Document:

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                                                                   EXHIBIT 10.20

                              BOSTROM HOLDING, INC.
                                 6530 Campus Way
                             New Albany, Ohio 43054

                            _______________________

_______________________
_______________________
_______________________
_______________________

            Re:   Bostrom Holding, Inc. (the "Company")
                  Grant of Nonqualified Stock Option

Dear _____:

            The Company is pleased to advise you that its Board of Directors has
granted to you a stock option (an "Option"), as provided below, under the
Bostrom Holding, Inc. 2004 Stock Option Plan (the "Plan"), a copy of which is
attached hereto and incorporated herein by reference. The Option has been
granted, and the Option Shares will be issued, pursuant to a "compensatory
benefit plan" within the meaning of such term under Rule 701 of the Securities
Act of 1933, as amended.

            1.    Definitions. For the purposes of this Agreement, the following
terms shall have the meanings set forth below:

            "Board" shall mean the Board of Directors of the Company.

            "Cause" shall mean (i) your theft or embezzlement, or attempted
theft or embezzlement, of money or property of the Company, your perpetration or
attempted perpetration of fraud, or your participation in a fraud or attempted
fraud, on the Company or your unauthorized appropriation of, or your attempt to
misappropriate, any tangible or intangible assets or property of the Company,
(ii) any act or acts of disloyalty, misconduct or moral turpitude by you
injurious to the interest, property, operations, business or reputation of the
Company or your conviction of a crime the commission of which results in injury
to the Company (iii) your failure or inability (other than by reason of your
Disability) to carry out effectively your duties and obligations to the Company
or to participate effectively and actively in the management of the Company, as
determined in the good faith judgment of the Board, or (iv) your failure to
comply with the written policies of the Company or perform duties as reasonably
directed by the Board.

            "Code" shall mean the Internal Revenue Code of 1986, as amended, and
any successor statute.

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            "Committee" shall mean the committee of the Board which may be
designated by the Board to administer the Plan. The Committee shall be composed
of two or more directors as appointed from time to time to serve by the Board.
The membership of the Committee shall be constituted so as to comply at all
times with the applicable requirements of Rule 16b-3 or any successor rule
("Rule 16b-3") under the Securities Exchange Act of 1934, as amended. No member
of the Committee shall have within one year prior to his or her appointment
received awards under the Plan if such receipt would cause such member to cease
to be a "disinterested person" under Rule 16b-3.

            "Common Stock" shall mean the Company's Class A Common Stock, par
value $.01 per share, or, in the event that the outstanding Class A Common Stock
is hereafter changed into or exchanged for different stock or securities of the
Company, such other stock or securities.

            "Company" shall mean Bostrom Holding, Inc., a Delaware corporation,
and (except to the extent the context requires otherwise) any subsidiary
corporation of Bostrom Holding, Inc. as such term is defined in Section 424(f)
of the Code.

            "Disability" shall mean your inability, due to illness, accident,
injury, physical or mental incapacity or other disability, to carry out
effectively your duties and obligations as an employee of the Company or to
participate effectively and actively in the management of the Company for a
period of at least 90 consecutive days or for shorter periods aggregating at
least 120 days (whether or not consecutive) during any twelve-month period, as
determined in the reasonable judgment of the Board.

            "Fair Market Value" of the Common Stock shall be determined in good
faith by the Committee or, in the absence of the Committee, by the Board.

            "Option Shares" shall mean (i) all shares of Common Stock issued or
issuable upon the exercise of the Option and (ii) all shares of Common Stock
issued with respect to the Common Stock referred to in clause (i) above by way
of stock dividend or stock split or in connection with any conversion, merger,
consolidation or recapitalization or other reorganization affecting the Common
Stock. Option Shares shall continue to be Option Shares in the hands of any
holder other than you, and each such transferee thereof shall succeed to the
rights and obligations of a holder of Option Shares hereunder.

            "Original Stockholders" shall mean the persons and entities listed
on the Schedule of Original Stockholders attached hereto and incorporated by
reference herein, so long as each such person or entity continues to own shares
of the Company's Common Stock.

            "Registration Agreement" shall mean that certain Registration
Agreement, dated as of October 5, 2000, by and among the Company and certain
investors as amended from time to time.

            "Sale of the Company" shall mean a merger or consolidation effecting
a change in control of the Company, a sale of all or substantially all of the
Company's assets or a sale of a majority of the Company's outstanding voting
securities.

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            "Securities Act" shall mean the Securities Act of 1933, as amended,
and any successor statute.

            "Senior Loan Agreement" shall mean that certain Amended and Restated
Credit Agreement dated of March 28, 2003, among Commercial Vehicle Systems
Limited, KAB Seating Limited, National Seating Limited, Commercial Vehicle
Systems, Inc., CVS Holdings, Inc., the Company, Bank of America, N.A., JPMorgan
Chase Bank, and other financial institutions a party thereto.

            2.    Option.

            (a)   Terms. Your Option is for the purchase of up to _________
shares of Common Stock (the "Option Shares") at a price per share of _________
(the "Exercise Price"), payable upon exercise as set forth in paragraph 2(b)
below. Your Option shall expire at the close of business on April 30, 2014 (the
"Expiration Date"), subject to earlier expiration as provided in paragraph 3(c)
below or upon termination of your employment as provided in paragraph 4(b)
below. Your Option is not intended to be an "incentive stock option" within the
meaning of Section 422 of the Code.

            (b)   Payment of Option Price. Subject to paragraph 3 below, your
Option may be exercised in whole or in part upon payment of an amount (the
"Option Price") equal to the product of (i) the Exercise Price multiplied by
(ii) the number of Option Shares to be acquired. Payment shall be made in cash
(including check, bank draft or money order).

            3.    Exercisability/Vesting.

            Normal Vesting. Your Option may be exercised only to the extent it
has become vested. Your Option shall fully vest and become exercisable (i) with
respect to 50% of your Option Shares (rounded to the nearest whole share)
immediately upon your execution of this Agreement, (ii) with respect to 25% of
your Option Shares (rounded to the nearest whole share) on June 30, 2005, and
(iii) with respect 25% of your Option Shares (rounded to the nearest whole
share) on June 30, 2006, if and only if, with respect to items (ii) and (iii) of
this paragraph, you are, and have been, continuously employed by the Company
from the date of this Agreement through (A) June 30, 2005, with respect to item
(ii) of this paragraph, and (B) June 30, 2006 with respect to item (iii) of this
paragraph.

            (a)   Effect on Vesting in Case of Employment Termination.
Notwithstanding paragraph 3(a) above, the following special vesting rules shall
apply if your employment with the Company terminates prior to the Expiration
Date:

                  (i)   Death or Disability. Your Option shall fully vest and
      become exercisable with respect to 100% of your Option Shares if you die
      or become subject to any Disability while an employee of the Company.

                  (ii)  Retirement. If you retire (with the approval of the
      Committee or the Board) from employment with the Company, your Option
      shall be vested and fully exercisable with respect to that portion of your
      Option that was vested and exercisable on

                                      -3-
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      the date of your retirement. Any portion of your Option that was not
      vested and exercisable on the date of your retirement shall expire and be
      forfeited.

                  (iii) Other Termination of Employment. Unless otherwise
      determined by the Committee, if your employment terminates other than for
      death, Disability, retirement (with the approval of the Committee or the
      Board), resignation or discharge for Cause, your Option shall be vested
      and fully exercisable with respect to that portion of your Option that was
      vested and exercisable on the date your employment with the Company ceased
      and any portion of your Option that was not vested and exercisable on such
      date shall expire and be forfeited. If you resign or are discharged for
      Cause, all of your Option not previously exercised shall expire and be
      forfeited whether exercisable or not.

            Except as provided in this paragraph 3(b), the number of Option
Shares with respect to which your Option may be exercised shall not increase
once you cease to be employed by the Company.

            (b)   Acceleration of Vesting on Sale of the Company. If you have
been continuously employed by the Company from the date of this Agreement until
a Sale of the Company, the portion of your outstanding Option which has not
become vested at the date of such event shall immediately vest and become
exercisable with respect to 100% of the Option Shares simultaneously with the
consummation of the Sale of the Company. In any event, any portion of your
Option which has not been exercised prior to or in connection with the Sale of
the Company shall expire and be forfeited, unless otherwise determined by the
Committee or the Board.

            4.    Expiration of Option.

            (a)   Normal Expiration. In no event shall any part of your Option
be exercisable after the Expiration Date set forth in paragraph 2(a) above.

            (b)   Early Expiration Upon Termination of Employment. Except as
otherwise provided herein, any portion of your Option that was not vested and
exercisable as of the date your employment with the Company terminated shall
expire and be forfeited on such date, and any portion of your Option that was
vested and exercisable as of the date your employment with the Company
terminated shall also expire and be forfeited; provided that: (i) if you die or
become subject to any Disability, the portion of your Option that is vested and
exercisable shall expire 180 days from the date of your death or Disability, but
in no event after the Expiration Date, (ii) if you retire (with the approval of
the Committee or the Board), the portion of your Option that is vested and
exercisable shall expire 90 days from the date of your retirement, but in no
event after the Expiration Date, and (iii) if you are discharged other than for
Cause, the portion of your Option that is vested and exercisable shall expire 30
days from the date of your discharge, but in no event after the Expiration Date.

            5.    Procedure for Exercise. You may exercise all or any portion of
your Option, to the extent it has vested and is exercisable, at any time and
from time to time prior to

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its expiration, by delivering written notice to the Company (to the attention of
the Company's Secretary) and your written acknowledgement that you have reviewed
and have been afforded an opportunity to ask questions of management of the
Company with respect to all financial and other information provided to you
regarding the Company, together with payment of the Option Price in accordance
with the provisions of paragraph 2(b) above. As a condition to any exercise of
your Option, you shall permit the Company to deliver to you all financial and
other information regarding the Company it believes necessary to enable you to
make an informed investment decision, and you shall make all customary
investment representations which the Company requires.

