Document:

Exhibit 10.1

                              1999 Plan as Amended

                                   QMED, INC.
                     1999 EQUITY INCENTIVE PLAN, AS AMENDED

1.       NAME AND PURPOSE.

         The name of this plan is the QMED, INC. 1999 Equity Incentive Plan (the
"Plan"). The purpose of this Plan is to enable QMED, INC. (the "Company") and
its Subsidiaries and Affiliates to attract and retain employees, consultants and
directors who contribute to the Company's success by their ability, ingenuity
and industry, and to enable such employees and directors to participate in the
long-term success and growth of the Company through an equity interest in the
Company.

2.       DEFINITIONS.

         For purposes of this Plan, the following terms shall be defined as set
forth below:

         "Affiliate" means any corporation (other than a subsidiary),
partnership, joint venture or any other entity in which the Company owns,
directly or indirectly, at least a ten percent (10%) beneficial ownership
interest.

         "Board" means the Board of Directors of the Company.

         "Cause" means a felony conviction of a participant or the failure of a
participant to contest prosecution for a felony, or a participant's willful or
grossly negligent action which is demonstrably inimical to the interests,
business or reputation of the Company or any Subsidiary or Affiliate.

         "Code" means the Internal Revenue Code of 1986, as amended, or any
successor thereto.

         "Committee" means the Stock Option or Compensation Committee of the
Board, whose members shall be appointed from time to time by the Board. If at
any time no Committee shall be in existence, the functions of the Committee
specified in this Plan shall be exercised by the Board.

         "Commission" means the Securities and Exchange Commission.

         "Company" means QMED, INC., a corporation organized under the laws of
the State of Delaware (or any successor corporation).

         "Deferred Stock" means an award made pursuant to Section 10 of the
right to receive Stock at the end of a specified deferral period.

         "Director Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 7.

                                       1
<PAGE>

         "Disability" means total and permanent disability as determined under
the Company's long term disability program.

         "Disinterested Person" shall have the meaning set forth in Rule
16b-3(d)(3) as promulgated by the Commission under the Exchange Act, or any
successor definition adopted by the Commission.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor thereto.

         "Executive" means, if the Company has any class of any equity security
registered pursuant to Section 12 of the Exchange Act, 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 he individual's
relationship with the Company or an Affiliate. If the Company does not have any
class of any equity security registered pursuant to Section 12 of the Exchange
Act, "Executive" means any (i) Director, (ii) any officer elected or appointed
by the board of directors, or (iii) any beneficial owner of more than 10% of any
class of the Company's equity securities.

         "Fair Market Value" means, as of any given date, the closing price of
the Stock on such date on the National Association of Securities Dealers
Automated Quotation System (NASDAQ) National Market System, or if not then
traded or listed on that system, on the securities trading system or stock
exchange on which the Stock is then primarily traded or listed; or if the stock
is not traded or listed on an exchange the average of the reported bid and ask
price on such date.

         "Incentive Stock Option" means any Stock Option intended to be and
designated as an "incentive stock option" within the meaning of Code Section
422.

         "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.

         "Normal Retirement," solely for the purpose of this Plan means
retirement from active employment with the Company, any Subsidiary, and any
Affiliate on or after age 65.

         "Officer" means an officer of the Company as defined in Rule 16a-1
adopted under the Exchange Act.

         "Plan" means this 1999 Employee Stock Incentive Plan, as amended.

         "Restricted Stock" means an award of shares of Stock that are subject
to restrictions under Section 9.

         "Retirement" means Normal Retirement.

         "Stock" means the common stock of the Company.

                                       2
<PAGE>

         "Stock Appreciation Right" means a right granted under Section 8 to
surrender to the Company all or a portion of a Stock Option in exchange for an
amount equal to the difference between (i) the Fair Market Value, as of the date
such Stock Option or such portion thereof is surrendered, of the shares of Stock
covered by such Stock Option or such portion thereof, and (ii) the aggregate
exercise price of such Stock Option or such portion thereof.

         "Stock Option" means any option to purchase shares of Stock granted
pursuant to Section 6.

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

3.       ADMINISTRATION.

         This Plan shall be administered by the Committee which shall at all
times consist of not less than three Disinterested Persons, each of whom shall
be members of the Board of the Directors. The Committee shall have the power and
authority to grant to eligible employees, pursuant to the terms of this Plan:
(i) Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock, or
(iv) Deferred Stock. In particular, the Committee shall have the authority to:

         3.1 Select the officers, other employees and consultants of the
Company, its Subsidiaries, and its Affiliates to whom Stock Options, Stock
Appreciation Rights, Restricted Stock or Deferred Stock awards, or a combination
of the foregoing from time to time will be granted hereunder;

         3.2 Determine whether and to what extent Incentive Stock Options,
Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock or
Deferred Stock, or a combination of the foregoing are to be granted hereunder;

         3.3 Determine the number of shares of Stock to be covered by each such
award granted hereunder;

         3.4 Determine the terms and conditions, not inconsistent with the terms
of this Plan, of any award granted hereunder, including, but not limited to, any
restriction on any Stock Option or other award and/or the shares of Stock
relating thereto based on performance and/or such other factors as the Committee
may determine, in its sole discretion, and any vesting acceleration features
based on performance and/or such other factors as the Committee may determine,
in its sole discretion;

         3.5 Determine whether, to what extent, and under what circumstances
Stock and other amounts payable with respect to an award under this Plan shall
be deferred either automatically or at the election of a participant, including
providing for and determining the amount (if any) of deemed earnings on any
deferred amount during any deferral period;

                                       3
<PAGE>

         3.6 Delegate the authority given to the Committee under Sections 3.1,
3.2, 3.3, 3.4 and 3.5 to grant Stock Options to one or more Executives of the
Company, provided that no such delegation of authority may be made by the
Committee to make any award to an Executive, Officer or Director and provided
further that each such delegation of authority shall specify the number of
shares of Stock which may be the subject of awards made by such Executives.

         3.7 Adopt, alter, and repeal such administrative rules, guidelines, and
practices governing this Plan as it shall, from time to time, deem advisable;

         3.8 Interpret the terms and provisions of this Plan and any award
issued under this Plan (and any agreements relating thereto); and

         3.9 Otherwise supervise the administration of this Plan.

         All decisions made by the Committee pursuant to the provisions of this
Plan shall be final and binding on all persons, including the Company and
participants in this Plan.

4.       STOCK SUBJECT TO PLAN.

         The total number of shares of Stock reserved and available for
distribution under this Plan shall be 2,000,000. Such shares may consist, in
whole or in part, of authorized and unissued shares or treasury shares. If any
shares of Stock that have been optioned cease to be subject to option, or if any
shares subject to any Restricted Stock or Deferred Stock award granted hereunder
are forfeited or such award otherwise terminates, those shares shall again be
available for distribution in connection with future awards under this Plan.

         In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, or other change in corporate structure
affecting the Stock, a substitution or adjustment shall be made in the aggregate
number of shares reserved for issuance under this Plan, in the number and option
price of shares subject to outstanding Stock Options and Director Stock Options
granted under this Plan, and in the number of shares subject to Restricted Stock
or Deferred Stock awards granted under this Plan, in such manner as may be
determined to be appropriate by the Committee, in its sole discretion, provided
that the number of shares subject to any award shall always be a whole number.
Such adjusted option price shall also be used to determine the amount payable by
the Company upon the exercise of any Stock Appreciation Right associated with
any Stock Option.

5.       ELIGIBILITY.

         5.1 Officers, other employees and consultants of the Company, its
Subsidiaries or its Affiliates (but excluding members of the Committee and any
person who serves only as a director) who are responsible for or contribute to
the management, growth, and/or profitability of the business of the Company, its
Subsidiaries, or its Affiliates are eligible to be granted Stock Options, Stock
Appreciation Rights, Restricted Stock or Deferred Stock awards.

                                       4
<PAGE>

         5.2 Directors of the Company (other than directors who are also
officers or employees of the Company, its Subsidiaries or its Affiliates) are
eligible to be granted Director Stock Options pursuant to Section 7 of the Plan.

         5.3 The optionees and participants under this Plan shall be selected
from time to time by the Committee, in its sole discretion, from among those
eligible, and the Committee shall determine, in its sole discretion, the number
of shares covered by each award or grant to an optionee or participant.

6.       STOCK OPTIONS.

         Stock Options may be granted either alone or in addition to other
awards granted under this Plan. Any Stock Option granted under this Plan shall
be in such form as the Committee from time to time approve, and the provisions
of Stock Option awards need not be the same with respect to each optionee.

         The Stock Options granted under this Plan may be of two types: (i)
Incentive Stock Options, or (ii) Non-Qualified Stock Options. The Committee
shall have the authority to grant any optionee Incentive Stock Options,
Non-Qualified Stock Options, or both types of Stock Options (in each case with
or without Stock Appreciation Rights) except that Incentive Stock Options shall
not be granted to employees of an Affiliate. To the extent that any Stock Option
does not qualify as an Incentive Stock Option, it shall constitute a separate
Non-Qualified Stock Option.

         Anything in this Plan to the contrary notwithstanding, no term of this
Plan relating to Incentive Stock Options shall be interpreted, amended, or
altered, nor shall any discretion or authority granted under this Plan be so
exercised, so as to disqualify either this Plan or any Incentive Stock Option
under Code Section 422. Notwithstanding the foregoing, in the event an optionee
voluntarily disqualifies an option as an Incentive Stock Option within the
meaning of Code Section 422, the Committee may, but shall not be obligated to,
make such additional grants, awards, or bonuses as the Committee shall deem
appropriate, to reflect the tax savings to the Company which results from such
disqualification.

