Document:

Exhibit
10.1

       

      Equity
Transfer Agreement of

    

    Hunan
Hanyang Environmental Protection Science & Technology Co., Ltd.

    

    The
agreement is signed by the authorized representatives on the date of September
18, 2009 in Dalian City, Liaoning Province.

    

    Equity
transferee: Dalian Dongtai Industrial Waste Treatment Co., Ltd. (referred to as
“Party A”) is an effectively existing company formed under the laws of the People’s Republic
of China;

    Official
Address: No.1 Huaihe West Road, E.T.D. Zone, Dalian City, Liaoning
Province.

    

    Equity
transferor: Hunan Luyi Industrial Development Co., Ltd. (referred to as “Party
B”) is an effectively existing company formed under the laws of the People’s Republic
of China;

    Official
Address: Room No.612, Building No.1, Huoyan Village, Gaoqiao Town, Yuhua
District, Changsha City, Hunan Province.

    

    Equity
transferor: Song Wenling (referred to as “Party C”),

    ID No.:
430102196602221325

    Official
Address: Room No.1206, Building No.2, Jingdian Garden, Rongyuan Road, Furong
District, Changsha City, Hunan Province.

    

    Preface

    

    1. Party
B and Party C hold 81% and 19% equity interests of Hunan Hanyang Environmental
Protection Science & Technology Co., Ltd. (referred to as “Hunan Hanyang”)
respectively. Hunan Hanyang is the project company of the Hazardous Waste
Treatment Center of Changsha City, Hunan Province (referred to as “the Center”),
with registered capital and paid-in capital amounting to RMB12 million
respectively.

    

    2. Party
B and Party C agree to transfer 46% and 19% equity interests respectively,
totally 65%, of Hunan Hanyang to Party A. Party A agrees to acquire the above
mentioned equity interests under the terms of this agreement.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    Chapter 1
Definitions

    

    1.1
Unless otherwise indicated in this agreement, the following abbreviations and
shortened forms have the meanings set forth as below:

    1)
“China” refers to the People’s Republic of China (excluding Hong Kong and Macao
Special Administrative Region and Taiwan Province)

    2) “RMB”
refers to the lawful currency of the P.R.C.

    3)
“Shares” refers to the shareholder’s equity owned by the existing shareholders
subscribing and investing registered capital in Hunan Hanyang under the relevant
legal documents accounting for the proportion of Hunan Hanyang’s total
registered capital. Generally, the manifestations of shares could be stock,
equity shares. And the share is calculated by the percentage in this
agreement.

    4)
“Transfer shares” refers to the transferors transferring their holding equities
of Hunan Hanyang’s 65% shares.

    5)
“Consideration” refers to transfer price mentioned in the Article 2.2 and
2.3.

    6) “Date
of transfer completion” as defined in Article 5.1

    7)
“Existing shareholders” refers to the transferors (Hunan Hanyang’s shareholders
specified in the latest effective contract and constitution prior to this
agreement coming into effect).

    8)
“Agreement” refers to the text, all the  appendixes and other
documents seen as agreement annex agreed by all of the Part A, Part B and Part
C.

    

    1.2
“Chapter, article, section, item and appendix” refers to the chapter, article,
section, item and appendix of this agreement

    

    Chapter 2
Equity Transfer

    

    
      2.1 Party
A agrees to pay Party B and Party C the cash amount that stipulated in Article
2.2 as consideration to acquire the transfer shares.

    

    

    2.2 The
consideration for Party A to acquire the transfer shares of Party B and Party C
is RMB10, 620,000 and RMB4,380,000 respectively.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    2.3
Consideration refers to acquisition price of the transfer share, including a
variety of shareholders’ equities contained in the transfer shares. The
shareholders’ equities refer to all the existing and potential interest attached
to transfer shares (including the interests represented by 65% of tangible and
intangible assets owned by Hunan Hanyang, the future national subsidy and other
government fund)

    

    2.4 For
any undisclosed debt, Party B and Party C should assume 100% repayment
responsibility of undisclosed debt.

    

    2.5 In
seven working days after the agreement is signed, Hunan Hanyang should submit
all the necessary documents to the authoritative bureaus in order to accomplish
the equity transfer registration.

    

    Chapter 3
Payment

    

    3.1
Within 7 working days after the agreement is signed, Party A should pay part of
the consideration, which is RMB7, 080,000 and RMB2, 920,000 to Part B and Party
C respectively.  Part A should pay the remainder of the consideration
within 15 working days when all the prerequisites mentioned in Article 4.1 of
this Agreement are satisfied.

    

    3.2 Party
A should transfer the consideration into the bank account designated by Party B
and Party C. The receipts should be issued and delivered to Party A in the most
secured way by Party B and Party C within 7 days after Party B and Party C
receive the consideration.

    

    3.3 The
three parties should pay the taxes resulting from the share transfer pursuant to
the laws and regulations.

    

    Chapter 4
Prerequisites of Equity Transfer

    

    4.1 Party
A only pays consideration stipulated in Chapter 3 when the following
prerequisites are completed within 3 months after the agreement comes into
effect.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    1) Party
B and Party C have completed all the legal procedures of transferring the equity
to Party A.

    2) Party
B and Party C have provided the resolution of equity transfer approved by the
Transferor’s Board of Directors (or refers to “meeting of shareholders”
depending on the provisions)

    3) Party
B and Party C have signed a disclaimer undertaking to exempt Party A from debt
which happens before the completion of transfer, and the possible tax liability
incurred by transfer.

    4) Party
B and Party C have completed the equity transfer registration process required
by the government authorities.

    5) The
lawyer appointed by Party A provides legal advice, certifying that all of the
above mentioned original legal documents are correct, and confirms that
transaction described in this agreement is legally valid, lawful and legally
binding for all contracting parties.

    

    4.2 Party
A has the right to abandon any or all the prerequisites mentioned in Article 4.1
at its own discretion. And the abandonment decision should be submitted in
writing.

    

    4.3 If
there are any prerequisites in Article 4.1 failing to satisfy, above all Party A
is unwilling to abandon the requisites. This agreement will terminate
automatically, and then any rights, obligations or responsibilities under this
agreement are invalid and no longer binding to any party immediately. Party B
and Party C shall not require Party A to pay the consideration pursuant to this
agreement. Besides Party B and Party C should return the consideration that has
been paid with the bank interests generated during the period defined in Article
3.1 to Party A after the termination of this agreement immediately or within no
more than 14 working days.

