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Exhibit 10.18
  
  AGREEMENT AND GENERAL RELEASE    
  

        This
AGREEMENT AND GENERAL RELEASE ("Agreement") is made and entered into by and between Bart Brown (hereinafter "Employee") and Gateway, Inc., a corporation having its principal
office at 14303 Gateway Place, Poway, CA, including its subsidiaries ("Gateway" or "Company"). 

 
 

WITNESSETH:    
  

        WHEREAS,
Employee is currently employed as Senior Vice President, Solutions; and 

        WHEREAS,
the Company and Employee have mutually agreed to sever their full time employment relationship; and 

        WHEREAS,
the parties agree that an appropriate transition period before Employee leaves the payroll is necessary to accommodate the needs of the business and ensure that Employee's
projects, assignments and work are properly managed and transitioned; and 

        WHEREAS,
the Company and Employee are agreeable to an off payroll date of 11:59 PM CST on November 30, 2003 ("Separation Date") to ensure an orderly transition of Employee's work,
provided Employee signs this Agreement; and 

        WHEREAS,
the Company is willing to pay Employee a Special Payment as consideration for his signing a Waiver and General Release ("Release") (attached as Exhibit "A") on his Separation
Date, which Release is intended to cover the period from the signing of this Agreement through Employee's Separation Date 

        WHEREAS,
Employee and the Company desire to settle fully all employment relationship matters between them including, but not limited to, any differences that might have arisen out of
Employee's employment with the Company and the termination thereof; 

        NOW
THEREFORE, in consideration of the premises and mutual promises contained herein, it is agreed as follows: 

        1.    Employee
understands that his regular full time employment with the Company as Senior Vice President, Solutions ("SVP") will cease on September 6, 2002. Employee
will resign his position as a SVP reporting officer effective on September 6, 2002 and agrees to sign forms of resignation from any offices that he holds in the Company. During the period from
September 6, 2002 through November 30, 2003 ["Transition Period"], Employee will provide services to ensure an orderly transition of his work. Furthermore,
Employee will serve as an advisor, perform special projects and provide consultation services to the Company and will be available thirty (30) hours per week, or longer if requested to do so by
executive management. 

        Employee
understands and agrees that if he signs this Agreement and performs Transition Duties acceptably and complies in all respects with the Company's Code of Ethics and other
policies, his employment with the Company will cease on his Separation Date, at 11:59 PM CST on November 30, 2003. The parties further agree that if Employee signs on his Separation Date the
Release (Exhibit "A"), Employee will: (a) be paid a Special Payment in the amount of $32,250.00 within ten (10) calendar days following his Separation Date. 

        Employee
understands that he will be paid his regular bi monthly salary during the Transition Period, (which amount shall be paid in accordance with the normal payroll practices of the
Company). 

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In addition, Employee will remain an employee during the Transition period and, except as provided below, will continue to receive benefits. 

        Employee
will not be entitled to, and expressly waives and gives up any right, title, or interest in, (i) any bonus payment for calendar year 2002 [specifically Q3 and
Q4 bonus payouts] and for calendar year 2003 in its entirety and thereafter, under the Gateway, Inc. Management Incentive Plan [or any replacement plan] or
any other bonus or incentive plan (including, without limitation, any holiday bonus) applicable to Senior Vice Presidents or to other Company employees, (ii) any payments under
the Gateway, Inc. Change in Control Compensation Plan, (iii) any stock option grant of any kind during or after 2002 (other than grants that already have been made to Employee),
irrespective of whether such grants are made to other active Gateway employees; (iv) any stock option program, stock option benefit (other than benefits already provided to Employee in
Employee's existing stock option agreement(s)), or other stock option payment or buy-back arrangement of any kind offered by the Company during or after 2002 (collectively "Stock Option
Benefits"), irrespective of whether such Stock Option Benefits are offered to other active Gateway employees; and (v) the accrual of vacation or sick days during the Transition Period. 

        All
Gateway stock options will be handled in accordance with the applicable stock option plans and individual Option Agreements including, without limitation, any applicable black out
period. 

        If
Employee dies after executing this Agreement, but before his Separation Date, (a) his estate will be paid the Special Payment provided the estate executes Exhibit "A" and
(b) all stock option grants held by Employee as of Employee's date of death shall be governed by this Agreement and the terms and conditions of the Plan and each stock option grant. 

        All
payments under this Agreement will be less legally required payroll deductions. 

        2.    The
parties further agree that at all times during the Transition Period and following his Separation Date, Employee will cooperate fully with the Company in providing
truthful testimony as a witness or a declarant in connection with any present or future judicial, governmental agency, administrative, or arbitration proceeding involving the Company with respect to
which the Employee has relevant information. 

        Employee
also will assist the Company during the discovery phase (or prior thereto) of any judicial, governmental agency, administrative, or arbitration proceeding involving the Company
and with respect to which the Employee has relevant information. Assist means, without limitation, meeting with counsel, assisting and cooperating in the preparation and review of documents, and
meeting with other Company representatives. 

        Following
the Separation Date, the parties agree that such assistance shall, to the extent practicable (giving due regard to the needs of the Company and the requirements of Employee's
then current work obligations), be at times and places that are mutually convenient to both the Employee and the Company. If the parties cannot agree on mutually convenient times and places, the
Company will provide the Employee with a choice of three acceptable dates and places and Employee will select one of the three. The parties agree that this procedure shall apply anytime the Company
and Employee cannot agree on a mutually convenient time and place to meet. The Company agrees that it will pay, upon production of appropriate receipts, the reasonable business expenses (including
coach transportation, hotel, and similar expenses) incurred by Employee in connection with such assistance. The Company also will reimburse Employee (i) for the value of his time or
(ii) for any actual loss of income, (in either case up to a maximum amount of $1200 per day), by virtue of meeting with the
Company, provided that in the case of (ii), Employee provides the Company with evidence, satisfactory to the Company, of such loss of income. For example, if Employee meets with the Company for two
days and, consequently, foregoes income from a third party in the amount of $2000 per day, the Company will pay Employee $1200 per day upon proof of such loss. Similarly, if Employee meets with 

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the Company for two days and is not then working for a third-party, the Company will pay Employee $1200 per day, representing the per diem value of Employee's time based on Employee's final annual
base salary on his Separation Date. 

        Employee
represents that he is not presently aware of any conflict of interest between himself and Gateway in connection with any pending litigation or investigations that may give rise
to a question regarding the possible need for independent counsel with respect to the defense of such matters. 

