Document:

Form of 2000 Stock Plan, as amended

 Exhibit 4.3 
  
 SUNRISE TELECOM INCORPORATED 
  

2000 STOCK PLAN 
  
 EFFECTIVE AS OF JULY 12, 2000 
  
 AND AMENDED MAY     , 2005 

 TABLE OF CONTENTS 
  

							
	 	 	 	  	 	  	Page

	 SECTION 1.
	 	 	  	INTRODUCTION	  	1
				
	 SECTION 2.
	 	 	  	DEFINITIONS	  	1
				
	 	 	 (a)
	  	“Affiliate”	  	1
	 	 	 (b)
	  	“Award”	  	1
	 	 	 (c)
	  	“Board”	  	1
	 	 	 (d)
	  	“Change In Control”	  	1
	 	 	 (e)
	  	“Code”	  	2
	 	 	 (f)
	  	“Committee”	  	2
	 	 	 (g)
	  	“Common Stock”	  	2
	 	 	 (h)
	  	“Company”	  	2
	 	 	 (i)
	  	“Consultant”	  	3
	 	 	 (j)
	  	“Director”	  	3
	 	 	 (k)
	  	“Disability”	  	3
	 	 	 (l)
	  	“Employee”	  	3
	 	 	 (m)
	  	“Exchange Act”	  	3
	 	 	 (n)
	  	“Exercise Price”	  	3
	 	 	 (o)
	  	“Fair Market Value”	  	3
	 	 	 (p)
	  	“Grant”	  	3
	 	 	 (q)
	  	“Incentive Stock Option” or “ISO”	  	3
	 	 	 (r)
	  	“Key Employee”	  	4
	 	 	 (s)
	  	“Non-Employee Director”	  	4
	 	 	 (t)
	  	“Nonstatutory Stock Option” or “NSO”	  	4
	 	 	 (u)
	  	“Option”	  	4
	 	 	 (v)
	  	“Optionee”	  	4
	 	 	 (w)
	  	“Parent”	  	4
	 	 	 (x)
	  	“Participant”	  	4
	 	 	 (y)
	  	“Plan”	  	4
	 	 	 (z)
	  	“Restricted Stock”	  	4
	 	 	 (aa)
	  	“Restricted Stock Agreement”	  	4
	 	 	 (bb)
	  	“Securities Act”	  	4
	 	 	 (cc)
	  	“Service”	  	4
	 	 	 (dd)
	  	“Share”	  	4
	 	 	 (ee)
	  	“Stock Option Agreement”	  	4
	 	 	 (ff)
	  	“Subsidiary”	  	4
	 	 	 (gg)
	  	“10-Percent Shareholder”	  	5
				
	 SECTION 3.
	 	 	  	ADMINISTRATION	  	5
				
	 	 	 (a)
	  	Committee Composition	  	5
	 	 	 (b)
	  	Authority of the Committee	  	5
	 	 	 (c)
	  	Indemnification	  	6
	 	 	 (d)
	  	Financial Reports	  	6

  

 -i- 

							
	 SECTION 4.
	 	 	  	ELIGIBILITY	  	6
				
	 	 	 (a)
	  	General Rules	  	6
	 	 	 (b)
	  	Incentive Stock Options	  	6
	 	 	 (c)
	  	Non-Employee Directors	  	6
				
	 SECTION 5.
	 	 	  	SHARES SUBJECT TO PLAN	  	7
				
	 	 	 (a)
	  	Basic Limitation	  	7
	 	 	 (b)
	  	Annual Addition	  	7
	 	 	 (c)
	  	Additional Shares	  	7
	 	 	 (d)
	  	Dividend Equivalents	  	7
	 	 	 (e)
	  	Limits on Options	  	8
	 	 	 (f)
	  	Limits on Restricted Stock	  	8
				
	 SECTION 6.
	 	 	  	TERMS AND CONDITIONS OF OPTIONS	  	8
				
	 	 	 (a)
	  	Stock Option Agreement	  	8
	 	 	 (b)
	  	Number of Shares	  	8
	 	 	 (c)
	  	Exercise Price	  	8
	 	 	 (d)
	  	Exercisability and Term	  	8
	 	 	 (e)
	  	Modifications or Assumption of Options	  	9
	 	 	 (f)
	  	Transferability of Options	  	9
	 	 	 (g)
	  	No Rights as Stockholder	  	9
	 	 	 (h)
	  	Restrictions on Transfer	  	9
				
	 SECTION 7.
	 	 	  	PAYMENT FOR OPTION SHARES	  	9
				
	 	 	 (a)
	  	General Rule	  	9
	 	 	 (b)
	  	Surrender of Stock	  	9
	 	 	 (c)
	  	Promissory Note	  	10
	 	 	 (d)
	  	Other Forms of Payment	  	10
				
	 SECTION 8.
	 	 	  	TERMS AND CONDITIONS FOR AWARDS OF RESTRICTED STOCK.	  	10
				
	 	 	 (a)
	  	Time, Amount and Form of Awards	  	10
	 	 	 (b)
	  	Restricted Stock Agreement	  	10
	 	 	 (c)
	  	Payment for Restricted Stock	  	10
	 	 	 (d)
	  	Vesting Conditions	  	10
	 	 	 (e)
	  	Assignment or Transfer of Restricted Stock	  	10
	 	 	 (f)
	  	Trusts	  	10
	 	 	 (g)
	  	Voting and Dividend Rights	  	11

  

 -ii- 

							
	 SECTION 9.
	 	 	  	PROTECTION AGAINST DILUTION	  	11
				
	 	 	 (a)
	  	Adjustments	  	11
	 	 	 (b)
	  	Participant Rights	  	11
				
	 SECTION 10.
	 	 	  	EFFECT OF A CHANGE IN CONTROL	  	11
				
	 	 	 (a)
	  	Merger or Reorganization	  	11
	 	 	 (b)
	  	Acceleration	  	12
				
	 SECTION 11.
	 	 	  	LIMITATIONS ON RIGHTS	  	12
				
	 	 	 (a)
	  	Retention Rights	  	12
	 	 	 (b)
	  	Stockholders’ Rights	  	12
	 	 	 (c)
	  	Regulatory Requirements	  	12
				
	 SECTION 12.
	 	 	  	WITHHOLDING TAXES	  	12
				
	 	 	 (a)
	  	General	  	12
	 	 	 (b)
	  	Share Withholding	  	12
				
	 SECTION 13.
	 	 	  	DURATION AND AMENDMENTS	  	13
				
	 	 	 (a)
	  	Term of the Plan	  	13
	 	 	 (b)
	  	Right to Amend or Terminate the Plan	  	13
				
	 SECTION 14.
	 	 	  	EXECUTION	  	13

  

 -iii- 

 SUNRISE TELECOM INCORPORATED 
  
 2000 STOCK PLAN 
  
 EFFECTIVE AS OF JULY 12, 2000 
  
 SECTION 1. INTRODUCTION. 
  