    

    Chapter 5
Completion Date of Equity Transfer

    

    5.1 This
agreement shall become effective upon signing by the three parties. The
transferee shall become one of the shareholders in Hunan Hanyang. However, the
rights and obligations under this agreement are finally completed when the
prerequisites in Chapter 4 are met within the period defined in Article 4.1 and
also the transferee pays the consideration to transferors.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    Chapter 6
Appointment of Directors & Other Conventions

    

    6.1 Party
A has the right to appoint directors into the Board of directors of Hunan
Hanyang pursuant to the corporate constitution of Hunan Hanyang.

     

    6.2 After
the transfer, Party A and Party B will continue to invest into Hunan Hanyang to
construct the Center. The proportion of the new investment should be Party A 65%
vs Party B 35%.

    

    Chapter 7
Default Responsibility

    

    7.1 Each
party shall be deemed as default if any of the following events
occurs:

    1)
Violation of the provisions in this Agreement by any party;

    2)
Statement, guarantee, commitment deemed as untrue, incorrect and misleading or
violating this Agreement offered by any party.

     

    7.2 The
other two parties have the right to terminate this Agreement or require
compensation for the resultant losses caused by any party of the
three.

    

    Chapter 8
Force Majeure

    

    8.1
Should each of the parties to this Agreement be prevented from executing this
Agreement by force majeture, including but not limited to strike, staff
turbulence, explosion, flood, earthquake, hurricane and other natural disasters,
war, intented wreck, expropriation, government acts, legal change, other reasons
caused by the government and mandatory regulations, important affairs and
emergency.

    

    8.2 The
prevented party shall notify the other party by written report without delay,
and within 15days thereafter provide the detailed information of the events
explaining the reason of its inability to execute or delay the execution of all
or part of this Agreement. Each party shall, through consultations, decide
whether to terminate this Agreement or to exempt the party of obligations for
implementation of this Agreement or whether to delay the execution of this
Agreement according to the effects of the events on the performance of this
Agreement.

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    Chapter 9
Applicable Law, Disputes Resolution, and Others

    

    91 The
law of the People’s Republic of China shall be applicable to signing, validity,
interpretation, performance, implementation and disputes resolution of this
Agreement.

    

    9.2 Any
disputes arising from the execution or performance of this Agreement shall be
settled through negotiation between parties involved. In case no settlement can
be reached through such negotiation, each party should appeal to the local
People’s Court having jurisdiction over Party A.

    

    9.3 This
agreement becomes effective upon signing of Party A, Party B and Party
C.

     

    
      
        
        

      

      
        6EXHIBIT 4.1

    

     

    Multicell
Technologies, Inc.

    2004
Equity Incentive Plan

    
 

    Adopted
by the Board of Directors on March 3, 2004

    Approved
by Stockholders on June 16, 2004

    Amended
by the Board of Directors on March 4, 2005

    Approved
by the Stockholders on May 18, 2005

    Amended
by the Board of Directors on June 25, 2009

    Approved
by the Stockholders on june 25, 2009

    Termination
Date:  March 2, 2014

     

    
      	
              1. 

            	
                    
                Purposes.

              

            

    

     

    (a)           Eligible Stock Award
Recipients.  The persons eligible to receive Stock Awards are
Employees, Directors and Consultants.

     

    (b)           Available Stock
Awards.  The purpose of the Plan is to provide a means by which
eligible recipients of Stock Awards 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 Purchase Awards, (iv) Stock Bonus Awards, (v) Stock
Appreciation Rights, (vi) Stock Unit Awards and (vii) Other Stock
Awards.

     

    (c)           General
Purpose.  The Company, by means of the Plan, seeks to retain
the services of the group of persons eligible to receive Stock Awards, to secure
and retain the services of new members of this group and to provide incentives
for such persons to exert maximum efforts for the success of the Company and its
Affiliates.

     

    
      	
              2. 

            	
                    
                Definitions.

              

            

    

     

    (a)           “Affiliate”
means any parent corporation or subsidiary corporation 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)           “Capitalization
Adjustment” has the meaning ascribed to that term in Section
11(a).

     

    (d)           “Cause”
means, with respect to a Participant, the occurrence of any of the
following:  (i) such Participant’s commission of any felony or any
crime involving fraud, dishonesty or moral turpitude under the laws of the
United States or any state therof; (ii) such Participant’s attempted commission
of, or participation in, a fraud or act of dishonesty against the Company; (iii)
such Participant’s intentional, material violation of any contract or agreement
between the Participant and the Company or any statutory duty owed to the
Company; (iv) such Participant’s unauthorized use or disclosure of the Company’s
confidential information or trade secrets; (v) such Participant’s gross
misconduct; or (vi) such Participant’s conduct that constitutes gross
insubordination, incompetence or habitual neglect of duties and that results in
(or might reasonably result in) material harm to the business of the
Company.  The determination that a termination is for Cause shall be
made by the Company in its sole and exclusive judgment and
discretion.  Any determination by the Company that the Continuous
Service of a Participant was terminated by reason of dismissal without Cause for
the purposes of outstanding Stock Awards held by such Participant shall have no
effect upon any determination of the rights or obligations of the Company or
such Participant for any other purpose.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (e)           “Change in
Control” means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:

     

    (i)           any
Exchange Act Person becomes the Owner, directly or indirectly, of securities of
the Company representing more than fifty percent (50%) of the combined voting
power of the Company’s then outstanding securities other than by virtue of a
merger, consolidation or similar transaction.  Notwithstanding the
foregoing, a Change in Control shall not be deemed to occur (A) on account of
the acquisition of securities of the Company by an investor, any affiliate
thereof or any other Exchange Act Person from the Company in a transaction or
series of related transactions the primary purpose of which is to obtain
financing for the Company through the issuance of equity securities or (B)
solely because the level of Ownership held by any Exchange Act Person (the
“Subject
Person”) exceeds the designated percentage threshold of the outstanding
voting securities as a result of a repurchase or other acquisition of voting
securities by the Company reducing the number of shares outstanding, provided
that if a Change in Control would occur (but for the operation of this sentence)
as a result of the acquisition of voting securities by the Company, and after
such share acquisition, the Subject Person becomes the Owner of any additional
voting securities that, assuming the repurchase or other acquisition had not
occurred, increases the percentage of the then outstanding voting securities
Owned by the Subject Person over the designated percentage threshold, then a
Change in Control shall be deemed to occur;