        3.    In
accordance with his existing and continuing obligations to the Company, Employee agrees to return to the Company, on or before his Separation Date, all Company
property or copies thereof, including, but not limited to, files, records, computer access codes, computer programs, keys, card key passes, instruction manuals, documents, business plans, computers of
any kind (except for Employee's Company provided laptop which Employee will be permitted to retain provided he first permits Gateway personnel to remove any Gateway information from the hard drive and
any floppy disks; and provided further that Employee also understands and agrees that the laptop may not be sold, transferred, or conveyed to any other party unless Employee complies with the terms
and conditions of the End User License Agreements attached hereto as Exhibits "A" and "B"), software, and other property (except for Employee's Company facsimile machine, which Employee shall be
permitted to retain in order to maintain contact with the Company for the provision of his part time duties, when requested to do so), which he received or prepared or helped to prepare in connection
with his employment with the Company (collectively "Company Property"). Employee further agrees that this Agreement constitutes an assignment to the Company of all right, title and interest in such
Company Property, and any other inventions, discoveries or, to the extent he owns the rights, works of authorship created by Employee during the course of his employment. 

        4.    Employee
affirms his obligation not to personally use or disclose Gateway Confidential Information to any third party, except pursuant to legal process (provided that in
the case of legal process Employee first notifies Gateway in advance of any disclosure such that Gateway has an opportunity to oppose disclosure). As used in this Agreement, the term "Confidential
Information" means all information including, but not limited to, technical or non-technical data, formulas, computer programs, devices, methods, techniques, drawings, processes, methods
of manufacture, financial data, personnel data, customer specific information, production and sales information, supplier specific information, cost information, and marketing plans and strategies,
which is (a) disclosed to or know by Employee as a consequence of or through his employment with Gateway and (b) not generally known to persons, corporations, organizations or others
outside of Gateway. The parties agree that inventions or discoveries by Employee during or following the Agreement Period will not be considered Gateway Confidential Information or Gateway property,
except where such inventions or discoveries are based, directly or indirectly and in whole or in part, on Gateway Confidential Information as defined in this Paragraph 4. 

        5.    Employee
agrees to keep this Agreement confidential and not to disclose its contents to anyone except his lawyer, his immediate family, his health care professional, his
financial consultant, his tax advisor or a prospective employer (and then only after informing such individuals that said information is confidential and should not be disclosed to others), or
pursuant to legal process (provided that Employee first notifies Gateway of the legal process in advance of any disclosure such that Gateway has an opportunity to oppose disclosure). The prohibition
against disclosure provided for in this Paragraph 5 shall not apply to the extent that Gateway has itself disclosed the Agreement or any term in the Agreement, but only to the extent of the
specific disclosure. 

        6.    Employee
agrees that he will not in any public forum (i.e., lectures, to the media, in published articles, to analysis, or in comparable public forums) or, with intent to
damage the Company or its directors, officers or employees, in private conversations (i.e., social settings, etc.) criticize, disparage, denigrate, or speak adversely of, or disclose negative
information about the operations, management, or 

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performance of the Company or about any director, officer, employee or agent of the Company. The intent of this Paragraph 6 is to ensure that Employee does not say or do anything that damages
or impairs, or might damage or impair, in any way the business organization, goodwill, or reputation of the Company or any of its directors, officers, employees or agents. 

        7.    Employee
agrees that for a period of one (1) year following his Separation Date, he will not personally, either directly or indirectly (including on behalf of
himself or one behalf of any entity with which Employee is or becomes affiliated), (i) solicit (or otherwise interfere with Gateway's business relationships with) any of Gateway's business
customers with respect to the sale of personal computers, computer related peripherals, digital information appliances including, without limitation, or hand held personal digital assistance devices;
(ii) recruit, solicit, induce or attempt to induce, or encourage others to recruit, solicit or induce, any employee of Gateway to terminate their employment with, or otherwise cease their
relationship with Gateway; or (iii) hire any then current employee of Gateway. 

        8.    Employee
understands and agrees that a material violation of Paragraphs 3, 4, 5, 6, or 7 of this Agreement will be considered a material breach of this Agreement.
Employee acknowledges and agrees that irreparable harm would result from any material breach by Employee of the covenants contained in Paragraphs 3, 4, 5, 6, or 7 of this Agreement and that monetary
damages alone would not provide adequate relief for any such breach. Accordingly, the parties agree that injunctive relief in favor of Gateway would be proper. 

        9.    Employee
acknowledges that there are various state, local and federal laws that prohibit, among other things, employment discrimination on the basis of age, sex, race,
color, national origin, religion, disability, sexual orientation or veteran status and that these laws are enforced through the Equal Employment Opportunity Commission, Department of Labor and State
or Local Human Rights agencies. Such laws include, without limitation, Title VII of the Civil Rights Act of 1964; the Americans with Disabilities Act ("ADA"); the Employee Retirement Income Security
Act ("ERISA"); the Workers Adjustment and Retraining Notification Act ("WARN"); 42 U.S.C. Section 1981; the California Fair Employment and Housing Act, etc., as each may have been amended, and
other state and local human
or civil rights laws as well as other statutes which regulate employment; and the common law of contracts and torts. Employee hereby waives and releases any rights he may have under these or any other
laws with respect to his employment and termination of employment at the Company and acknowledges that the Company has not (a) discriminated against him, including on the basis of age,
disability or association with a disabled person (b) breached any contract with him, (c) committed any civil wrong (tort) against him, or (d) otherwise acted unlawfully toward
him. 

        Employee
also waives any right to become, and promises not to consent to become, a member of any class in a case in which claims are asserted against any Release (as defined in
Paragraph 10 hereof) that are related in any way to his employment or the termination of his employment with Gateway, and that involve events which have occurred as of the date of this
Agreement (defined to mean the date on which Employee signs this Agreement). If Employee, without his prior knowledge and consent, is made a member of a class in any proceeding, he will opt out of the
class at the first opportunity afforded to him after learning of his inclusion. In this regard, Employee agrees that he will execute, without objection or delay, an "opt out" form presented to him
either by the court in which such proceeding is pending or by counsel for any Releasee who is made a defendant in any such proceeding. 

        10.  Employee,
on behalf of himself or his heirs, executors, administrators, successors and assigns, hereby unconditionally releases and discharges Gateway, and its
subsidiaries, successors, assigns, affiliates, shareholders, directors, officers, representatives, agents and employees as well as any benefit plan and its fiduciaries and insurers (collectively
"Releasees" and individually "Releasee") from all known and unknown claims (including claims for attorneys' fees and costs), charges, actions and causes of action, demands, damages, and liabilities of
any kind or character, in law or equity, suspected or unsuspected, past or present, that he ever had, may now have, or may later assert against any Releasee, 

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arising out of or related to his employment with Gateway. To the fullest extent permitted by law, this release includes, but is not limited to: (a) claims arising under the WARN Act, ERISA,
the Family and Medical Leave Act of 1993, the ADA, the California Fair Employment and Housing Act, and any other federal, state, or local law prohibiting age, race, color, gender, creed, religion,
sexual preference/orientation, martial status, national origin, mental or physical disability, veteran status, or any other form of unlawful discrimination or claim with respect to or arising out of
Employee's employment with or termination from Gateway; (b) claims (whether based on common law or otherwise) arising out of or related to any contract (whether express or implied);
(c) claims under any federal, state, or local constitutions, statutes, rules or regulations; (d) claims (whether based on common law or otherwise) arising out of any kind of tortious
conduct (whether intentional or otherwise) including but not limited to, wrongful termination, defamation, violation of public policy; and (e) claims included in, related to, or which could
have been included in any presently pending federal, state or local lawsuit filed by Employee or on his behalf against any Releasee, which Employee agrees to immediately dismiss with prejudice. 