         Stock Options granted under this Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of this Plan, as the Committee shall deem desirable:

         6.1 Option Price. The option price per share of Stock purchasable under
a Stock Option shall be determined by the Committee at the time of grant but
shall not be less than 100% of the Fair Market Value of the Stock on the date of
the grant of the Stock Option.

         6.2 Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable later than 10
years after the date such Incentive Stock Option is granted and no Non-Qualified
Stock Option shall be exercisable later than 10 years and two days after the
date such Non-Qualified Stock Option is granted.

                                       5
<PAGE>

         6.3 Exercisability. Subject to Section 6.10 with respect to Incentive
Stock Options, Stock Options shall be exercisable at such time or times and
subject to such terms and conditions as shall be determined by the Committee at
the date of grant; provided, however, that, except as provided in Sections 6.6,
6.7, and 6.8, unless otherwise determined by the Committee at grant, no Stock
Option shall be exercisable prior to the first anniversary date of the granting
of the option. If the Committee provides, in its discretion, that any Stock
Option is exercisable only in installments, the Committee may waive such
installment exercise provisions at any time in whole or in part based on
performance and/or such other factors as the Committee may determine in its sole
discretion.

         6.4 Method of Exercise. Stock Options may be exercised in whole or in
part at any time during the option period, by giving written notice of exercise
to the Company specifying the number of shares to be purchased, accompanied by
payment in full of the purchase price, in cash, by check or such other
instrument or mode of payment as may be acceptable to the Committee. As
determined by the Committee, in its sole discretion, at or after grant, payment
in full or in part may also be made in the form of unrestricted Stock already
owned by the optionee or, in the case of the exercise of a Non-Qualified Stock
Option, Restricted Stock or Deferred Stock subject to an award hereunder (based,
in each case, on the Fair Market Value of the Stock on the date the option is
exercised, as determined by the Committee). If payment of the option exercise
price of a Non-Qualified Stock Option is made in whole or in part in the form of
Restricted Stock or Deferred Stock, the shares received upon the exercise of
such Stock Option shall be restricted or deferred, as the case may be, in
accordance with the original term of the Restricted Stock award or Deferred
Stock award in question, equal to the number of shares of Restricted Stock or
Deferred Stock surrendered upon the exercise of that option. No shares of
unrestricted Stock shall be issued until full payment therefor has been made. An
optionee shall have the right to dividends or other rights of a stockholder with
respect to shares subject to the option when the optionee has given written
notice of exercise and has paid in full for those shares.

         6.5 Non-transferability of Options. No Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution, and all Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee.

         6.6 Termination by Death. Unless otherwise determined by the Committee
at grant, if an optionee's employment with the Company, any Subsidiary, and any
Affiliate terminates by reason of his death, the Stock Option may thereafter be
exercised, to the extent then exercisable (or on such accelerated basis as the
Committee shall determine at or after grant), by the legal representative of the
estate or by the legatee of the optionee under the will of the optionee or by
the heir of the optionee under the laws of descent and distribution, for a
period of one year from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter.

                                       6
<PAGE>

         6.7 Termination by Reason of Disability. Unless otherwise determined by
the Committee at grant, if an optionee's employment with the Company, any
Subsidiary and any Affiliate terminates by reason of Disability, any Stock
Option held by such optionee may thereafter be exercised to the extent it was
exercisable at the time of termination due to Disability (or on such accelerated
basis as the Committee shall determine at or after grant), but may not be
exercised after one year from the date of such termination of employment or the
expiration of the stated term or such Stock Option, whichever period is shorter;
provided, however, that, if the optionee dies within such one-year period, any
unexercised Stock Option held by such optionee shall thereafter be exercisable
to the extent to which it was exercisable at the time of death for a period of
three months from the date of such death or for the stated term of such Stock
Option, whichever period is the shorter. In the event of termination of
employment by reason of Disability, if an Incentive Stock Option is exercised
after the expiration of the exercise periods that apply for purposes of Code
Section 422, such Stock Option will thereafter be treated as a Non-Qualified
Stock Option.

         6.8 Termination by Reason of Retirement. Unless otherwise determined by
the Committee at grant, if an optionee's employment with the Company, any
Subsidiary and any Affiliate terminates by reason of Normal Retirement, any
Stock Option held by such optionee may thereafter be exercised to the extent it
was exercisable at the time of such Retirement (or on such accelerated basis as
the Committee shall determine at or after grant), but may not be exercised after
one year from the date of such termination of employment or the expiration of
the stated term of such Stock Option, whichever period is the shorter; provided,
however, that, if the optionee dies within such one-year period any unexercised
Stock Option held by such optionee shall thereafter be exercisable, to the
extent to which it was exercisable at the time of death, for a period of three
months from the date of such death or for the stated term of the Stock Option,
whichever period is the shorter. Notwithstanding the foregoing, the tax
treatment available pursuant to Section 422 of the Internal Revenue Code of 1986
upon the exercise of an Incentive Stock Option will not be available to an
optionee who exercises any Incentive Stock Options more than (i) 12 months after
the date of termination of employment due to permanent disability or (ii) three
months after the date of termination of employment due to retirement.

         6.9 Other Termination. Unless otherwise determined by the Committee at
grant, if an optionee's employment with the Company, any Subsidiary and any
Affiliate terminates for any reason other than death, Disability or Normal
Retirement, any Stock Option held by such optionee shall thereupon terminate,
except that such Stock Option may be exercised for the lesser of three months
from the date of termination or the balance of such Stock Option's term if the
optionee's employment with the Company, any Subsidiary and any Affiliate is
involuntarily terminated by the optionee's employer without Cause.

         6.10 Limit on Value of Incentive Stock Option First Exercisable
Annually. The aggregate Fair Market Value (determined at the time of grant) of
the Stock for which "incentive stock options" within the meaning of Code Section
422 are exercisable for the first time by an optionee during any calendar year
under this Plan (and/or any other stock option plans of the Company, any
Subsidiary and any Affiliate) shall not exceed $100,000.

                                       7
<PAGE>

7.       DIRECTOR STOCK OPTIONS.

         Director Stock Options granted under this Plan shall be Non-Qualified
Stock Options which are not intended to be "incentive stock options" within the
meaning of Code Section 422. Director Stock Options granted under this Plan
shall be in such form as the Committee may from time to time approve, and the
provisions of Director Stock Options need not be the same with respect to each
optionee. The Committee shall have the authority to grant any eligible optionee
Director Stock Options.

         Director Stock Options granted under the Plan shall be evidenced by a
written agreement in such form as the Committee shall from time to time approve,
which agreements shall comply with and be subject to the following terms and
conditions:

         7.1 Option Price. The option price per share of Stock purchasable under
a Director Stock Option shall be determined by the Committee at the time of
grant but shall not be less than 100% of the Fair Market Value of the Stock on
the date of the grant of the Director Stock Option.

         7.2 Option Term. Each Director Stock Option shall be fixed by the
Committee, but shall in no event be exercisable later than 10 years and two days
after the date such Director Stock Option is granted (subject to prior
termination as hereinafter provided).

         7.3 Exercisability. Director Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be determined by
the Committee at the date of grant. If the Committee provides, in its
discretion, that any Director Stock Option is exercisable only in installments,
the Committee may waive such installment exercise provisions at any time in
whole or in part based on performance and/or such other factors as the Committee
may determine in its sole discretion; provided, however, that in the event of a
"Change of Control" (as defined in Section 14 below), the value of all
outstanding Director Stock Options that have been outstanding for at least six
months shall be cashed out on the basis of the "Change of Control Price" (as
defined in Section 14 below) as of the date the Change of Control occurs, and
all Director Stock Options that have not been outstanding for at least six
months shall be immediately exercisable.

         7.4 Method of Exercise. Director Stock Options may be exercised in
whole or in part at any time during the option period, by giving written notice
of exercise to the Company specifying the number of shares to be purchased,
accompanied by payment in full of the purchase price, in cash, by check or such
other instrument or mode of payment as may, be acceptable to the Committee.
Payment in full or in part may also be made in the form of Stock already owned
by the optionee (based on the Fair Market value of the Stock on the date the
option is exercised). No shares of Stock shall be issued until full payment
therefor has been made. An optionee shall have the rights to dividends or other
rights of a stockholder with respect to shares subject to the option when the
optionee has given written notice of exercise and has paid in full for such
shares.

         7.5 Non-transferability of Options. No Director Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution, and all Director Stock Options shall be exercisable, during
the optionee's lifetime, only by the optionee.

                                       8
<PAGE>

         7.6 Termination by Disability or Death.Upon an optionee's termination
of service as a director by reason of disability or death, any Director Stock
Options held by such optionee may thereafter be immediately exercised by the
optionee or, in the case of death, by the legal representative or the estate or
by the legatee of the optionee under the will of the optionee, until the
expiration of the stated term of such Director Stock Options.

         7.7 Other Termination. Upon an optionee's termination of service as a
director with the Company for any reason other than disability or death, any
Director Stock Options held by such optionee may thereafter be exercised, to the
extent exercisable at termination, until the expiration of the stated term of
such Director Stock Options.

8.       STOCK APPRECIATION RIGHTS.

         8.1 Grant and Exercise. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under this Plan. In the
case of a Non-Qualified Stock Option, such rights may be granted either at or
after the time of the grant of such Non-Qualified Stock Option. In the case of
an Incentive Stock Option, such rights may be granted only at the time of the
grant of such Incentive Stock Option.