     

    (ii)          there
is consummated a merger, consolidation or similar transaction involving
(directly or indirectly) the Company and, immediately after the consummation of
such merger, consolidation or similar transaction, the stockholders of the
Company immediately prior thereto do not Own, directly or indirectly, either (A)
outstanding voting securities representing more than fifty percent (50%) of the
combined outstanding voting power of the surviving Entity in such merger,
consolidation or similar transaction or (B) more than fifty percent (50%) of the
combined outstanding voting power of the parent of the surviving Entity in such
merger, consolidation or similar transaction, in each case in substantially the
same proportions as their Ownership of the outstanding voting securities of the
Company immediately prior to such transaction;

     

    (iii)         the
stockholders of the Company approve or the Board approves a plan of complete
dissolution or liquidation of the Company, or a complete dissolution or
liquidation of the Company shall otherwise occur;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (iv)          there
is consummated a sale, lease, license or other disposition of all or
substantially all of the consolidated assets of the Company and its
Subsidiaries, other than a sale, lease, license or other disposition of all or
substantially all of the consolidated assets of the Company and its Subsidiaries
to an Entity, more than fifty percent (50%) of the combined voting power of the
voting securities of which are Owned by stockholders of the Company in
substantially the same proportions as their Ownership of the outstanding voting
securities of the Company immediately prior to such sale, lease, license or
other disposition; or

     

    (v)           individuals
who, on the date this Plan is adopted by the Board, are members of the Board
(the “Incumbent
Board”) cease for any reason to constitute at least a majority of the
members of the Board; provided, however, that if
the appointment or election (or nomination for election) of any new Board member
was approved or recommended by a majority vote of the members of the Incumbent
Board then still in office, such new member shall, for purposes of this Plan, be
considered as a member of the Incumbent Board.

     

    Notwithstanding
the foregoing or any other provision of this Plan, the definition of Change in
Control (or any analogous term) in an individual written agreement between the
Company or any Affiliate and the Participant shall supersede the foregoing
definition with respect to Stock Awards subject to such agreement (it being
understood, however, that if no definition of Change in Control or any analogous
term is set forth in such an individual written agreement, the foregoing
definition shall apply).

     

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

     

    (g)           “Committee”
means a committee of one (1) or more members of the Board appointed by the Board
in accordance with Section 3(c).

     

    (h)           “Common
Stock” means the common stock of the Company.

     

    (i)       
    “Company”
means Multicell Technologies, Inc., a Delaware corporation.

     

    (j)       
    “Consultant”
means any person, including an advisor, who (i) is engaged by the Company or an
Affiliate to render consulting or advisory services and is compensated for such
services or (ii) is serving as a member of the Board of Directors of an
Affiliate and is compensated for such services.  However, service
solely as a Director, or payment of a fee for such services, shall not cause a
Director to be considered a “Consultant” for purposes of the Plan.

     

    (k)           “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.  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 service with
the Company or an Affiliate, shall not terminate a Participant’s Continuous
Service.  For example, a change in status from an Employee of the
Company to a Consultant of an Affiliate or to a Director shall not constitute an
interruption of Continuous Service.  The Board or the chief executive
officer of the Company, 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.  Notwithstanding the foregoing, a leave of
absence shall be treated as Continuous Service for purposes of vesting in a
Stock Award only to such extent as may be provided in the Company’s leave of
absence policy or in the written terms of the Participant’s leave of
absence.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (l)     
      “Corporate
Transaction” means the occurrence, in a single transaction or in a series
of related transactions, of any one or more of the following
events:

     

    (i)           a
sale or other
disposition of all or substantially all, as determined by the Board in its
discretion, of the consolidated assets of the Company and its
Subsidiaries;

     

    (ii)      
   a sale or other disposition of at least ninety percent
(90%) of the
outstanding securities of the Company;

     

    (iii)        a
merger, consolidation or similar transaction following which the Company is not
the surviving corporation; or

     

    (iv)         a
merger, consolidation or similar transaction following which the Company is the
surviving corporation but the shares of Common Stock outstanding immediately
preceding the merger, consolidation or similar transaction are converted or
exchanged by virtue of the merger, consolidation or similar transaction into
other property, whether in the form of securities, cash or
otherwise.

     

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

     

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

     

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

     

    (p)         
  “Effective
Date” means the date on which this Plan is originally approved by the
Company’s stockholders (on or about June 16, 2004).

     

    (q)       
    “Employee”
means any person employed by the Company or an Affiliate.  However,
service solely as a Director, or payment of a fee for such services, shall not
cause a Director to be considered an “Employee” for purposes of the
Plan.

     

    (r)      
     “Entity”
means a corporation, partnership or other entity.

     

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

     

    (t)     
      “Exchange Act
Person” means any natural person, Entity or “group” (within the meaning
of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act
Person” shall not include (A) the Company or any Subsidiary of the Company, (B)
any employee benefit plan of the Company or any Subsidiary of the Company or any
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any Subsidiary of the Company, (C) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (D) an Entity
Owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their Ownership of stock of the
Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (u)           “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 by the Board in good faith.

     

    (v)            “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.

     

    (w)           “Non-Employee
Director” means a Director who
either (i) is not a current Employee or Officer of the Company or an Affiliate,
does not receive compensation, either directly or indirectly, from the Company
or an Affiliate 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 for which
disclosure would be required under Item 404(a) of Regulation S-K, and is not
engaged in a business relationship for which disclosure would be required
pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered
a “non-employee director” for purposes of Rule 16b-3.

     

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

     

    (y)       
    “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.

     

    (z)        
   “Option”
means an Incentive Stock Option or a Nonstatutory Stock Option to purchase
shares of Common Stock granted pursuant to the Plan.

     

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

     

    (bb)          “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.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (cc)          “Other Stock
Award” means an award based in whole or in part by reference to the
Common Stock which is granted pursuant to the terms and conditions of Section
7(e).