        Section 1543
of the Civil Code of the State of California states: 

"A
general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected
his settlement with the debtor." 

        Notwithstanding
the provisions of Section 1542, and for the purpose of implementing a full and complete release and discharge of all Releasees with respect to claims in
California, South Dakota, Iowa and all other jurisdictions, Employee expressly acknowledges that this Release is intended to include not only claims that are known, anticipated or disclosed, but also
claims that are unknown, unanticipated and undisclosed. 

        This
Paragraph 10 shall not serve as a release of rights under or preclude Employee from filing suit to enforce the provisions of this Agreement, including his right to
indemnification under (i) the Company's Directors and Officers liability insurance policy and (ii) the Company's by-laws. 

        11.  Except
as provided in Paragraph 10, Employee agrees not to bring any action, suit or administrative proceeding contesting the validity of this Agreement or
attempting to negate, modify, or reform it, nor to sue any Releasee for any reason arising out of his employment. If Employee breaches either Paragraph 9 or 10 hereof, Employee shall
(i) promptly return to Gateway all consideration received hereunder (meaning the amount and/or benefits referred to in Paragraph 1 of this Agreement), except for $25,000; and
(ii) pay any Releasee all of their reasonable attorneys' fees and costs incurred in each such action, suit, or other proceeding, including any and all appeals or petitions therefrom, provided
Gateway is the successful party. Employee agrees to pay such fees and costs within thirty (30) days of final award. With respect to Paragraph 11, if Employee is the successful party,
Gateway will pay Employee his reasonable attorneys' fees and costs incurred in such action, suit, or other proceeding, including all appeals or petitions therefrom. This Paragraph 11 is not
intended to limit Employee from instituting legal action for the sole purpose of enforcing this Agreement or from filing a charge with, or participating in an investigation conducted by, the Equal
Employment Opportunity Commission; provided however, that Employee expressly waives and relinquishes any rights he might have to recover damages or other relief, whether equitable or legal, in any
such proceeding concerning events or actions that arose on or before the date Employee signed this Agreement. 

        12.  In
the event that any one or more of the provisions contained herein is for any reason held to be unenforceable in any respect under the law of any state or of the
United States of America, such unenforceability will not affect any other provision of the Agreement, but, with respect only to the jurisdiction holding the provision to be unenforceable, this
Agreement will then be construed as if such unenforceable provision or provisions had never been contained herein. 

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        13.  The
construction, interpretation and performance of this Agreement will be governed by the laws of the State of Delaware, without regard to its conflict of laws rule. In
the event a court of competent jurisdiction declines to apply Delaware law, despite the parties election of Delaware law, the parties
agree that the law of the state in which the Employee is working on his Separation Date shall control, without regard to its conflict of laws rule. 

        14.  This
Agreement contains the entire agreement between the Company and Employee and fully supersedes all prior agreements or understandings pertaining to the subject
matter hereof, except for Sections 6 and 7 of the Non-Compete, Non-Disclosure and Intellectual Property agreement ("Non-Compete") which Employee signed at the time
of hire and which sections the parties agree shall remain in full force and effect except with respect to the last sentence of Section 6 which the parties agree shall be amended to deleted the
words (or within one (1) year of your termination of employment." Employee represents and acknowledges that in executing this Agreement he has not relied upon any representation or statement
not set forth herein made by any of the Releasees or by any of the Releasee's agents, representatives or attorneys with regard to the subject matter of this Agreement. 

        15.  Employee
agrees that he has been given sufficient time to consider this Agreement and has had sufficient time consult with an attorney of his choosing. 

        16.  Employee
represents that he has no knowledge of any wrongdoing involving acts of discrimination by Gateway management against current or former employees of the Company;
or improper or false claims against a federal or state government agency that involves him or other present or former Company employees, other than those, if any, reported by Employee to the Gateway
Law Division. 

        BY
SIGNING THIS SEPARATION AGREEMENT AND GENERAL RELEASE, EMPLOYEE STATES THAT: 

	a)
	HE
HAS READ IT AND HAS HAD SUFFICIENT TIME TO CONSIDER ITS TERMS.

	b)
	HE
UNDERSTANDS IT AND KNOWS THAT HE IS GIVING UP IMPORTANT RIGHTS.

	c)
	HE
ACCEPTS ITS TERMS.

	d)
	HE
IS AWARE OF HIS RIGHT TO (AND THAT HE SHOULD) CONSULT AN ATTORNEY BEFORE SIGNING IT AND HAS DONE SO.

	e)
	HE
HAS SIGNED IT KNOWINGLY AND VOLUNTARILY. 

        Employee:

	/s/  BART BROWN      
 Bart Brown	 	 
	

Date: October 28, 2002	
 	

 

        Gateway,
Inc. 

	By:	 	/s/  JACK VAN BERKEL      
 Jack Van Berkel	 	 
	Title:	 	Senior Vice President, Human Resources	 	 

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Exhibit 10.18 AGREEMENT AND GENERAL RELEASE

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Exhibit 10.10    
  

 
 

IDEC PHARMACEUTICALS CORPORATION
  1988 STOCK OPTION PLAN    
    
    (Amended and Restated Through October 21, 2002)    
  

        I.    PURPOSES OF THE PLAN    

        (a)  This
Stock Option Plan (the "Plan") is intended to promote the interests of IDEC Pharmaceuticals Corporation, a Delaware corporation (the "Corporation"), by providing a
method whereby key employees (including officers) of the Corporation (or its parent or subsidiary corporations) responsible for the management, growth and financial success of the Corporation (or its
parent or subsidiary corporations) may be offered incentives and rewards which will encourage them to acquire a proprietary interest, or otherwise increase their proprietary interest, in the
Corporation and continue to render services to the Corporation (or its parent or subsidiary corporations). 

        (b)  The
following provisions shall be applicable in determining the parent and subsidiary corporations of the Corporation: 

          (i)  Any
corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation shall be considered to be a  parent corporation of the Corporation, provided each such
corporation in the unbroken chain (other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 

        (ii)  Each
corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation shall be considered to be a  subsidiary of the Corporation, provided each such corporation
(other than the last corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 

        II.    ADMINISTRATION OF THE PLAN    

        (a)  The
Corporation's Board of Directors (the "Board") shall appoint a committee ("Committee") of two (2) or more non-employee Board members to assume
full responsibility for the administration of the Plan. Members of the Committee shall serve for such period of time as the Board may determine and shall be subject to removal by the Board at any
time. 

