, and (iv) rights to
acquire restricted stock.

     
(d) Definitions. Capitalized terms not
defined elsewhere in this Agreement are defined in
Section 15 of the Plan.

Section 2.     Administration.

     
(a) Administration by Board. The Board shall
administer the Plan unless and until the Board delegates
administration to a Committee, as provided in Section 2(c).

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

		
	 	     
    (i) to determine from time to time which of the
    persons eligible under the Plan shall be granted Stock Awards;
    when and how each Stock Award shall be granted; what type or
    combination of types of Stock Award shall be granted; the
    provisions of each Stock Award granted (which need not be
    identical), including the time or times when a person shall be
    permitted to receive Common Stock pursuant to a Stock Award; the
    number of shares of Common Stock with respect to which a Stock
    Award shall be granted to each such person; whether shares of
    Common Stock acquired pursuant to a Stock Award shall be subject
    to forfeiture or buy back; and the form of consideration that
    the Company may receive upon exercise of an Option or a right to
    acquire restricted stock;
	 
	 	     
    (ii) to construe and interpret the Plan and Stock
    Awards granted under it, and to establish, amend and revoke
    rules and regulations for its administration, including the
    correction of any defect, omission or inconsistency in the Plan
    or in any Stock Award Agreement, in a manner and to the extent
    the Board shall deem necessary or expedient to make the Plan
    fully effective;
	 
	 	     
    (iii) to amend the Plan or a Stock Award as provided
    in Section 11; and

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    (iv) generally, to exercise such powers and to
    perform such acts as the Board deems necessary or expedient to
    promote the best interests of the Company and that are not in
    conflict with the provisions of the Plan.

     
(c) Delegation to Committee.

		
	 	     
    (i) General. From time to time, the Board may
    delegate administration of the Plan to a Committee or Committees
    of one or more members of the Board, and the term
    “Committee” shall apply to any person or
    persons to whom such authority has been delegated. If
    administration is delegated to a Committee, the Committee shall
    have, in connection with the administration of the Plan, the
    powers theretofore possessed by the Board, including the power
    to delegate to a subcommittee any of the administrative powers
    the Committee is authorized to exercise (and references in this
    Plan to the Board shall thereafter be to the Committee or
    subcommittee), subject, however, to such resolutions, not
    inconsistent with the provisions of the Plan, as may be adopted
    from time to time by the Board. The Board may abolish the
    Committee at any time and revest in the Board the administration
    of the Plan.
	 
	 	     
    (ii) Committee Composition when Common Stock is
    Publicly Traded. At such time as the Common Stock is
    publicly traded, in the discretion of the Board, a Committee may
    consist solely of two or more Outside Directors, in accordance
    with Section 162(m) of the Code, and/or solely of two or
    more Non-Employee Directors, in accordance with Rule 16b-3.
    Within the scope of such authority, the Board or the Committee
    may (1) delegate to a committee of one or more
    members of the Board who are not Outside Directors the authority
    to grant Stock Awards to eligible persons who are either
    (a) not then Covered Employees and are not expected
    to be Covered Employees at the time of recognition of income
    resulting from such Stock Award, or (b) not persons
    with respect to whom the Company wishes to comply with
    Section 162(m) of the Code, and/or (2) delegate
    to a committee of one or more members of the Board who are not
    Non-Employee Directors the authority to grant Stock Awards to
    eligible persons who are not then subject to Section 16 of
    the Exchange Act.

     
(d) Effect of Board’s Decision. All
determinations, interpretations and constructions made by the
Board in good faith shall not be subject to review by any person
and shall be final, binding and conclusive on all persons.

Section 3.     Shares
Subject to the Plan.

     
(a) Share Reserve. Subject to the provisions
of Section 10 relating to adjustments upon changes in
Common Stock, the Common Stock that may be issued pursuant to
Stock Awards shall not exceed, in the aggregate
3,500,000 shares of Common Stock, par value
$0.0001 per share.

     
(b) Reversion of Shares to the Share Reserve.
If any Stock Award shall for any reason expire or otherwise
terminate, in whole or in part, without having been exercised in
full, the shares of Common Stock not acquired under such Stock
Award shall revert to and again become available for issuance
under the Plan.

     
(c) Source of Shares. The shares of Common
Stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.

Section 4.     Options.

     
Each Option shall be in such form and shall contain such terms
and conditions as the Board shall deem appropriate. All Options
shall be separately designated Incentive Stock Options or
Nonstatutory Stock Options at the time of grant, and, if stock
certificates are issued, such certificates will include a legend
that will indicate whether each such certificate was issued
pursuant to exercise of an Incentive Stock Option or
Nonstatutory Stock Option; provided, however, that
notwithstanding the following, an Incentive Stock Option may
provide that it will remain exercisable as a Nonstatutory Stock
Option after an event or series of events that may otherwise
disqualify such Option from being an Incentive Stock Option. The
provisions of separate Options need not be identical, but each
Option shall include (through

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incorporation of provisions hereof by reference in the Option
Agreement for shares of Common Stock or otherwise) the substance
of each of the following provisions:

		
	 	     
    (a) Eligibility.