     

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

     

    (ee)          “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” who receives compensation
for prior services (other than benefits under a tax-qualified retirement plan)
during the taxable year, has not been an officer of the Company or an
“affiliated corporation”, and does not receive remuneration from the Company or
an “affiliated corporation,” either directly or indirectly, 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.

     

    (ff)           “Own,” “Owned,”
“Owner,” “Ownership” A person or Entity shall
be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired
“Ownership” of securities if such person or Entity, directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise, has
or shares voting power, which includes the power to vote or to direct the
voting, with respect to such securities.

     

    (gg)         “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.

     

    (hh)         “Plan”
means this Multicell Technologies, Inc. 2004 Equity Incentive Plan, as
amended.

     

    (ii)           “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.

     

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

     

    (kk)        “Stock
Appreciation Right” means a right to receive the appreciation of Common
Stock that is granted pursuant to the terms and conditions of Section
7(d).

     

    (ll)           “Stock
Appreciation Right Agreement” means a written agreement between the
Company and a holder of a Stock Appreciation Right evidencing the terms and
conditions of a Stock Appreciation Right grant.  Each Stock
Appreciation Right Agreement shall be subject to the terms and conditions of the
Plan.

     

    (mm)       “Stock
Award” means any right granted under the Plan, including an Option, a
Stock Purchase Award, Stock Bonus Award, a Stock Appreciation Right, a Stock
Unit Award or any Other Stock Award.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

     

    (oo)          “Stock Bonus
Award” means an award of shares of Common Stock which is granted pursuant
to the terms and conditions of Section 7(b).

     

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

     

    (qq)          “Stock Purchase
Award” means an award of shares of Common Stock which is granted pursuant
to the terms and conditions of Section 7(a).

     

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

     

    (ss)         “Stock Unit
Award” means a right to receive shares of Common Stock which is granted
pursuant to the terms and conditions of Section 7(c).

     

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

     

    (uu)         “Subsidiary”
means, with respect to the Company, (i) any corporation of which more than fifty
percent (50%) of the outstanding capital stock having ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether, at the time, stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, Owned by the Company, and
(ii) any partnership in which the Company has a direct or indirect interest
(whether in the form of voting or participation in profits or capital
contribution) of more than fifty percent (50%).

     

    (vv)           “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 ten percent (10%) of the
total combined voting power of all classes of stock of the Company or of any of
its Affiliates.

     

    
      	
              3. 

            	
                    
                Administration.

              

            

    

     

    (a)           Administration by
Board.  The Board shall administer the Plan unless and until
the Board delegates administration of the Plan to a Committee, as provided in
Section 3(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; and the number of shares of Common Stock with respect to which a
Stock Award shall be granted to each such person.

     

    (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.  The Board, in the exercise of this power, may correct
any defect, omission or inconsistency in the Plan or in any Stock Award
Agreement, in a manner and to the extent it shall deem necessary or expedient to
make the Plan fully effective.

     

    (iii)        To
effect, at any time and from time to time, with the consent of any adversely
affected Optionholder, (1) the reduction of the exercise price of any
outstanding Option under the Plan, (2) the cancellation of any outstanding
Option under the Plan and the grant in substitution therefor of (A) a new Option
under the Plan or another equity plan of the Company covering the same or a
different number of shares of Common Stock, (B) a Stock Purchase Award, (C) a
Stock Bonus Award, (D) a Stock Appreciation Right, (E) a Stock Unit Award (F) an
Other Stock Award, (G) cash and/or (H) other valuable consideration (as
determined by the Board, in its sole discretion), or (3) any other action that
is treated as a repricing under generally accepted accounting
principles.

     

    (iv)         To
amend the Plan or a Stock Award as provided in Section 12.

     

    (v)          To
terminate or suspend the Plan as provided in Section 13.

     

    (vi)         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.

     

    (vii)       To
adopt such procedures and sub-plans as are necessary or appropriate to permit
participation in the Plan by Employees who are foreign nationals or employed
outside the United States.

     

    (c)           Delegation
to Committee.

     

    (i)          General.  The Board
may delegate some or all of the administration of the Plan to a Committee or
Committees of one (1) 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 that have been delegated to the
Committee, 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 retain the authority to concurrently administer the Plan with the Committee
and may, at any time, revest in the Board some or all of the powers previously
delegated.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (ii)         Section 162(m) and Rule 16b-3
Compliance.  In the discretion of the Board, the 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.  In addition, the Board or the Committee,
in its discretion, may (1) delegate to a committee of one or more members of the
Board who need not be 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 need not be 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)           Delegation to an
Officer.  The Board may delegate to one or more Officers of the
Company the authority to do one or both of the following (i) designate Officers
and Employees of the Company or any of its Subsidiaries to be recipients of
Stock Awards and (ii) determine the number of shares of Common Stock to be
subject to such Stock Awards granted to such Officers and Employees of the
Company; provided, however,
that the Board resolutions regarding such delegation shall specify the
total number of shares of Common Stock that may be subject to the Stock Awards
granted by such Officer and that such Officer may not grant a Stock Award to
himself or herself.  Notwithstanding anything to the contrary in this
Section 3(d), the Board may not delegate to an Officer authority to determine
the Fair Market Value of the Common Stock pursuant to Section 2(t)(ii)
above.

     

    (e)           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.

     

    (f)           Arbitration.  Any
and all disputes, claims, or causes of action, in law or equity, concerning any
Stock Awards granted (or not granted) pursuant to the Plan or any disputes or
claims relating to or arising out of the Plan shall be resolved, to the fullest
extent permitted by law, by final, binding arbitration in San Diego, California
conducted by the Judicial Arbitration and Mediation Services (“JAMS”), or its successors, under
the then current rules of JAMS; provided that the arbitrator
shall:  (a) have the authority to compel adequate discovery for the
resolution of the dispute and to award such relief as would otherwise be
permitted by law; and (b) issue a written arbitration decision including the
arbitrator’s essential findings and conclusions and a statement of the
award.  Both the Participant and the Company shall be entitled to all
rights and remedies that either the Participant or the Company would be entitled
to pursue in a court of law.

     

    
      	
              4. 

            	
                    
                Shares
      Subject to the Plan.