 The Company’s Board of Directors adopted the Sunrise Telecom Incorporated 2000 Stock Plan on April 5, 2000 and the Company’s stockholders
approved the Plan on April 5, 2000. The Plan is effective on July 12, 2000, the date of the Company’s initial public offering. 
  
 The purpose of the Plan is to promote the long-term success of the Company and the creation of shareholder value by offering Key Employees an opportunity
to acquire a proprietary interest in the success of the Company, or to increase such interest, and to encourage such selected persons to continue to provide services to the Company and to attract new individuals with outstanding qualifications.

  
 The Plan seeks to achieve this purpose by providing for
Options (which may constitute Incentive Stock Options or Nonstatutory Stock Options) and Awards of Restricted Stock. 
  
 The Plan shall be governed by, and construed in accordance with, the laws of the State of Delaware (except its choice-of-law provisions). Capitalized
terms shall have the meaning provided in Section 2 unless otherwise provided in this Plan or Stock Option Agreement or Restricted Stock Agreement. 
  
 SECTION 2. DEFINITIONS. 
  
 (a) “Affiliate” means any entity other than a Subsidiary, if the Company and/or one or more Subsidiaries own not less than 50% of such
entity. For purposes of determining an individual’s “Service,” this definition shall include any entity other than a Subsidiary, if the Company, a Parent and/or one or more Subsidiaries own not less than 50% of such entity.

  
 (b) “Award” means any award of an Option or
Restricted Stock under the Plan. 
  
 (c) “Board”
means the Board of Directors of the Company, as constituted from time to time. 
  
 (d) “Change In Control” except as may otherwise be provided in the Stock Option Agreement or Restricted Stock Agreement, means the occurrence of any of the following: 
  
 (i) The consummation of a merger or consolidation of the
Company with or into another entity or any other corporate reorganization, if more than 

 50% of the combined voting power of the continuing or surviving entity’s securities outstanding
immediately after such merger, consolidation or other reorganization is owned by persons who were not stockholders of the Company immediately prior to such merger, consolidation or other reorganization; 
  
 (ii) The sale, transfer or other disposition of all or
substantially all of the Company’s assets; 
  
 (iii) A change in the composition of the Board, as a result of which fewer that one-half of the incumbent directors are directors who either (i) had been directors of the Company on the date 24 months prior to the date of the event that may
constitute a Change in Control (the “original directors”) or (ii) were elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the aggregate of the original directors who were still in office
at the time of the election or nomination and the directors whose election or nomination was previously so approved; or 
  
 (iv) Any transaction as a result of which any person is the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing at least 20% of the total voting power represented by the Company’s then outstanding voting securities. For purposes of this Paragraph (iv), the term “person”
shall have the same meaning as when used in sections 13(d) and 14(d) of the Exchange Act but shall exclude: 
  
 (A) A trustee or other fiduciary holding securities under an employee benefit plan of the Company or a subsidiary of the Company;
and 
  
 (B) A corporation owned directly
or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the common stock of the Company. 
  
 A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation or
to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transactions. 
  
 (e) “Code” means the Internal Revenue Code of 1986, as amended. 
  
 (f) “Committee” means a committee consisting of one or more
members of the Board that is appointed by the Board (as described in Section 3) to administer the Plan. 
  
 (g) “Common Stock” means the Company’s common stock. 
  
 (h) “Company” means Sunrise Telecom Incorporated, a Delaware corporation. 
  

 2 

 (i) “Consultant” means an individual who performs bona fide services to the Company, a
Parent, a Subsidiary or an Affiliate other than as an Employee or Director or Non-Employee Director. 
  
 (j) “Director” means a member of the Board who is also an Employee. 
  
 (k) “Disability” means that the Key Employee is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. 
  
 (l) “Employee” means any individual who is a common-law
employee of the Company, a Parent, a Subsidiary or an Affiliate. 
  
 (m) “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 (n) “Exercise Price” means the amount for which a Share may be purchased upon exercise of such Option, as specified in the applicable
Stock Option Agreement. 
  
 (o) “Fair Market
Value” means the market price of Shares, determined by the Committee as follows: 
  
 (i) If the Shares were traded over-the-counter on the date in question but were not classified as a national market issue, then the Fair
Market Value shall be equal to the mean between the last reported representative bid and asked prices quoted by the NASDAQ system for such date; 
  
 (ii) If the Shares were traded over-the-counter on the date in question and were classified as a national market issue, then the Fair
Market Value shall be equal to the last-transaction price quoted by the NASDAQ system for such date; 
  
 (iii) If the Shares were traded on a stock exchange on the date in question, then the Fair Market Value shall be equal to the closing
price reported by the applicable composite transactions report for such date; and 
  
 (iv) If none of the foregoing provisions is applicable, then the Fair Market Value shall be determined by the Committee in good faith on
such basis as it deems appropriate. 
  
 Whenever possible, the
determination of Fair Market Value by the Committee shall be based on the prices reported in the Wall Street Journal. Such determination shall be conclusive and binding on all persons. 
  
 (p) “Grant” means any grant of an Option under the Plan.

  
 (q) “Incentive Stock Option” or
“ISO” means an incentive stock option described in Code section 422(b). 
  

 3 

 (r) “Key Employee” means an Employee, Director, Non-Employee Director or Consultant who
has been selected by the Committee to receive an Award under the Plan. 
  
 (s) “Non-Employee Director” means a member of the Board who is not an Employee. 
  
 (t) “Nonstatutory Stock Option” or “NSO” means a stock option that is not an ISO. 
  
 (u) “Option” means an ISO or NSO granted under the Plan
entitling the Optionee to purchase Shares. 
  
 (v)
“Optionee” means an individual, estate or other entity that holds an Option. 
  
 (w) “Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent
commencing as of such date. 
  