		
	 	     
    (i) Incentive Stock Options. Incentive Stock
    Options may be granted only to Employees.
	 
	 	     
    (ii) Nonstatutory Stock Options. Nonstatutory
    Stock Options may be granted to Employees, Directors and
    Consultants.

		
	 	     
    (b) Term. No Incentive Stock Option shall be
    exercisable after the expiration of ten years from the date it
    was granted; provided however that no Incentive Stock
    Option granted to a Ten Percent Stockholder shall be exercisable
    after the expiration of five years from the date it was granted.
	 
	 	     
    (c) Exercise Price.

		
	 	     
    (i) Generally. Subject to clauses (ii)
    and (iii) below, the Board of Directors may determine
    exercise price of Options granted pursuant to this Plan;
    provided, however, that the exercise price of an Option
    shall be not less than the par value of the Common Stock subject
    to the Option.
	 
	 	     
    (ii) Incentive Stock Option. The exercise
    price of each Incentive Stock Option shall be not less than 100%
    of the Fair Market Value of the Common Stock subject to the
    Option on the date the Option is granted; provided,
    however, that a Ten Percent Stockholder shall not be granted
    an Incentive Stock Option unless the exercise price of such
    Option is at least 110% of the Fair Market Value of the Common
    Stock on the date of grant. Notwithstanding the foregoing, an
    Incentive Stock Option may be granted with an exercise price
    lower than that set forth in the preceding sentence if such
    Option is granted pursuant to an assumption or substitution for
    another option in a manner satisfying the provisions of
    Section 424(a) of the Code.
	 
	 	     
    (iii) Nonstatutory Stock Option. The exercise
    price of each Nonstatutory Stock Option shall be determined by
    the Board of Directors on the date the Option is granted;
    provided, however, that subsequent to the Listing Date,
    the exercise price of each Nonstatutory Stock Option granted
    pursuant to this Plan shall be at least 85% of the Fair Market
    Value of the Common Stock subject to the Option on the date the
    Option is granted.

		
	 	     
    (d) Consideration. The purchase price of
    Common Stock acquired pursuant to an Option shall be paid, to
    the extent permitted by applicable statutes and regulations,
    either (i) in cash at the time the Option is exercised,
    or (ii) at the discretion of the Board at the time of the
    grant of the Option (or subsequently in the case of a
    Nonstatutory Stock Option) (1) by delivery to the Company
    of other shares of Common Stock, (2) according to a
    deferred payment or a similar arrangement with the Optionholder,
    or (3) in any other form of legal consideration that may
    be acceptable to the Board. Unless otherwise specifically
    provided in the Option, the purchase price of Common Stock
    acquired pursuant to an Option that is paid by delivery to the
    Company of other Common Stock acquired, directly or indirectly
    from the Company, shall be paid only by shares of the Common
    Stock of the Company that have been held for more than six
    months (or such longer or shorter period of time required to
    avoid a charge to earnings for financial accounting purposes).
    At any time that the Company is incorporated in the State of
    Delaware, payment of the Common Stock’s “par
    value,” as defined in the Delaware General Corporation Law
    shall not be made by deferred payment. In the case of any
    deferred payment arrangement, interest shall be compounded at
    least annually and shall be charged at the market rate of
    interest necessary, as determined by the Board, to avoid a
    charge to earnings for financial accounting purposes.

3

 

		
	 	     
    (e) Transferability.

		
	 	     
    (i) Incentive Stock Option. An Incentive
    Stock Option shall not be transferable except by will or by the
    laws of descent and distribution and shall be exercisable during
    the lifetime of the Optionholder only by the Optionholder.
	 
	 	     
    (ii) Nonstatutory Stock Option. A
    Nonstatutory Stock Option shall be non-transferable, unless
    otherwise expressly provided in the Option Agreement. If a
    Nonstatutory Stock Option does not provide for transferability
    or otherwise states that it is non-transferable, then the
    Nonstatutory Stock Option shall not be transferable except by
    will or by the laws of descent and distribution and shall be
    exercisable during the lifetime of the Optionholder only by the
    Optionholder.

		
	 	     
    (f) Vesting Generally. The total number of
    shares of Common Stock subject to an Option may, but need not,
    vest and therefore become exercisable in periodic installments
    that may, but need not, be equal. The Option may be subject to
    such other terms and conditions on the time or times when it may
    be exercised (which may be based on performance or other
    criteria) as the Board may deem appropriate. The vesting
    provisions of individual Options may vary.
	 
	 	     
    (g) Limitations on the Exercise of Incentive
    Stock Options.