            6.    Securities Laws Restrictions and Other Restrictions on
Transfer of Option Shares. You represent and warrant that when you exercise your
Option you shall be purchasing Option Shares for your own account and not on
behalf of others. You understand and acknowledge that federal and state
securities laws govern and restrict your right to offer, sell or otherwise
dispose of any Option Shares unless your offer, sale or other disposition
thereof is registered or qualified under the Securities Act and applicable state
securities laws, or in the opinion of the Company's counsel, such offer, sale or
other disposition is exempt from registration or qualification thereunder. You
agree that you shall not offer, sell or otherwise dispose of any Option Shares
in any manner which would: (i) require the Company to file any registration
statement with the Securities and Exchange Commission (or any similar filing
under state law) or to amend or supplement any such filing or (ii) violate or
cause the Company to violate the Securities Act, the rules and regulations
promulgated thereunder or any other state or federal law. You further understand
that the certificates for any Option Shares you purchase shall bear such legends
as the Company deems necessary or desirable in connection with the Securities
Act or other rules, regulations or laws.

            7.    Non-Transferability of Option. Your Option is personal to you
and is not transferable by you other than by will or the laws of descent and
distribution. During your lifetime only you (or your guardian or legal
representative) may exercise your Option. In the event of your death, your
Option may be exercised only (i) by the executor or administrator of your estate
or the person or persons to whom your rights under the Option shall pass by will
or the laws of descent and distribution and (ii) to the extent that you were
entitled hereunder at the date of your death.

            8.    Conformity with Plan. Your Option is intended to conform in
all respects with, and is subject to all applicable provisions of, the Plan
(which is incorporated herein by reference). Inconsistencies between this
Agreement and the Plan shall be resolved in accordance with the terms of the
Plan. By executing and returning the enclosed copy of this Agreement, you
acknowledge your receipt of this Agreement and the Plan and agree to be bound by
all of the terms of this Agreement and the Plan.

            9.    Rights of Participants. Nothing in this Agreement shall
interfere with or limit in any way the right of the Company to terminate your
employment at any time (with or without Cause), nor confer upon you any right to
continue in the employ of the Company for any period of time or to continue your
present (or any other) rate of compensation, and in the event of your
termination of employment (including, but not limited to, termination by the
Company

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without Cause), any portion of your Option that was not previously vested and
exercisable shall expire and be forfeited, except as otherwise provided herein.
Nothing in this Agreement shall confer upon you any right to be selected again
as a Plan participant, and nothing in the Plan or this Agreement shall provide
for any adjustment to the number of Option Shares subject to your Option upon
the occurrence of subsequent events except as provided in paragraph 11 below.

            10.   Withholding of Taxes. The Company shall be entitled, if
necessary or desirable, to withhold from you from any amounts due and payable by
the Company to you (or secure payment from you in lieu of withholding) the
amount of any withholding or other tax due from the Company with respect to any
Option Shares issuable under this Plan, and the Company may defer such issuance
unless indemnified by you to its satisfaction.

            11.   Adjustments. In the event of a reorganization,
recapitalization, stock dividend or stock split, or combination or other change
in the shares of Common Stock, the Board or the Committee may, make such
adjustments in the number and type of shares authorized by the Plan, the number
and type of shares covered by your Option and the Exercise Price specified
herein as may be determined to be appropriate and equitable, in order to prevent
the dilution or enlargement of rights under your Option.

            12.   Right to Purchase Option Shares Upon Your Termination of
Employment.

            (a)   Repurchase of Option Shares. If your employment with the
Company shall terminate, including upon your death, Disability, resignation or
termination with or without Cause (the date on which such termination occurs
being referred to as the "Termination Date"), then the Company shall have the
option to repurchase all or any part of the Option Shares issued or issuable
upon exercise of your Option, whether held by you or by one or more of your
transferees, at the price determined in accordance with the provisions of
paragraph 13 hereof (the "Repurchase Option").

            (b)   Repurchase by Company. The Company may elect to purchase all
or any portion of the Option Shares by delivery of written notice (the
"Repurchase Notice") to you or any other holders of the Option Shares within 180
days after the Termination Date. The Repurchase Notice shall set forth the
number of Option Shares to be acquired from you and such other holder(s), the
aggregate consideration to be paid for such shares and the time and place for
the closing of the transaction. The number of Option Shares to be repurchased by
the Company shall first be satisfied to the extent possible from the Option
Shares held by you at the time of delivery of the Repurchase Notice. If the
number of Option Shares then held by you is less than the total number of Option
Shares the Company has elected to purchase, then the Company shall purchase the
remaining shares elected to be purchased from the other holders thereof, pro
rata according to the number of shares held by each such holder at the time of
delivery of such Repurchase Notice (determined as close as practical to the
nearest whole share).

            (c)   Repurchase by Original Stockholders. If for any reason the
Company does not elect to purchase all of the Option Shares pursuant to the
Repurchase Option, then the Original Stockholders shall be entitled to exercise
the Company's Repurchase Option in the manner set forth in paragraph 12(a) for
all or any portion of the number of Option Shares the

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Company has not elected to purchase (the "Available Shares"). As soon as
practicable after the Company has determined that there shall be Available
Shares, but in any event within 90 days after the Termination Date, the Company
shall deliver written notice (the "Option Notice") to the Original Stockholders
setting forth the number of Available Shares and the price for each Available
Share. Each Original Stockholder may elect to purchase any number of Available
Shares by delivering written notice to the Company within 20 days after receipt
of the Option Notice from the Company. If more than one Original Stockholder
elects to purchase the Available Shares and such elections exceed the number of
Available Shares, the number of Available Shares to be purchased by the electing
Original Stockholders shall be allocated among them pro rata based upon their
relative percentage ownership of Original Stock as set forth in paragraph 1
hereof. As soon as practicable, and in any event within five days after the
expiration of such 20-day period, the Company shall notify you and any other
holder(s) of Option Shares as to the number of Option Shares being purchased
from you by the Original Stockholders (the "Supplemental Repurchase Notice"). At
the time the Company delivers the Supplemental Repurchase Notice to you and such
other holder(s) of Option Shares, the Original Stockholders shall also receive
written notice from the Company setting forth the number of shares it is
entitled to purchase, the aggregate purchase price and the time and place of the
closing of the transaction.

            (d)   Closing of Repurchase of Option Shares. The purchase of Option
Shares pursuant to this paragraph 12 shall be closed at the Company's executive
offices within 20 days after the expiration of the 180-day period referred to in
paragraph 12(b). At the closing, the purchaser or purchasers shall pay the
purchase price in the manner specified in paragraph 13(b) and you and any other
holders of Option Shares being purchased shall deliver the certificate or
certificates representing such shares to the purchaser or purchasers or their
nominees, accompanied by duly executed stock powers. Any purchaser of Option
Shares under this paragraph 12 shall be entitled to receive customary
representations and warranties from you and any other selling holders of Option
Shares regarding the sale of such shares (including representations and
warranties regarding good title to such shares, free and clear of any liens or
encumbrances) and to require all sellers' signatures to be guaranteed by a
national bank or reputable securities broker.

            13.   Purchase Price for Option Shares.

            (a)   Purchase Price. The purchase price per share to be paid for
the Option Shares purchased by the Company and the Original Stockholders
pursuant to paragraph 12 shall be equal to the Fair Market Value of such Option
Shares as of the Termination Date.

            (b)   Manner of Payment. If the Company elects to purchase all or
any part of the Option Shares, including Option Shares held by one or more
transferees, the Company shall pay for such shares: (i) first, by certified
check or wire transfer of funds to the extent such payment would not cause the
Company to violate the General Corporation Law of the State of Delaware and
would not cause the Company to breach any agreement to which it is a party
relating to the indebtedness for borrowed money or other material agreement; and
(ii) thereafter, with a subordinated promissory note of the Company. Such
subordinated promissory note shall bear interest annually at the Base Rate
(which shall be payable annually in cash unless otherwise

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prohibited), shall have all principal payment due on the fifth anniversary of
the date of issuance and shall be subordinated on terms and conditions
satisfactory to the holders of the Company's indebtedness for borrowed money.
The "Base Rate" means a rate of interest equal to the sum of (x) the rate of
interest which is identified as the "Prime Rate" and published in the Money
Rates section of The Wall Street Journal on the Termination Date and (y) 100
basis points. In addition, the Company may pay the purchase price for such
shares by offsetting amounts outstanding under any indebtedness or obligations
owed by you to the Company. If any Original Stockholders elect to purchase all
or any portion of the Available Shares, such Original Stockholders shall pay for
that portion of such Option Shares by certified check or wire transfer of funds.

            14.   Restrictions on Transfer.

            (a)   Transfer of Option Shares. You shall not sell, pledge or
otherwise transfer any interest in any Option Shares except pursuant to a Public
Sale or the provisions of paragraph 12 or 16 hereof ("Exempt Transfers") and
except pursuant to the provisions of this paragraph 14. At least 30 days prior
to making any transfer other than an Exempt Transfer, you shall deliver a
written notice (the "Sale Notice") to the Company; provided that in no event
shall any transfer of Option Shares pursuant to this paragraph 14 be made for
any consideration other than cash payable upon consummation of the transfer or
in installments over time. The Sale Notice shall disclose in reasonable detail
the identity of the prospective transferee(s) and the terms and conditions of
the proposed transfer. You agree not to consummate any such transfer until 30
days after the Sale Notice has been delivered to the Company, unless the parties
to the transfer have been finally determined pursuant to this paragraph 14 prior
to the expiration of such 30-day period. (The date of the first to occur of such
events is referred to herein as the "Authorization Date").