        (b)  The
Committee as Plan Administrator shall have full power and authority (subject to the express provisions of the Plan) to establish such rules and regulations as it may
deem appropriate for the proper administration of the Plan and to make such determinations under, and issue such interpretations of, the Plan and any outstanding option grants or stock issuances as it
may deem necessary or advisable. Decisions of the Plan Administrator shall be final and binding on all parties who have an interest in the Plan or any outstanding option or stock issuance thereunder. 

        III.    ELIGIBILITY FOR OPTION GRANTS    

        (a)  The
persons eligible to receive option grants under the Plan shall be limited tokey employees (including officers) of the Corporation (or its parent or subsidiary
corporations) who render services which contribute to the success and growth of the Corporation (or its parent or subsidiary corporations) or which may reasonably be anticipated to contribute to the
future success and growth of the Corporation (or its parent or subsidiary corporations). 

        (b)  The
Plan Administrator shall have full authority to determine which eligible individuals are to receive option grants under the Plan, the number of shares to be covered
by each such grant, whether the granted option is to be an incentive stock option ("Incentive Option") which satisfies the requirements of Section 422 of the Internal Revenue Code or a
non-statutory option 

 

not intended to meet such requirements, the time or times at which each such option is to become exercisable, and the maximum term for which the option is to be outstanding. 

        IV.    STOCK SUBJECT TO THE PLAN    

        (a)  The
stock issuable under the Plan shall be shares of the Corporation's authorized but unissued or reacquired Common Stock. The maximum number of shares which may be
issued under the Plan shall not exceed 58,580,000 shares.* The total number of shares issuable under the Plan shall be subject to adjustment from time to time in accordance with
Section IV.(d) of the Plan. 

	*
	Adjusted
to reflect (i) the 1 for 2.5 reverse Common Stock split effected by the Company on August 18, 1991, a 2 for 1 stock split effected by the
Corporation on December 21, 1999 and a 3 for 1 stock split effected in the form of a stock dividend on January 17, 2001, (ii) the 4,020,000 share increase authorized by the Board
on March 18, 1992 and approved by the stockholders at the 1992 Annual Meeting, (iii) the 4,200,000 share increase authorized by the Board on January 13, 1993 and approved by the
stockholders at the 1993 Annual Meeting, (iv) the 3,900,000 share increase authorized by the Board on February 28, 1994 and approved by the stockholders at the 1994 Annual Meeting,
(v) the 3,000,000 share increase authorized by the Board on January 25, 1995, and approved by the stockholders at the 1995 Annual Meeting, (vi) the 7,200,000 share increase
authorized by the Board on January 24, 1996, and approved by the stockholders at the 1996 Annual Meeting, (vii) the 4,800,000 share increase authorized by the Board on
February 24, 1997, and approved by the stockholders at the 1997 Annual Meeting, (viii) the 5,130,000 share increase authorized by the Board on February 20, 1998, approved by the
stockholders at the 1998 Annual Meeting, (ix) the 4,800,000 share increase authorized by the Board on January 13, 1999, approved by the stockholders at the 1999 Annual Meeting,
(x) the 5,130,000 share increase authorized by the Board on January 12, 2000, approval at the 2000 Annual Meeting, (xi) the 5,640,000 share increase authorized by the Board on
January 16, 2001, approved by the stockholders at the 2001 Annual Meeting, and (xii) the 5,000,000 share increase authorized by the Board on January 23, 2002, subject to
stockholder approval at the 2002 Annual Meeting. In no event, however, shall more than 30,707,067 shares of Common Stock be issued under the Plan after February 28, 2002, inclusive of the
5,000,000 share increase for which stockholder approval is sought at the 2002 Annual Meeting, subject to adjustment under Section IV(d) in the event of changes in the Corporation's
capital structure. 

        (b)  In
no event may the aggregate number of shares of Common Stock for which any one individual participating in the Plan may be granted stock options and separately
exercisable stock appreciation rights exceed 7,500,000 shares in the aggregate over the remaining term of the Plan, subject to adjustment from time to time in accordance with Section IV.(d) of
the Plan. For purposes of such limitation, no stock options or stock appreciation rights granted prior to January 1, 1994 shall be taken into account. 

        (c)  Should
an option expire or terminate for any reason prior to exercise in full, the shares subject to the portion of the option not so exercised shall be available for
subsequent option grants under the Plan. Unvested shares issued under the Plan and subsequently repurchased by the Corporation, at the option exercise price paid per share, pursuant to the
Corporation's repurchase rights under the Plan, shall be added back to the number of shares of Common Stock reserved for issuance under the Plan and shall accordingly be available for reissuance
through one or more subsequent option grants under the Plan. Shares subject to any option cancelled in accordance with Section VIII of the Plan shall
reduce on a share-for-share basis the number of shares of Common Stock available for subsequent option grants under this Plan. In addition, should the exercise price of an
outstanding option under the Plan be paid with shares of Common Stock, then the number of shares of Common Stock available for issuance under the Plan shall be reduced by the gross 

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number of shares for which the option is exercised, and not by the net number of shares of Common Stock actually issued to the option holder. 

        (d)  In
the event any change is made to the Common Stock issuable under the Plan by reason of any stock split, stock dividend, combination of shares, exchange of shares or
other change affecting the outstanding Common Stock as a class without the Corporation's receipt of consideration, then appropriate adjustments shall be made to (I) the maximum number and/or
class of securities issuable under the Plan, (II) the maximum number and/or class of securities for which stock options and separately exercisable stock appreciation rights may be granted to
any one participant in the aggregate after December 31, 1993 and (III) the number and/or class of securities and exercise price per share in effect under each outstanding option in order
to prevent the dilution or enlargement of benefits thereunder. The adjustments determined by the Plan Administrator shall be final, binding and conclusive. 

        V.    TERMS AND CONDITIONS OF OPTIONS    Options granted pursuant to the Plan shall be
authorized by action of the Plan Administrator and may, at the Plan Administrator's discretion, be either Incentive Options or non-statutory options. Each granted option shall be evidenced
by one or more instruments in the form approved by the Plan Administrator; provided, however, that each such instrument shall comply with the terms and
conditions specified below. Each instrument evidencing an Incentive Option shall, in addition, be subject to the applicable provisions of Section VI. 

        1.    Option Price.    

        A.    The
option price per share shall be fixed by the Plan Administrator, but in no event shall the option price per share be less than one hundred percent (100%) of the fair
market value of a share of Common Stock on the date of the option grant. 