 (x)
“Participant” means an individual or estate or other entity that holds an Award. 
  
 (y) “Plan” means this Sunrise Telecom Incorporated 2000 Stock Plan as it may be amended from time to time. 
  
 (z) “Restricted Stock” means a Share awarded under the
Plan. 
  
 (aa) “Restricted Stock Agreement”
means the agreement described in Section 8 evidencing each Award of Restricted Stock. 
  
 (bb) “Securities Act” means the Securities Act of 1933, as amended. 
  
 (cc) “Service” means service as an Employee, Director, Non-Employee Director or Consultant. 
  
 (dd) “Share” means one share of Common Stock. 

 
 (ee) “Stock Option Agreement” means the agreement
described in Section 6 evidencing each Grant of an Option. 
  
 (ff) “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 fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date. 
  

 4 

 (gg) “10-Percent Shareholder” means an individual who owns more than ten percent (10%)
of the total combined voting power of all classes of outstanding stock of the Company, its Parent or any of its subsidiaries. In determining stock ownership, the attribution rules of section 424(d) of the Code shall be applied. 
  
 SECTION 3. ADMINISTRATION. 
  
 (a) Committee Composition. A Committee appointed by the Board shall
administer the Plan. The Board shall designate one of the members of the Committee as chairperson. If no Committee has been approved, the entire Board shall constitute the Committee. Members of the Committee shall serve for such period of time as
the Board may determine and shall be subject to removal by the Board at any time. The Board may also at any time terminate the functions of the Committee and reassume all powers and authority previously delegated to the Committee. 
  
 With respect to officers or directors subject to Section 16 of the Exchange
Act, the Committee shall consist of those individuals who shall satisfy the requirements of Rule 16b-3 (or its successor) under the Exchange Act with respect to Awards granted to persons who are officers or directors of the Company under Section 16
of the Exchange Act. 
  
 The Board may also appoint one or more
separate committees of the Board, each composed of one or more directors of the Company who need not qualify under Rule 16b-3, who may administer the Plan with respect to Key Employees who are not considered officers or directors of the Company
under Section 16 of the Exchange Act, may grant Awards under the Plan to such Key Employees and may determine all terms of such Awards. 
  
 Notwithstanding the foregoing, the Board shall constitute the Committee and shall administer the Plan with respect to Options granted to Non-Employee
Directors under Section 4(c). 
  
 (b) Authority of the
Committee. Subject to the provisions of the Plan, the Committee shall have full authority and discretion to take any actions it deems necessary or advisable for the administration of the Plan. Such actions shall include: 
  

	 	(i)	selecting Key Employees who are to receive Awards under the Plan; 

  

	 	(ii)	determining the type, number, vesting requirements and other features and conditions of such Awards; 

  

	 	(iii)	interpreting the Plan; and 

  

	 	(iv)	making all other decisions relating to the operation of the Plan. 

  
 The Committee may adopt such rules or guidelines, as it deems appropriate to implement the Plan. The Committee’s determinations under the Plan shall
be final and binding on all persons. 
  

 5 

 (c) Indemnification. Each member of the Committee, or of the Board, shall be indemnified and held
harmless by the Company against and from (i) any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a
party or in which he or she may be involved by reason of any action taken or failure to act under the Plan or any Stock Option Agreement or any Restricted Stock Agreement, and (ii) from any and all amounts paid by him or her in settlement thereof,
with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such claim, action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the
Company’s Certificate of Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under any power that the Company may have to indemnify them or hold them harmless. 
  
 (d) Financial Reports. To the extent required by applicable law, the
Company shall furnish to Participants the Company’s summary financial information including a balance sheet regarding the Company’s financial condition and results of operations, unless such Participants have duties with the Company that
assure them access to equivalent information. Such financial statements need not be audited. 
  
 SECTION 4. ELIGIBILITY. 
  
 (a) General Rules. Only Employees, Directors, Non-Employee Directors and Consultants shall be eligible for designation as Key Employees by the Committee. 
  
 (b) Incentive Stock Options. Only Key Employees who are common-law employees of the Company, a Parent or a Subsidiary
shall be eligible for the grant of ISOs. In addition, a Key Employee who is a 10-Percent Shareholder shall not be eligible for the grant of an ISO unless the requirements set forth in section 422(c)(5) of the Code are satisfied. 
  
 (c) Non-Employee Directors. Non-Employee Directors shall also be
eligible to receive Options as described in this Section 4(c) from and after the date the Board has determined to implement this provision. 
  
 (i) Each eligible Non-Employee Director shall automatically be granted an NSO to purchase Shares with a Fair Market Value of $25,000 as of
the date of grant of such NSO as of the later of (i) the effective date of this Plan, or (ii) his or her initial appointment as a Non-Employee Director. In addition, upon the conclusion of each regular annual meeting of the Company’s
stockholders following the effective date of this Plan, each eligible Non-Employee Director who will continue serving as a member of the Board thereafter shall automatically receive an NSO to purchase Shares with a Fair Market Value of $25,000 as of
the date of grant of such NSO. 
  

 6 

 (ii) All NSOs granted to a Non-Employee Director under this Section 4(c) shall vest and
become 100% exercisable upon the one (1) year anniversary of the date the Option is granted to the Non-Employee Director, provided the Non-Employee Director is a member of the Board on such date. Notwithstanding the foregoing, all NSOs granted to a
Non-Employee Director under this Section 4(c) shall become fully vested and exercisable upon the Non-Employee Director’s death or Disability while the Non-Employee Director is a member of the Board. 
  
 (iii) The Exercise Price under all NSOs granted to a
Non-Employee Director under this Section 4(c) shall be equal to one hundred percent (100%) of the Fair Market Value of a Common Share on the date of grant, payable in one of the forms described in Section 7. 
  
 (iv) All NSOs granted to a Non-Employee Director under this
Section 4(c) shall terminate on the earlier of: 
  
 (1) The 10th anniversary of the date of grant; 
  
 (2) The date ninety (90) days after the termination of such Non-Employee Director’s service for any reason, other than the Non-Employee Director’s death or Disability while a member of the Board; or

  
 (3) The date one (1) year after the
Non-Employee Director’s death or Disability while a member of the Board. 
  
 SECTION 5. SHARES SUBJECT TO PLAN. 
  