            (b)   Certain Permitted Transfers. The restrictions contained in
this paragraph 14 shall not apply with respect to transfers of Option Shares (i)
pursuant to applicable laws of descent and distribution or (ii) among your
family group; provided that the restrictions contained in this paragraph shall
continue to be applicable to the Option Shares after any such transfer and the
transferees of such Option Shares have agreed in writing to be bound by the
provisions of this Agreement. Your "family group" means your spouse and
descendants.

            (c)   Termination of Restrictions. The restrictions on the transfer
of Option Shares set forth in this paragraph 14 shall continue with respect to
each Option Share until the date on which such Option Share has been transferred
in a transaction permitted by this paragraph (except in a transaction
contemplated by paragraph 14(c)); provided in any event the restrictions on
transfers set forth in this paragraph 14 shall terminate when the Company has
sold shares of its Common Stock pursuant to a public offering registered under
the Securities Act.

            15.   Additional Restrictions on Transfer.

            (a)   Restrictive Legend. The certificates representing the Option
Shares shall bear the following legend:

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      "THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON
      ______________, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
      AS AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE
      SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
      UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM
      REGISTRATION THEREUNDER. THE SECURITIES REPRESENTED BY THIS CERTIFICATE
      ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER, CERTAIN
      REPURCHASE OPTIONS AND CERTAIN OTHER AGREEMENTS SET FORTH IN AN OPTION
      AGREEMENT BETWEEN THE COMPANY AND JERRY ARMSTRONG DATED AS OF _________
      _____ A COPY OF WHICH MAY BE OBTAINED BY THE HOLDER HEREOF AT THE
      COMPANY'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE."

            (b)   Opinion of Counsel. You may not sell, transfer or dispose of
any Option Shares (except pursuant to an effective registration statement under
the Securities Act) without first delivering to the Company an opinion of
counsel reasonably acceptable in form and substance to the Company that
registration under the Securities Act or any applicable state securities law is
not required in connection with such transfer.

            16.   Sale of the Company.

            (a)   Consent to Sale of Company. If the Board and the holders of a
majority of the Company's Common Stock then outstanding approve the sale of the
Company to an independent third party (whether by merger, consolidation, sale of
all or substantially all of its assets or sale of all of the outstanding Common
Stock) (the "Approved Sale"), you shall consent to and raise no objections
against the Approved Sale of the Company, and if the Approved Sale of the
Company is structured as a sale of stock, reverse merger, or other transaction
having the effect of a stock sale, you shall agree to sell all of your Option
Shares and rights to acquire Option Shares on the terms and conditions approved
by the Board and the holders of a majority of the Common Stock then outstanding.
You shall take all necessary and desirable actions in connection with the
consummation of the Approved Sale of the Company. For purposes of this paragraph
16, an "independent third party" is any person who does not own in excess of 5%
of the Company's Common Stock on a fully-diluted basis, who is not controlling,
controlled by or under common control with any such 5% owner of the Company's
Common Stock and who is not the spouse, ancestor or descendant (by birth or
adoption) of any such 5% owner of the Company's Common Stock.

            (b)   Purchaser Representative. If the Company or the holders of the
Company's securities enter into any negotiation or transaction for which Rule
506 (or any similar rule then in effect) promulgated by the Securities Exchange
Commission may be available with respect to such negotiation or transaction
(including a merger, consolidation or other reorganization), you shall, at the
request of the Company, appoint a purchaser representative (as such term is
defined in Rule 501) reasonably acceptable to the Company. If you appoint the
purchaser representative

                                      -9-
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designated by the Company, the Company shall pay the fees of such purchaser
representative, but if you decline to appoint the purchaser representative
designated by the Company you shall appoint another purchaser representative
(reasonably acceptable to the Company), and you shall be responsible for the
fees of the purchaser representative so appointed.

            (c)   Termination of Restrictions. The provisions of this paragraph
16 shall terminate when the Company has sold shares of its Common Stock pursuant
to a public offering registered under the Securities Act.

            17.   Remedies. The parties hereto shall be entitled to enforce
their rights under this Agreement specifically, to recover damages by reason of
any breach of any provision of this Agreement and to exercise all other rights
existing in their favor. The parties hereto acknowledge and agree that money
damages would not be an adequate remedy for any breach of the provisions of this
Agreement and that any party hereto shall be entitled to specific performance
and/or injunctive relief (without posting bond or other security) from any court
of law or equity of competent jurisdiction in order to enforce or prevent any
violation of the provisions of this Agreement.

            18.   Amendment. Except as otherwise provided herein, any provision
of this Agreement may be amended or waived only with the prior written consent
of you and the Company.

            19.   Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto shall bind and inure to the benefit of the
respective successors and permitted assigns of the parties hereto whether so
expressed or not.

            20.   Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.

            21.   Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall constitute an original, but all of
which taken together shall constitute one and the same Agreement.

            22.   Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.

            23.   Governing Law. The corporate law of the State of Delaware
shall govern all questions concerning the relative rights of the Company and its
stockholders. All other questions concerning the construction, validity and
interpretation of this Agreement shall be governed by the internal law, and not
the law of conflicts, of New York.

            24.   Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be

                                      -10-
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deemed to have been given when delivered personally or mailed by certified or
registered mail, return receipt requested and postage prepaid, to the recipient.
Such notices, demands and other communications shall be sent to you and to the
Company and the Original Stockholders at the addresses indicated below:

            If to the Optionee:

            ___________________________________
            ___________________________________
            ___________________________________
            ___________________________________

            If to the Company:

            Bostrom Holding, Inc.
            c/o Hidden Creek Industries
            4508 IDS Center
            Minneapolis, Minnesota 55402
            Attention: Judith A. Vijums
            Telecopy: (612) 332-2012

            If to the Original Stockholders:

            c/o Hidden Creek Industries
            4508 IDS Center
            Minneapolis, Minnesota 55402
            Attention: Judith A. Vijums
            Telecopy: (612) 332-2012

or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.

            25.   Entire Agreement. This Agreement and the Plan constitute the
entire understanding between you and the Company, and supersedes all other
agreements, whether written or oral, with respect to the acquisition by you of
Common Stock of the Company. If there are any conflicts in terms and conditions
between this Agreement and the Plan, the terms and conditions of the Plan shall
govern, unless otherwise determined by the Committee or the Board.

                                    * * * * *

                                      -11-
<PAGE>

            Please execute the extra copy of this Agreement in the space below
and return it to the Company's Secretary at its executive offices to confirm
your understanding and acceptance of the agreements contained in this Agreement.

                                          Very truly yours,

                                          By: __________________________________
                                              Name:  Daniel F. Moorse
                                              Title: Vice President

Enclosures: (1)   Extra copy of this Agreement
            (2)   Copy of the Plan

            The undersigned hereby acknowledges having read this Agreement and
the Plan and hereby agrees to be bound by all provisions set forth herein and in
the Plan.

Dated as of                               OPTIONEE

May __, 2004                              ______________________________________

                                          Name: ________________________________

<PAGE>

                                     CONSENT

            The undersigned spouse of ___________hereby acknowledges that I have
read the foregoing Stock Option Agreement and that I understand its contents. I
am aware that the Agreement provides for the repurchase of my spouse's shares of
Common Stock under certain circumstances and imposes other restrictions on the
transfer of such Common Stock. I agree that my spouse's interest in the Common
Stock is subject to this Agreement and any interest I may have in such Common
Stock shall be irrevocably bound by this Agreement and further that the my
community property interest, if any, shall be similarly bound by this Agreement.

            I am aware that the legal, financial and other matters contained in
this Agreement are complex and I am free to seek advice with respect thereto
from independent counsel. I have either sought such advice or determined after
carefully reviewing this Agreement that I will waive such right.

                                         ______________________________
                                         Name of Spouse:

                                         ______________________________
                                         Witness

                                       13
<PAGE>

                        Schedule of Original Stockholders

        See Annex A attached hereto and incorporated by reference herein.exv10w1

 

Exhibit 10.1

2002 EQUITY INCENTIVE PLAN

OF

VIRAGE LOGIC CORPORATION

As amended on December 10, 2003

1.     Purpose of
this Plan

     
The purpose of this 2002 Equity Incentive Plan of
Virage Logic Corporation is to enhance the long-term
stockholders’ value of Virage Logic Corporation by offering
opportunities to eligible individuals to participate in the
growth in value of the equity of Virage Logic Corporation.

2.     Definitions
and Rules of Interpretation

     
2.1     Definitions.
This Plan uses the following defined terms:

		
	 	     
    (a) “1997 Plan”
    means the Virage Logic Corporation 1997 Equity Incentive
    Plan, as amended.
    
	 
	 	     
    (b) “Administrator”
    means the Board, the Committee, or any officer or
    employee of the Company to whom the Board or the Committee
    delegates authority to administer this Plan.
    
	 
	 	     
    (c) “Affiliate”
    means a “parent” or “subsidiary” (as
    each is defined in Section 424 of the Code) of the Company
    and any other entity that the Board or Committee designates as
    an “Affiliate” for purposes of this Plan.
    
	 
	 	     
    (d) “Applicable Law”
    means any and all laws of whatever jurisdiction, within
    or without the United States, and the rules of any stock
    exchange or quotation system on which Shares are listed or
    quoted, applicable to the taking or refraining from taking of
    any action under this Plan, including the administration of this
    Plan and the grant, issuance or transfer of Awards or Award
    Shares.
    
	 
	 	     
    (e) “Award”
    means a Stock Award, Cash Award, or Option granted in
    accordance with the terms of the Plan.
    
	 
	 	     
    (f) “Award Agreement”
    means the document evidencing the grant of an Award.
    
	 
	 	     
    (g) “Award Shares”
    means Shares covered by an outstanding Award or
    purchased under an Award.
    
	 
	 	     
    (h) “Awardee” means:
    (i) a person to whom an Award has been granted, including a
    holder of a Substitute Award, (ii) a person to whom an
    Award has been transferred in accordance with all applicable
    requirements of Sections 6.5, 7(h), and 16, and (iii) a
    person who holds Option Shares subject to any right of
    repurchase under Section 15.2.
    