                  A Stock Appreciation Right or applicable portion thereof
granted with respect to a given Stock Option shall terminate and no longer be
exercisable upon the termination or exercise of the related Stock Option, except
that, unless otherwise provided by the Committee at the time of grant, a Stock
Appreciation Right granted with respect to less than the full number of shares
covered by a related Stock Option shall only be reduced if and to the extent
that the number of shares covered by the exercise or termination of the related
Stock Option exceeds the number of shares not covered by the Stock Appreciation
Right.

                  A Stock Appreciation Right may be exercised by an optionee, in
accordance with Section 8.2, by surrendering the applicable portion of the
related Stock Option. Upon such exercise and surrender, the optionee shall be
entitled to receive amount determined in the manner prescribed in Section 8.2.
Stock Options having been so surrendered, in whole or in part, shall no longer
be exercisable to the extent the related Stock Appreciation Rights have been
exercised.

         8.2 Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions, not inconsistent with the provisions of this Plan, as
shall be determined from time to time by the Committee, including the following:

         (a)      Stock Appreciation Rights shall be exercisable only at such
                  time or times and to the extent that the Stock Options to
                  which they relate shall be exercisable in accordance with the
                  provisions of Section 6 and this Section; provided, however,
                  that any Stock Appreciation Right granted subsequent to the
                  grant of the related Stock Option shall not be exercisable
                  during the first six months of the term of the Stock
                  Appreciation Right, except that this additional limitation
                  shall not apply in the event of death or Disability of the
                  optionee prior to the expiration of the six-month period.

                                       9
<PAGE>

         (b)      Upon the exercise of a Stock Appreciation Right, an optionee
                  shall be entitled to receive up to, but not more than, an
                  amount in cash or shares of Stock equal in value to the excess
                  of the Fair Market Value of one share of Stock over the option
                  price per share specified in the related Stock Option
                  multiplied by the number of shares with respect to which the
                  Stock Appreciation Right shall have been exercised, with the
                  Committee having the sole and exclusive right to determine the
                  form of payment.

         (c)      Stock Appreciation Rights shall be transferable only when and
                  to the extent that the underlying Stock Option would be
                  transferable under Section 6.5.

         (d)      Upon the exercise of a Stock Appreciation Right, the Stock
                  Option or part thereof to which such Stock Appreciation Right
                  is related shall be deemed to have been exercised for the
                  purpose of the limitation set forth in Section 4 on the number
                  of shares of Stock to be issued under this Plan.

         (e)      A Stock Appreciation Right granted in connection with an
                  Incentive Stock Option may be exercised only if and when the
                  market price of the Stock subject to the Incentive Stock
                  Option exceeds the exercise price of such Stock Option.

         (f)      In its sole discretion, the Committee may provide, at the time
                  of grant of a Stock Appreciation Right under this Section,
                  that such Stock Appreciation Right can be exercised only in
                  the event of a "Change of Control" and/or a "Potential Change
                  of Control" (as defined in Section 14).

         (g)      The Committee, in its sole discretion, may also provide that,
                  in the event of a "Change of Control" and/or a "Potential
                  Change of Control" (as defined in Section 14), the amount to
                  be paid upon the exercise of a Stock Appreciation Right shall
                  be based on the "Change of Control Price" (as defined in
                  Section 14).

9.       RESTRICTED STOCK.

         9.1 Administration. Shares of Restricted Stock may be issued either
alone or in addition to other awards granted under this Plan. The Committee
shall determine the officers and key employees of the Company and its
Subsidiaries and Affiliates to whom, and the time or times at which, grants of
Restricted Stock will be made, the number of shares to be awarded, the price, if
any, to be paid by the recipient of Restricted Stock (subject to Section 9.2,
the time or times within which such awards may be subject to forfeiture, and all
other conditions of the awards. The Committee may also condition the grant of
Restricted Stock upon the attainment of specified performance goals, or such
other criteria as the Committee may determine, in its sole discretion. The
provisions of Restricted Stock awards need not be the same with respect to each
recipient.

                                       10
<PAGE>

         9.2 Awards and Certificates. The prospective recipient of an award of
shares of Restricted Stock shall not have any rights with respect to such award,
unless and until such recipient has executed an agreement evidencing the award
(a "Restricted Stock Award Agreement") and has delivered a fully executed copy
thereof to the Company, and has otherwise complied with the then applicable
terms and conditions.

         (a)      Awards of Restricted Stock must be accepted within a period of
                  90 days (or such shorter period as the Committee may specify)
                  after the award date by executing a Restricted Stock Award
                  Agreement and paying whatever price, if any, is required.

         (b)      Each participant who is awarded Restricted Stock shall be
                  issued a stock certificate with respect to those shares of
                  Restricted Stock. The certificate shall be registered in the
                  name of the participant, and shall bear an appropriate legend
                  referring to the terms, conditions, and restrictions
                  applicable to such award, substantially in the following form:

                  "The transferability of this certificate and the shares of
                  stock represented hereby are subject to the terms and
                  conditions (including forfeiture) of the QMED, INC. 1999
                  Equity Incentive Plan and a Restricted Stock Award Agreement
                  entered into between the registered owner and QMED, INC.
                  Copies of the Plan and the Agreement are on file in the
                  offices of QMED, INC., 100 Metro Park South, 3rd Floor,
                  Laurence Harbor, New Jersey 08878."

         (c)      The Committee shall require that the stock certificates
                  evidencing such shares will be held in custody by the Company
                  until the restrictions thereon shall have lapsed, and that, as
                  a condition of any Restricted Stock award, the participant
                  shall have delivered a stock power to the Company, endorsed in
                  blank, relating to the Stock covered by such award.

                  9.3 Restrictions and Conditions. The shares of Restricted
Stock awarded pursuant to this Section shall be subject to the following
restrictions and conditions:

         (a)      Subject to the provisions of this Plan and the Restricted
                  Stock Award Agreements, during such period as may be set by
                  the Committee commencing on the grant date (the "Restriction
                  Period"), the participant shall not be permitted to sell,
                  transfer, pledge or assign shares of Restricted Stock awarded
                  under this Plan. Within these limits, the Committee may, in
                  its sole discretion, provide for the lapse of such
                  restrictions in installments and may accelerate or waive such
                  restrictions in whole or in part based on performance and/or
                  such other factors as the Committee may determine, in its sole
                  discretion.

         (b)      Except as provided in Section 9.3(a), the participant shall
                  have, with respect to the shares of Restricted Stock, all of
                  the rights of a stockholder of the Company, including the
                  right to receive any dividends. Dividends paid in stock of the
                  Company or stock received in connection with a stock split

                                       11
<PAGE>

                  with respect to Restricted Stock shall be subject to the same
                  restrictions as on such Restricted Stock. Certificates for
                  shares of unrestricted Stock shall be delivered to the
                  participant promptly after, and only after, the period of
                  forfeiture shall expire without forfeiture in respect of such
                  shares of Restricted Stock.

         (c)      Subject to the provisions of the Restricted Stock Award
                  Agreement and this Section, upon the participant's termination
                  of employment for any reason during the Restriction Period,
                  all shares still subject to restriction shall be forfeited by
                  the participant, and the participant shall only receive the
                  amount, if any, paid by the participant for such forfeited
                  Restricted Stock.

         (d)      In the event of special hardship circumstances of a
                  participant whose employment is involuntarily terminated
                  (other than for Cause), the Committee may, in its sole
                  discretion, waive in whole or in part any or all remaining
                  restrictions with respect to such participant's shares of
                  Restricted Stock.

10.      DEFERRED STOCK AWARDS.

         10.1 Administration. Deferred Stock may be awarded either alone or in
addition to other awards granted under this Plan. The Committee shall determine
the officers and key employees of the Company, its Subsidiaries and Affiliates
to whom, and the time or times at which, Deferred Stock shall be awarded, the
number of shares of Deferred Stock to be awarded to any participant, the
duration of the period (the "Deferral Period") during which, and the conditions
under which, receipt of the Stock will be deferred and the terms and conditions
of the award in addition to those set forth in Section 10.2. The Committee may
also condition the grant of Deferred Stock upon the attainment of specified
performance goals, or such other criteria as the Committee shall determine, in
its sole discretion. The provisions of Deferred Stock awards need not be the
same with respect to each recipient.

         10.2 Terms and Conditions. The shares of Deferred Stock awarded
pursuant to this Section shall be subject to the following terms and conditions:

         (a)      Subject to the provisions of this Plan and the award
                  agreement, Deferred Stock awards may not be sold, assigned,
                  transferred, pledged, or otherwise encumbered during the
                  Deferral Period. At the expiration of the Deferral Period (or
                  Elective Deferral Period, where applicable), share
                  certificates shall be delivered to the participant, or his
                  legal representative, in a number equal to the shares covered
                  by the Deferred Stock award.

         (b)      At the time of the award, the Committee may, in its sole
                  discretion, determine that amounts equal to any dividends
                  declared during the Deferral Period with respect to the number
                  of shares covered by a Deferred Stock award will be: (a) paid
                  to the participant currently, (b) deferred and deemed to be
                  reinvested, or (c) forfeited because the participant has no
                  rights with respect thereto.

                                       12
<PAGE>

         (c)      Subject to the provisions of the award agreement and this
                  Section, upon termination of employment for any reason during
                  the Deferral Period for a given award, the Deferred Stock in
                  question including any deferred and reinvested dividends
                  thereon shall be forfeited by the participant.

         (d)      Based on performance and/or such other criteria as the
                  Committee may determine, the Committee may, at or after the
                  grant, accelerate the vesting of all or any part of any
                  Deferred Stock award and/or waive the deferral limitations for
                  all or any part of such award.

         (e)      In the event of special hardship circumstances of a
                  participant whose employment is involuntarily terminated
                  (other than for Cause), the Committee may, in its sole
                  discretion, waive in whole or in part any or all of the
                  remaining deferral limitations imposed hereunder with respect
                  to any or all of the participant's Deferred Stock.