 (a)
Basic Limitation. The stock issuable under the Plan shall be authorized but unissued Shares or treasury Shares. The aggregate number of Shares reserved for Awards under the Plan shall be 3,750,000, plus such number of Shares as were available
for issuance under the Company’s 1993 Stock Plan as of the effective date of this Plan. The foregoing limit is subject to adjustment pursuant to Section 9. 
  
 (b) Annual Addition. Beginning with the first fiscal year of the Company beginning after the effective date of this
Plan, on the first day of each fiscal year, Shares shall be added to the Plan equal to the least of (i) 2.5% (two and one-half percent) of the outstanding Shares as of the last day of the prior fiscal year, (ii) 1,300,000 Shares, subject to the
adjustment pursuant to Section 9, or (iii) such lesser amount as the Board may determine. 
  
 (c) Additional Shares. If Awards are forfeited or terminate for any other reason before being exercised, then the Shares underlying such Awards shall again become available for Awards under the Plan.

  
 (d) Dividend Equivalents. Any dividend equivalents
distributed under the Plan shall not be applied against the number of Shares available for Awards. 
  

 7 

 (e) Limits on Options. No Key Employee shall receive Options to purchase Shares during any fiscal
year covering in excess of 600,000 Shares; provided, however, a newly hired Key Employee may receive Options to purchase up to 900,000 Shares during the fiscal year of his or her date of hire. 
  
 (f) Limits on Restricted Stock. No Key Employee shall receive
Award(s) of Restricted Stock during any fiscal year covering in excess of 75,000 Shares. 
  
 SECTION 6. TERMS AND CONDITIONS OF OPTIONS. 
  
 (a) Stock Option Agreement. Each Grant under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms and conditions of
the Plan and may be subject to any other terms and conditions that are not inconsistent with the Plan and that the Committee deems appropriate for inclusion in a Stock Option Agreement. The provisions of the various Stock Option Agreements entered
into under the Plan need not be identical. A Stock Option Agreement may provide that new Options will be granted automatically to the Optionee when he or she exercises the prior Options. The Stock Option Agreement shall also specify whether the
Option is an ISO or an NSO. 
  
 (b) Number of Shares. Each
Stock Option Agreement shall specify the number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with Section 9. 
  
 (c) Exercise Price. An Option’s Exercise Price shall be established by the Committee and set forth in a Stock
Option Agreement. To the extent required by applicable law the Exercise Price of an ISO shall not be less than 100% of the Fair Market Value (110% for 10-Percent Shareholders) of a Share on the date of Grant. In the case of an NSO, a Stock Option
Agreement may specify an Exercise Price that varies in accordance with a predetermined formula while the NSO is outstanding. 
  
 (d) Exercisability and Term. Each Stock Option Agreement shall specify the date when all or any installment of the Option is to become exercisable.
The Stock Option Agreement shall also specify the term of the Option; provided that the term of an ISO shall in no event exceed ten (10) years from the date of Grant. An ISO that is granted to a 10-Percent Shareholder shall have a maximum term of
five (5) years. No Option can be exercised after the expiration date provided in the applicable Stock Option Agreement. A Stock Option Agreement may provide for accelerated exercisability in the event of the Optionee’s death, disability or
retirement or other events and may provide for expiration prior to the end of its term in the event of the termination of the Optionee’s service. A Stock Option Agreement may permit an Optionee to exercise an Option before it is vested, subject
to the Company’s right of repurchase over any Shares acquired under the unvested portion of the Option (an “early exercise”), which right of repurchase shall lapse at the same rate the Option would have vested had there been no early
exercise. In no event shall the Company be required to issue fractional Shares upon the exercise of an Option. 
  

 8 

 (e) Modifications or Assumption of Options. Within the limitations of the Plan, the Committee may
modify, extend or assume outstanding options or may accept the cancellation of outstanding options (whether granted by the Company or by another issuer) in return for the grant of new Options for the same or a different number of Shares and at the
same or a different Exercise Price. The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, alter or impair his or her rights or obligations under such Option. 
  
 (f) Transferability of Options. Except as otherwise provided in the
applicable Stock Option Agreement and then only to the extent permitted by applicable law, no Option shall be transferable by the Optionee other than by will or by the laws of descent and distribution. Except as otherwise provided in the applicable
Stock Option Agreement, an Option may be exercised during the lifetime of the Optionee only or by the guardian or legal representative of the Optionee. No Option or interest therein may be assigned, pledged or hypothecated by the Optionee during his
lifetime, whether by operation of law or otherwise, or be made subject to execution, attachment or similar process. 
  
 (g) No Rights as Stockholder. An Optionee, or a transferee of an Optionee, shall have no rights as a stockholder with respect to any Common Stock
covered by an Option until such person becomes entitled to receive such Common Stock by filing a notice of exercise and paying the Exercise Price pursuant to the terms of such Option. 
  
 (h) Restrictions on Transfer. Any Shares issued upon exercise of an Option shall be subject to such rights of
repurchase, rights of first refusal and other transfer restrictions as the Committee may determine. Such restrictions shall apply in addition to any restrictions that may apply to holders of Shares generally and shall also comply to the extent
necessary with applicable law. 
  
 SECTION 7. PAYMENT FOR OPTION SHARES.

  
 (a) General Rule. The entire Exercise Price of
Shares issued upon exercise of Options shall be payable in cash at the time when such Shares are purchased, except as follows: 
  
 (i) In the case of an ISO granted under the Plan, payment shall be made only pursuant to the express provisions of the applicable Stock
Option Agreement. The Stock Option Agreement may specify that payment may be made in any form(s) described in this Section 7. 
  
 (ii) In the case of an NSO granted under the Plan, the Committee may in its discretion, at any time accept payment in any form(s)
described in this Section 7. 
  
 (b) Surrender of Stock.
To the extent that this Section 7(b) is applicable, payment for all or any part of the Exercise Price may be made with Shares which have already been owned by the Optionee for such duration as shall be specified by the Committee. Such Shares shall
be valued at their Fair Market Value on the date when the new Shares are purchased under the Plan. 
  

 9 

 (c) Promissory Note. To the extent that this Section 7(c) is applicable, payment for all or any
part of the Exercise Price may be made with a full-recourse promissory note. 
  
 (d) Other Forms of Payment. To the extent that this Section 7(d) is applicable, payment may be made in any other form that is consistent with applicable laws, regulations and rules. 
  
 SECTION 8. TERMS AND CONDITIONS FOR AWARDS OF RESTRICTED STOCK. 
  