	 
	 	     
    (i) “Board” means
    the board of directors of the Company.
    
	 
	 	     
    (j) “Cash Award”
    means the right to receive cash as described in Section
    8.2.
    
	 
	 	     
    (k) “Change of Control”
    means any transaction or event that the Board specifies
    as a Change of Control under Section 10.4.
    
	 
	 	     
    (l) “Code” means the
    Internal Revenue Code of 1986.
    
	 
	 	     
    (m) “Committee”
    means a committee composed of Company Directors appointed in
    accordance with the Company’s charter documents and
    Section 4.
    
	 
	 	     
    (n) “Company” means
    Virage Logic Corporation, a Delaware corporation.
    
	 
	 	     
    (o) “Company Director”
    means a member of the Board.
    

1

 

		
	 	     
    (p) “Consultant”
    means an individual who, or an employee of any entity
    that, provides bona fide services to the Company or an Affiliate
    not in connection with the offer or sale of securities in a
    capital-raising transaction, but who is not an Employee.
    
	 
	 	     
    (q) “Director” means
    a member of the board of directors of the Company or an
    Affiliate.
    
	 
	 	     
    (r) “Divestiture”
    means any transaction or event that the Board specifies
    as a Divestiture under Section 10.5.
    
	 
	 	     
    (s) “Effective Date”
    means the day of the Company’s 2002 Annual Meeting
    of Stockholders.
    
	 
	 	     
    (t) “Employee” means
    a regular employee of the Company or an Affiliate, including an
    officer or Director, who is treated as an employee in the
    personnel records of the Company or an Affiliate, but not
    individuals who are classified by the Company or an Affiliate
    as: (i) leased from or otherwise employed by a third party,
    (ii) independent contractors, or (iii) intermittent or
    temporary workers. The Company’s or an Affiliate’s
    classification of an individual as an “Employee” (or
    as not an “Employee”) for purposes of this Plan shall
    not be altered retroactively even if that classification is
    changed retroactively for another purpose as a result of an
    audit, litigation or otherwise. An Awardee shall not cease to be
    an Employee due to transfers between locations of the Company,
    or between the Company and an Affiliate, or to any successor to
    the Company or an Affiliate that assumes the Awardee’s
    Options under Section 10. Neither service as a Director nor
    receipt of a director’s fee shall be sufficient to make a
    Director an “Employee.”
    
	 
	 	     
    (u) “Exchange Act”
    means the Securities Exchange Act of 1934.
    
	 
	 	     
    (v) “Executive”
    means an individual who is subject to Section 16 of
    the Exchange Act or who is a “covered employee” under
    Section 162(m) of the Code, in either case because of the
    individual’s relationship with the Company or an Affiliate.
    
	 
	 	     
    (w) “Expiration Date”
    means, with respect to an Award, the date stated in the
    Award Agreement as the expiration date of the Award or, if no
    such date is stated in the Award Agreement, then the last day of
    the maximum exercise period for the Award, disregarding the
    effect of an Awardee’s Termination or any other event that
    would shorten that period.
    
	 
	 	     
    (x) “Fair Market Value”
    means the value of Shares as determined under
    Section 17.2.
    
	 
	 	     
    (y) “Fundamental
    Transaction” means any transaction or event
    described in Section 10.3.
    
	 
	 	     
    (z) “Grant Date”
    means the date the Administrator approves the grant of
    an Award. However, if the Administrator specifies that an
    Award’s Grant Date is a future date or the date on which a
    condition is satisfied, the Grant Date for such Award is that
    future date or the date that the condition is satisfied.
    
	 
	 	     
    (aa) “Incentive Stock
    Option” means an Option intended to qualify as an
    incentive stock option under Section 422 of the Code and
    designated as an Incentive Stock Option in the Award Agreement
    for that Option.
    
	 
	 	     
    (bb) “Nonemployee Director”
    means Non-Employee Director as defined in Rule 16b-3.
    
	 
	 	     
    (cc) “Nonstatutory Option”
    means any Option other than an Incentive Stock Option.
    
	 
	 	     
    (dd) “Objectively Determinable
    Performance Condition” shall mean a performance
    condition (i) that is established (x) at the time an
    Award is granted or (y) no later than the earlier of
    (1) 90 days after the beginning of the period of
    service to which it relates, or (2) before the elapse of
    25% of the period of service to which it relates, (ii) that
    is uncertain of achievement at the time it is established, and
    (iii) the achievement of which is determinable by a third
    party with knowledge of the relevant facts. Examples of measures
    that may be used in Objectively Determinable Performance
    Conditions include net order dollars, net profit dollars, net
    profit growth, net revenue dollars, revenue growth, individual
    performance, earnings per share, return on assets, return on
    equity, and other financial objectives, objective customer
    satisfaction indicators and efficiency measures, each with
    respect to the Company and/or an individual business unit of the
    Company.
    

2

 

		
	 	     
    (ee) “Officer” means
    an officer of the Company as defined in Rule 16a-1 adopted
    under the Exchange Act.
    
	 
	 	     
    (ff) “Option” means
    a right to purchase Shares granted under this Plan.
    
	 
	 	     
    (gg) “Option Price”
    means the price payable under an Option for Shares, not
    including any amount payable in respect of withholding or other
    taxes.
    
	 
	 	     
    (hh) “Option Shares”
    means Shares covered by an outstanding Option or
    purchased under an Option.
    
	 
	 	     
    (ii) “Plan” means
    this 2002 Equity Incentive Plan of Virage Logic
    Corporation.
    
	 
	 	     
    (jj) “Purchase Price”
    means the price payable under a Stock Award for Shares,
    not including any amount payable in respect of withholding or
    other taxes.
    
	 
	 	     
    (kk) “Qualified Domestic
    Relations Order” means a judgment, order, or decree
    meeting the requirements of Section 414(p) of the Code.
    
	 
	 	     
    (ll) “Reverse Vesting”
    means, with respect to an Option, that an Option is
    fully exercisable but that the Company has a lapsing right to
    repurchase the Option Shares as specified in
    Section 15.2(a) in accordance with the vesting schedule
    that would otherwise have applied to the Option under which the
    Option Shares were purchased or other vesting schedule described
    in the Award Agreement. With respect to a Stock Award, Reverse
    Vesting means that the Company has a lapsing right to repurchase
    the Award Shares purchased pursuant to the Stock Award as
    specified in Section 15.2(a) in accordance with the vesting
    schedule described in the Award Agreement.
    
	 
	 	     
    (mm) “Rule 16b-3”
    means Rule 16b-3 adopted under Section 16(b)
    of the Exchange Act.
    
	 
	 	     
    (nn) “Securities Act”
    means the Securities Act of 1933.
    
	 
	 	     
    (oo) “Share” means a
    share of the common stock of the Company, $0.001 par value, or
    other securities substituted for the common stock under
    Section 10.
    
	 
	 	     
    (pp) “Stock Award”
    means an offer by the Company to sell shares subject to
    certain restrictions pursuant to the Award Agreement as
    described in Section 8.1.
    
	 
	 	     
    (qq) “Substitute Option”
    means an Option granted in substitution for, or upon the
    conversion of, an option granted by another entity to purchase
    equity securities in the granting entity.
    
	 
	 	     
    (rr) “Substitute Stock
    Award” means a Stock Award granted in substitution
    for, or upon the conversion of, a stock award granted by another
    entity to purchase equity securities in the granting entity.
    
	 
	 	     
    (ss) “Termination”
    means that the Awardee has ceased to be, with or without
    any cause or reason, an Employee, Director or Consultant. Unless
    determined otherwise by the Administrator,
    “Termination” shall not include a change in status
    from an Employee, Consultant or Director to another such status.
    An event that causes an Affiliate to cease being an Affiliate
    shall be treated as the “Termination” of that
    Affiliate’s Employees, Directors, and Consultants.
    
	 
	 	     
    (tt) “Vest” means
    that the Option has become exercisable by or payable to the
    Awardee by reason of an Awardee’s continued service as
    Employee, Director or Consultant as provided in the Award
    Agreement (or, in the case of “qualified performance-based
    compensation” within the meaning of Section 162(m) of
    the Code, by reason of the Awardee meeting one or more of
    Objectively Determinable Performance Conditions), or by reason
    of restrictions on exercise having been removed automatically or
    by action of the Administrator.
    

     
2.2     Rules of
Interpretation. Any reference to a “Section,”
without more, is to a Section of this Plan. Captions and titles
are used for convenience in this Plan and shall not, by
themselves, determine the meaning of this Plan. Except when
otherwise indicated by the context, the singular includes the
plural and vice versa. Any reference to a statute is also a
reference to the applicable rules and regulations adopted under
that statute. Any reference to a statute, rule or regulation, or
to a section of a statute, rule or regulation, is a reference to

3

 

that statute, rule, regulation, or section as
amended from time to time, both before and after the effective
date of this Plan and including any successor provisions.

3.     Shares Subject
to this Plan; Term of this Plan

     
3.1     Number of
Award Shares. Subject to adjustment under Section 10,
the maximum number of Shares that may be issued under this Plan
is 4,100,000.

     
3.2     Source of
Shares. Award Shares may be authorized but unissued Shares
or treasury Shares. If an Award is terminated, expires, or
otherwise becomes unexercisable without having been exercised in
full, the unpurchased Shares that were subject to the Award
shall revert to this Plan and shall again be available for
future issuance under this Plan. Shares actually issued under
this Plan shall not be available for regrant even if repurchased
by the Company.

     
3.3     Term of this
Plan

     
(a) This Plan has been adopted by the Board
on December 5, 2001 and it shall be effective on the date
it has been adopted by the Company’s stockholders.

     
(b) This Plan has no set termination date.
However, it may be terminated as provided in Section 13.
Moreover, no Incentive Stock Option may be granted after the
time described in Section 7(b).