         (f)      A participant may elect to defer further receipt of the award
                  for a specified period or until a specified event (the
                  "Elective Deferral Period"), subject in each case to the
                  Committee's approval and to such terms as are determined by
                  the Committee, all in its sole discretion. Subject to any
                  exceptions adopted by the Committee, such election must be
                  made at least six months prior to the completion of the
                  Deferral Period for a Deferred Stock award (or for an
                  installment of such an award).

         (g)      Each award shall be confirmed by, and subject to the terms of,
                  a Deferred Stock award agreement executed by the Company and
                  the participant.

11.      LOAN PROVISIONS.

         With the consent of the Committee, the Company may make, guarantee, or
arrange for, a loan or loans to an employee with respect to the exercise of any
Stock Option granted under this Plan and/or with respect to the payment of the
purchase price, if any, of any Restricted Stock awarded hereunder and/or with
respect to the payment by optionee of any or all federal and/or state income
taxes due on account of the granting or exercise of any stock option or other
awards hereunder. The Committee shall have full authority to decide whether to
make a loan or loans hereunder and to determine the amount, terms and provisions
of any such loan or loans, including the interest rate to be charged in respect
of any such loan or loans, whether the loan or loans are to be with or without
recourse against the borrower, the terms on which the loan is to be repaid and
the conditions, if any, under which the loan or loans may be forgiven.
Notwithstanding the foregoing, no personal loan or extension of credit may be
made by the Company to directors or Executives in contravention of Section 402
of the Sarbanes-Oxley Act of 2002.

                                       13
<PAGE>

12.      AMENDMENTS AND TERMINATION.

         The Board may amend, alter, or discontinue this Plan, but no amendment,
alteration, or discontinuation shall be made which would impair the right of an
optionee or participant under a Stock Option, Director Stock Option, Stock
Appreciation Right, Restricted Stock or Deferred Stock award theretofore
granted, without the optionee's or participant's consent, or which without the
approval of the stockholders would:

         12.1 Except as expressly provided in this Plan, increase the total
number of shares reserved for the purpose of this Plan;

         12.2 Extend the maximum option period under Section 6.2 or 7.2 of the
Plan.

         The Committee may amend the terms of any award or option (other than
Director Stock Options) theretofore granted, prospectively or retroactively, but
no such amendment shall impair the rights of any holder without his consent. The
Committee may also substitute new Stock Options for previously granted Stock
Options having higher option prices.

13.      UNFUNDED STATUS OF PLAN.

         This Plan is intended to constitute an "unfunded" plan for incentive
and deferred compensation. With respect to any payments not yet made to a
Participant or optionee by the Company, nothing set forth herein shall give any
such participant or optionee any rights that are greater than those of an
unsecured, general creditor of the Company. In its sole discretion, the
Committee may authorize the creation of trusts or other arrangements to meet the
obligations created under this Plan to deliver Stock or payments in lieu of or
with respect to awards hereunder; provided, however, that the existence of such
trusts or other arrangements is consistent with the unfunded status of this
Plan.

14.      CHANGE OF CONTROL.

         The following acceleration and valuation provisions shall apply in the
event of a "Change of Control" or "Potential Change of Control," as defined in
this Section:

         14.1 In the event of a "Change of Control," as defined in Section 14.2,
unless otherwise determined by the Committee or the Board in writing at or after
grant, but prior to the occurrence of the Change of Control, or, if and to the
extent so determined by the Committee or the Board in writing at or after grant
(subject to any right of approval expressly reserved by the Committee or the
Board at the time of such determination) in the event of a "Potential Change of
Control," as defined in Section 14(c):

         (a)      Any Stock Appreciation Rights outstanding for at least six (6)
                  months and any Stock Options awarded under this Plan not
                  previously exercisable and vested shall become fully
                  exercisable and vested;

         (b)      The restrictions and deferral limitations applicable to any
                  Restricted Stock and preferred Stock awards under this Plan
                  shall lapse and such shares and awards shall be deemed fully
                  vested; and

                                       14
<PAGE>

         (c)      All outstanding Stock Options, Stock Appreciation Rights,
                  Restricted Stock and Deferred Stock awards, shall, to the
                  extent determined by the Committee at or after grant, be
                  canceled and the holder thereof shall be paid in cash therefor
                  on the basis of the "Change of Control Price" (as defined in
                  Section 14.4) as of the date that the Change of Control occurs
                  or Potential Change of Control is determined to have occurred,
                  or such other date as the Committee may determine prior to the
                  Change of Control or Potential Change of Control.

         14.2 For Purposes of Section 14.2, a "Change of Control" means the
happening of any of the following:

         (a)      When any "person" as such term is used in Sections 13(d) and
                  14(d) of the Exchange Act (other than the Company, or any
                  Company employee benefit plan, including its trustee) is or
                  becomes the "beneficial owner" (as defined in Rule 13d-3 under
                  the Exchange Act), directly or indirectly of securities of the
                  Company representing 25 percent or more of the combined voting
                  power of the Company's then outstanding securities;

         (b)      The occurrence of any transaction or event relating to the
                  Company required to be described pursuant to the requirements
                  of Item 6(e) of Schedule 14A of Regulation 14A of the
                  Commission under the Exchange Act;

         (c)      The occurrence of a transaction requiring stockholder approval
                  for the acquisition of the company by an entity other than the
                  Company or a Subsidiary, through purchase of assets, or by
                  merger, or otherwise;

         (d)      The dissolution of the Company; or

         (e)      The sale by the Company of substantially all of its assets.

         14.3 For purposes of Section 14.1, a "Potential Change of Control"
means the happening of any of the following:

         (a)      The entering into an agreement by the Company, the
                  consummation of which would result in a Change of Control of
                  the Company as defined in Section 14.2;

         (b)      The public announcement by any person (including the Company)
                  of an intention to take or consider taking actions which, if
                  consummated, would constitute a Change in Control; or

         (c)      The adoption by the Board of Directors of a resolution to the
                  effect that a Potential Change of Control of the Company has
                  occurred for purposes of this Plan.

         14.4 For purposes of this Section, "Change of Control Price" means the
highest price based upon the Fair Market Value per share or the price paid or
offered in any transaction related to a potential or actual Change of Control of

                                       15
<PAGE>

the Company at any time during the preceding sixty day period as determined by
the Committee, except that (i) in the case of Incentive Stock Options and Stock
Appreciation Rights relating to Incentive Stock Options, such price shall be
based only on transactions reported for the date on which the Committee decides
to cash out such options, and (ii) in the case of Director Stock Options, the
sixty day period shall be the period immediately prior to the Change of Control.

15.      GENERAL PROVISIONS.

         15.1 All certificates for shares of Stock delivered under this Plan
shall be subject to such stock transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations, and other
requirements of the Commission or the National Association of Securities
Dealers, Inc., any stock exchange upon which the Stock is then listed, and any
applicable federal or state securities law, and the Committee may cause a legend
or legends to be placed on any such certificates to make appropriate reference
to such restrictions.

         15.2 Nothing set forth in this Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject to stockholder
approval if such approval is required; and such arrangements may be either
generally applicable or applicable only in specific cases. The adoption of this
Plan shall not confer upon any employee of the Company, any Subsidiary or any
Affiliate, any right to continued employment (or, in the case of a director,
continued retention as a director) with the Company, a Subsidiary or an
Affiliate, as the case may be, nor shall it interfere in any way with the right
of the Company, a Subsidiary or an Affiliate to terminate the employment of any
of its employees at any time.

         15.3 Each participant shall, no later than the date as of which the
value of an award first becomes includable in the gross income of the
participant for federal income tax purposes, pay to the Company, or make
arrangements satisfactory to the Committee regarding payment of, any federal,
state, or local taxes of any kind required by law to be withheld with respect to
the award. The obligations of the Company under this Plan shall be conditioned
on such payment or arrangements and the Company (and, where applicable, its
Subsidiaries and Affiliates) shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
participant. If permitted by the Committee, a participant may irrevocably elect
to have the withholding tax obligation or, in the case of all awards hereunder
except Stock Options which have related Stock Appreciation Rights, if the
Committee so determines, any additional tax obligation with respect to awards
hereunder by (a) having the Company withhold shares of Stock otherwise
deliverable to the participant with respect to the award, or (b) delivering to
the Company shares of unrestricted Stock; provided, however, that any such
election shall be made either (i) during one of the "window" periods described
in section (e) (3) (iii) of Rule 16b-3 promulgated under the Exchange Act, or
(ii) at least six months prior to the date income is recognized with respect to
the award.

         15.4 At the time of grant or purchase, the Committee may provide in
connection with any grant or purchase made under this Plan that the shares of
Stock received as a result of such grant or purchase shall be subject to a right
of first refusal, pursuant to which the participant shall be required to offer
to the Company any shares that the participant wishes to sell, with the price
being the then Fair Market Value of the Stock, subject to the provisions of
Section 14 and to such other terms and conditions as the Committee my specify at
the time of grant.

         15.5 No member of the Board or the Committee, nor any officer or
employee of the Company acting on behalf of the Board or the Committee, shall be

                                       16
<PAGE>

personally liable for any action, determination, or interpretation taken or made
in good faith with respect to this Plan, and all members of the Board or the
Committee and each and any officer or employee of the Company acting on their
behalf shall, to the extent permitted by law, be fully indemnified and protected
by the Company with respect to any such action, determination or interpretation.