              

            

    

     

    (a)           Share Reserve. Subject to
the provisions of Section 11(a) relating to Capitalization Adjustments, the
shares of Common Stock that may be issued pursuant to Stock Awards shall not
exceed in the aggregate thirty-two million (32,000,000) shares of Common Stock
plus an annual increase to be added on the first day of each Company fiscal
year, beginning in 2005 and ending in (and including) 2013, equal to the least
of the following amounts: (A) two percent (2%) of the Company’s outstanding
shares of Common Stock on the day preceding the first day of such fiscal year
(rounded to the nearest whole share), (B) one million five hundred thousand
(1,500,000) shares of Common Stock, or (C) an amount determined by the
Board. In addition, the share reserve under this Plan shall be increased
from time to time by such number of shares of Common Stock as is equal to the
number of shares of Common Stock that, but for the termination of the 2000 Stock
Incentive Plan (the “2000
Plan”) as of the Effective Date, would otherwise have reverted to the
share reserve of the 2000 Plan pursuant to the terms thereof.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (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,
or if any shares of Common Stock issued to a Participant pursuant to a Stock
Award are forfeited to or repurchased by the Company, including, but not limited
to, any repurchase or forfeiture caused by the failure to meet a contingency or
condition required for the vesting of such shares, then the shares of Common
Stock not issued under such Stock Award, or forfeited to or repurchased by the
Company, shall revert to and again become available for issuance under the
Plan.  If any shares subject to a Stock Award are not delivered to a
Participant because such shares are withheld for the payment of taxes or the
Stock Award is exercised through a reduction of shares subject to the Stock
Award (i.e., “net
exercised”), the number of shares that are not delivered to the Participant
shall remain available for issuance under the Plan.  If the exercise
price of any Stock Award is satisfied by tendering shares of Common Stock held
by the Participant (either by actual delivery or attestation), then the number
of shares so tendered shall remain available for issuance under the
Plan.  Notwithstanding anything to the contrary in this Section 4(b),
subject to the provisions of Section 11(a) relating to Capitalization
Adjustments the aggregate maximum number of shares of Common Stock that may be
issued as Incentive Stock Options shall be thirty-two million (32,000,000)
shares of Common Stock.

     

    (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.

     

    
      	
              5. 

            	
                    
                Eligibility.

              

            

    

     

    (a)           Eligibility for Specific Stock
Awards.  Incentive Stock Options may be granted only to
Employees.  Stock Awards other than Incentive Stock Options may be
granted to Employees, Directors and Consultants.

     

    (b)           Ten Percent
Stockholders.  A Ten Percent Stockholder shall not be granted
an Incentive Stock Option unless the exercise price of such Option is at least
one hundred ten percent (110%) of the Fair Market Value of the Common Stock on
the date of grant and the Option is not exercisable after the expiration of five
(5) years from the date of grant.

     

    (c)           Section 162(m) Limitation on Annual
Grants. Subject to the provisions of Section 11(a) relating to
Capitalization Adjustments, at such time as the Company may be subject to the
applicable provisions of Section 162(m) of the Code, no Employee shall be
eligible to be granted Options or Stock Appreciation Rights covering more than
two million (2,000,000) shares of Common Stock during any calendar
year.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (d)           Consultants.  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, because the Consultant is not a
natural person, or because of any other rule governing the use of Form
S-8.

     

    
      	
              6. 

            	
                    
                Option
      Provisions.

              

            

    

     

    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 certificates are issued, a separate certificate or certificates
shall be issued for shares of Common Stock purchased on exercise of each type of
Option.  The provisions of separate Options need not be identical, but
each Option shall include (through incorporation of provisions hereof by
reference in the Option or otherwise) the substance of each of the following
provisions:

     

    (a)           Term.  The Board
shall determine the term of an Option; provided however that,
subject to the provisions of Section 5(b) regarding Ten Percent
Stockholders, no Incentive Stock Option shall be exercisable after the
expiration of ten (10) years from the date on which it was granted.

     

    (b)           Exercise Price of an Incentive Stock
Option.  Subject to the provisions of Section 5(b) regarding
Ten Percent Stockholders, the exercise price of each Incentive Stock Option
shall be not less than one hundred percent (100%) of the Fair Market Value of
the Common Stock subject to the Option on the date the Option is
granted.  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.

     

    (c)           Exercise Price of a Nonstatutory
Stock Option.  The Board, in its discretion, shall determine
the exercise price of each Nonstatutory Stock Option.

     

    (d)           Consideration.  The
purchase price of Common Stock acquired pursuant to an Option shall be paid, to
the extent permitted by applicable law, 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 (either by actual delivery or attestation) of
other Common Stock at the time the Option is exercised, (2) according to a
deferred payment or other similar arrangement with the Optionholder, (3) by a
“net exercise” of the Option (as further described below), (4) pursuant to a
program developed under Regulation T as promulgated by the Federal Reserve Board
that, prior to the issuance of Common Stock, results in either the receipt of
cash (or check) by the Company or the receipt of irrevocable instructions to pay
the aggregate exercise price to the Company from the sales proceeds or (5) 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 (6) 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
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 minimum rate of interest necessary to avoid
(1) the treatment as interest, under any applicable provisions of the Code, of
any amounts other than amounts stated to be interest under the deferred payment
arrangement and (2) the treatment of the Option as a variable award for
financial accounting purposes.

     

    In the
case of a “net exercise” of an Option, the Company will not require a payment of
the exercise price of the Option from the Participant but will reduce the number
of shares of Common Stock issued upon the exercise by the largest number of
whole shares that has a Fair Market Value that does not exceed the aggregate
exercise price.  With respect to any remaining balance of the
aggregate exercise price, the Company shall accept a cash payment from the
Participant.  Shares of Common Stock will no longer be outstanding
under an Option (and will therefore not thereafter be exercisable) following the
exercise of such Option to the extent of (i) shares used to pay the exercise
price of an Option under the “net exercise”, (ii) shares actually delivered to
the Participant as a result of such exercise and (iii) shares withheld for
purposes of tax withholding.

     

    (e)           Transferability of an 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.  Notwithstanding the foregoing, the Optionholder may, by
delivering written notice to the Company, in a form provided by or otherwise
satisfactory to the Company, designate a third party who, in the event of the
death of the Optionholder, shall thereafter be entitled to exercise the
Option.