		
	 	     
    (i) Termination of Employee Status Generally.
    In the event an Incentive Stock Option holder’s Employment
    terminates (other than upon the Optionholder’s death or
    Disability), the Optionholder may exercise his or her Option (to
    the extent that the Optionholder was entitled to exercise such
    Option as of the date of termination) but only within such
    period of time ending on the earlier of (1) the date
    three months following the effective date of termination of the
    Optionholder’s Employment (or such shorter period specified
    in the Option Agreement), or (2) the expiration of the
    term of the Option as set forth in the Option Agreement. If,
    after termination, the Optionholder does not exercise his or her
    Option within the time specified in the Option Agreement, the
    Option shall terminate.
	 
	 	     
    (ii) Disability of Optionholder. In the event
    that an Incentive Stock Option holder’s Employment
    terminates as a result of his or her Disability, the
    Optionholder may exercise his or her Option (to the extent that
    the Optionholder was entitled to exercise such Option as of the
    date of termination), but only within such period of time ending
    on the earlier of (1) the date that is twelve months
    following such effective date of termination (or such shorter
    period specified in the Option Agreement) or (2) the
    expiration of the term of the Option as set forth in the Option
    Agreement. If, after the effective date of termination, the
    Optionholder does not exercise his or her Option within the time
    specified herein, the Option shall terminate.
	 
	 	     
    (iii) Death of Optionholder. In the event
    (1) an Incentive Stockholder’s Employment terminates
    as a result of the his or her death, or (2) the
    Optionholder dies within the period (if any) specified in the
    Option Agreement after the termination of the
    Optionholder’s Employment during which he or she may
    exercise such Option, then the Option may be exercised (to the
    extent the Optionholder was entitled to exercise such Option as
    of the date of death) by the Optionholder’s estate or by a
    person who acquired the right to exercise the Option by bequest
    or inheritance, but only within the period ending on the earlier
    of (x) the date twelve months following the date of death
    (or such shorter period specified in the Option Agreement), or
    (y) the expiration of such Option. If, after death, the
    Option is not exercised within the time specified herein, the
    Option shall terminate.
	 
	 	     
    (iv) Incentive Stock Option $100,000
    Limitation. To the extent that the aggregate Fair Market
    Value (determined at the time of grant) of Common Stock with
    respect to which Incentive Stock Options are exercisable for the
    first time by any Optionholder during any calendar year (under
    all plans of the Company and its Affiliates) are in excess of
    $100,000, the Options or portions thereof that exceed such limit
    (according to the order that they were granted) shall be treated
    as Nonstatutory Stock Options.

4

 

		
	 	     
    (h) Extension of Termination Date. A
    Nonstatutory Stock Option Agreement may provide that if the
    exercise of the Option following the termination of the
    Optionholder’s Continuous Service (other than upon the
    Optionholder’s death or Disability) would be prohibited at
    any time solely because the issuance of shares of Common Stock
    would violate the registration requirements under the Securities
    Act, then the Option may terminate on the earlier of (i)
    the expiration of the term of the Option set forth in
    Section 3(b), or (ii) the expiration of a period of
    three months after the termination of the Optionholder’s
    Continuous Service during which the exercise of the Option would
    not be in violation of such registration requirements.
	 
	 	     
    (i) Early Exercise. An Option Agreement may,
    but need not, include a provision whereby the Optionholder may
    elect at any time before the Optionholder’s Continuous
    Service terminates to exercise the Option as to any part or all
    of the shares of Common Stock subject to the Option prior to the
    full vesting of the Option. Any unvested shares of Common Stock
    so purchased may be subject to a repurchase option in favor of
    the Company or to any other restriction the Board determines to
    be appropriate.
	 
	 	     
    (j) Right of First Refusal. An Option may,
    but need not, include a provision whereby the Company may elect,
    prior to the Listing Date, to exercise a right of first refusal
    following receipt of notice from the Optionholder of the intent
    to transfer all or any part of the shares of Common Stock
    received upon the exercise of the Option. Except as expressly
    provided in this Section 4(j), such right of first refusal
    shall otherwise comply with any applicable provisions of the
    Bylaws of the Company.
	 
	 	     
    (k) Deferred Delivery. An Option may, but
    need not, include provisions relating to deferred delivery of
    shares of Common Stock upon its exercise as may be determined by
    the Board of Directors.
	 
	 	     
    (l) Re-Load Options. Without in any way
    limiting the authority of the Board to make or not to make
    grants of Options hereunder, the Board shall have the authority
    (but not an obligation) to include as part of any Option
    Agreement a provision entitling the Optionholder to a further
    Option (a “Re-Load Option”) in the event the
    Optionholder exercises the Option evidenced by the Option
    Agreement, in whole or in part, by surrendering other shares of
    Common Stock in accordance with this Plan and the terms and
    conditions of the Option Agreement. Unless otherwise
    specifically provided in the Option, the Optionholder shall not
    surrender shares of Common Stock acquired, directly or
    indirectly from the Company, unless such shares have been held
    for more than six months (or such longer or shorter period of
    time required to avoid a charge to earnings for financial
    accounting purposes).