16.      EFFECTIVE DATE OF PLAN.

         This Plan shall be effective on the date it is approved by a majority
of the votes cast at a duly held shareholders' meeting at which a quorum
representing a majority of all outstanding voting stock is, either in person or
by proxy, present and voting on the Plan.

17.      TERM OF PLAN.

         No Stock Option, Director Stock Option, Stock Appreciation Right,
Restricted Stock or Deferred Stock award shall be granted pursuant to this Plan
on or after September 9, 2009, but awards theretofore granted may extend beyond
that date.

                                       17
<PAGE>

                     CERTIFICATION OF ADOPTION AND AMENDMENT

         I, Herbert H. Sommer, Secretary of Q-MED, INC., hereby certify that the
foregoing is a true and correct copy of the 1999 Equity Incentive Plan of the
Company as:

         (i)      adopted by the Board of Directors of the Company by unanimous
                  consent given on September 10, 1999 and by the Stockholders of
                  the Company at an annual meeting held on October 25, 1999;

         (ii)     amended by the Board of Directors at a meeting held March 6,
                  2002 and by the Stockholders of the Company at our annual
                  meeting held on May 22, 2002; and

         (iii)    amended by a resolution of the Executive Evaluation and
                  Compensation Committee of the Board of Directors on November
                  1, 2002.

         IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
seal of the Company this November 1, 2002.

                                                    /s Herbert H. Sommer
                                                    ----------------------------
                                                    Herbert H. Sommer, Secretary

                                       18QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.3    
    

 
 

IKANOS COMMUNICATIONS, INC.
  
    AMENDED AND RESTATED
  2004 EQUITY INCENTIVE PLAN    
    

        1.    Purposes of the Plan.    The purposes of this Plan are: 

	•
	to
attract and retain the best available personnel for positions of substantial responsibility,

	•
	to
provide additional incentive to Employees, Directors and Consultants, and

	•
	to
promote the success of the Company's business. 

        The
Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Restricted Stock, Stock Appreciation Rights, Deferred Stock Units, Performance Units and Performance
Shares. 

        2.    Definitions.    As used herein, the following definitions will apply: 

        (a)   "Administrator" means the Board or any of its Committees as will be administering the Plan, in accordance with
Section 4 of the Plan. 

        (b)   "Applicable Laws" means the requirements relating to the administration of equity-based awards or equity compensation
programs under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws
of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan. 

        (c)   "Award" means, individually or collectively, a grant under the Plan of Options, SARs, Restricted Stock, Restricted Stock
Units, Deferred Stock Units, Performance Units or Performance Shares. 

        (d)   "Award Agreement" means the written or electronic agreement setting forth the terms and provisions applicable to each
Award granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan. 

        (e)   "Board" means the Board of Directors of the Company. 

        (f)    "Change in Control" means the occurrence of any of the following events: 

        (i)    Any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 of the
Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company's then outstanding voting securities; 

        (ii)   The
consummation of the sale or disposition by the Company of all or substantially all of the Company's assets; 

        (iii)  A
change in the composition of the Board occurring within a two-year period, as a result of which fewer than a majority of the directors are Incumbent
Directors. "Incumbent Directors" means directors who either (A) are Directors as of the effective date of the Plan, or (B) are elected, or
nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but will not include an individual whose
election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company); or 

        (iv)  The
consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its
parent) at least fifty percent (50%) of the total voting power represented by the voting 

 

securities
of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation. 

        (g)   "Code" means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code herein will be a
reference to any successor or amended section of the Code. 

        (h)   "Committee" means a committee of Directors or other individuals satisfying Applicable Laws appointed by the Board in
accordance with Section 4 of the Plan. 

        (i)    "Common Stock" means the common stock of the Company. 

        (j)    "Company" means Ikanos Communications, Inc., a Delaware corporation, or any successor thereto. 

        (k)   "Consultant" means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services
to such entity. 

        (l)    "Deferred Stock Unit" means an Award that the Administrator permits to be paid in installments or on a deferred basis
pursuant to Sections 4 and 11 of the Plan. 

        (m)  "Director" means a member of the Board. 

        (n)   "Disability" means total and permanent disability as defined in Section 22(e)(3) of the Code, provided that in the
case of Awards other than Incentive Stock Options, the Administrator in its
discretion may determine whether a permanent and total disability exists in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time. 

        (o)   "Employee" means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the
Company. Neither service as a Director nor payment of a director's fee by the Company will be sufficient to constitute "employment" by the Company. 

        (p)   "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

        (q)   "Exchange Program" means a program under which (i) outstanding Awards are surrendered or cancelled in exchange for
Awards of the same type (which may have lower exercise prices and different terms), Awards of a different type, or cash, or (ii) the exercise price of an outstanding Award is reduced. The
Administrator, in its sole discretion, will determine the terms and conditions of any Exchange Program. 

        (r)   "Fair Market Value" means, as of any date, the value of Common Stock determined as follows: 

          (i)  If
the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq
SmallCap Market of The Nasdaq Stock Market, its Fair Market Value will be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on
the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; 

         (ii)  If
the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock will be
the mean between the high bid and low asked prices for the Common Stock on the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable; 

        (iii)  For
purposes of any Awards granted on the Registration Date, the Fair Market Value will be the initial price to the public as set forth in the final prospectus
included within the 

2

 

registration
statement in Form S-1 filed with the Securities and Exchange Commission for the initial public offering of the Company's Common Stock; or 

        (iv)  In
the absence of an established market for the Common Stock, the Fair Market Value will be determined in good faith by the Administrator. 

        (s)   "Incentive Stock Option" means an Option that by its terms qualifies and is otherwise intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder. 

        (t)    "Inside Director" means a Director who is an Employee. 

        (u)   "Nonstatutory Stock Option" means an Option that by its terms does not qualify or is not intended to qualify as an
Incentive Stock Option. 

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

        (w)  "Option" means a stock option granted pursuant to the Plan. 

        (x)   "Outside Director" means a Director who is not an Employee. 

        (y)   "Parent" means a "parent corporation," whether now or hereafter existing, as defined in Section 424(e) of the
Code. 

        (z)   "Participant" means the holder of an outstanding Award. 

        (aa) "Performance Share" means an Award denominated in Shares which may be earned in whole or in part upon attainment of
performance goals or other vesting criteria as the Administrator may determine pursuant to Section 10. 

        (bb) "Performance Unit" means an Award which may be earned in whole or in part upon attainment of performance goals or other
vesting criteria as the Administrator may determine and which may be settled for cash, Shares or other securities or a combination of the foregoing pursuant to Section 10. 

        (cc) "Period of Restriction" means the period during which the transfer of Shares of Restricted Stock are subject to
restrictions and therefore the Shares are subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of target levels of performance, or the
occurrence of other events as determined by the Administrator. 

        (dd) "Plan" means this 2004 Equity Incentive Plan. 

        (ee) "Registration Date" means the effective date of the first registration statement that is filed by the Company and
declared effective pursuant to Section 12(g) of the Exchange Act, with respect to any class of the Company's securities. 

        (ff)  "Restricted Stock" means shares of Common Stock issued pursuant to a Restricted Stock award under Section 7 of
the Plan or issued pursuant to the early exercise of an Option. 

        (gg) "Restricted Stock Unit" means a bookkeeping entry representing an amount equal to the Fair Market Value of one Share,
granted pursuant to Section 8. Each Restricted Stock Unit represents an unfunded and unsecured obligation of the Company. 

        (hh) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor to
Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan. 

        (ii)   "Section 16(b)" means Section 16(b) of the Exchange Act. 

        (jj)   "Service Provider" means an Employee, Director or Consultant. 

3

 

        (kk) "Share" means a share of the Common Stock, as adjusted in accordance with Section 15 of the Plan. 

        (ll)   "Stock Appreciation Right" or "SAR" means an Award, granted alone or in
connection with an Option, that pursuant to Section 9 is designated as a SAR. 

        (mm) "Subsidiary" means a "subsidiary corporation," whether now or hereafter existing, as defined in Section 424(f) of
the Code. 

        3.    Stock Subject to the Plan.    

        (a)    Stock Subject to the Plan.    Subject to the provisions of Section 15 of the Plan, the maximum aggregate
number of Shares that may be optioned and sold under the Plan is (i) the number of Shares which have been reserved but not issued under the Company's 1999 Stock Plan (the
"1999 Plan") as of the Registration Date, (ii) any Shares returned to the 1999 Plan as a result of termination of options or repurchase of Shares
issued under such plan on or following the Registration Date, and (iii) an annual increase to be added on the first day of the Company's fiscal year beginning in 2006, equal to the least of
(A) 4.4% of the outstanding Shares on such date, (B) 3,000,000 Shares, or (C) an amount determined by the Board. The Shares may be authorized, but unissued, or reacquired Common
Stock. 

        (b)    Lapsed Awards.    If an Award expires or becomes unexercisable without having been exercised in full, is
surrendered pursuant to an Exchange Program, or, with respect to Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units, is forfeited to or repurchased by the Company, the
unpurchased Shares (or for Awards other than Options and SARs, the forfeited or repurchased Shares) which were subject thereto will become available for future grant or sale under the Plan (unless the
Plan has terminated). With respect to SARs, only Shares actually issued pursuant to an SAR will cease to be available under the Plan; all remaining Shares under SARs will remain available for future
grant or sale under the Plan (unless the Plan has terminated). However, Shares that have actually been issued under the Plan under any Award will not be returned to the Plan and will not become
available for future distribution under the Plan; provided, however, that if Shares of Restricted Stock, Performance Shares or Performance Units are repurchased by the Company or are forfeited to the
Company, such Shares will become available for future grant under the Plan. Shares used to pay the tax and/or exercise price of an Award will become available for future grant or sale under the Plan.
To the extent an Award under the Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the number of Shares available for issuance under the Plan. Notwithstanding
the foregoing and, subject to adjustment provided in Section 15, the maximum number of Shares that may be issued upon the exercise of Incentive Stock Options shall equal the aggregate Share
number stated in Section 3(a), plus, to the extent allowable under Section 422 of the Code, any Shares that become available for issuance under the Plan under this Section 3(b). 