        B.    The
option price shall become immediately due upon exercise of the option and shall, subject to the provisions of Section IX and the instrument evidencing the
grant, be payable in one of the alternative forms specified below: 

        (i)    full
payment in cash or check payable to the Corporation; or 

        (ii)  full
payment in shares of Common Stock held by the optionee for the requisite period necessary to avoid a charge to the Corporation's reported earnings and valued at
fair market value on the Exercise Date (as such term is defined below); or 

        (iii)  full
payment through a combination of shares of Common Stock held by the optionee for the requisite period necessary to avoid a charge to the Corporation's reported
earnings and valued at fair market value on the Exercise Date and cash or check payable to the Corporation; or 

        (iv)  full
payment effected through a broker-dealer sale and remittance procedure pursuant to which the optionee shall provide irrevocable instructions (I) to a
Corporation-designated brokerage firm to (A) effect the immediate sale of a sufficient number of the purchased shares to enable such firm to remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate option price payable for the purchased shares plus all applicable Federal and State income and employment taxes required to be
withheld by the Corporation in connection with such purchase and (B) remit those funds to the Corporation on the settlement date, and (II) to the Corporation to deliver the certificates
for the purchased shares directly to such brokerage firm. 

        For
purposes of this subparagraph B, the Exercise Date shall be the date on which written or electronic notice of the option exercise is received by the Corporation. Except to the
extent the sale and remittance procedure is utilized in connection with the exercise of the option, payment of the option price for the purchased shares must accompany such notice. 

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        C.    The
fair market value per share of Common Stock on any relevant date under subparagraph A or B (and for all other valuation purposes under the Plan) shall be
determined in accordance with the following provisions: 

          (i)  If
the Common Stock is not at the time listed or admitted to trading on any national stock exchange but is traded on The Nasdaq Stock Market, the fair market value
shall be the closing selling price per share of Common Stock on the date in question, as reported by the National Association of Securities Dealers on The Nasdaq Stock Market and published in  The Wall Street
Journal. If there is no reported closing selling price for the Common Stock on the date in question, then the closing selling price on
the last preceding date for which such quotation exists shall be determinative of fair market value. 

        (ii)  If
the Common Stock is at the time listed or admitted to trading on any national stock exchange, then the fair market value shall be the closing selling price per share
of Common Stock on the date in question on the stock exchange determined by the Plan Administrator to be the primary market for the Common Stock, as such price is officially quoted in the composite
tape of transactions on such exchange and published in The Wall Street Journal. If there is no reported sale of Common Stock on
such exchange on the date in question, then the fair market value shall be the closing selling price on the exchange on the last preceding date for which such quotation exists. 

        2.    Term and Exercise of Options.    Each option granted under the Plan shall be exercisable at such time or times,
during such period, and for such number of shares as shall be determined by the Plan Administrator and set forth in the instrument evidencing such option;  provided, however, that no such option shall
have a term in excess of ten (10) years from the grant date. 

        3.    Limited Transferability of Options.    During the lifetime of the optionee, Incentive Options shall be
exercisable only by the optionee and shall not be assignable or transferable other than by will or by the laws of descent and distribution following the optionee's death. However,
non-statutory options may, in connection with the optionee's estate plan, be assigned in whole or in part during the optionee's lifetime to one or more members of the optionee's immediate
family or to a trust established exclusively for one or more such family members. The assigned portion may only be exercised by the person or persons who acquire a proprietary interest in the option
pursuant to the assignment. The terms applicable to the assigned portion shall be the same as those in effect for the option immediately prior to such assignment and shall be set forth in such
documents issued to the assignee as the Plan Administrator may deem appropriate. 

        4.    Effect of Termination of Service.    

        A.    Should
an optionee cease to remain in Service (as defined in subparagraph D below) for any reason (including death or permanent disability as defined in
Section 22(e)(3) of the Internal Revenue Code) while the holder of one or more outstanding options granted to such optionee under the Plan, then such option or options shall not (except to the
extent otherwise provided pursuant to Section X below) remain exercisable for more than a thirty-six (36)-month period (or such shorter period determined by the Plan Administrator
and specified in the instrument evidencing the grant) following the date of such cessation of Service. Under no circumstances, however, shall any such option be exercisable after the specified
expiration date of the option term. Each such option shall, during such thirty-six (36)-month or shorter period, be exercisable only to the extent of the number of shares (if any) for
which the option is exercisable on the date of the optionee's cessation of Service. Upon the expiration of such thirty-six (36)-month or shorter period or (if earlier) upon the expiration
of the option term, the option shall terminate and cease to be exercisable. However, the option shall, immediately upon the optionee's cessation of Service for any reason, terminate and cease to be
outstanding for any option shares for which the option is not otherwise at that time exercisable. 

4

 

        B.    Any
outstanding option held by the optionee and exercisable in whole or in part on the date of his or her death may be subsequently exercised, but only to the extent of
the number of shares (if any) for which the option is exercisable on the date of the optionee's cessation of Service (less any option shares subsequently purchased by the optionee prior to death), by
the personal representative of the
optionee's estate or by the person or persons to whom the option is transferred pursuant to the optionee's will or in accordance with the laws of descent and distribution. The right to exercise the
option for those shares shall terminate upon the earlier of (i) the third anniversary of the date of the optionee's cessation of Service or
(ii) the specified expiration date of the option term. 

        C.    Notwithstanding
subparagraphs A and B above, the Plan Administrator shall have complete discretion, exercisable either at the time the option is granted or at any
time while the option remains outstanding, to permit one or more options held by the optionee under the Plan to be exercised, during the limited period of exercisability provided under
Section V.4.A above, not only with respect to the number of shares for which each such option is exercisable at the time of the optionee's cessation of Service but also with respect to one or
more subsequent installments for which the option would otherwise have become exercisable had such cessation of Service not occurred. 

        D.    For
purposes of the foregoing provisions of this Section V.4 (and all other provisions of the Plan), the optionee shall be deemed to remain in the Service of the
Corporation for so long as such individual renders services on a periodic basis to the Corporation or any parent or subsidiary corporation in the capacity of an Employee, a non-employee
member of the board of directors or an independent consultant or advisor, unless the option agreement evidencing the option grant and/or the purchase agreement evidencing the purchased option shares
specifically provides otherwise. The optionee shall be considered to be an Employee for so long as such individual remains in the employ of the Corporation or one or more of its parent or subsidiary
corporations, subject to the control and direction of the employer entity as to the work to be performed and as to the manner and method of performance. 

        5.    Stockholder Rights.    An optionee shall have none of the rights of a stockholder with respect to any shares
covered by the option until such individual shall have exercised the option and paid the option price for the purchased shares. 

        6.    Repurchase Rights.    Unvested shares of Common Stock may be issued under the Plan which are subject to
repurchase by the Corporation in accordance with the following provisions: 

        (a)  Upon
the optionee's cessation of Service while holding unvested shares under the Plan, the Corporation shall have the right to repurchase any or all of those unvested
shares at the option price paid per share. The terms and conditions upon which such repurchase right shall be exercisable (including the period and procedure for exercise and the appropriate vesting
schedule for the purchased shares) shall be established by the Plan Administrator and set forth in the instrument evidencing such repurchase right. 