		
	 	     
    (i) Any such Re-Load Option shall (1) provide
    for a number of shares of Common Stock equal to the number of
    shares of Common Stock surrendered as part or all of the
    exercise price of such Option; (2) have an expiration
    date which is the same as the expiration date of the Option the
    exercise of which gave rise to such Re-Load Option; and (3)
    have an exercise price which is equal to 100% of the Fair
    Market Value of the Common Stock subject to the Re-Load Option
    on the date of exercise of the original Option (subject to the
    provisions of Section 4(c)(2) in the event such Option is
    an Incentive Stock Option). Notwithstanding the foregoing, a
    Re-Load Option shall be subject to the same exercise price and
    term provisions heretofore described for Options under the Plan.
	 
	 	     
    (ii) Any such Re-Load Option may be an Incentive
    Stock Option or a Nonstatutory Stock Option, as the Board may
    designate at the time of the grant of the original Option;
    provided, however, that the designation of any Re-Load
    Option as an Incentive Stock Option shall be subject to the
    $100,000 annual limitation on the ability to exercise Incentive
    Stock Options described in Section 422(d) of the Code.
    There shall be no Re-Load Options on a Re-Load Option. Any such
    Re-Load Option shall be subject to the availability of
    sufficient shares of Common Stock under Section 3(a) and
    the “Section 162(m) Limitation” on the grants of
    Options under Section 4(g)(iv) and shall be subject to such
    other terms and conditions as the

5

 

		
	 	
    Board may determine which are not inconsistent with the express
    provisions of the Plan regarding the terms of Options.

Section 5.     Stock Bonus
Awards and Rights to Acquire Restricted Stock.

     
(a) Stock Bonus Awards. Each stock bonus
agreement shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. Subject to the
terms of this Section 5(a), the terms and conditions of
stock bonus agreements may change from time to time, and the
terms and conditions of separate stock bonus agreements need not
be identical.

		
	 	     
    (i) Consideration. A stock bonus may be
    awarded in consideration for past services actually rendered to
    the Company or an Affiliate for its benefit.
	 
	 	     
    (ii) Vesting. Shares of Common Stock awarded
    under the stock bonus agreement may, but need not, be subject to
    a share repurchase option in favor of the Company in accordance
    with a vesting schedule to be determined by the Board.
	 
	 	     
    (iii) Termination of Participant’s
    Continuous Service. A stock bonus may provide that in the
    event a Participant’s Continuous Service terminates, the
    Company may reacquire any or all of the shares of Common Stock
    held by a Participant which have not vested as of the date of
    termination under the terms of the stock bonus agreement.
	 
	 	     
    (iv) Transferability. Rights to acquire
    shares of Common Stock under a stock bonus agreement shall be
    transferable by the Participant only upon such terms and
    conditions as are set forth in the stock bonus agreement, and as
    the Board shall determine in its discretion, so long as Common
    Stock awarded under the stock bonus agreement remains subject to
    the terms of the stock bonus agreement and the Investor Rights
    Agreement.

     
(b) Restricted Stock Awards. Each restricted
stock purchase agreement shall be in such form and shall contain
such terms and conditions as the Board shall deem appropriate.
Subject to the terms of this Section 5(b) the terms and
conditions of the restricted stock purchase agreements may
change from time to time, and the terms and conditions of
separate restricted stock purchase agreements need not be
identical.

		
	 	     
    (i) Purchase Price. The purchase price of
    restricted stock awards may be determined by the Board of
    Directors, but shall not be less than 85% of the Fair Market
    Value of the Common Stock on the date issued.
	 
	 	     
    (ii) Consideration. The purchase price of
    Common Stock acquired pursuant to the restricted stock purchase
    agreement may be paid either: (a) in cash at the time of
    purchase; (b) at the discretion of the Board, according
    to a deferred payment or other similar arrangement with the
    Participant; or (c) in any other form of legal
    consideration that may be acceptable to the Board in its
    discretion; provided, however, that payment of the Common
    Stock’s “par value,” as defined in the Delaware
    General Corporation Law shall not be made by deferred payment.
	 
	 	     
    (iii) Vesting. Shares of Common Stock
    acquired under the restricted stock purchase agreement may, but
    need not, be subject to a share repurchase option in favor of
    the Company in accordance with a vesting schedule to be
    determined by the Board.
	 
	 	     
    (iv) Termination of Participant’s Continuous
    Service. In the event a Participant’s Continuous
    Service terminates, the Company may repurchase or otherwise
    reacquire any or all of the shares of Common Stock held by the
    Participant which have not vested as of the date of termination
    under the terms of the restricted stock purchase agreement.
	 