     

    (f)           Transferability of a Nonstatutory
Stock Option.  A Nonstatutory Stock Option shall be
transferable to the extent provided in the Option Agreement.  If the
Nonstatutory Stock Option does not provide for transferability, 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.  Notwithstanding the
foregoing, the Optionholder may, by delivering written notice to the Company, in
a form provided by or otherwise satisfactory to the Company, designate a third
party who, in the event of the death of the Optionholder, shall thereafter be
entitled to exercise the Option.

     

    (g)           Vesting
Generally.  The total number of shares of Common Stock subject
to an Option may vest and therefore become exercisable in periodic installments
that may 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.  The provisions of
this Section 6(g) are subject to any Option provisions governing the minimum
number of shares of Common Stock as to which an Option may be
exercised.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (h)           Termination of Continuous
Service.  In the event that an Optionholder’s Continuous
Service terminates (for reasons other than Cause or 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 of Continuous Service) but only within such period of time ending
on the earlier of (i) the expiration of the term of the Option as set forth in
the Option Agreement or (ii) the date three (3) months following the termination
of the Optionholder’s Continuous Service (or such longer or shorter period
specified in the Option Agreement).  If, after termination of
Continuous Service, the Optionholder does not exercise his or her Option within
the time specified herein or in the Option Agreement (as applicable), the Option
shall terminate.

     

    (i)         
  Extension of
Termination Date.  An Optionholder’s Option Agreement may
provide that if the exercise of the Option following the termination of the
Optionholder’s Continuous Service (for reasons other than Cause or 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 shall terminate on the
earlier of (i) the expiration of the term of the Option set forth in the Option
Agreement or (ii) the expiration of a period of three (3) 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.

     

    (j)        
   Disability of
Optionholder.  In the event that an Optionholder’s Continuous
Service terminates as a result of the Optionholder’s 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 of Continuous
Service), but only within such period of time ending on the earlier of (i) the
expiration of the term of the Option as set forth in the Option Agreement or
(ii) the date twelve (12) months following such termination of Continuous
Service (or such longer or shorter period specified in the Option
Agreement).  If, after termination of Continuous Service, the
Optionholder does not exercise his or her Option within the time specified
herein or in the Option Agreement (as applicable), the Option shall
terminate.

     

    (k)           Death of
Optionholder.  In the event that (i) an Optionholder’s
Continuous Service terminates as a result of the Optionholder’s death or (ii)
the Optionholder dies within the period (if any) specified in the Option
Agreement after the termination of the Optionholder’s Continuous Service for a
reason other than death, 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, by a person who acquired the right to exercise the
Option by bequest or inheritance or by a person designated to exercise the
option upon the Optionholder’s death pursuant to Section 6(e) or 6(f), but only
within the period ending on the earlier of (i) the expiration of the term of
such Option as set forth in the Option Agreement or (ii) the date eighteen (18)
months following the date of death (or such longer or shorter period specified
in the Option Agreement).  If, after the Optionholder’s death, the
Option is not exercised within the time specified herein or in the Option
Agreement (as applicable), the Option shall terminate.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (l)           Termination for
Cause.  In the event that an Optionholder’s Continuous Service
is terminated for Cause, the Option shall terminate upon the termination date of
such Optionholder’s Continuous Service, and the Optionholder shall be prohibited
from exercising his or her Option from and after the time of such termination of
Continuous Service.

     

    (m)           Early Exercise.  The
Option may 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.  The Company shall not be required to exercise its
repurchase option until at least six (6) months (or such longer or shorter
period of time required to avoid a charge to earnings for financial accounting
purposes) have elapsed following exercise of the Option unless the Board
otherwise specifically provides in the Option.

     

    
      	
              7. 

            	
                    
                Provisions
      of Stock Awards other than
Options.

              

            

    

     

    (a)           Stock Purchase
Awards.  Each Stock Purchase Award Agreement shall be in such
form and shall contain such terms and conditions as the Board shall deem
appropriate.  At the Board’s election, shares of Common Stock may be
(i) held in book entry form subject to the Company’s instructions until any
restrictions relating to the Stock Purchase Award lapse; or (ii) evidenced by a
certificate, which certificate shall be held in such form and manner as
determined by the Board.  The terms and conditions of Stock Purchase
Award Agreements may change from time to time, and the terms and conditions of
separate Stock Purchase Award Agreements need not be identical, provided, however, that each
Stock Purchase Award Agreement shall include (through incorporation of the
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:

     

    (i)          Purchase Price.  At
the time of the grant of a Stock Purchase Award, the Board will determine the
price to be paid by the Participant for each share subject to the Stock Purchase
Award.  To the extent required by applicable law, the price to be paid
by the Participant for each share of the Stock Purchase Award will not be less
than the par value of a share of Common Stock.

     

    (ii)         Consideration.  At
the time of the grant of a Stock Purchase Award, the Board will determine the
consideration permissible for the payment of the purchase price of the Stock
Purchase Award.  The purchase price of Common Stock acquired pursuant
to the Stock Purchase Award shall be paid either: (i) in cash at the time of
purchase or (ii) in any other form of legal consideration that may be acceptable
to the Board and permissible under the Delaware General Corporation
Law.

     

    (iii)       Vesting. Shares of Common
Stock acquired under a Stock Purchase Award may be subject to a share repurchase
right or 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 that a Participant’s Continuous Service
terminates, the Company shall have the right, but not the obligation, to
repurchase or otherwise reacquire, any or all of the shares of Common Stock held
by the Participant that have not vested as of the date of termination under the
terms of the Stock Purchase Award Agreement.  At the Board’s election,
the repurchase right may be at the least of: (i) the Fair Market Value on the
relevant date or (ii) the Participant’s original cost.  The Company
shall not be required to exercise its repurchase option until at least six (6)
months (or such longer or shorter period of time required to avoid a charge to
earnings for financial accounting purposes) have elapsed following the purchase
of the restricted stock unless otherwise determined by the Board or provided in
the Stock Purchase Award Agreement.

     

    (v)     
    Transferability. Rights to
purchase or receive shares of Common Stock granted under a Stock Purchase Award
shall be transferable by the Participant only upon such terms and conditions as
are set forth in the Stock Purchase Award Agreement, as the Board shall
determine in its discretion, and so long as Common Stock awarded under the Stock
Purchase Award remains subject to the terms of the Stock Purchase Award
Agreement.