        (b)  All
of the Corporation's outstanding repurchase rights shall automatically terminate, and all shares subject to such terminated rights shall immediately vest in full,
upon the occurrence of any Corporate Transaction under Section VII of this Plan, except to the extent: (i) any such repurchase right is to be assigned to the successor corporation (or
parent thereof) in connection with the Corporate Transaction
or (ii) such accelerated vesting is precluded by other limitations imposed by the Plan Administrator at the time the repurchase right is issued. 

        (c)  The
Plan Administrator shall have the discretionary authority, exercisable either before or after the optionee's cessation of Service, to cancel the Corporation's
outstanding repurchase rights 

5

 

with respect to any or all unvested shares purchased or purchasable by the optionee under the Plan and thereby accelerate the vesting of those shares in whole or in part at any time. 

        VI.    INCENTIVE OPTIONS.    

        The
terms and conditions specified below shall be applicable to all Incentive Options granted under the Plan. Incentive Options may only be granted to individuals who are Employees.
Options which are specifically designated as "non-statutory" options when issued under the Plan shall not be subject to such terms and
conditions. 

        (a)    Dollar Limitation.    The aggregate fair market value (determined as of the respective date or dates of grant)
of the Common Stock for which one or more options granted to any Employee under this Plan (or any other option plan of the Corporation or its parent or subsidiary corporations) may for the first time
become exercisable as incentive stock options under the Federal tax laws during any one calendar year shall not exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the Employee
holds two or more such options which become exercisable for the first time in the same calendar year, the foregoing limitation on the exercisability of such options as incentive stock options under
the Federal tax laws shall be applied on the basis of the order in which such options are granted. Should the number of shares of Common Stock for which an Incentive Option first becomes exercisable
in any calendar year exceed the applicable One Hundred Thousand Dollar ($100,000) limitation, the option may nevertheless be exercised for those excess shares in such calendar year as a
non-statutory option. 

        (b)    10% Stockholder.    If any individual to whom the Incentive Option is granted is the owner of stock (as
determined under Section 424(d) of the Internal Revenue Code) possessing ten percent (10%) or more of the total combined voting power of all classes of stock of the Corporation or any one of
its parent or subsidiary corporations, then the option price per share shall not be less than one hundred and ten percent (110%) of the fair market value per share of Common Stock on the grant date,
and the option term shall not exceed five (5) years, measured from such grant date. 

        Except
as modified by the preceding provisions of this Section VI, all the provisions of the Plan shall be applicable to the Incentive Options granted hereunder. 

        VII.    CORPORATE TRANSACTION/CHANGE IN CONTROL    

        (a)  In
the event of any of the following transactions (a "Corporate Transaction"): 

        (i)    a
merger or consolidation in which the Corporation is not the surviving entity, except for a transaction the principal purpose of which is to change the State of the
Corporation's incorporation, 

        (ii)  the
sale, transfer or other disposition of all or substantially all of the assets of the Corporation in liquidation or dissolution of the Corporation, or 

        (iii)  any
reverse merger in which the Corporation is the surviving entity but in which fifty percent (50%) or more of the Corporation's outstanding voting stock is
transferred to persons different from those who held the stock immediately prior to such merger, 

        each
outstanding option under the Plan shall automatically accelerate so that each such option shall, immediately prior to the specified effective date for the Corporate Transaction,
become exercisable for the total number of shares of Common Stock at the time subject to such option and may be exercised for all or any portion of those shares as fully-vested shares of Common Stock.
However, an outstanding option under the Plan shall not so accelerate if and to the extent: (i) such option is, in connection with the Corporate Transaction, either to be assumed by the
successor corporation or parent thereof or be replaced with a comparable option to purchase shares of the capital stock of the successor corporation or parent thereof or (ii) the acceleration
of 

6

 

such option is subject to other applicable limitations imposed by the Plan Administrator at the time of grant. The determination of comparability under clause (i) above shall be made by the
Plan Administrator and its determination shall be final, binding and conclusive. 

        (b)  Each
outstanding option under the Plan which is assumed in connection with the Corporate Transaction or is otherwise to continue in effect shall be appropriately
adjusted, immediately after such Corporate Transaction, to apply and pertain to the number and class of securities which would have been issued, in consummation of such Corporate Transaction, to an
actual holder of the same number of shares of Common Stock as are subject to such option immediately prior to such Corporate Transaction. Appropriate adjustments shall also be made to the option price
payable per share, provided the aggregate option price payable for such securities shall remain the same. In addition, the class and number of securities available for issuance under the Plan on both
an aggregate and per participant basis shall be appropriately adjusted to reflect the effect of the Corporate Transaction upon the Corporation's capital structure. 

        (c)  In
connection with any Change in Control (as defined below), the Plan Administrator shall have full power and authority, exercisable either at the time the option is
granted or at any time while the option remains outstanding, to provide for the automatic acceleration of each outstanding option under the Plan so that each such option shall, immediately prior to
the effective date of the Change in Control, become exercisable for the total number of shares at the time subject to such option and may be exercised for all or any portion of those shares as
fully-vested shares of Common Stock. The Plan Administrator shall also have full power and authority to condition such option acceleration, and the termination of any of the Corporation's repurchase
rights with respect to any unvested shares purchased or purchasable under the Plan, upon the subsequent termination of the optionee's Service within a designated period following the Change in
Control. 

        A
Change in Control shall be deemed to occur in the event: 

        (i)    twenty-five
percent (25%) or more of the Corporation's outstanding voting stock is acquired pursuant to a tender or exchange offer (A) which is made
directly to the Corporation's stockholders by any person or related group of persons (other than the Corporation or a person that directly or indirectly controls, is controlled by or is under common
control with, the Corporation) and (B) which the Board does not recommend the stockholders to accept; or 

        (ii)  there
is a change in the composition of the Board over a period of twenty-four (24) consecutive months or less such that a majority of the Board
members ceases, by reason of one or more proxy contests for the election of Board members, to be comprised of individuals who either (A) have been Board members continuously since the beginning
of such period or (B) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (A) who were still
in office at the time such election or nomination was approved by the Board. 

        (d)  Immediately
following the consummation of a Corporate Transaction, all outstanding options under the Plan shall terminate and cease to be outstanding, except to the
extent assumed by the successor corporation or its parent company. Upon a Change in Control, each outstanding option accelerated pursuant to subsection VII.(c) above shall remain fully
exercisable until the expiration or sooner termination of the option term specified in the agreement evidencing such grant. 

        (e)  The
exercisability as incentive stock options under the Federal tax laws of any options accelerated in connection with a Corporate Transaction or Change in Control shall
remain subject to the dollar limitation of Section VI.(a) of the Plan. To the extent such dollar limitation is 

7

 

exceeded, the accelerated option shall be exercisable as a non-statutory option under the Federal tax laws. 