4.     Administration

     
4.1     General

     
(a) The Board shall have ultimate
responsibility for administering this Plan. The Board may
delegate certain of its responsibilities to a Committee, which
shall consist of at least two members of the Board. The Board or
the Committee may further delegate certain of its
responsibilities to any Employee of the Company or any
Affiliate, provided that delegation of the responsibility to
grant Awards shall be only to the Chief Executive Officer or
President of the Company. Where this Plan specifies that an
action is to be taken or a determination made by the Board, only
the Board may take that action or make that determination. Where
this Plan specifies that an action is to be taken or a
determination made by the Committee, only the Committee may take
that action or make that determination. Where this Plan
references the “Administrator,” the action may be
taken or determination made by the Board, the Committee, or
other Administrator. However, only the Board or the Committee
may approve grants of Awards to Executives, and an Administrator
other than the Board or the Committee may grant Awards only to
non-executive level employees and within guidelines established
by the Board or Committee. All actions and determinations by any
Administrator are subject to the provisions of this Plan.

     
(b) The Administrator may engage a brokerage
firm, bank, or other financial institution to assist in the
delivery of Shares upon exercise of Awards, delivery of reports,
or other administrative aspects of the Plan. If the
Administrator so elects, each Awardee shall be deemed upon
enrollment in the Plan to have authorized the establishment of
an account on his or her behalf at such institution. Shares
purchased by an Awardee under the Plan shall be held in the
account in the name in which the share certificate would
otherwise be issued.

     
(c) So long as the Company has registered
and outstanding a class of equity securities under
Section 12 of the Exchange Act, the Committee shall consist
of Company Directors who are “Non-Employee Directors”
as defined in Rule 16b-3 and who are “outside
directors” as defined in Section 162(m) of the Code.

     
4.2     Authority of
Administrator. Subject to the other provisions of this Plan,
the Administrator shall have the authority:

		
	 	     
    (a) to grant Awards, including Substitute
    Awards;
    
	 
	 	     
    (b) to determine the Fair Market Value of
    Shares;
    
	 
	 	     
    (c) to determine the Option Price and the
    Purchase Price under Awards;
    

4

 

		
	 	     
    (d) to select the Awardees;
    
	 
	 	     
    (e) to determine the times Awards are
    granted;
    
	 
	 	     
    (f) to determine the number of Shares
    subject to each Award;
    
	 
	 	     
    (g) to determine the types of payment that
    may be used to purchase Award Shares;
    
	 
	 	     
    (h) to determine the types of payment that
    may be used to satisfy withholding tax obligations;
    
	 
	 	     
    (i) to determine the other terms of each
    Award, including but not limited to the time or times at which
    Awards may be exercised, whether and under what conditions an
    Award is assignable, and whether an Option is a Nonstatutory
    Option or an Incentive Stock Option;
    
	 
	 	     
    (j) to modify or amend any Award;
    
	 
	 	     
    (k) to authorize any person to sign any
    Award Agreement or other document related to this Plan on behalf
    of the Company;
    
	 
	 	     
    (l) to determine the form of any Award
    Agreement or other document related to this Plan, and whether
    that document, including signatures, may be in electronic form;
    
	 
	 	     
    (m) to interpret this Plan and any Award
    Agreement or document related to this Plan;
    
	 
	 	     
    (n) to correct any defect, remedy any
    omission, or reconcile any inconsistency in this Plan, any Award
    Agreement or any other document related to this Plan;
    
	 
	 	     
    (o) to adopt, amend, and revoke rules and
    regulations under this Plan, including rules and regulations
    relating to sub-plans and Plan addenda;
    
	 
	 	     
    (p) to adopt, amend, and revoke rules and
    procedures relating to the operation and administration of this
    Plan to accommodate non-U.S. Awardees and the requirements of
    Applicable Law such as: (i) rules and procedures regarding
    the conversion of local currency, withholding procedures and the
    handling of stock certificates to comply with local practice and
    requirements, and (ii) sub-plans and Plan addenda for
    non-U.S. Awardees;
    
	 
	 	     
    (q) to determine whether a transaction or
    event should be treated as a Change of Control, a Divestiture or
    neither;
    
	 
	 	     
    (r) to determine the effect of a Fundamental
    Transaction and, if the Board determines that a transaction or
    event should be treated as a Change of Control or a Divestiture,
    then the effect of that Change of Control or Divestiture; and
    
	 
	 	     
    (s) to make all other determinations the
    Administrator deems necessary or advisable for the
    administration of this Plan.
    

     
4.3     Scope of
Discretion. Subject to the last sentence of this
Section 4.3, on all matters for which this Plan confers the
authority, right or power on the Board, the Committee, or other
Administrator to make decisions, that body may make those
decisions in its sole and absolute discretion, and such
decisions shall be final and binding on all Awardees. In making
those decisions the Board, Committee or other Administrator need
not treat all persons eligible to receive Awards, all Awardees,
all Awards or all Award Shares the same way. However, the
discretion of the Board, Committee or other Administrator is
subject to the specific provisions and specific limitations of
this Plan, as well as all rights conferred on specific Awardees
by Award Agreements and other agreements.

5.     Persons
Eligible to Receive Awards

     
5.1     Eligible
Individuals. Awards (including Substitute Awards) may be
granted to, and only to, Employees, Directors and Consultants,
including to prospective Employees, Directors and Consultants
conditioned on the beginning of their service for the Company or
an Affiliate.

5

 

     
5.2     Section 162(m)
Limitation.

     
(a) Options. So long as the Company
is a “publicly held corporation” within the meaning of
Section 162(m) of the Code: (a) no Employee or
prospective Employee may be granted one or more Options within
any fiscal year of the Company to purchase more than 500,000
Shares under Options, subject to adjustment under
Section 10, and (b) notwithstanding the provisions of
Section 4.1(a), Options may be granted to an Executive only
by the Committee. If an Option is cancelled without being
exercised, that cancelled Option shall continue to be counted
against the limit on Shares under this Section 5.2 for the
fiscal year in which the Option was granted.

     
(b) Cash Awards and Stock Awards. Any
Cash Award or Stock Award intended as “qualified
performance-based compensation” within the meaning of
Section 162(m) of the Code must vest or become exercisable
contingent on the achievement of one or more Objectively
Determinable Performance Conditions, the Cash Award or Stock
Award may be granted only by the Committee, and the material
terms of the Award, including the maximum amount payable and the
payment formula, must be approved by the stockholders of the
Company before such Award is paid.

6.     Terms and
Conditions of Options

     
The following rules apply to all Options:

		
	 	     
    6.1     Price. No
    Option may have an Option Price less than 85% of the Fair Market
    Value of the Shares on the Grant Date. No Option intended as
    “qualified incentive-based compensation” within the
    meaning of Section 162(m) of the Code may have an Option
    Price less than 100% of the Fair Market Value of the Shares on
    the Grant Date. In no event will the Option Price of any Option
    be less than the par value of the Shares issuable under the
    Option.
    
	 
	 	     
    6.2     Term. No
    Option shall be exercisable after its Expiration Date. No Option
    may have an Expiration Date that is more than ten years after
    its Grant Date.
    
	 
	 	     
    6.3     Vesting.
    Options shall be exercisable: (a) on the Grant Date, or
    (b) in accordance with a schedule related to the Grant
    Date, the date the Awardee’s directorship, employment or
    consultancy begins, or a different date specified in the Option
    Agreement. If so provided in the Option Agreement, an Option may
    be exercisable subject to the application of Reverse Vesting to
    the Option Shares.
    
	 
	 	     
    6.4     Form of
    Payment.
    
	 
	 	     
    (a) The Administrator shall determine the
    acceptable form and method of payment for exercising an Option.
    
	 
	 	     
    (b) Acceptable forms of payment for all
    Option Shares are cash, check or wire transfer, denominated in
    U.S. dollars except as specified by the Administrator for
    non-U.S. Employees or non-U.S. sub-plans.
    
	 
	 	     
    (c) In addition, the Administrator may
    permit payment to be made by any of the following methods:
    

		
	 	     
    (i) other Shares, or the designation of
    other Shares, which (A) in the case of Shares acquired upon
    exercise of an option (whether or not under this Plan) have been
    owned by the Awardee for more than six months on the date of
    surrender, and (B) have a Fair Market Value on the date of
    surrender equal to the Option Price of the Shares as to which
    the Option is being exercised;
    
	 
	 	     
    (ii) provided that a public market exists
    for the Shares, through a “same day sale” commitment
    from the Awardee and a broker-dealer that is a member of the
    National Association of Securities Dealers (an “NASD
    Dealer”) under which the Awardee irrevocably elects
    to exercise the Option and the NASD Dealer irrevocably commits
    to forward an amount equal to the Option Price, directly to the
    Company, upon receipt of the Option Shares (a
    “Cashless Exercise”);
    

6

 

		
	 	     
    (iii) provided that a public market exists
    for the Shares, through funds provided to the Awardee under a
    “margin” commitment from an NASD Dealer under which
    the Awardee irrevocably elects to exercise the Option and pledge
    the Option Shares so purchased to the NASD Dealer in a margin
    account as security for a loan from the NASD Dealer in the
    amount of the Option Price and the NASD Dealer irrevocably
    commits to forward an amount equal to the Option Price, directly
    to the Company, upon receipt of the Option Shares;
    
	 
	 	     
    (iv) one or more full recourse promissory
    notes bearing interest at a market rate that is at least
    sufficient to avoid imputation of interest under
    Sections 483, 1274 and 7872 of the Code and with such other
    terms as the Administrator specifies, except that Consultants
    may not purchase Shares with a promissory note unless the note
    is adequately secured by collateral other than the Shares, the
    portion of the Option Price equal to the par value of the Shares
    must be paid in cash or other lawful consideration, other than
    the note, and the Company shall at all times comply with any
    applicable margin rules of the Federal Reserve; and
    
	 
	 	     
    (v) any combination of the methods of
    payment permitted by any paragraph of this Section 6.4.
    