	 	     
    (v) Transferability. Rights to acquire shares
    of Common Stock under the restricted stock purchase agreement
    shall be transferable by the Participant only upon such terms
    and conditions as are set forth in the restricted stock purchase
    agreement, as the Board shall determine in its discretion,

6

 

		
	 	
    so long as Common Stock awarded under the restricted stock
    purchase agreement remains subject to the terms of the
    restricted stock purchase agreement and the Investor Rights
    Agreement.

Section 6.     Certain
Restrictions Applicable Generally.

     
(a) Section 162(m) Limitation. Subject
to the provisions of Section 10 relating to adjustments
upon changes in the shares of Common Stock, no Employee shall be
eligible to be granted Awards covering more than $1 million
in shares of Common Stock during any calendar year. This
Section 6(a) shall not apply prior to the Listing Date and,
following the Listing Date, this Section 6(a) shall not
apply until (i) the earliest of: (1) the
first material modification of the Plan (including any increase
in the number of shares of Common Stock reserved for issuance
under the Plan in accordance with Section 3); (2)
the issuance of all of the shares of Common Stock reserved
for issuance under the Plan; (3) the expiration of the
Plan; or (4) the first meeting of stockholders at which
Directors are to be elected that occurs after the close of the
third calendar year following the calendar year in which
occurred the first registration of an equity security under
Section 12 of the Exchange Act; or (ii) such other
date required by Section 162(m) of the Code and the rules
and regulations promulgated thereunder.

     
(b) Consultants.

		
	 	     
    (i) Prior to the Listing Date, a Consultant shall
    not be eligible for the grant of a Stock Award if, at the time
    of grant, either the offer or the sale of the Company’s
    securities to such Consultant is not exempt under Rule 701
    of the Securities Act (“Rule 701”) because
    of the nature of the services that the Consultant is providing
    to the Company or because the Consultant is not a natural
    person, or as otherwise provided by Rule 701, unless the
    Company determines that such grant need not comply with the
    requirements of Rule 701 and will satisfy another exemption
    under the Securities Act as well as comply with the securities
    laws of all other relevant jurisdictions.
	 
	 	     
    (ii) From and after the Listing Date, a Consultant
    shall not be eligible for the grant of a Stock Award if, at the
    time of grant, a Form S-8 Registration Statement under the
    Securities Act (“Form S-8”) is not
    available to register either the offer or the sale of the
    Company’s securities to such Consultant because of the
    nature of the services that the Consultant is providing to the
    Company or because the Consultant is not a natural person, or as
    otherwise provided by the rules governing the use of
    Form S-8, unless the Company determines both
    (i) that such grant (A) shall be
    registered in another manner under the Securities Act
    (e.g., on a Form S-3 Registration Statement) or
    (B) does not require registration under the
    Securities Act in order to comply with the requirements of the
    Securities Act, if applicable, and (ii) that such
    grant complies with the securities laws of all other relevant
    jurisdictions.

     
(c) Lock-Up; Stockholders’ Agreement. By
receipt and acceptance of a Stock Award, each Participant
agrees, if requested in writing by an underwriter of Common
Stock or other securities of the Company, not to sell, assign,
donate, pledge, encumber, hypothecate, grant an option to, or
otherwise transfer or dispose of, whether in privately
negotiated or open market transactions, any Common Stock or
other securities of the Company held by him, her or it during
the 180-day period following the effective date of a
registration statement filed pursuant to the Company’s
initial public offering. The provisions of this
Section 6(c) are intended to be automatic in effect, and no
further acknowledgement or evidence of agreement shall be
required for the Company or its transfer agent to enforce the
provisions of this Section 6(c), or for the Company or its
transfer agent to enter into a “stop transfer” or
similar order with respect to securities of the Company held by
Participants. As a condition to receipt of any Stock Award (or
Common Stock underlying any option), you may be required to
execute a counterpart or otherwise agree to be bound by the
Company’s Stockholders’ Rights Agreement, as is in
effect from time to time.

Section 7.     Covenants of
the Company.

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

7

 

     
(b) Securities Law Compliance. The Company
shall seek to obtain from each regulatory commission or agency
having jurisdiction over the Plan such authority as may be
required to grant Stock Awards and to issue and sell shares of
Common Stock upon exercise of the Stock Awards; provided,
however, that this undertaking shall not require the Company
to register under the Securities Act the Plan, any Stock Award
or any Common Stock issued or issuable pursuant to any such
Stock Award. If, after reasonable efforts, the Company is unable
to obtain from any such regulatory commission or agency the
authority which counsel for the Company deems necessary for the
lawful issuance and sale of Common Stock under the Plan, the
Company shall be relieved from any liability for failure to
issue and sell Common Stock upon exercise of such Stock Awards
unless and until such authority is obtained.

Section 8.     Use of
Proceeds from Stock.

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

Section 9.     Miscellaneous.