        (f)    The
grant of options under this Plan shall in no way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. 

        VIII.    STOCK APPRECIATION RIGHTS    

        (a)  Provided
and only if the Plan Administrator determines in its discretion to implement the stock appreciation right provisions of this Section VIII, one or more
optionees may be granted the right, exercisable upon such terms and conditions as the Plan Administrator may establish, to surrender all or part of an unexercised option under the Plan in exchange for
a distribution from the Corporation in an amount equal to the excess of (i) the fair market value (on the option surrender date) of the number of shares in which the optionee is at the time
vested under the surrendered option (or surrendered portion thereof) over (ii) the aggregate option price payable for such vested shares. 

        (b)  No
surrender of an option shall be effective hereunder unless it is approved by the Plan Administrator. If the surrender is so approved, then the distribution to which
the optionee shall accordingly become entitled under this Section VIII may be made in shares of Common Stock valued at fair market value on the option surrender date, in cash, or partly in
shares and partly in cash, as the Plan Administrator shall in its sole discretion deem appropriate. 

        (c)  If
the surrender of an option is rejected by the Plan Administrator, then the optionee shall retain whatever rights the optionee had under the surrendered option (or
surrendered portion thereof) on the option surrender date and may exercise such rights at any time prior to the later of (i) five
(5) business days after the receipt of the rejection notice or (ii) the last day on which the option is otherwise exercisable in accordance with the terms of the instrument evidencing
such option, but in no event may such rights be exercised more than ten (10) years after the date of the option grant. 

        (d)  One
or more officers of the Corporation subject to the short-swing profit restrictions of the Federal securities laws may, in the Plan Administrator's sole discretion,
be granted limited stock appreciation rights in tandem with their outstanding options under the Plan. Upon the occurrence of a Hostile Take-Over, each outstanding option with such a
limited stock appreciation right shall automatically be cancelled, to the extent such option is at the time exercisable for fully-vested shares of Common Stock (including any shares which may vest in
connection with such Hostile Take-Over). The optionee shall in return be entitled to a cash distribution from the Corporation in an amount equal to the excess of (i) the
Take-Over Price of the vested shares of Common Stock at the time subject to the cancelled option (or cancelled portion of such option) over (ii) the aggregate exercise price payable
for such shares. The cash distribution payable upon such cancellation shall be made within five (5) days following the consummation of the Hostile Take-Over. The Plan Administrator
shall pre-approve, at the time the limited stock appreciation right is granted, the subsequent exercise of that right in accordance with the terms of the grant and the provisions of this
Section VIII.(d). No additional approval of the Plan Administrator or the Board shall be required at the time of the actual option cancellation and cash distribution. The balance of the option
(if any) shall continue to remain outstanding and exercisable in accordance with the terms and conditions of the instrument evidencing such grant. 

        (e)  For
purposes of Section VIII.(d), the following definitions shall be in effect: 

        A
Hostile Take-Over shall be deemed to occur in the event any person or related group of persons (other than the Corporation
or a person that directly or indirectly controls, is controlled by, or is under common control with, the Corporation) directly or indirectly acquires beneficial 

8

 

ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934) of securities possessing more than twenty-five percent (25%) of the total combined
voting power of the Corporation's outstanding securities pursuant to a tender or exchange offer made directly to the Corporation's stockholders which the Board does not recommend such stockholders to
accept. 

        The
Take-Over Price per share shall be deemed to be equal to the greater of
(a) the fair market value per share on the date of cancellation, as determined pursuant to the valuation provisions of Section II.1.C, or (b) the highest reported price per share
paid by the acquiring entity in effecting such Hostile Take-Over. However, to the extent the cancelled option is an Incentive Option, the Take-Over Price shall not exceed the
clause (a) price per share. 

        (f)    The
shares of Common Stock subject to any option surrendered or cancelled for an appreciation distribution pursuant to this Section VIII shall  not be available for subsequent option grant under the
Plan. 

        IX.    LOANS OR INSTALLMENT PAYMENTS    

        The
Plan Administrator may, in its discretion, assist any optionee (other than any executive officer of the Corporation or member of the Board) in the exercise of one or more options
granted to such individual under the Plan, including the satisfaction of any Federal and State income and employment tax obligations arising therefrom, by (i) authorizing the extension of a
loan from the Corporation to such optionee or (ii) permitting the optionee to pay the option price for the purchased Common Stock in installments over a period of years. The terms of any such
loan or installment method of payment (including the interest rate and terms of repayment) will be upon such terms as the Plan Administrator specifies in the applicable option agreement or otherwise
deems appropriate under the circumstances. Loans or installment payments may be granted with or without security or collateral (other than to individuals who are independent consultants or advisors,
in which event the loan must be adequately secured by collateral other than the purchased shares). However, the maximum credit available to the optionee may not exceed the option price of the acquired
shares (less the par value of those shares) plus any Federal and State income and employment withholding taxes to which theoptionee may become subjectin connection with the exercise of the option. 

        X.    EXTENSION OF EXERCISE PERIOD    

        The
Plan Administrator shall have full power and authority, to extend the period of time for which the option is to remain exercisable following the optionee's cessation of Service from
the thirty-six (36) month or shorter period set forth in the option agreement to such greater period of time as the Plan Administrator shall deem appropriate. In no event, however,
shall such option be exercisable after the specified expiration date of the option term. 

        XI.    AMENDMENT OF THE PLAN    

        The
Board shall have complete and exclusive power and authority to amend or modify the Plan in any or all respects whatsoever; provided,
however, that no such amendment or modification shall, without the consent of the stockholders, adversely affect rights and obligations with respect to options at the time outstanding under the Plan.
In addition, any amendment which increases the number of shares of Common Stock authorized for issuance under the Plan or which materially increases the benefits accruing to individuals participating
in the Plan shall require stockholder approval. 

        XII.    EFFECTIVE DATE AND TERM OF PLAN    

        (a)  The
Plan was initially adopted by the Board on July 19, 1988 and approved by the Corporation's stockholders on March 29, 1989. The Plan was subsequently
amended by the Board on July 18, 1990, and such amendment was approved by the Corporation's stockholders in October, 1990. In January 1991, the Plan was again amended to increase by
2,880,000 shares the number of shares of Common Stock issuable under the Plan, and such share increase was 

9

 

approved by the Corporation's stockholders on March 20, 1991. The Board further amended the Plan on May 22, 1991, with such amendments to become effective as of the date the
Corporation's Common Stock first became traded on The Nasdaq Stock Market, in order to revise certain provisions previously required when the Plan was subject to the permit requirements of the
California Corporations Department. On March 18, 1992, the Plan was amended and restated in its entirety, including an increase of 4,020,000 shares to the number of shares of Common Stock
issuable thereunder. The 1992 restatement, including the 4,020,000 share increase, was approved by the stockholders at the 1992 Annual Meeting. On January 13, 1993, the Board amended the Plan
to increase by an additional 4,200,000 shares the number of shares of Common Stock issuable under the Plan, and such share increase was approved by the stockholders at the 1993 Annual Meeting. On
February 28, 1994, the Board amended the Plan to increase by an additional 3,900,000 shares the number of shares of Common Stock issuable under the Plan, and such increase was approved by the
stockholders at the 1994 Annual Meeting. On January 25, 1995, the Board amended the Plan to increase by an additional 3,000,000 shares the number of shares of Common Stock issuable under the
Plan, and such increase was approved by the stockholders at the 1995 Annual Meeting. On January 24, 1996, the Board adopted an amendment which increased the number of shares of Common Stock
issuable under the Plan by an
additional 7,200,000 shares, and such increase was approved by the stockholders at the 1996 Annual Meeting. 