     
6.5     Nonassignability
of Options. Except as determined by the Administrator,
no Option shall be assignable or otherwise transferable by
the Awardee except by will or by the laws of descent and
distribution. However, Options may be transferred and exercised
in accordance with a Qualified Domestic Relations Order.

     
6.6     Substitute
Options. The Board may cause the Company to grant Substitute
Options in connection with the acquisition by the Company or an
Affiliate of equity securities of any entity (including by
merger) or all or a portion of the assets of any entity. Any
such substitution shall be effective when the acquisition closes
or at such later date as the Board determines. Substitute
Options may be Nonstatutory Options or Incentive Stock Options.
Unless and to the extent specified otherwise by the Board,
Substitute Options shall have the same terms and conditions as
the options they replace, except that (subject to
Section 10) Substitute Options shall be Options to purchase
Shares rather than equity securities of the granting entity and
shall have an Option Price and other terms that, as determined
by the Board in its sole and absolute discretion, properly
reflect the substitution.

7.     Incentive
Stock Options

     
The following rules apply only to Incentive Stock
Options and only to the extent these rules are more restrictive
than the rules that would otherwise apply under this Plan. With
the consent of the Awardee, or where this Plan provides that an
action may be taken notwithstanding any other provision of this
Plan, the Administrator may deviate from the requirements of
this Section, notwithstanding that any Incentive Stock Option
modified by the Administrator will thereafter be treated as a
Nonstatutory Option.

     
(a) The Expiration Date of an Incentive
Stock Option shall not be later than ten years from its Grant
Date, with the result that no Incentive Stock Option may be
exercised after the expiration of ten years from its Grant Date.

     
(b) No Incentive Stock Option may be granted
more than ten years from the date this Plan was approved by the
Board.

     
(c) Options intended to be Incentive Stock
Options that are granted to any single Awardee under all equity
compensation plans of the Company and its Affiliates, including
Incentive Stock Options granted under this Plan, may not vest at
a rate of more than $100,000 in Fair Market Value of stock
(measured on the Grant Dates of the Options) during any calendar
year. For the purpose of this Section 7(c), an Option vests
with respect to a given share of stock the first time its holder
may purchase that share, notwithstanding any right of the
Company to repurchase that share. Unless the Administrator
specifies otherwise in the related agreement governing the
option, this vesting limitation shall be applied by, to the
extent necessary to satisfy this $100,000 rule, treating certain
stock options that were intended to be incentive stock options
under Section 422 of the Code as nonstatutory options. The
stock options or portions of stock options to be reclassified as
nonstatutory options are those with the highest option prices,
whether granted under this Plan or any other equity

7

 

compensation plan of the Company or any Affiliate
that permits that treatment. This Section 7(c) shall not
cause an Incentive Stock Option to vest before its original
vesting date or cause an Incentive Stock Option that has already
vested to cease to be vested.

     
(d) In order for an Incentive Stock Option
to be exercised for any form of payment other than those
described in Section 6.4(b), that right must be stated in
the Option Agreement relating to that Incentive Stock Option.

     
(e) Any Incentive Stock Option granted to a
Ten Percent Shareholder, must have an Expiration Date that is
not later than five years from its Grant Date, with the result
that no such Option may be exercised after the expiration of
five years from the Grant Date. A “Ten Percent
Shareholder” is any person who, directly or by
attribution under Section 424(d) of the Code, owns stock
possessing more than ten percent of the total combined voting
power of all classes of stock of the Company or of any Affiliate
on the Grant Date.

     
(f) The Option Price of an Incentive Stock
Option shall never be less than the Fair Market Value of the
Shares at the Grant Date. The Option Price for the Shares
covered by an Incentive Stock Option granted to a Ten Percent
Shareholder shall never be less than 110% of the Fair Market
Value of the Shares at the Grant Date.

     
(g) Incentive Stock Options may be granted
only to Employees.

     
(h) No rights under an Incentive Stock
Option may be transferred by the Awardee, other than by will or
the laws of descent and distribution. During the life of the
Awardee, an Incentive Stock Option may be exercised only by the
Awardee. The Company’s compliance with a Qualified Domestic
Relations Order, or the exercise of an Incentive Stock Option by
a guardian or conservator appointed to act for the Awardee,
shall not violate this Section 7(h).

     
(i) An Incentive Stock Option shall be
treated as a Nonstatutory Option if it remains exercisable
after, but is not exercised within three months following
Awardee’s Termination for any reason other than the
Awardee’s death or disability (as defined in
Section 22(c) of the Code) or change of status of an
Awardee from an Employee to a Consultant. In the case of
Termination due to disability, an Incentive Stock Option shall
be treated as a Nonstatutory Option if it remains exercisable
after, but is not exercised within, one year after the
Awardee’s Termination. In the case of Termination due to
death, an Incentive Stock Option shall continue to be treated as
an Incentive Stock Option if it remains exercisable after, but
is not exercised within, three months following Awardee’s
Termination provided it is exercised before the Expiration Date.

8.     Stock Awards
and Cash Awards

     
8.1     Stock
Awards. The following rules apply to all Stock Awards:

		
	 	     
    (a) Price. No Stock Award may have a
    Purchase Price less than 85% of the Fair Market Value of the
    Shares on the Grant Date or on the date on which the purchase is
    completed. In no event will the Purchase Price of any Stock
    Award be less than the par value of the Shares issuable under
    the Stock Award.
    
	 
	 	     
    (b) Term. No Stock Award shall be
    exercisable after its Expiration Date. No Stock Award may have
    an Expiration Date that is more than ten years after its Grant
    Date.
    
	 
	 	     
    (c) Vesting. Stock Awards shall be
    exercisable: (a) on the Grant Date, or (b) in
    accordance with a schedule related to the Grant Date, the date
    the Awardee’s directorship, employment or consultancy
    begins, or a different date specified in the Award Agreement.
    
	 
	 	     
    (d) Right of Repurchase. If so
    provided in the Award Agreement, Award Shares acquired pursuant
    to a Stock Award may be subject to Reverse Vesting.
    
	 
	 	     
    (e) Form of Payment. The
    Administrator shall determine the acceptable form and method of
    payment for exercising a Stock Award.
    

8

 

		
	 	     
    (i) Acceptable forms of payment for all
    Award Shares are cash, check or wire transfer, denominated in
    U.S. dollars except as specified by the Administrator for
    non-U.S. Employees or non-U.S. sub-plans.
    
	 
	 	     
    (ii) In addition, the Administrator may
    permit payment to be made by any of the methods permitted with
    respect to the exercise of Options pursuant to Section 6.4.
    

		
	 	     
    (f) Nonassignability of Stock Awards.
    Except as determined by the Administrator, including in the
    Award Agreement, no Stock Award shall be assignable or otherwise
    transferable by the Awardee except by will or by the laws of
    descent and distribution. However, Stock Awards may be
    transferred and exercised in accordance with a Qualified
    Domestic Relations Order.
    
	 
	 	     
    (g) Substitute Stock Award. The Board
    may cause the Company to grant Substitute Stock Awards in
    connection with the acquisition by the Company or an Affiliate
    of equity securities of any entity (including by merger) or all
    or a portion of the assets of any entity. Unless and to the
    extent specified otherwise by the Board, Substitute Stock Awards
    shall have the same terms and conditions as the options they
    replace, except that (subject to Section 10) Substitute
    Stock Awards shall be Stock Awards to purchase Shares rather
    than equity securities of the granting entity and shall have a
    Purchase Price and other terms that, as determined by the Board
    in its sole and absolute discretion, properly reflect the
    substitution.
    

     
8.2     Cash
Awards. The following rules apply to all Cash Awards:

		
	 	     
    (a) Term. No Cash Award shall be
    payable after its Expiration Date. No Cash Award may have an
    Expiration Date that is more than ten years after its Grant Date.
    
	 
	 	     
    (b) Vesting. Cash Awards shall be
    payable: (a) on the Grant Date, (b) in accordance with
    a schedule related to the Grant Date, the date the
    Awardee’s directorship, employment or consultancy begins,
    or a different date specified in the Award Agreement, or
    (c) or upon the achievement of Objectively Determinable
    Performance Conditions.
    

9.     Exercise of
Awards

     
9.1     In
General. An Award shall be exercisable in accordance with
this Plan, the Award Agreement under which it is granted, and as
prescribed by the Administrator.

     
9.2     Time of
Exercise. Options and Stock Awards shall be considered
exercised when the Company receives: (a) written notice of
exercise from the person entitled to exercise the Option or
Stock Award, (b) full payment, or provision for payment, in
a form and method approved by the Administrator, for the Shares
for which the Option or Stock Award is being exercised, and
(c) payment, or provision for payment, in a form approved
by the Administrator, of all applicable withholding taxes due
upon exercise. An Award may not be exercised for a fraction of a
Share. Cash Awards shall be considered exercised when the
Company receives written notice of the exercise from the person
entitled to exercise the Cash Award.

     
9.3     Issuance of
Award Shares. The Company shall issue Award Shares in the
name of the person properly exercising the Award. If the Awardee
is that person and so requests, the Award Shares shall be issued
in the name of the Awardee and the Awardee’s spouse. The
Company shall endeavor to issue Award Shares promptly after an
Award is exercised. However, until Award Shares are actually
issued, as evidenced by the appropriate entry on the stock books
of the Company or the transfer agent for the Shares, no right to
vote or receive dividends or other distributions, and no other
rights as a stockholder, shall exist with respect to the Award
Shares, even though the Awardee has provided the Company with
the necessary notices and payments required under
Section 9.2. No adjustment shall be made for any dividend,
distribution, or other right for which the record date precedes
the date the Award Shares are issued, except as provided in
Section 10.