     
(a) Acceleration of Exercisability and Vesting;
Forfeiture. The Board shall have the power to accelerate the
time at which a Stock Award may first be exercised or the time
during which a Stock Award or any part thereof will vest in
accordance with the Plan, notwithstanding the provisions in the
Stock Award stating the time at which it may first be exercised
or the time during which it will vest. The Board shall have the
authority to provide in any Stock Award that such Stock Award
will be forfeited under certain limited conditions, such as the
breach of any of the Company’s policies or a termination
for “Cause” (as defined in Section 15).

     
(b) Stockholder Rights. No Participant shall
be deemed to be the holder of, or to have any of the rights of a
holder with respect to, any shares of Common Stock subject to
such Stock Award unless and until such Participant has satisfied
all requirements for exercise of the Stock Award pursuant to its
terms.

     
(c) No Employment or other Service Rights.
Nothing in the Plan or any instrument executed or Stock Award
granted pursuant thereto shall confer upon any Participant any
right to continue to serve the Company or an Affiliate in the
capacity in effect at the time the Stock Award was granted or
shall affect the right of the Company or an Affiliate to
terminate (i) the employment of an Employee with or
without notice and with or without cause, (ii) the
service of a Consultant pursuant to the terms of such
Consultant’s agreement with the Company or an Affiliate or
(iii) the service of a Director pursuant to the Bylaws of
the Company or an Affiliate, and any applicable provisions of
the corporate law of the state in which the Company or the
Affiliate is incorporated, as the case may be.

     
(d) Investment Assurances. The Company may
require a Participant, as a condition of exercising or acquiring
Common Stock under any Stock Award, (i) to give written
assurances satisfactory to the Company as to the
Participant’s knowledge and experience in financial and
business matters and/or to employ a purchaser representative
reasonably satisfactory to the Company who is knowledgeable and
experienced in financial and business matters and that he or she
is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock
Award; and (ii) to give written assurances satisfactory
to the Company stating that the Participant is acquiring Common
Stock subject to the Stock Award for the Participant’s own
account and not with any present intention of selling or
otherwise distributing the Common Stock. The foregoing
requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (1) the issuance of
the shares of Common Stock upon the exercise or acquisition of
Common Stock under the Stock Award has been registered under a
then currently effective registration statement under the
Securities Act or (2) as to any particular requirement, a
determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then
applicable securities laws. The Company may, upon advice of
counsel to the Company, place legends on stock certificates
issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer
of the Common Stock.

8

 

     
(e) Withholding Obligations. To the extent
provided by the terms of a Stock Award Agreement, the
Participant may satisfy any federal, state or local tax
withholding obligation relating to the exercise or acquisition
of Common Stock under a Stock Award by any of the following
means (in addition to the Company’s right to withhold from
any compensation paid to the Participant by the Company) or by a
combination of such means: (i) tendering a cash payment;
(ii) authorizing the Company to withhold shares of
Common Stock from the shares of Common Stock otherwise issuable
to the Participant as a result of the exercise or acquisition of
Common Stock under the Stock Award, provided, however,
that no shares of Common Stock are withheld with a value
exceeding the minimum amount of tax required to be withheld by
law; or (iii) delivering to the Company owned and
unencumbered shares of Common Stock.

Section 10.     Adjustments
upon Changes in Stock.

     
(a) Capitalization Adjustments. If any change
is made in the Common Stock subject to the Plan, or subject to
any Stock Award, without the receipt of consideration by the
Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in
property other than cash, stock split, liquidating dividend,
combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of
consideration by the Company), the Plan will be appropriately
adjusted in the class(es) and maximum number of securities
subject to the Plan pursuant to Section 3(a) and the
outstanding Stock Awards will be appropriately adjusted in the
class(es) and number of securities and price per share of Common
Stock subject to such outstanding Stock Awards. The Board shall
make such adjustments, and its determination shall be final,
binding and conclusive. (The conversion of any convertible
securities of the Company shall not be treated as a transaction
“without receipt of consideration” by the Company.)

     
(b) Dissolution or Liquidation. In the event
of a dissolution or liquidation of the Company, then all
outstanding Stock Awards shall terminate immediately prior to
such event.

     
(c) Asset Sale, Merger, Consolidation, or Series
of Transactions. Unless a Stock Award Agreement provides
otherwise, in the event of (i) a sale, lease or other
disposition of all or substantially all of the assets of the
Company, (ii) a consolidation or merger of the Company
with or into any other corporation or other entity or person, or
any other corporate reorganization, in which the stockholders of
the Company immediately prior to such consolidation, merger or
reorganization, own less than 50% of the Company’s
outstanding voting power of the surviving entity (or its parent)
following the consolidation, merger or reorganization or
(iii) any transaction (or series of related transactions
involving a person or entity, or a group of affiliated persons
or entities) in which in excess of 50% of the Company’s
outstanding voting power is transferred (individually, a
“Corporate Transaction”), then any surviving
corporation or acquiring corporation shall assume any Stock
Awards outstanding under the Plan or shall substitute similar
stock awards (including an award to acquire the same
consideration paid to the stockholders in the Corporate
Transaction) for those outstanding under the Plan. In the event
any surviving corporation or acquiring corporation refuses to
assume such Stock Awards or to substitute similar stock awards
for those outstanding under the Plan, then with respect to Stock
Awards held by Participants whose Continuous Service has not
terminated, the vesting of such Stock Awards (and, if
applicable, the time during which such Stock Awards may be
exercised) may, in the discretion of the Board, be accelerated
in full, and the Stock Awards shall terminate if not exercised
(if applicable) at or prior to the Corporate Transaction. With
respect to any other Stock Awards outstanding under the Plan,
such Stock Awards shall terminate if not exercised (if
applicable) prior to the Corporate Transaction.