        (c)    Share Reserve.    The Company, during the term of this Plan, will at all times reserve and keep available such
number of Shares as will be sufficient to satisfy the requirements of the Plan. 

        4.    Administration of the Plan.    

        (a)    Procedure.    

        (i)    Multiple Administrative Bodies.    Different Committees with respect to different groups of Service Providers
may administer the Plan. 

        (ii)    Section 162(m).    To the extent that the Administrator determines it to be necessary or desirable to
qualify Awards granted hereunder as "performance-based compensation" within the meaning of Section 162(m) of the Code, the Plan will be administered by a 

4

 

Committee
of two or more "outside directors" within the meaning of Section 162(m) of the Code. 

        (iii)    Rule 16b-3.    To the extent desirable to qualify transactions hereunder as exempt under
Rule 16b-3, the transactions contemplated hereunder will be structured to satisfy the requirements for exemption under Rule 16b-3. 

        (iv)    Other Administration.    Other than as provided above, the Plan will be administered by (A) the Board
or (B) a Committee, which committee will be constituted to satisfy Applicable Laws. 

        (v)    Delegation of Authority for Day-to-Day Administration.    Except to the extent
prohibited by Applicable Law, the Administrator may delegate to one or more individuals the day-to-day administration of the Plan and any of the functions assigned to it under
the Plan. Such delegation may be revoked at any time. The Administrator may not delegate authority with respect to Awards intended to qualify as "performance-based compensation" within the meaning of
Section 162(m) of the Code. 

        (b)    Powers of the Administrator.    Subject to the provisions of the Plan, and in the case of a Committee, subject
to the specific duties delegated by the Board to such Committee, the Administrator will have the authority, in its discretion: 

        (i)    to
determine the Fair Market Value; 

        (ii)   to
select the Service Providers to whom Awards may be granted hereunder; 

        (iii)  to
determine the number of Shares to be covered by each Award granted hereunder; 

        (iv)  to
approve forms of agreement for use under the Plan; 

        (v)   to
determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions include, but are not
limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture or repurchase
restrictions, and any restriction or limitation regarding any Award or the Shares relating thereto, based in each case on such factors as the Administrator, in its sole discretion, will determine; 

        (vi)  to
reduce the exercise price of any Award to the then current Fair Market Value if the Fair Market Value of Common Stock covered by such Award shall have declined since
the date the Award was granted; 

        (vii) to
institute an Exchange Program; 

        (viii) to
construe and interpret the terms of the Plan and Awards granted pursuant to the Plan; 

        (ix)  to
prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the
purpose of satisfying applicable foreign laws (including qualifying for preferred tax treatment under applicable foreign tax laws); 

        (x)   to
modify or amend each Award (subject to Section 20(c) of the Plan), including the discretionary authority to extend the post-termination
exercisability period of Awards longer than is otherwise provided for in the Plan; 

        (xi)  to
allow Participants to satisfy withholding tax obligations in such manner as prescribed in Section 16; 

        (xii) to
authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator; 

5

 

        (xiii) to
allow a Participant to defer the receipt of the payment of cash or the delivery of Shares that would otherwise be due to such Participant under an Award; 

        (xiv) to
determine whether Awards will be settled in Shares, cash, or in any combination thereof; and 

        (xv) to
make all other determinations deemed necessary or advisable for administering the Plan. 

        (c)    Effect of Administrator's Decision.    The Administrator's decisions, determinations and interpretations will
be final and binding on all Participants and any other holders of Awards. 

        5.    Eligibility.    Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights,
Deferred Stock Units, Performance Units and Performance Shares may be granted to Service Providers. Incentive Stock Options may be granted only to Employees. 

        6.    Stock Options.    

        (a)    Limitations.    Each Option will be designated in the Award Agreement as either an Incentive Stock Option or a
Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for
the first time by the Participant during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such Options will be treated as Nonstatutory Stock Options.
For purposes of this Section 6(a), Incentive Stock Options will be taken into account in the order in which they were granted. The Fair Market Value of the Shares will be determined as of the
time the Option with respect to such Shares is granted. 

        (b)    Term of Option.    The term of each Option will be stated in the Award Agreement. In the case of an Incentive
Stock Option, the term will be ten (10) years from the date of grant or such shorter term as may be provided in the Award Agreement. Moreover, in the case of an Incentive Stock Option granted
to a Participant who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company
or any Parent or Subsidiary, the term of the Incentive Stock Option will be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement. 

        (c)    Option Exercise Price and Consideration.    

        (i)    Exercise Price.    The per Share exercise price for the Shares to be issued pursuant to exercise of an Option
will be determined by the Administrator, subject to the following: 

        (1)   In
the case of an Incentive Stock Option 

        a)    granted
to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the per Share exercise price will be no less than 110% of the Fair Market Value per Share on the date of grant. 

        b)    granted
to any Employee other than an Employee described in paragraph (A) immediately above, the per Share exercise price will be no less than 100% of the Fair
Market Value per Share on the date of grant. 

        c)     Notwithstanding
the foregoing, Incentive Stock Options may be granted with a per Share exercise price of less than 100% of the Fair Market Value per Share on 

6

 

the
date of grant pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code. 

        (2)   In
the case of a Nonstatutory Stock Option, the per Share exercise price will be determined by the Administrator. In the case of a Nonstatutory Stock Option intended to
qualify as "performance-based compensation" within the meaning of Section 162(m) of the Code, the per Share exercise price will be no less than 100% of the Fair Market Value per Share on the
date of grant. 

        (ii)    Waiting Period and Exercise Dates.    At the time an Option is granted, the Administrator will fix the period
within which the Option may be exercised and will determine any conditions that must be satisfied before the Option may be exercised. 

        (iii)    Form of Consideration.    The Administrator will determine the acceptable form of consideration for
exercising an Option, including the method of payment. In the case of an Incentive Stock Option, the Administrator will determine the acceptable form of consideration at the time of grant. Such
consideration, to the extent permitted by Applicable Law, may consist entirely of: (1) cash; (2) check; (3) promissory note; (4) other Shares that meet conditions
established by the Administrator to avoid averse accounting consequences (as determined by the Administrator); (5) consideration received by the Company under a cashless exercise program
implemented by the Company in connection with the Plan;
(6) a reduction in the amount of any Company liability to the Participant, including any liability attributable to the Participant's participation in any Company-sponsored deferred compensation
program or arrangement; (7) any combination of the foregoing methods of payment; or (8) such other consideration and method of payment for the issuance of Shares to the extent permitted
by Applicable Laws. 

        (d)    Exercise of Option.    

        (i)    Procedure for Exercise; Rights as a Stockholder.    Any Option granted hereunder will be exercisable according
to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option may not be exercised for a fraction of a Share. 

An
Option will be deemed exercised when the Company receives: (x) notice of exercise (in such form as the Administrator specify from time to time) from the person entitled to exercise the
Option, and (y) full payment for the Shares with respect to which the Option is exercised (together with any applicable withholding taxes). Full payment may consist of any consideration and
method of payment authorized by the Administrator and permitted by the Award Agreement and the Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant or, if
requested by the Participant, in the name of the Participant and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder will exist with respect to the Awarded Stock, notwithstanding the exercise of the
Option. The Company will issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior
to the date the Shares are issued, except as provided in Section 15 of the Plan or the applicable Award Agreement. 

Exercising
an Option in any manner will decrease the number of Shares thereafter available under the Option by the number of Shares as to which the Option is exercised. 

        (ii)    Termination of Relationship as a Service Provider.    If a Participant ceases to be a Service Provider, other
than upon the Participant's death or Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement 

7

 

to
the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a
specified time in the Award Agreement, the Option will remain exercisable for three (3) months following the Participant's termination. Unless otherwise provided by the Administrator, if on the
date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant
does not exercise his or her Option within the time specified by the Administrator, the Option will terminate, and the Shares covered by such Option will revert to the Plan. 

        (iii)    Disability of Participant.    If a Participant ceases to be a Service Provider as a result of the
Participant's Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option will remain
exercisable for twelve (12) months following the Participant's termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his
or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time
specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan. 

        (iv)    Death of Participant.    If a Participant dies while a Service Provider, the Option may be exercised following
the Participant's death within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of death (but in no event may the option be exercised
later than the expiration of the term of such Option as set forth in the Award Agreement), by the Participant's designated beneficiary, provided such beneficiary has been designated prior to the
Participant's death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Participant, then such Option may be exercised by the personal representative of the
Participant's estate or by the person(s) to whom the Option is transferred pursuant to the Participant's will or in accordance with the laws of descent and distribution. In the absence of a specified
time in the Award Agreement, the Option will remain exercisable for twelve (12) months following the Participant's death. Unless otherwise provided by the Administrator, if at the time of death
the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will immediately revert to the Plan. If the Option is not so exercised within the
time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan. 

        7.    Restricted Stock.    

        (a)    Grant of Restricted Stock.    Subject to the terms and provisions of the Plan, the Administrator, at any time
and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine. 

        (b)    Restricted Stock Agreement.    Each Award of Restricted Stock will be evidenced by an Award Agreement that will
specify the Period of Restriction, the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine. Unless the Administrator determines
otherwise, Shares of Restricted Stock will be held by the Company as escrow agent until the restrictions on such Shares have lapsed. 