     

    (b)           Stock Bonus
Awards.  Each Stock Bonus Award Agreement shall be in such form
and shall contain such terms and conditions as the Board shall deem
appropriate.  At the Board’s election, shares of Common Stock may be
(i) held in book entry form subject to the Company’s instructions until any
restrictions relating to the Stock Bonus Award lapse; or (ii) evidenced by a
certificate, which certificate shall be held in such form and manner as
determined by the Board.  The terms and conditions of Stock Bonus
Award Agreements may change from time to time, and the terms and conditions of
separate Stock Bonus Award Agreements need not be identical, but each Stock
Bonus Award Agreement shall include (through incorporation of provisions hereof
by reference in the agreement or otherwise) the substance of each of the
following provisions:

     

    (i)          Consideration.  A
Stock Bonus Award may be awarded in consideration for past services actually
rendered to the Company or an Affiliate.

     

    (ii)         Vesting.  Shares of
Common Stock awarded under the Stock Bonus Award Agreement may be subject to
forfeiture to the Company in accordance with a vesting schedule to be determined
by the Board.

     

    (iii)  
     Termination of Participant’s
Continuous Service.  In the event a Participant’s Continuous
Service terminates, the Company may receive via a forfeiture condition, any or
all of the shares of Common Stock held by the Participant which have not vested
as of the date of termination of Continuous Service under the terms of the Stock
Bonus Award Agreement.

     

    (iv)         Transferability.  Rights
to acquire shares of Common Stock under the Stock Bonus Award Agreement shall be
transferable by the Participant only upon such terms and conditions as are set
forth in the Stock Bonus Award Agreement, as the Board shall determine in its
discretion, so long as Common Stock awarded under the Stock Bonus Award
Agreement remains subject to the terms of the Stock Bonus Award
Agreement.

     

    (c)           Stock Unit
Awards.  Each Stock Unit Award Agreement shall be in such form
and shall contain such terms and conditions as the Board shall deem
appropriate.  The terms and conditions of Stock Unit Award Agreements
may change from time to time, and the terms and conditions of separate Stock
Unit Award Agreements need not be identical, provided, however, that each
Stock Unit Award Agreement shall include (through incorporation of the
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (i)          Consideration.  At
the time of grant of a Stock Unit Award, the Board will determine the
consideration, if any, to be paid by the Participant upon delivery of each share
of Common Stock subject to the Stock Unit Award. To the extent required by
applicable law, the consideration to be paid by the Participant for each share
of Common Stock subject to a Stock Unit Award will not be less than the par
value of a share of Common Stock.  The consideration may be paid in
any form permitted under applicable law.

     

    (ii)         Vesting.  At the
time of the grant of a Stock Unit Award, the Board may impose such restrictions
or conditions to the vesting of the Stock Unit Award as it, in its absolute
discretion, deems appropriate.

     

    (iii)        Payment.  A Stock
Unit Award may be settled by the delivery of shares of Common Stock, their cash
equivalent, any combination thereof or in any other form of consideration as
determined by the Board and contained in the Stock Unit Award
Agreement.

     

    (iv)         Additional
Restrictions.  At the time of the grant of a Stock Unit Award,
the Board, as it deems appropriate, may impose such restrictions or conditions
that delay the delivery of the shares of Common Stock (or their cash equivalent)
subject to a Stock Unit Award after the vesting of such Stock Unit
Award.

     

    (v)          Dividend
Equivalents.  Dividend equivalents may be credited in respect
of shares of Common Stock covered by a Stock Unit Award, as determined by the
Board and contained in the Stock Unit Award Agreement.  At the
discretion of the Board, such dividend equivalents may be converted into
additional shares of Common Stock covered by the Stock Unit Award in such manner
as determined by the Board.  Any additional shares covered by the
Stock Unit Award credited by reason of such dividend equivalents will be subject
to all the terms and conditions of the underlying Stock Unit Award Agreement to
which they relate.

     

    (vi)         Termination of Participant’s
Continuous Service.  Except as otherwise provided in the
applicable Stock Unit Award Agreement, such portion of the Stock Unit Award that
has not vested will be forfeited upon the Participant’s termination of
Continuous Service for any reason.

     

    (d)           Stock Appreciation
Rights.  Each Stock Appreciation Right Agreement shall be in
such form and shall contain such terms and conditions as the Board shall deem
appropriate.  The terms and conditions of Stock Appreciation Right
Agreements may change from time to time, and the terms and conditions of
separate Stock Appreciation Right Agreements need not be identical, provided, however, that each
Stock Appreciation Right Agreement shall include (through incorporation of the
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (i)          Strike Price and Calculation of
Appreciation.  Each Stock Appreciation Right will be
denominated in share of Common Stock equivalents.  The appreciation
distribution payable on the exercise of a Stock Appreciation Right will be not
greater than an amount equal to the excess of (A) the aggregate Fair Market
Value (on the date of the exercise of the Stock Appreciation Right) of a number
of shares of Common Stock equal to the number of share of Common Stock
equivalents in which the Participant is vested under such Stock Appreciation
Right, and with respect to which the Participant is exercising the Stock
Appreciation Right on such date, over (B) an amount (the strike price) that will
be determined by the Board at the time of grant of the Stock Appreciation
Right.

     

    (ii)         Vesting.  At the
time of the grant of a Stock Appreciation Right, the Board may impose such
restrictions or conditions to the vesting of such Stock Appreciation Right as
it, in its absolute discretion, deems appropriate.

     

    (iii)        Exercise.  To
exercise any outstanding Stock Appreciation Right, the Participant must provide
written notice of exercise to the Company in compliance with the provisions of
the Stock Appreciation Right Agreement evidencing such Stock Appreciation
Right.

     

    (iv)         Payment.  The
appreciation distribution in respect to a Stock Appreciation Right may be paid
in Common Stock, in cash, in any combination of the two or in any other form of
consideration as determined by the Board and contained in the Stock Appreciation
Right Agreement evidencing such Stock Appreciation Right.