		
	Section 11.	
    Amendment of the Plan and Stock Awards.

     
(a) Amendment of Plan. The Board at any time,
and from time to time, may amend the Plan. However, except as
provided in Section 10 relating to adjustments upon changes
in Common Stock, no amendment shall be effective unless approved
by the stockholders of the Company to the extent stockholder
approval is necessary to satisfy the requirements of
Section 422 of the Code, Rule 16b-3 or any Nasdaq or
securities exchange listing requirements.

9

 

     
(b) Stockholder Approval. The Board may, in
its sole discretion, submit any other amendment to the Plan for
stockholder approval, including, but not limited to, amendments
to the Plan intended to satisfy the requirements of
Section 162(m) of the Code and the regulations thereunder
regarding the exclusion of performance-based compensation from
the limit on corporate deductibility of compensation paid to
certain executive officers.

     
(c) Contemplated Amendments. It is expressly
contemplated that the Board may amend the Plan in any respect
the Board deems necessary or advisable to provide eligible
Employees with the maximum benefits provided or to be provided
under the provisions of the Code and the regulations promulgated
thereunder relating to Incentive Stock Options and/or to bring
the Plan and/or Incentive Stock Options granted under it into
compliance therewith.

     
(d) No Impairment of Rights. Rights under any
Stock Award granted before amendment of the Plan shall not be
impaired by any amendment of the Plan unless (i) the
Company requests the consent of the Participant and (ii)
the Participant consents in writing.

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

		
	Section 12.	
    Termination or Suspension of the Plan.

     
(a) Plan Term. The Board may suspend or
terminate the Plan at any time. Unless sooner terminated, the
Plan shall terminate on the day before the tenth anniversary of
the date the Plan is adopted by the Board or approved by the
stockholders of the Company, whichever is earlier. No Stock
Awards may be granted under the Plan while the Plan is suspended
or after it is terminated.

     
(b) No Impairment of Rights. Suspension or
termination of the Plan shall not impair rights and obligations
under any Stock Award granted while the Plan is in effect except
with the written consent of the Participant.

		
	Section 13.	
    Effective Date of Plan.

     
The Plan shall become effective as determined by the Board, but
no Stock Award shall be exercised (or, in the case of a stock
bonus, shall be granted) unless and until the Plan has been
approved by the stockholders of the Company, which approval
shall be within twelve months before or after the date the Plan
is adopted by the Board.

		
	Section 14.	
    Choice of Law.

     
The law of the State of Delaware shall govern all questions
concerning the construction, validity and interpretation of this
Plan, without regard to such state’s conflict of laws rules.

		
	Section 15.	
    Definitions.

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

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

     
(c) “Cause” includes (and is not
limited to) dishonesty with respect to the Company and its
Affiliates, insubordination, substantial malfeasance or
nonfeasance of duty, unauthorized disclosure of confidential
information, conduct substantially prejudicial to the business
of the Company or any Affiliate and termination by the
Participant in violation of an agreement by the Participant to
remain in the employ of the Company or of an Affiliate. The
determination of the Committee as to the existence of cause will
be conclusive on the Participant and the Company.
“Cause” is not limited to events that have occurred
prior to a Participant’s termination of service to the
Company, nor is it necessary that the Committee’s

10

 

finding of “cause” occur prior to termination. If the
Committee determines, subsequent to the termination of a
Participant’s service but prior to the exercise of a Stock
Award, that either prior or subsequent to the Participant’s
termination the Participant engaged in conduct which would
constitute “Cause,” then the right any Stock Award
will be forfeited. Any definition in an agreement between a
Participant and the Company or an Affiliate which contains a
conflicting definition of “Cause” for termination and
which is in effect at the time of such termination will
supersede the definition in this Plan with respect to that
Participant.

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

     
(e) “Committee” means a committee
of one or more members of the Board appointed by the Board in
accordance with subsection 2(c).

     
(f) “Common Stock” means the Common
Stock, par value $0.0001, of the Company.

     
(g) “Company” means Cyberkinetics
Neurotechnology, Inc., a Delaware corporation.