 (a) Time, Amount and Form of Awards. Awards under the Plan may be
granted in the form of Restricted Stock. 
  
 (b) Restricted
Stock Agreement. Each Award of Restricted Stock under the Plan shall be evidenced by a Restricted Stock Agreement between the Participant and the Company. Such Award shall be subject to all applicable terms and conditions of the Plan and may be
subject to any other terms and conditions that are not inconsistent with the Plan and that the Committee deems appropriate for inclusion in a Restricted Stock Agreement. The provisions of the various Restricted Stock Agreements entered into under
the Plan need not be identical. 
  
 (c) Payment for Restricted
Stock. Restricted Stock may be issued with or without cash consideration under the Plan. 
  
 (d) Vesting Conditions. Each Award of Restricted Stock shall become vested, in full or in installments, upon satisfaction of the conditions specified in the Restricted Stock Agreement. A Restricted Stock
Agreement may provide for accelerated vesting in the event of the Participant’s death, Disability or retirement or other events. 
  
 (e) Assignment or Transfer of Restricted Stock. Except as provided in Section 12, or in a Restricted Stock Agreement, or as required by applicable
law, a Restricted Stock granted under the Plan shall not be anticipated, assigned, attached, garnished, optioned, transferred or made subject to any creditor’s process, whether voluntarily, involuntarily or by operation of law. Any act in
violation of this Section 8(e) shall be void. However, this Section 8(e) shall not preclude a Participant from designating a beneficiary who will receive any outstanding Restricted Stock in the event of the Participant’s death, nor shall it
preclude a transfer of Restricted Stock by will or by the laws of descent and distribution. 
  
 (f) Trusts. Neither this Section 8 nor any other provision of the Plan shall preclude a Participant from transferring or assigning Restricted Stock to (a) the trustee of a trust that is revocable by such
Participant alone, both at the time of the transfer or assignment and at all times thereafter prior to such Participant’s death, or (b) the trustee of any other trust to the extent approved in advance by the Committee in writing. A transfer or
assignment of Restricted Stock from such trustee to any person other than such Participant shall be permitted only to the extent approved in advance by the Committee in writing, and Restricted Stock held by such trustee shall be subject to all of
the conditions and restrictions set forth in the Plan and in the applicable Restricted Stock Agreement, as if such trustee were a party to such Agreement. 
  

 10 

 (g) Voting and Dividend Rights. The holders of Restricted Stock awarded under the Plan shall have
the same voting, dividend and other rights as the Company’s other stockholders. A Restricted Stock Agreement, however, may require that the holders of Restricted Stock invest any cash dividends received in additional Restricted Stock. Such
additional Restricted Stock shall be subject to the same conditions and restrictions as the Award with respect to which the dividends were paid. Such additional Restricted Stock shall not reduce the number of Shares available under Section 5.

  
 SECTION 9. PROTECTION AGAINST DILUTION. 
  
 (a) Adjustments. In the event of a subdivision of the outstanding
Shares, a declaration of a dividend payable in Shares, a declaration of a dividend payable in a form other than Shares in an amount that has a material effect on the price of Shares, a combination or consolidation of the outstanding Shares (by
reclassification or otherwise) into a lesser number of Shares, a recapitalization, a spin-off or a similar occurrence, the Committee shall make such adjustments as it, in its sole discretion, deems appropriate in one or more of: 
  

	 	(i)	the number of Shares available for future Awards under Section 5; 

  

	 	(ii)	the number of Shares that may be awarded per person under Section 5; 

  

	 	(iii)	the number of Shares covered by each outstanding Award; or 

  

	 	(iv)	the Exercise Price under each outstanding Option. 

  
 (b) Participant Rights. Except as provided in this Section 9, a Participant shall have no rights by reason of any issue by the Company of stock of
any class or securities convertible into stock of any class, any subdivision or consolidation of shares of stock of any class, the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class.

  
 SECTION 10. EFFECT OF A CHANGE IN CONTROL. 
  
 (a) Merger or Reorganization. In the event that the Company is a
party to a merger or other reorganization, outstanding Awards shall be subject to the agreement of merger or reorganization. Such agreement may provide, without limitation, for the assumption of outstanding Awards by the surviving corporation or its
parent, for their continuation by the Company (if the Company is a surviving corporation), for accelerated vesting or for their cancellation with or without consideration, in all cases without the consent of the Participant. 
  

 11 

 (b) Acceleration. The Committee may determine, at the time of granting an Award or thereafter,
that such Award shall become fully vested as to all Shares subject to such Award in the event that a Change in Control occurs with respect to the Company. 
  
 SECTION 11. LIMITATIONS ON RIGHTS. 
  
 (a) Retention Rights. Neither the Plan nor any Award granted under the Plan shall be deemed to give any individual a right to remain an employee,
consultant or director of the Company, a Parent, a Subsidiary or an Affiliate. The Company and its Parents and Subsidiaries and Affiliates reserve the right to terminate the Service of any person at any time, and for any reason, subject to
applicable laws, the Company’s Certificate of Incorporation and Bylaws and a written employment agreement (if any). 
  
 (b) Stockholders’ Rights. A Participant shall have no dividend rights, voting rights or other rights as a stockholder with respect to any
Shares covered by his or her Award prior to the issuance of a stock certificate for such Shares. No adjustment shall be made for cash dividends or other rights for which the record date is prior to the date when such certificate is issued, except as
expressly provided in Section 9. 
  
 (c) Regulatory
Requirements. Any other provision of the Plan notwithstanding, the obligation of the Company to issue Shares under the Plan shall be subject to all applicable laws, rules and regulations and such approval by any regulatory body as may be
required. The Company reserves the right to restrict, in whole or in part, the delivery of Shares pursuant to any Award prior to the satisfaction of all legal requirements relating to the issuance of such Shares, to their registration, qualification
or listing or to an exemption from registration, qualification or listing. 
  
 SECTION 12. WITHHOLDING TAXES. 
  
 (a)
General. A Participant shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise in connection with his or her Award. The Company shall not be required to issue any Shares or make
any cash payment under the Plan until such obligations are satisfied. 
  
 (b) Share Withholding. If a public market for the Company’s Shares exists, the Committee may permit a Participant to satisfy all or part of his or her withholding or income tax obligations by having the Company withhold all or a
portion of any Shares that otherwise would be issued to him or her or by surrendering all or a portion of any Shares that he or she previously acquired. Such Shares shall be valued at their Fair Market Value on the date when taxes otherwise would be
withheld in cash. Any payment of taxes by assigning Shares to the Company may be subject to restrictions, including, but not limited to, any restrictions required by rules of the Securities and Exchange Commission. 
  