        (c)    Transferability.    Except as provided in this Section 7, Shares of Restricted Stock may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction. 

8

  

        (d)    Other Restrictions.    The Administrator, in its sole discretion, may impose such other restrictions on Shares
of Restricted Stock as it may deem advisable or appropriate. 

        (e)    Removal of Restrictions.    Except as otherwise provided in this Section 7, Shares of Restricted Stock
covered by each Restricted Stock grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction. The Administrator, in its discretion,
may accelerate the time at which any restrictions will lapse or be removed. 

        (f)    Voting Rights.    During the Period of Restriction, Service Providers holding Shares of Restricted Stock
granted hereunder may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise. 

        (g)    Dividends and Other Distributions.    During the Period of Restriction, Service Providers holding Shares of
Restricted Stock will be entitled to receive all dividends and other distributions paid with respect to such Shares unless otherwise provided in the Award Agreement. If any such dividends or
distributions are paid in Shares, the Shares will be subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid. 

        (h)    Return of Restricted Stock to Company.    On the date set forth in the Award Agreement, the Restricted Stock
for which restrictions have not lapsed will revert to the Company and again will become available for grant under the Plan. 

        8.    Restricted Stock Units.    

        (a)    Grant.    Restricted Stock Units may be granted at any time and from time to time as determined by the
Administrator. After the Administrator determines that it will grant Restricted Stock Units under the Plan, it shall advise the Participant in an Award Agreement of the terms, conditions, and
restrictions related to the grant, including the number of Restricted Stock Units and the form of payout, which, subject to Section 8(d), may be left to the discretion of the Administrator. 

        (b)    Vesting Criteria and Other Terms.    The Administrator shall set vesting criteria in its discretion, which,
depending on the extent to which the criteria are met, will determine the number of Restricted Stock
Units that will be paid out to the Participant. The Administrator may set vesting criteria based upon the achievement of Company-wide, business unit, or individual goals (including, but
not limited to, continued employment), or any other basis determined by the Administrator in its discretion. 

        (c)    Earning Restricted Stock Units.    Upon meeting the applicable vesting criteria, the Participant shall be
entitled to receive a payout as specified in the Restricted Stock Unit Award Agreement. Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the Administrator, in its
sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout. 

        (d)    Form and Timing of Payment.    Payment of earned Restricted Stock Units shall be made as soon as practicable
after the date(s) set forth in the Restricted Stock Unit Award Agreement. The Administrator, in its sole discretion, may pay earned Restricted Stock Units in cash, Shares, or a combination thereof.
Shares represented by Restricted Stock Units that are fully paid in cash again shall be available for grant under the Plan. 

        (e)    Cancellation.    On the date set forth in the Restricted Stock Unit Award Agreement, all unearned Restricted
Stock Units shall be forfeited to the Company. 

        9.    Stock Appreciation Rights.    

        (a)    Grant of SARs.    Subject to the terms and conditions of the Plan, a SAR may be granted to Service Providers at
any time and from time to time as will be determined by the Administrator, in its sole discretion. 

9

 

        (b)    Number of Shares.    The Administrator will have complete discretion to determine the number of SARs granted to
any Service Provider. 

        (c)    Exercise Price and Other Terms.    The Administrator, subject to the provisions of the Plan, will have complete
discretion to determine the terms and conditions of SARs granted under the Plan. 

        (d)    Exercise of SARs.    SARs will be exercisable on such terms and conditions as the Administrator, in its sole
discretion, will determine. 

        (e)    SAR Agreement.    Each SAR grant will be evidenced by an Award Agreement that will specify the exercise price,
the term of the SAR, the conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, will determine. 

        (f)    Expiration of SARs.    An SAR granted under the Plan will expire upon the date determined by the Administrator,
in its sole discretion, and set forth in the Award Agreement. Notwithstanding the foregoing, the rules of Section 6(d) also will apply to SARs. 

        (g)    Payment of SAR Amount.    Upon exercise of an SAR, a Participant will be entitled to receive payment from the
Company in an amount determined by multiplying: 

          (i)  The
difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times 

         (ii)  The
number of Shares with respect to which the SAR is exercised. 

        At
the discretion of the Administrator, the payment upon SAR exercise may be in cash, in Shares of equivalent value, or in some combination thereof. 

        10.    Performance Units and Performance Shares.    

        (a)    Grant of Performance Units/Shares.    Subject to the terms and conditions of the Plan, Performance Units and
Performance Shares may be granted to Service Providers at any time and from time to time, as will be determined by the Administrator, in its sole discretion. The Administrator will have complete
discretion in determining the number of Performance Units and Performance Shares granted to each Participant. 

        (b)    Value of Performance Units/Shares.    Each Performance Unit will have an initial value that is established by
the Administrator on or before the date of grant. Each Performance Share will have an initial value equal to the Fair Market Value of a Share on the date of grant. 

        (c)    Performance Objectives and Other Terms.    The Administrator will set performance objectives or other vesting
provisions (including, without limitation, continued status as a Service Provider) in its discretion which, depending on the extent to which they are met, will determine the number or value of
Performance Units/Shares that will be paid out to the Service Providers. The time period during which the performance objectives or other vesting provisions must be met will be called the
"Performance Period." Each Award of Performance Units/Shares will be evidenced by an Award Agreement that will specify the Performance Period, and such
other terms and conditions as the Administrator, in its sole discretion, will determine. The Administrator may set performance objectives based upon the achievement of Company-wide,
divisional, or individual goals (including solely continued service), applicable federal or state securities laws, or any other basis determined by the Administrator in its discretion. 

        (d)    Earning of Performance Units/Shares.    After the applicable Performance Period has ended, the holder of
Performance Units/Shares will be entitled to receive a payout of the number of Performance Units/Shares earned by the Participant over the Performance Period, to be determined as a function of the
extent to which the corresponding performance objectives or other vesting provisions have been achieved. After the grant of a Performance Unit/Share, the Administrator, in its sole discretion, may 

10

 

reduce
or waive any performance objectives or other vesting provisions for such Performance Unit/Share. 

        (e)    Form and Timing of Payment of Performance Units/Shares.    Payment of earned Performance Units/Shares will be
made after the expiration of the applicable Performance Period at the time determined by the Administrator. The Administrator, in its sole discretion, may pay earned Performance Units/Shares in the
form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned Performance Units/Shares at the close of the applicable Performance Period) or in a combination
thereof. 

        (f)    Cancellation of Performance Units/Shares.    On the date set forth in the Award Agreement, all unearned or
unvested Performance Units/Shares will be forfeited to the Company, and again will be available for grant under the Plan. 

        11.    Deferred Stock Units.    Deferred Stock Units shall consist of a Restricted Stock, Restricted Stock Units,
Performance Share or Performance Unit Award that the Administrator, in its sole discretion permits to be paid out in installments or on a deferred basis, in accordance with rules and procedures
established by the Administrator. Deferred Stock Units may be settled, at the discretion of the Administrator, in cash, Shares, or any combination thereof. 

        12.    Formula Option Grants to Outside Directors.    All grants of Options to Outside Directors pursuant to this
Section will be automatic and nondiscretionary, except as otherwise provided herein, and will be made in accordance with the following provisions: 

        (a)    Type of Option.    All Options granted pursuant to this Section will be Nonstatutory Stock Options and, except
as otherwise provided herein, will be subject to the other terms and conditions of the Plan. 

        (b)    No Discretion.    No person will have any discretion to select which Outside Directors will be granted Options
under this Section or to determine the number of Shares to be covered by such Options (except as provided in Sections 12(g) and 15). 

        (c)    First Option.    Each person who first becomes an Outside Director following the Registration Date will be
automatically granted an Option to purchase 30,000 Shares (the "First Option") on or about the date on which such person first becomes an Outside
Director, whether through election by the stockholders of the Company or appointment by the Board to fill a vacancy; provided, however, that an Inside Director who ceases to be an Inside Director, but
who remains a Director, will not receive a First Option. 

        (d)    Subsequent Option.    Each Outside Director will be automatically granted an Option to purchase 12,000 Shares
(a "Subsequent Option") on each date of the annual meeting of the stockholders of the Company beginning in 2006, if as of such date, he or she will have
served on the Board for at least the preceding six (6) months. 

        (e)    Terms.    The terms of each Option granted pursuant to this Section will be as follows: 

          (i)  The
term of the Option will be ten (10) years. 

         (ii)  The
exercise price per Share will be 100% of the Fair Market Value per Share on the date of grant of the Option. 

        (iii)  Subject
to Section 15, the First Option will vest and become exercisable as to 25% of the Shares on the first anniversary of the date of grant and as to
1/48th of the Shares each month thereafter, provided that the Participant continues to serve as a Director through each such date. 

11

 

        (iv)  Subject
to Section 15, the Subsequent Option will vest and become exercisable as to 1/12th of the shares each month following the
date of grant, provided that the Participant continues to serve as a Director through such date. 

        (f)    Exercise of Options.    The rules of Sections 6(d) also will apply to Options granted pursuant to this
Section 12. To the extent that the Participant was not entitled to exercise an Option on the date of termination, or if he or she does not exercise an Option (to the extent otherwise so
entitled) granted pursuant to this Section 12 within the time specified in the applicable Award Agreement, the Option shall terminate. 

        (g)    Adjustments.    The Administrator in its discretion may change and otherwise revise the terms of Options
granted under this Section 12, including, without limitation, the number of Shares and exercise prices thereof, for Options granted on or after the date the Administrator determines to make any
such change or revision. 