     

    (v)          Termination of Continuous
Service.  In the event that a Participant’s Continuous Service
terminates, the Participant may exercise his or her Stock Appreciation Right (to
the extent that the Participant was entitled to exercise such Stock Appreciation
Right as of the date of termination) but only within such period of time ending
on the earlier of (i) the date three (3) months following the termination of the
Participant’s Continuous Service (or such longer or shorter period specified in
the Stock Appreciation Right Agreement) or (ii) the expiration of the term of
the Stock Appreciation Right as set forth in the Stock Appreciation Right
Agreement.  If, after termination, the Participant does not exercise
his or her Stock Appreciation Right within the time specified herein or in the
Stock Appreciation Right Agreement (as applicable), the Stock Appreciation Right
shall terminate.

     

    (e)           Other Stock
Awards.  Other forms of Stock Awards valued in whole or in part
by reference to, or otherwise based on, Common Stock may be granted either alone
or in addition to Stock Awards provided for under Section 6 and the preceding
provisions of this Section 7.  Subject to the provisions of the Plan,
the Board shall have sole and complete authority to determine the persons to
whom and the time or times at which such Other Stock Awards will be granted, the
number of shares of Common Stock (or the cash equivalent thereof) to be granted
pursuant to such Awards and all other terms and conditions of such
Awards.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              8. 

            	
                    
                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.

     

    (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.

     

    
      	
              9. 

            	
                    
                Use
      of Proceeds from
Stock.

              

            

    

     

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

     

    
      	
              10. 

            	
                    
                Miscellaneous.

              

            

    

     

    (a)           Acceleration of Exercisability and
Vesting.  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.

     

    (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, any Stock Award Agreement or
other instrument executed thereunder or any 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)           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)
exceeds one hundred thousand dollars ($100,000), the Options or portions thereof
that exceed such limit (according to the order in which they were granted) shall
be treated as Nonstatutory Stock Options, notwithstanding any contrary provision
of the applicable Option Agreement(s).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (e)           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.

     

    (f)           Withholding
Obligations.  To the extent provided by the terms of a Stock
Award Agreement, the Company may in its sole discretion, satisfy any federal,
state or local tax withholding obligation relating to 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) causing the Participant to tender a cash payment; (ii)
withholding shares of Common Stock from the shares of Common Stock issued or
otherwise issuable to the Participant in connection with the Stock Award; or
(iii) by such other method as may be set forth in the Stock Award
Agreement.

     

    
      	
              11. 

            	
                    
                Adjustments
      upon Changes in Stock.

              

            

    

     

    (a)           Capitalization
Adjustments.  If any change is made in, or other event occurs
with respect to, 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 (each a “Capitalization
Adjustment”), the Plan will be appropriately adjusted in the class(es)
and maximum number of securities subject to the Plan pursuant to Sections 4(a)
and 4(b) and the maximum number of securities subject to award to any person
pursuant to Section 5(c), 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.  (Notwithstanding the foregoing, 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 the completion of such dissolution or liquidation.

     

    (c)           Corporate
Transaction.  In the event of a Corporate Transaction, any
surviving corporation or acquiring corporation may assume or continue any or all
Stock Awards outstanding under the Plan or may substitute similar stock awards
for Stock Awards outstanding under the Plan (including but not limited to,
awards to acquire the same consideration paid to the stockholders of the
Company, as the case may be, pursuant to the Corporate Transaction), and any
reacquisition or repurchase rights held by the Company in respect of Common
Stock issued pursuant to Stock Awards may be assigned by the Company to the
successor of the Company (or the successor’s parent company), if any, in
connection with such Corporate Transaction.  In the event that any
surviving corporation or acquiring corporation does not assume or continue all
such outstanding Stock Awards or substitute similar stock awards for all such
outstanding Stock Awards, then with respect to Stock Awards that have been not
assumed, continued or substituted and that are held by Participants whose
Continuous Service has not terminated prior to the effective time of the
Corporate Transaction, the vesting of such Stock Awards (and, if applicable, the
time at which such Stock Awards may be exercised) shall (contingent upon the
effectiveness of the Corporate Transaction) be accelerated in full to a date
prior to the effective time of such Corporate Transaction as the Board shall
determine (or, if the Board shall not determine such a date, to the date that is
five (5) days prior to the effective time of the Corporate Transaction), and
such Stock Awards shall terminate if not exercised (if applicable) at or prior
to such effective time, and any reacquisition or repurchase rights held by the
Company with respect to such Stock Awards shall (contingent upon the
effectiveness of the Corporate Transaction) lapse.  With respect to
any other Stock Awards outstanding under the Plan that have not been assumed,
continued or substituted, the vesting of such Stock Awards (and, if applicable,
the time at which such Stock Award may be exercised) shall not be accelerated,
unless otherwise provided in a written agreement between the Company or any
Affiliate and the holder of such Stock Award, and such Stock Awards shall
terminate if not exercised (if applicable) prior to the effective time of the
Corporate Transaction.

     

    (d)           Change in
Control.  A Stock Award may be subject to additional
acceleration of vesting and exercisability upon or after a Change in Control as
may be provided in the Stock Award Agreement for such Stock Award or as may be
provided in any other written agreement between the Company or any Affiliate and
the Participant, but in the absence of such provision, no such acceleration
shall occur.

     

    
      	
              12. 

            	
                    
                Amendment
      of the Plan and Stock
Awards.

              

            

    

     

    (a)           Amendment of
Plan.  Subject to the limitations, if any, of applicable law,
the Board at any time, and from time to time, may amend the
Plan.  However, except as provided in Section 11(a) relating to
Capitalization Adjustments, no amendment shall be effective unless approved by
the stockholders of the Company to the extent stockholder approval is necessary
to satisfy applicable law.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b)           Stockholder
Approval.  The Board, in its sole discretion, may 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 Covered Employees.

     

    (c)           Contemplated
Amendments.  It is expressly contemplated that the Board may
amend the Plan in any respect the Board deems necessary or advisable to (i) to
bring the Plan and/or Stock Awards granted under it into compliance with the
provisions of any law, rule or regulation, including but not limited to any
state “blue sky” law, rule or regulation, and/or (ii) 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, including, but not limited to, amendments
to provide terms more favorable than previously provided in the agreement
evidencing a Stock Award, subject to any specified limits in the Plan that are
not subject to Board discretion; 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.

     

    
      	
              13. 

            	
                    
                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 (10th) 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.

     

    
      	
              14. 

            	
                    
                Effective
      Date of Plan.

              

            

    

     

    The Plan
shall become effective on the Effective Date.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              15. 

            	
                    
                Choice
      of Law.

              

            

    

     

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

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