 12 

 SECTION 13. DURATION AND AMENDMENTS. 
  
 (a) Term of the Plan. The Plan, as set forth herein, shall become effective on the date of its adoption by the Board,
subject to the approval of the Company’s stockholders. No Options shall be exercisable until such stockholder approval is obtained. In the event that the stockholders fail to approve the Plan within twelve (12) months after its adoption by the
Board, any Awards made shall be null and void and no additional Awards shall be made. To the extent required by applicable law, the Plan shall terminate on the date that is ten (10) years after its adoption by the Board and may be terminated on any
earlier date pursuant to Section 13(b). 
  
 (b) Right to Amend
or Terminate the Plan. The Board may amend or terminate the Plan at any time and for any reason. The termination of the Plan, or any amendment thereof, shall not affect any Award previously granted under the Plan. No Awards shall be granted
under the Plan after the Plan’s termination. An amendment of the Plan shall be subject to the approval of the Company’s stockholders only to the extent required by applicable laws, regulations or rules. 
  
 SECTION 14. EXECUTION. 
  
 To record the adoption of the Plan by the Board, the Company has caused its duly authorized officer to execute this Plan on
behalf of the Company. 
  

			
	SUNRISE TELECOM INCORPORATED
		
	 By
	 	  

		
	 Title
	 	  

  

 13 

 AMENDMENT TO THE SUNRISE TELECOM INCORPORATED 
 2000 STOCK PLAN 
  
 The undersigned, Paul Ker-Chin Chang and Kirk O. Williams, hereby certify that: 
  
 They are the duly elected and acting President and Secretary, respectively, of SUNRISE TELECOM INCORPORATED, a Delaware corporation.

  
 The Sunrise Telecom Incorporated 2000 Stock Plan was adopted by the
Company’s Board of Directors and approved by the Company’s stockholders on April 5, 2000. The Plan is effective July 12, 2000. 
  
 Section 4(c)(i) of the Sunrise Telecom Incorporated 2000 Stock Plan which currently reads: 
  
 Each eligible Non-Employee Director shall automatically be granted an NSO to purchase Shares with a Fair Market Value of
$25,000 as of the date of grant of such NSO as of the later of (i) the effective date of this Plan, or (ii) his or her initial appointment as a Non-Employee Director. In addition, upon the conclusion of each regular annual meeting of the
Company’s stockholders following the effective date of this Plan, each eligible Non-Employee Director who will continue serving as a member of the Board thereafter shall automatically receive an NSO to purchase Shares with a Fair Market Value
of $25,000 as of the date of grant of such NSO. 
  
 shall
be amended as follows: 
  
 Each eligible Non-Employee Director
shall automatically be granted an NSO to purchase 12,000 Shares as of his or her initial appointment as a Non-Employee Director. In addition, upon the conclusion of each regular annual meeting of the Company’s Stockholders beginning with the
annual meeting scheduled for May 11, 2005, each eligible Non-Employee Director who will continue serving as a member of the Board thereafter shall automatically receive an NSO to purchase 12,000 Shares. 
  
 This Amendment is limited as specified and shall not constitute a modification, amendment or
waiver of any other provision of the Sunrise Telecom Incorporated 2000 Stock Plan. Except as specifically amended by this Amendment, in all other respects, the Sunrise Telecom Incorporated 2000 Stock Plan shall remain in full force and effect. This
Amendment shall be governed by, and construed in accordance with, the laws of the State of Delaware (except its choice-of-law provisions). Capitalized terms not otherwise defined in this Amendment are used with the definitions assigned to them in
the Sunrise Telecom Incorporated 2000 Stock Plan or Stock Option Agreement or Restricted Stock Agreement. 

 The foregoing Amendment has been duly adopted by this Company’s Board of Directors and Stockholders in accordance
with the applicable provisions of Section 228, 242 and 245 of the General Corporation Law of the State of Delaware. 
  
 Executed at                     , on the
         day of                     , 2005. 
  

	
	  

	Paul Ker-Chin Chang, President
	
	  

	Kirk O. Williams, SecretaryNON-QUALIFIED STOCK OPTION AGREEMENT

ERGO SCIENCE CORPORATION

          AGREEMENT made as of the ____ day of _______ 20___, between Ergo Science Corporation (the “Company”), a Delaware corporation having a principal place of business at 790 Turnpike Street, North Andover, Massachusetts 01845, and __________________ (the “Participant”).

          WHEREAS, the Company desires to grant to the Participant an Option to purchase shares of its common stock, $0.01 par value per share (the “Shares”), under and for the purposes set forth in the Company’s 2001 Employee, Director and Consultant Stock Plan (the “Plan”).

          WHEREAS, the Company and the Participant understand and agree that any terms used and not defined herein have the same meanings as in the Plan; and

          WHEREAS, the Company and the Participant each intend that the Option granted herein shall be a Non-Qualified Option.

          NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree us follows:

1.       GRANT OF OPTION.

          The Company hereby grants to the Participant the right and option to purchase all or any part of an aggregate of Twenty-two Thousand Five Hundred (22,500) Shares, on the terms and conditions and subject to all the limitations set forth herein and in the Plan, which is incorporated herein by reference.  The Participant acknowledges receipt of a copy of the Plan.

2.       PURCHASE PRICE.

          The purchase price of the Shares covered by the Option shall be _____ Dollars _____ Cents ($______) per Share, subject to adjustment, as provided in the Plan, in the event of a stock split, reverse stock split or other events affecting the holders of Shares.  Payment shall be made in accordance with Paragraph 8 of the Plan.

3.       EXERCISABILITY OF OPTION.

          Subject to the terms and conditions set forth in this Agreement and the Plan, the Option granted hereby shall become exercisable as follows:

	
  
On ______   __, 20___
  	
  
up to 4,500   Shares
  
	
  
 
  	
  
 
  
	
  
On ______   __, 20___
  	
  
an   additional 4,500 Shares
  
	
  
 
  	
  
 
  
	
  
On ______   __, 20___
  	
  
an   additional 4,500 Shares
  
	
   
  	
  
 
  
	
  
On ______   __, 20___
  	
  
an   additional 4,500 Shares
  
	
  
 
  	
  
 
  
	
  
On ______   __, 20___
  	
  
an   additional 4,500 Shares
  

          The foregoing rights are cumulative and are subject to the other terms and conditions of this Agreement and the Plan.