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

9

 

     
9.5     Termination

     
(a) In General. Except as provided by
the Administrator, including in an Award Agreement, and as
otherwise provided in Sections 9.5(b), (c), (d) and
(e), after an Awardee’s Termination, the Awardee’s
Awards shall be exercisable to the extent (but only to the
extent) they are vested on the date of that Termination and only
during the period ending three months after the Termination, but
in no event after the Expiration Date. To the extent the Awardee
does not exercise an Award within the time specified for
exercise, the Award shall automatically terminate.

     
(b) Leaves of Absence. Unless
otherwise provided in the Award Agreement, no Award may be
exercised more than three months after the beginning of a leave
of absence, other than a personal or medical leave approved by
the Administrator with employment guaranteed upon return. Awards
shall not continue to vest during a leave of absence, other than
an approved personal or medical leave with employment guaranteed
upon return.

     
(c) Death or Disability. Unless
otherwise provided by the Administrator, if an Awardee’s
Termination is due to death or disability (as determined by the
Administrator with respect to all Awards other than Incentive
Stock Options and as defined by Section 22(e) of the Code
with respect to Incentive Stock Options), all Awards of that
Awardee, to the extent exercisable at the date of that
Termination, may be exercised for one year after that
Termination, but in no event after the Expiration Date. In the
case of Termination due to death, an Award may be exercised as
provided in Section 16. In the case of Termination due to
disability, if a guardian or conservator has been appointed to
act for the Awardee and been granted this authority as part of
that appointment, that guardian or conservator may exercise the
Award on behalf of the Awardee. In the case of an Awardee who
dies or becomes disabled within three months after Termination
not due to Cause, the Awardee’s Awards may be exercised for
one year after that Termination.

     
(d) Divestiture. If an Awardee’s
Termination is due to a Divestiture, the Board may take any one
or more of the actions described in Section 10.3 or 10.4.

     
(e) Termination for Cause. If an
Awardee’s Termination is due to Cause, all of the
Awardee’s Awards shall automatically terminate and cease to
be exercisable at the time of Termination and all Awards
exercised after the first event constituting Cause may be
rescinded by the Administrator. “Cause”
means dishonesty, fraud, misconduct, disclosure or misuse of
confidential information, conviction of, or a plea of guilty or
no contest to, a felony or similar offense, habitual absence
from work for reasons other than illness, intentional conduct
that could cause significant injury to the Company or an
Affiliate, or habitual abuse of alcohol or a controlled
substance in a way that interfered with the Awardee’s
performance of his or her duties, in each case as determined by
the Administrator.

     
(f) Consulting or Employment
Relationship. Nothing in this Plan or in any Award
Agreement, and no Award or the fact that Award Shares remain
subject to repurchase rights, shall: (a) interfere with or
limit the right of the Company or any Affiliate to terminate the
employment or consultancy of any Awardee at any time, whether
with or without cause or reason, and with or without the payment
of severance or any other compensation or payment, or
(b) interfere with the application of any provision in any
of the Company’s or any Affiliate’s charter documents
or the Delaware General Corporation Law relating to the
election, appointment, term of office, or removal of a Director.

10.     Certain
Transactions and Events

     
10.1     In General.
Except as provided in this Section 10, no change in the
capital structure of the Company, merger, sale or other
disposition of assets or a subsidiary, change of control,
issuance by the Company of shares of any class of securities
convertible into shares of any class, conversion of securities,
or other transaction or event shall require or be the occasion
for any adjustments of the type described in this
Section 10.

     
10.2     Changes in
Capital Structure. In the event of any stock split, reverse
stock split, recapitalization, combination or reclassification
of stock, stock dividend, spin-off, or similar change to the
capital structure of the Company (not including a Fundamental
Transaction or Change of Control), the Board shall make

10

 

whatever adjustments it concludes are appropriate
to: (a) the number and type of Awards that may be granted
under this Plan, (b) the number and type of Options that
may be granted to any individual under this Plan, (c) the
Purchase Price of any Stock Award, (d) the Option Price and
number and class of securities issuable under each outstanding
Option, and (e) the repurchase price of any securities
substituted for Option Shares that are subject to Reverse
Vesting. The specific adjustments shall be determined by the
Board in its sole and absolute discretion. Unless the Board
specifies otherwise, any securities issuable as a result of any
such adjustment shall be rounded to the next lower whole
security.

     
10.3     Fundamental
Transactions. If the Company merges with another entity in a
transaction in which the Company is not the surviving entity or
if, as a result of any other transaction or event, other
securities are substituted for the Shares or Shares may no
longer be issued (each a “Fundamental
Transaction”), then, notwithstanding any other
provision of this Plan, the Board shall do one or more of the
following contingent on the closing or completion of the
Fundamental Transaction: (a) arrange for the substitution
of options or other compensatory awards on equity securities
other than Shares (including, if appropriate, equity securities
of an entity other than the Company) in exchange for Awards,
(b) accelerate the vesting and termination of outstanding
Awards, in whole or in part, so that Awards can be exercised
prior to the closing or completion of the Fundamental
Transaction but then terminate, (c) cancel Awards in
exchange for cash payments to Awardees, and (d) arrange for
any repurchase rights of the Company with respect to Award
Shares to apply to the securities issued in substitution for
Shares or terminate repurchase rights on Award Shares. The Board
need not adopt the same rules for each Award or each Awardee.

     
10.4     Changes of
Control. The Board may also, but need not, specify that
other transactions or events constitute a “Change of
Control”. The Board may do that either before or
after the transaction or event occurs. Examples of transactions
or events that the Board may treat as Changes of Control are:
(a) the Company or an Affiliate is a party to a merger,
consolidation, amalgamation, or other transaction in which the
beneficial stockholders of the Company, immediately before the
transaction, beneficially own securities representing 50% or
less of the total combined voting power or value of the Company
immediately after the transaction, (b) any person or
entity, including a “group” as contemplated by
Section 13(d)(3) of the Exchange Act, acquires securities
holding 30% or more of the total combined voting power or value
of the Company, or (c) as a result of or in connection with
a contested election of Company Directors, the persons who were
Company Directors immediately before the election cease to
constitute a majority of the Board. In connection with a Change
of Control, notwithstanding any other provision of this Plan,
the Board may take any one or more of the actions described in
Section 10.3. In addition, the Board may extend the date
for the exercise of Awards (but not beyond their original
Expiration Date). The Board need not adopt the same rules for
each Award or each Awardee.

     
10.5     Divestiture.
If the Company or an Affiliate sells or otherwise transfers
equity securities of an Affiliate to a person or entity other
than the Company or an Affiliate, or leases, exchanges or
transfers all or any portion of its assets to such a person or
entity, then the Board, in its sole and absolute discretion, may
specify that such transaction or event constitutes a
“Divestiture”. In connection with a
Divestiture, notwithstanding any other provision of this Plan,
the Board may take one or more of the actions described in
Section 10.3 or 10.4 with respect to Awards or Award Shares
held by, for example, Employees, Directors or Consultants for
whom that transaction or event results in a Termination. The
Board need not adopt the same rules for each Award or each
Awardee.

     
10.6     Dissolution.
If the Company adopts a plan of dissolution, the Board may,
in its sole and absolute discretion, cause Awards to be fully
vested and exercisable (but not after their Expiration Date)
before the dissolution is completed but contingent on its
completion and may cause the Company’s repurchase rights on
Award Shares to lapse upon completion of the dissolution. To the
extent not exercised before the earlier of the completion of the
dissolution or their Expiration Date, Awards shall terminate
immediately prior to the completion of the dissolution. The
Board need not adopt the same rules for each Award or each
Awardee.

     
10.7     Cut-Back to
Preserve Benefits. If the Administrator determines that the
net after-tax amount to be realized by any Awardee, taking into
account any accelerated vesting, termination of repurchase
rights, or cash payments to that Awardee in connection with any
transaction or event addressed in this Section 10 would

11

 

be greater if one or more of those steps were not
taken with respect to that Awardee’s Awards or Award
Shares, then and to that extent one or more of those steps shall
not be taken.

11.     Withholding
and Tax Reporting

     
11.1     Tax
Withholding Alternatives

     
(a) General. Whenever Award Shares
are issued or become free of restrictions, the Company may
require the Awardee to remit to the Company an amount sufficient
to satisfy any applicable tax withholding requirement, whether
the related tax is imposed on the Awardee or the Company. The
Company shall have no obligation to issue or deliver Award
Shares or release Award Shares from an escrow until the Awardee
has satisfied those tax withholding obligations. Whenever
payment in satisfaction of Awards is made in cash, the payment
will be reduced by an amount sufficient to satisfy all tax
withholding requirements.

     
(b) Method of Payment. The Awardee
shall pay any required withholding using the forms of
consideration described in Section 6.4(b), except that, in
the discretion of the Administrator, the Company may also permit
the Awardee to use any of the forms of payment described in
Section 6.4(c). The Administrator may also permit Award
Shares to be withheld to pay required withholding. If the
Administrator permits Award Shares to be withheld, the Fair
Market Value of the Award Shares withheld shall not exceed the
amount determined by the applicable minimum statutory
withholding rates, and shall be determined as of the date that
the amount of tax to be withheld or tendered for this purpose is
to be determined.

     
11.2     Reporting of
Dispositions. Any holder of Option Shares acquired under an
Incentive Stock Option shall promptly notify the Administrator
in writing of the sale or other disposition of any of those
Option Shares if the disposition occurs during: (a) the
longer of two years after the Grant Date of the Incentive Stock
Option and one year after the date the Incentive Stock Option
was exercised, or (b) such other period as the
Administrator has established.