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

     
(i) “Continuous Service” means that
the Participant’s service with the Company or an Affiliate,
whether as an Employee, Director or Consultant, is not
interrupted or terminated. The Participant’s Continuous
Service shall not be deemed to have terminated merely because of
a change in the capacity in which the Participant renders
service to the Company or an Affiliate as an Employee,
Consultant or Director or a change in the entity for which the
Participant renders such service, provided that there is
no interruption or termination of the Participant’s
Continuous Service. For example, a change in status from an
Employee of the Company to a Consultant of an Affiliate or a
Director will not constitute an interruption of Continuous
Service. The Board or Committee, in that party’s sole
discretion, may determine whether Continuous Service shall be
considered interrupted in the case of any leave of absence
approved by that party, including sick leave, military leave or
any other personal leave.

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

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

     
(l) “Disability” means the
permanent and total disability of a person within the meaning of
Section 22(e)(3) of the Code.

     
(m) “Employee” or
“Employment” means any person employed by the
Company or an Affiliate as determined in accordance with
Section 3401(c) of the Code.

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

     
(o) “Fair Market Value” means, as
of any date, the value of the Common Stock determined as follows:

		
	 	     
    (i) If the Common Stock is listed on any established
    stock exchange or traded on the Nasdaq National Market or the
    Nasdaq SmallCap Market, the Fair Market Value of a share of
    Common Stock shall be the closing sales price for such stock (or
    the closing bid, if no sales were reported) as quoted on such
    exchange or market (or the exchange or market with the greatest
    volume of trading in the Common Stock) on the last market
    trading day prior to the day of determination, as reported in
    The Wall Street Journal or such other source as the Board
    deems reliable.
	 
	 	     
    (ii) In the absence of such markets for the Common
    Stock, the Fair Market Value shall be determined in good faith
    by the Board, with particular reference to sales of shares of
    Common Stock

11

 

		
	 	
    and, if no such sales provide meaningful guidance, with
    reference to sales of any classes or series of preferred stock
    of the Company; provided that proper discounts may be
    taken by the Board to reflect the fair market value of the
    Common Stock in light of liquidation and redemption rights
    enjoyed by such preferred stock.

     
(p) “Incentive Stock Option” means
an Option intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

     
(q) “Listing Date” means the first
date upon which any security of the Company is listed (or
approved for listing) upon notice of issuance on any securities
exchange or designated (or approved for designation) upon notice
of issuance as a national market security on an interdealer
quotation system.

     
(r) “Non-Employee Director” means a
Director who either (i) is not a current Employee or
Officer of the Company or its parent or a subsidiary, does not
receive compensation (directly or indirectly) from the Company
or its Affiliates for services rendered as a consultant or in
any capacity other than as a Director (except for an amount as
to which disclosure would not be required under Item 404(a)
of Regulation S-K promulgated pursuant to the Securities
Act (“Regulation S-K”)), does not possess
an interest in any other transaction as to which disclosure
would be required under Item 404(a) of Regulation S-K
and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of
Regulation S-K; or (ii) is otherwise considered a
“non-employee director” for purposes of
Rule 16b-3.

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

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

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

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

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

     
(x) “Outside Director” means a
Director who either (i) is not a current employee of the
Company or an “affiliated corporation” (within the
meaning of Treasury Regulations promulgated under
Section 162(m) of the Code), is not a former employee of
the Company or an “affiliated corporation” receiving
compensation for prior services (other than benefits under a tax
qualified pension plan), was not an officer of the Company or an
“affiliated corporation” at any time and is not
currently receiving direct or indirect remuneration from the
Company or an “affiliated corporation” for services in
any capacity other than as a Director or (ii) is
otherwise considered an “outside director” for
purposes of Section 162(m) of the Code.

     
(y) “Participant” means a person to
whom a Stock Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Stock
Award.

     
(z) “Plan” means this Second
Amended and Restated 2002 Equity Incentive Plan.

     
(aa) “Rule 16b-3” means
Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule 16b-3, as in effect from time to time.

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

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

12

 

     
(dd) “Stock Award Agreement” means
a written agreement between the Company and a holder of a Stock
Award, subject to the terms and conditions of this Plan,
evidencing the terms and conditions of an individual Stock Award
grant.

     
(ee) “Ten Percent Stockholder”
means a person who owns (or is deemed to own pursuant to
Section 424(d) of the Code) stock possessing more than 10%
of the total combined voting power of all classes of stock of
the Company or of any of its Affiliates.

* * *

13

 

     
I, Nicholas Hatsopoulos, Secretary of Cyberkinetics
Neurotechnology Systems, Inc., having in my custody and
possession the corporate records of said corporation, do hereby
certify that the foregoing is a true and correct copy of the
Cyberkinetics Neurotechnology Systems, Inc. Amended and
Restated 2002 Equity Incentive Plan as in effect as of
March 30, 2005.

Witness my hand this March 30, 2005.

As Aforesaid

		
	 	
    /s/ Nicholas Hatsopoulos, Secretary
	 	
     

	 	
    Nicholas Hatsopoulos, Secretary

14

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