        13.    Leaves of Absence.    Unless the Administrator provides otherwise, vesting of Awards granted hereunder will be
suspended during any unpaid leave of absence. A Service Provider will not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers
between locations of the Company or between the Company, its Parent, or any Subsidiary. For purposes of Incentive Stock Options, no such leave may exceed ninety (90) days, unless reemployment
upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then three months following the
91st day of such leave any Incentive Stock Option held by the Participant will cease to be treated as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory
Stock Option. 

        14.    Transferability of Awards.    Unless determined otherwise by the Administrator, an Award may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Participant,
only by the Participant. If the Administrator makes an Award transferable, such Award will contain such additional terms and conditions as the Administrator deems appropriate. 

        15.    Adjustments; Dissolution or Liquidation; Merger or Change in Control.    

        (a)    Adjustments.    In the event that any dividend or other distribution (whether in the form of cash, Shares,
other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or
exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs such that the Administrator (in its sole discretion)
determines an adjustment is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Administrator shall, in
such manner as it may deem equitable, adjust the number and class of Shares that may be delivered under the Plan and the number, class, and price of Shares covered by each outstanding
Award, the numerical Share limits in Section 3 of the Plan and the number of Shares issuable pursuant to Options to be granted under Section 12. 

        (b)    Dissolution or Liquidation.    In the event of the proposed dissolution or liquidation of the Company, the
Administrator will notify each Participant as soon as practicable prior to the effective date of such proposed transaction. The Administrator in its discretion may provide for a Participant to have
the right to exercise his or her Award, to the extent applicable, until ten (10) days prior to such transaction as to all of the Awarded Stock covered thereby, including Shares as to which the
Award would not otherwise be exercisable. In addition, the Administrator may provide that any Company repurchase option or forfeiture rights applicable to any Award shall lapse 100%, and that any
Award vesting shall accelerate 100%, provided the proposed dissolution or liquidation takes place at the time 

12

 

and
in the manner contemplated. To the extent an Award has not been previously exercised or settled, the Award will terminate immediately prior to the consummation of such proposed action. 

        (c)    Change in Control.    

          (i)  Stock Options and SARS.    In the event of a merger or Change in Control, each outstanding Option and SAR
shall be assumed or an equivalent option or SAR substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. Unless determined otherwise by the Administrator, in
the event that the successor corporation refuses to assume or substitute for the Option or SAR, the Participant shall fully vest in and have the right to exercise the Option or SAR as to all of the
Awarded Stock, including Shares as to which the Award would not otherwise be vested or exercisable. If an Option or SAR is not assumed or substituted in the event of a merger or Change in Control, the
Administrator shall notify the Participant in writing or electronically that the Option or SAR shall be exercisable, to the extent vested, for a period from the date of such notice as the
Administrator may determine, and the Option or SAR shall terminate upon the expiration of such period. For the purposes of this paragraph, the Option or SAR shall be considered assumed if, following
the merger or Change in Control, the option or stock appreciation right confers the right to purchase or receive, for each Share of Awarded Stock subject to the Option or SAR immediately prior to the
merger or Change in Control, the consideration (whether stock, cash, or other securities or property) received in the merger or Change in Control by holders of Common Stock for each Share held on the
effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however,
that if such consideration received in the merger or Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor
corporation, provide for the consideration to be received upon the exercise of the Option or SAR, for each Share of Awarded Stock subject to the Option or SAR, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or Change in Control. Notwithstanding anything herein to
the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more performance goals will not be considered assumed if the Company or its successor modifies any
of such performance goals without the Participant's consent; provided, however, a modification to such performance goals only to
reflect the successor corporation's post-merger or post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption. 

         (ii)  Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units, and Deferred Stock
Units.    In the event of a merger or Change in Control, each outstanding Award of Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units,
and Deferred Stock Units shall be assumed or an equivalent Restricted Stock, Restricted Stock Unit, Performance Share, Performance Unit, or Deferred Stock Unit award substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. Unless determined otherwise by the Administrator, in the event that the successor corporation refuses to assume or substitute for
the Award, the Participant shall fully vest in the Award including as to Shares or amounts which would not otherwise be vested or earned. For the purposes of this paragraph, a Restricted Stock,
Restricted Stock Unit, Performance Share, Performance Unit, and Deferred Stock Unit award shall be considered assumed if, following the merger or Change in Control, the Award confers the right to
purchase or receive, for each Share subject to the Award immediately prior to the merger or Change in Control, the consideration (whether stock, cash, or other securities or property) or, in the case
of a Stock Appreciation Right upon the exercise of which the Administrator determines to pay cash or a Restricted Stock Unit, Performance Share or Performance Unit which the Administrator can
determine to pay in cash, the fair market value of received in the merger or 

13

 

Change
in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by
the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or Change in Control is not solely common stock of the successor corporation
or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received, for each Share and each unit/right to acquire a Share subject to the
Award (or in the case of Restricted Stock Units and Performance Units, the number of implied Shares determined by dividing the value of the Restricted Stock Units and Performance Units, as applicable,
by the per Share consideration received by holders of Common Stock in the Change in Control), to be solely common stock of the successor corporation or its Parent equal in fair market value to the per
share consideration received by holders of Common Stock in the merger or Change in Control. Notwithstanding anything herein to the contrary, an Award that vests, is earned or paid-out upon
the satisfaction of one or more performance goals will not be considered assumed if the Company or its successor modifies any of such performance goals without the Participant's consent; provided,
however, a modification to such performance goals only to reflect the successor corporation's post-merger or post-Change in Control corporate structure will not be deemed to
invalidate an otherwise valid Award assumption. 

        (iii)  Outside Director Awards.    Notwithstanding any provision of Section 15(c)(i) or 15(c)(ii) to the
contrary, with respect to Awards granted to an Outside Director that are assumed or substituted for, if on the date of or following such assumption or substitution the Participant's status as a
Director or a director of the successor corporation, as applicable, is terminated other than upon a voluntary resignation by the Participant, then the Participant will fully vest in and have the right
to exercise his or her Options and Stock Appreciation Rights as to all of the Awarded Stock, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on
Restricted Stock, Restricted Stock Units and Deferred Stock Units, as applicable, will lapse, and, with respect to
Performance Shares and Performance Units (and related Deferred Stock Units), all performance goals or other vesting criteria will be deemed achieved at target levels and all other terms and conditions
met. 

        16.    Tax Withholding.    

        (a)    Withholding Requirements.    Prior to the delivery of any Shares or cash pursuant to an Award (or exercise
thereof), the Company will have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, local, foreign or other
taxes (including the Participant's FICA obligation) required to be withheld with respect to such Award (or exercise thereof). 

        (b)    Withholding Arrangements.    The Administrator, in its sole discretion and pursuant to such procedures as it
may specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part by (without limitation) (a) paying cash, (b) electing to have the
Company withhold otherwise deliverable cash or Shares having a Fair Market Value equal to the minimum amount required to be withheld, or (c) delivering to the Company already-owned Shares
having a Fair Market Value equal to the minimum amount required to be withheld. The amount of the withholding requirement will be deemed to include any amount which the Administrator agrees may be
withheld at the time the election is made, not to exceed the amount determined by using the maximum federal, state or local marginal income tax rates applicable to the Participant with respect to the
Award on the date that the amount of tax to be withheld is to be determined. The Fair Market Value of the Shares to be withheld or delivered will be determined as of the date that the taxes are
required to be withheld. 

        17.    No Effect on Employment or Service.    Neither the Plan nor any Award will confer upon a Participant any right
with respect to continuing the Participant's relationship as a Service Provider with 

14

 

the
Company, nor will they interfere in any way with the Participant's right or the Company's right to terminate such relationship at any time, with or without cause, to the extent permitted by
Applicable Laws. 

        18.    Date of Grant.    The date of grant of an Award will be, for all purposes, the date on which the Administrator
makes the determination granting such Award, or such other later date as is determined by the Administrator. Notice of the determination will be provided to each Participant within a reasonable time
after the date of such grant. 

        19.    Term of Plan.    Subject to Section 23 of the Plan, the Plan will become effective upon its adoption by
the Board. It will continue in effect for a term of ten (10) years unless terminated earlier under Section 20 of the Plan. 

        20.    Amendment and Termination of the Plan.    

        (a)    Amendment and Termination.    The Board may at any time amend, alter, suspend or terminate the Plan. 

        (b)    Stockholder Approval.    The Company will obtain stockholder approval of any Plan amendment to the extent
necessary and desirable to comply with Applicable Laws. 

        (c)    Effect of Amendment or Termination.    No amendment, alteration, suspension or termination of the Plan will
impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company.
Termination of the Plan will not affect the Administrator's ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination. 

        21.    Conditions Upon Issuance of Shares.    

        (a)    Legal Compliance.    Shares will not be issued pursuant to the exercise of an Award unless the exercise of such
Award and the issuance and delivery of such Shares will comply with Applicable Laws and will be further subject to the approval of counsel for the Company with respect to such compliance. 

        (b)    Investment Representations.    As a condition to the exercise, receipt, or settlement of an Award, the Company
may require the person exercising or receiving such Award or settlement to represent and warrant at the time of any such exercise or receipt that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required. 

        22.    Inability to Obtain Authority.    The inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, will relieve the Company of any liability in respect of
the failure to issue or sell such Shares as to which such requisite authority will not have been obtained. 

        23.    Stockholder Approval.    The Plan will be subject to approval by the stockholders of the Company within
twelve (12) months after the date the Plan is adopted. Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws. 

15

QuickLinks

Exhibit 10.3

IKANOS COMMUNICATIONS, INC. AMENDED AND RESTATED 2004 EQUITY INCENTIVE PLAN

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}]]