12.     Compliance
with Law

     
12.1     Applicable
Law. The grant of Awards and the issuance and subsequent
transfer of Award Shares shall be subject to compliance with all
Applicable Law. Awards may not be exercised, and Award Shares
may not be transferred, in violation of Applicable Law. Awards
may not be exercised unless: (a) a registration statement
under the Securities Act is then in effect with respect to the
related Award Shares, or (b) in the opinion of legal
counsel to the Company, those Award Shares may be issued in
accordance with an applicable exemption from the registration
requirements of the Securities Act and any other applicable
securities laws. The failure or inability of the Company to
obtain from any regulatory body the authority considered by the
Company’s legal counsel to be necessary or useful for the
lawful issuance of any Award Shares or their subsequent transfer
shall relieve the Company of any liability for failing to issue
those Award Shares or permitting their transfer. As a condition
to the exercise of any Award or the transfer of any Award
Shares, the Company may require the Awardee to satisfy any
requirements or qualifications that may be necessary or
appropriate to comply with or evidence compliance with any
Applicable Law.

     
12.2     Certificates.
All certificates for Shares or other securities delivered
under this Plan will be subject to such stop transfer
instructions, legends and other restrictions as the
Administrator may deem necessary or advisable, including
restrictions under any applicable federal, state or foreign
securities law, or any rules, regulations and other requirements
of the Securities and Exchange Commission or any stock exchange
or automated quotation system upon which the Shares may be
listed or quoted.

13.     Amendment or
Termination of this Plan or Outstanding Awards

     
13.1     Amendment
and Termination. The Board may at any time amend, suspend,
or terminate this Plan.

     
13.2     Stockholder
Approval. The Company shall obtain the approval of the
Company’s stockholders for any amendment to this Plan if
stockholder approval is necessary or desirable to comply with
any Applicable Law or with the requirements applicable to the
grant of Awards intended to be Incentive Stock

12

 

Options. The Board may also, but need not,
require that the Company’s stockholders approve any other
amendments to this Plan.

     
13.3     Effect.
No amendment, suspension, or termination of this Plan, and
no modification of any Award even in the absence of an
amendment, suspension, or termination of this Plan, shall impair
any existing contractual rights of any Awardee unless the
affected Awardee consents to the amendment, suspension,
termination, or modification. However, no such consent shall be
required if the Administrator determines in its sole and
absolute discretion that the amendment, suspension, termination,
or modification: (a) is required or advisable in order for
the Company, the Plan or the Award to satisfy Applicable Law, to
meet the requirements of any accounting standard or to avoid any
adverse accounting treatment, or (b) in connection with any
transaction or event described in Section 10, is in the
best interests of the Company or its stockholders. The
Administrator may, but need not, take the tax consequences to
affected Awardees into consideration in acting under the
preceding sentence. Termination of this Plan shall not affect
the Administrator’s ability to exercise the powers granted
to it under this Plan with respect to Awards granted before the
termination, or Award Shares issued under such Awards, even if
those Award Shares are issued after the termination.

14.     Reserved
Rights

     
14.1     Nonexclusivity
of this Plan. This Plan shall not limit the power of the
Company or any Affiliate to adopt other incentive arrangements
including, for example, the grant or issuance of stock options,
stock, or other equity-based rights under other plans or
independently of any plan.

     
14.2     Unfunded
Plan. This Plan shall be unfunded. Although bookkeeping
accounts may be established with respect to Awardees, any such
accounts will be used merely as a convenience. The Company shall
not be required to segregate any assets on account of this Plan,
the grant of Awards, or the issuance of Award Shares. The
Company and the Administrator shall not be deemed to be a
trustee of stock or cash to be awarded under this Plan. Any
obligations of the Company to any Awardee shall be based solely
upon contracts entered into under this Plan, such as Award
Agreements. No such obligation shall be deemed to be secured by
any pledge or other encumbrance on any assets of the Company.
Neither the Company nor the Administrator shall be required to
give any security or bond for the performance of any such
obligation.

15.     Special
Arrangements Regarding Award Shares

     
15.1     Escrows and
Pledges. To enforce any restrictions on Award Shares
including restrictions related to Reverse Vesting, the
Administrator may require their holder to deposit the
certificates representing Award Shares, with stock powers or
other transfer instruments approved by the Administrator
endorsed in blank, with the Company or an agent of the Company
to hold in escrow until the restrictions have lapsed or
terminated. The Administrator may also cause a legend or legends
referencing the restrictions to be placed on the certificates.
Any Awardee who delivers a promissory note as partial or full
consideration for the purchase of Award Shares will be required
to pledge and deposit, with the Company, some or all of the
Award Shares as collateral to secure the payment of the note.
However, the Administrator may require or accept other or
additional forms of collateral to secure the note and, in any
event, the Company will have full recourse against the maker of
the note, notwithstanding any pledge or other collateral, unless
stated otherwise in the Award Agreement and the note.

15.2     Repurchase
Rights.

     
(a) Reverse Vesting. If an Option or
Stock Award is subject to Reverse Vesting, the Company shall
have the right, during the three months after the Awardee’s
Termination, to repurchase any or all of the Award Shares that
were unvested as of the date of that Termination, for a price
equal to the lower of: (i) the Option Price or Purchase
Price for such Shares, minus the amount of any cash dividends
paid or payable with respect to the Award Shares for which the
record date precedes the repurchase, and (ii) the Fair
Market Value of those Option Shares as of the date of the
Termination. The repurchase price shall be paid in cash or, if
the Option Shares were purchased in whole or in part for a
promissory note, cancellation of the indebtedness

13

 

under that note related to the repurchased
portion of an Award, or a combination of those means. The
Company may assign this right of repurchase.

     
(b) Procedure. The Company or its
assignee may choose to give the Awardee a written notice of
exercise of its repurchase rights under this Section 15.2.
However, the Company’s failure to give such a notice shall
not affect its rights to repurchase Award Shares. The Company
must, however, tender the repurchase price during the period
specified in this Section 15.2 for exercising its
repurchase rights in order to exercise such rights.

     
15.3     Cash
Dividends. Cash Dividends on Award Shares that are subject
to any restrictions, including Reverse Vesting shall be held by
the Company for the benefit of the Awardee until the lapsing of
the restrictions on such Award Shares with such interest as
determined by the Administrator in its sole discretion.

16.     Beneficiaries

     
An Awardee may file a written designation of one
or more beneficiaries who are to receive the Awardee’s
rights under the Awardee’s Awards after the Awardee’s
death. An Awardee may change such a designation at any time by
written notice. If an Awardee designates a beneficiary, the
beneficiary may exercise the Awardee’s Awards after the
Awardee’s death. If an Awardee dies when the Awardee has no
living beneficiary designated under this Plan, the Company shall
allow the executor or administrator of the Awardee’s estate
to exercise the Award or, if there is none, the person entitled
to exercise the Option under the Awardee’s will or the laws
of descent and distribution. In any case, no Award may be
exercised after its Expiration Date.

17.     Miscellaneous

     
17.1     Governing
Law. This Plan and all determinations made and actions taken
under this Plan shall be governed by the substantive laws, but
not the choice of law rules, of the State of Delaware.

     
17.2     Determination
of Value. Fair Market Value shall be determined as follows:

		
	 	     
    (a) Listed Stock. If the Shares are
    traded on any established stock exchange or quoted on a national
    market system, Fair Market Value shall be the closing sales
    price for the Shares as quoted on that stock exchange or system
    for the date the value is to be determined (the
    “Value Date”) as reported in The Wall
    Street Journal or a similar publication. If no sales are
    reported as having occurred on the Value Date, Fair Market Value
    shall be that closing sales price for the last preceding trading
    day on which sales of Shares are reported as having occurred. If
    no sales are reported as having occurred during the five trading
    days before the Value Date, Fair Market Value shall be the
    closing bid for Shares on the Value Date. If Shares are listed
    on multiple exchanges or systems, Fair Market Value shall be
    based on sales or bids on the primary exchange or system on
    which Shares are traded or quoted.
    
	 
	 	     
    (b) Stock Quoted by Securities Dealer.
    If Shares are regularly quoted by a recognized securities
    dealer but selling prices are not reported on any established
    stock exchange or quoted on a national market system, Fair
    Market Value shall be the mean between the high bid and low
    asked prices on the Value Date. If no prices are quoted for the
    Value Date, Fair Market Value shall be the mean between the high
    bid and low asked prices on the last preceding trading day on
    which any bid and asked prices were quoted.
    
	 
	 	     
    (c) No Established Market. If Shares
    are not traded on any established stock exchange or quoted on a
    national market system and are not quoted by a recognized
    securities dealer, the Board will determine Fair Market Value in
    good faith. The Board will consider the following factors, and
    any others it considers significant, in determining Fair Market
    Value: (i) the price at which other securities of the
    Company have been issued to purchasers other than Employees,
    Directors, or Consultants, (ii) the Company’s net
    worth, prospective earning power, dividend-paying capacity, and
    non-operating assets, if any, and (iii) any other relevant
    factors, including the economic outlook for the Company and the
    Company’s industry, the Company’s position in that
    industry, the Company’s goodwill and other intellectual
    property, and the values of securities of other businesses in
    the same industry.
    

14

 

     
17.3     Reservation
of Shares. During the term of this Plan, the Company will at
all times reserve and keep available such number of Shares as
are still issuable under this Plan.

     
17.4     Electronic
Communications. Any Award Agreement, notice of exercise of
an Award, or other document required or permitted by this Plan
may be delivered in writing or, to the extent determined by the
Administrator, electronically. Signatures may also be electronic
if permitted by the Administrator and Applicable Law.

     
17.5     Notices.
Unless the Administrator specifies otherwise, any notice to
the Company under any Option Agreement or with respect to any
Awards or Award Shares shall be in writing (or, if so authorized
by Section 17.4, communicated electronically), shall be
addressed to the Chief Financial Officer of the Company, and
shall only be effective when received by the Chief Financial
Officer of the Company.

Adopted by the Board on: December 5, 2001

Approved by the stockholders
on: February 8, 2002

Effective date of this
Plan: February 8, 2002

Amended by the Board on: January 14,
2003

Amendment approved by the stockholders
on: February 25, 2003

Amended by the Board on: December 10,
2003

Amendment approved by the stockholders
on: February 24, 2004

15

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