        On
February 24, 1997, the Board adopted a series of amendments to the Plan (the "1997 Amendments") which (i) increased the number of shares of Common Stock reserved for
issuance over the term of the Plan by an additional 4,800,000 shares, (ii) rendered non-employee Board members serving as Plan Administrator eligible to receive option grants under
the Plan, (iii) allowed unvested shares issued under the Plan and subsequently repurchased by the Corporation at the option exercise price paid per share to be reissued under the Plan,
(iv) removed certain restrictions on the eligibility of non-employee Board members to serve as Plan Administrator, (v) extended the term of the Option Plan from
July 19, 1998 to December 31, 2002 and (vi) effected a series of additional changes to the provisions of the Plan (including the stockholder approval requirements, the
transferability of non-statutory stock options and the elimination of the six (6)-month holding period requirement as a condition to the exercise of stock appreciation rights) in order to
take advantage of the recent amendments to Rule 16b-3 of the 1934 Act which exempts certain officer and director transactions under the Plan from the short-swing liability
provisions of the Federal securities laws. The 1997 Amendments were approved by the Corporation's stockholders at the 1997 Annual Meeting. 

        On
February 20, 1998, the Board authorized an increase of 5,130,000 shares of Common Stock to the share reserve under the Plan, and the stockholders approved such increase at the
1998 Annual Meeting. 

        On
January 13, 1999, the Board authorized an increase of 4,800,000 shares of Common Stock to the share reserve under the Plan, and the stockholders approved such increase at the
1999 Annual Meeting. 

        On
January 12, 2000, the Board adopted a series of amendments to the Plan (the "2000 Amendments") which (i) increased the number of shares of Common Stock reserved for
issuance over the term of the Plan by an additional 5,130,000 shares; (ii) extend the term of the Option Plan from December 31, 2002 to December 31, 2005; (iii) required
the option price per share of Common Stock subject to each option granted under the Option Plan to be not less than 100% of the fair market value per share of Common Stock on the date of grant;
(iv) removed the non-employee Board members and all independent consultants from the class of persons eligible to receive option grants under the Option Plan; and
(v) required the Plan Administrator to be a committee comprised only of non-employee Board members. The 2000 Amendments were approved by the Corporation's stockholders at the 2000
Annual Meeting. 

10

 

        On
May 17, 2000, the Board further amended the Plan to eliminate the Plan Administrator's authority to effect the cancellation and regrant of options under the Plan. 

        On
January 16, 2001, the Board authorized an increase of 5,640,000 shares of Common Stock to the share reserve under the Plan, and the stockholders approved such increase at the
2001 Annual Meeting. 

        On
January 23, 2002, the Board authorized an increase of 5,000,000 shares of Common Stock to the share reserve under the Plan. No options granted on the basis of the 5,000,000
share increase shall vest or become exercisable unless and until such share increase is approved by the stockholders at the 2002 Annual Meeting. 

        On
October 21, 2002, the Board amended the Plan to (i) require stockholder approval of any amendments which increase the number of shares of Common Stock authorized for
issuance under the Plan or which materially increase the benefits accruing to individuals participating in the Plan and (ii) eliminate the authority of the Plan Administrator to make loans
under the Plan to executive officers of the Corporation or Board members. 

        (b)  The
provisions of the 1992 restatement and of each subsequent amendment to the Plan shall apply only to stock options and stock appreciation rights granted under the
Plan from and after the applicable effective date of such restatement or amendment. All stock options and stock appreciation rights issued and outstanding under the Plan immediately prior to each such
effective date shall continue to be governed by the terms and conditions of the Plan (and the respective agreements evidencing each such option or stock appreciation right) as in effect on the date
each such option or stock appreciation right was previously granted, and nothing in the 1992 restatement or in any subsequent amendment shall be deemed to affect or otherwise modify the rights or
obligations of the holders of such prior options or stock appreciation rights with respect to their acquisition of shares of Common Stock under such options or their exercise of such stock
appreciation rights. However, the Plan Administrator may, in its discretion, modify stock option or stock appreciation right issued and outstanding immediately prior to the effective date of the 1992
restatement or any subsequent amendment to include one or more provisions to the Plan added by such restatement or amendment. 

        (c)  Unless
sooner terminated in accordance with Section VII, the Plan shall terminate upon the earlier of
(i) December 31, 2005 or (ii) the date on which all shares available for issuance under the Plan shall have been issued or cancelled pursuant to the exercise, surrender of
cash-out of the stock options and stock appreciation rights granted hereunder. If the date of termination is determined under clause (i) above, then each stock option or stock
appreciation right outstanding on such date shall thereafter continue to have force and effect in accordance with the provisions of the instruments evidencing such grant. 

        (d)  Options
may be granted under this Plan to purchase shares of Common Stock in excess of the number of shares then available for issuance under the Plan, provided any
excess shares actually issued under the Plan are held in escrow until stockholder approval is obtained for a sufficient increase in the number of shares available for issuance under the Plan. If such
stockholder approval is not obtained within twelve (12) months after the date the first such excess option grants are made, then (I) any unexercised excess options shall terminate and
cease to be exercisable and (II) the Corporation shall promptly refund the purchase price paid for any excess shares actually issued under the Plan and held
in escrow, together with interest (at the applicable Short Term Federal Rate) for the period the shares were held in escrow. 

        XIII.    USE OF PROCEEDS    

        Any
cash proceeds received by the Corporation from the sale of shares pursuant to options granted under the Plan shall be used for general corporate purposes. 

11

 

        XIV.    REGULATORY APPROVALS    

        The
implementation of the Plan, the granting of any stock option or stock appreciation right hereunder, and the issuance of stock upon the exercise of any such option or stock
appreciation right shall be subject to the procurement by the Corporation of all approvals and permits required by regulatory authorities having jurisdiction over the Plan, the options and stock
appreciation rights granted under it and the stock issued pursuant to it. 

12

QuickLinks

Exhibit 10.10

IDEC PHARMACEUTICALS CORPORATION 1988 STOCK OPTION PLAN (Amended and Restated Through October 21, 2002)

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