4.       TERM OF OPTION.

          The Option shall terminate ten (10) years from the date of this Agreement, but shall be subject to earlier termination as provided herein or in the Plan.

          If the Participant ceases to be an employee, director or consultant of the Company or of an Affiliate (for any reason other than the death or Disability of the Participant or termination of the Participant for “cause” (as defined in the Plan)), the Option may be exercised, if it has not previously terminated, within three (3) months after the date the Participant ceases to be an employee, director or consultant of the Company or an Affiliate, or within the originally prescribed term of the Option, whichever is earlier, but may not be exercised thereafter.  In such event, the Option shall be exercisable only to the extent that the Option has become exercisable and is in effect at the date of such cessation of employment, directorship or consultancy.

          Notwithstanding the foregoing, in the event of the Participant’s Disability or death within three (3) months after the termination of employment, directorship or consultancy, the Participant or the Participant’s Survivors may exercise the Option within one (1) year after the date of the Participant’s termination of employment, directorship or consultancy, but in no event after the date of expiration of the term of the Option.

          In the event the Participant’s employment, directorship or consultancy is terminated by the Company or an Affiliate for “cause” (as defined in the Plan), the Participant’s right to exercise any unexercised portion of this Option shall cease as of such termination, and this Option shall thereupon terminate.  Notwithstanding anything herein to the contrary, if subsequent to the Participant’s termination, but prior to the exercise of the Option, the Board of Directors of the Company determines that, either prior or subsequent to the Participant’s termination, the Participant engaged in conduct which would constitute “cause,” then the Participant shall immediately cease to have any right to exercise the Option and this Option shall thereupon terminate.

          In the event of the Disability of the Participant, as determined in accordance with the Plan, the Option shall be exercisable within one (1) year after the Participant’s termination of service or, if earlier, within the term originally prescribed by the Option.  In such event, the Option shall be exercisable:

2

	
   
  	
  
(a)
  	
  
to the extent exercisable but not exercised as of the date of   Disability; and
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(b)
  	
  
in the event rights to exercise the Option accrue periodically, to   the extent of a pro rata portion of any additional rights to exercise the   Option as would have accrued had the Participant not become Disabled prior to   the end of the accrual period which next ends following the date of   Disability.  The proration shall be   based upon the number of days during the accrual period prior to the date of   Disability.
  

          In the event of the death of the Participant while an employee, director or consultant of the Company or of an Affiliate, the Option shall be exercisable by the Participant’s Survivors within one (1) year after the date of death of the Participant or, if earlier, within the originally prescribed term or the Option.  In such event, the Option shall be exercisable:

	
  
 
  	
  
(x)
  	
  
to the   extent exercisable but not exercised as of the date of death; and
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
(y)
  	
  
in the event   rights to exercise the Option accrue periodically, to the extent of a pro   rata portion of any additional rights to exercise the Option as would have   accrued had the Participant not died prior to the end of the accrual period which   next ends following the date of death.    The proration shall be based upon the number of days during the   accrual period prior to the Participant’s death.
  

5.       METHOD OF EXERCISING OPTION.

          Subject to the terms and conditions of this Agreement, the Option may be exercised by written notice to the Company at its principal executive office, in substantially the form of Exhibit A attached hereto.  Such notice shall state the number of Shares with respect to which the Option is being exercised and shall be signed by the person exercising the Option.  Payment of the purchase price for such Shares shall be made in accordance with Paragraph 8 of the Plan.  The Company shall deliver a certificate or certificates representing such Shares as soon as practicable after the notice shall be received, provided, however, that the Company may delay issuance of such Shares until completion of any action or obtaining of any consent, which the Company deems necessary under any applicable law (including, without limitation, state securities or “blue sky” laws). 
The certificate or certificates for the Shares as to which the Option shall have been so exercised shall be registered in the name of the person or persons so exercising the Option (or, if the Option shall be exercised by the Participant and if the Participant shall so request in the notice exercising the Option, shall be registered in the name of the Participant and another person jointly, with right of survivorship) and shall be delivered as provided above to or upon the written order of the person or persons exercising the Option.  In the event the Option shall be exercised, pursuant to Section 4 hereof, by any person or persons other than the Participant, such notice shall be accompanied by appropriate proof of the right of such person or persons to exercise the Option.  All Shares that shall be purchased upon the exercise of the Option as provided herein shall be fully paid and nonassessable.

6.       PARTIAL EXERCISE.

          Exercise of this Option to the extent above stated may be made in part at any time and from time to time within the above limits, except that no fractional share shall be issued pursuant to this Option.

3

7.       NON-ASSIGNABILITY.

          Except as otherwise provided in this Section 7, the Option shall not be transferable by the Participant otherwise than by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act or the rules thereunder.  Except as provided in the previous sentence, the Option shall be exercisable, during the Participant’s lifetime, only by the Participant (or, in the event of legal incapacity or incompetency, by the Participant’s guardian or representative) and shall not be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process.  Any attempted transfer, assignment, pledge, hypothecation or other disposition of the Option or of any rights granted hereunder contrary to the
provisions of this Section 7, or the levy of any attachment or similar process upon the Option shall be null and void.

          Notwithstanding the foregoing, this Option may be transferred, in whole or in part, by the Participant to  (i) the spouse, children, step-children or any other issue of the Participant (“Immediate Family Members”),  (ii) any trust for the exclusive benefit of Immediate Family Members,  (iii) any partnership of which immediate Family Members are the only partners, or  (iv) any limited liability company of which Immediate Family Members are the only shareholders; provided, however, that any subsequent transfers of this Option, or any part thereof, shall be prohibited except by will or by the laws of descent and distribution.  The Plan Administrator may permit transfers in addition to those described above in its discretion.

          Following any transfer hereunder, the Option shall continue to be subject to the terms and conditions of this Agreement.  The events of termination of employment in section 4 hereof shall continue to be applied to the Participant, and following termination the Option shall be exercisable by the transferee only to the extent and for the periods specified in Section 4 hereof.  The Participant will remain subject to withholding taxes upon exercise of the Option pursuant to Section 12 hereof.  The Participant agrees to notify the Company in writing upon the completion of any transfer pursuant to this Section, such notice to include the name and address of the transferee and the date of transfer.  The Company undertakes no obligation to notify any transferee of any event affecting the employment status of the Participant or otherwise affecting this Option which may have the effect of
limiting or terminating the Option.

8.       NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.

          The Participant shall have no rights as a stockholder with respect to Shares subject to this Agreement until registration of the Shares in the Company’s share register in the name of the Participant.  Except as is expressly provided in the Plan with respect to certain changes in the capitalization of the Company, no adjustment shall be made for dividends or similar rights for which the record date is prior to the date of such registration.

9.       CAPITAL CHANGES AND BUSINESS SUCCESSIONS.

          The Plan contains provisions covering the treatment of Options in a number of contingencies such as stock splits and mergers.  Provisions in the Plan for adjustment with respect to stock subject to Options and the related provisions with respect to successors to the business of the Company are hereby made applicable hereunder and are incorporated herein by reference.

4

10.     TAXES.

          The Participant acknowledges that upon exercise of the Option the Participant will be deemed to have taxable income measured by the difference between the then fair market value of the Shares received upon exercise and the price paid for such Shares pursuant to this Agreement.  The Participant acknowledges that any income or other taxes due from him or her with respect to this Option or the Shares issuable pursuant to this Option shall be the Participant’s responsibility.

          The Participant agrees that the Company may withhold from the Participant’s remuneration, if any, the minimum statutory amount of federal, state and local withholding taxes attributable to such amount that is considered compensation includable in such person’s gross income.  At the Company’s discretion, the amount required to be withheld may be withheld in cash from such remuneration, or in kind from the Shares otherwise deliverable to the Participant on exercise of the Option.  The Participant further agrees that, if the Company does not withhold an amount from the Participant’s remuneration sufficient to satisfy the Company’s income tax withholding obligation, the Participant will reimburse the Company on demand, in cash, for the amount under-withheld.

11.     PURCHASE FOR INVESTMENT.

          Unless the offering and sale of the Shares to be issued upon the particular exercise of the Option shall have been effectively registered under the Securities Act of 1933, as now in force or hereafter amended (the “1933 Act”), the Company shall be under no obligation to issue the Shares covered by such exercise unless and until the following conditions have been fulfilled:

	
   
  	
  
(a)
  	
  
The person(s) who exercise the Option shall warrant to the Company,   at the time of such exercise, that such person(s) are acquiring such Shares   for their own respective accounts, for investment, and not with a view to, or   for sale in connection with, the distribution of any such Shares, in which   event the person(s) acquiring such Shares shall be bound by the provisions of   the following legend which shall be endorsed upon the certificate(s)   evidencing the Shares issued pursuant to such exercise:
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
“The shares   represented by this certificate have been taken for investment and they may   not be sold or otherwise transferred by any person, including a pledgee,   unless (1) either (a) a Registration Statement with respect to such shares   shall be effective under the Securities Act of 1933, as amended, or (b) the   Company shall have received an opinion of counsel satisfactory to it that an   exemption from registration under such Act is then available, and (2) there   shall have been compliance with all applicable state securities laws;” and
  

5

	
  
 
  	
  
(b)
  	
  
If the Company so requires, the Company shall have received an   opinion of its counsel that the Shares may be issued upon such particular   exercise in compliance with the 1933 Act without registration   thereunder.  Without limiting the generality   of the foregoing, the Company may delay issuance of the Shares until   completion of any action or obtaining any consent, which the Company deems   necessary under any applicable law (including without limitation state   securities or “blue sky” laws).
  

12.     NO OBLIGATION TO MAINTAIN RELATIONSHIP.

          The Company is not by the Plan or this Option obligated to continue the Participant as an employee, director or consultant of the Company.

13.     NOTICES.

          Any notices required or permitted by the terms of this Agreement or the Plan shall be given by recognized courier service, facsimile, registered or certified mail, return receipt requested, addressed as follows:

	
  
If to the   Company:
  	
  
Ergo Science   Corporation
  	
  
 
  
	
   
  	
  
790 Turnpike   Street, Suite 202
  	
  
 
  
	
  
 
  	
  
North   Andover, MA 01845
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
If to the   Participant:
  	
  
 
  	
  
 
  
	
  
 
  	
  

  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  

  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  

  	
  
 
  

or to such other address or addresses of which notice in the same manner has previously been given.  Any such notice shall be deemed to have been given upon the earlier of receipt, one business day following delivery to a recognized courier service or three business days following mailing by registered or certified mail.

14.     GOVERNING LAW.

          This Agreement shall be construed and enforced in accordance with the law of the State of Delaware, without giving effect to the conflict of law principles thereof.

15.     BENEFIT OF AGREEMENT.

          Subject to the provisions of the Plan and the other provisions hereof; this Agreement shall be for the benefit of and shall be binding upon the heirs, executors, administrators, successors and assigns of the parties hereto.

16.     ENTIRE AGREEMENT.

          This Agreement, together with the Plan, embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof.  No statement, representation, warranty, covenant or agreement not expressly set forth in this Agreement shall affect or be used to interpret, change or restrict, the express terms and provisions of this Agreement, provided, however, in any event, this Agreement shall be subject to and governed by the Plan.

6

17.     MODIFICATIONS AND AMENDMENTS.

          The terms and provisions of this Agreement maybe modified or amended as provided in the Plan.

18.     WAIVERS AND CONSENTS.

          Except as provided in the Plan, the terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by written document executed by the party entitled to the benefits of such terms or provisions.  No such waiver or consent shall be deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar.  Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given, and shall not constitute a continuing waiver or consent.

7

          IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and the Participant has hereunto set his or her hand, all as of the day and year first above written.

	
  
 
  	
  
ERGO SCIENCE   CORPORATION
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
  
  	
  
 Name:
  
	
  
 
  	
  
  
  	
  
 Title:
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  

  
	
  
 
  	
  
Participant
  

Exhibit A

NOTICE OF EXERCISE OF NON-QUALIFIED STOCK OPTION

[Form For Registered Shares]

TO:    Ergo Science Corporation

IMPORTANT NOTICE:  This form of Notice of Exercise may only be used at such time as the Company has filed a Registration Statement with the Securities and Exchange Commission under which the issuance of the Shares for which this exercise is being made is registered and such Registration Statement remains effective.

Ladies and Gentlemen:

          I hereby exercise my Non-Qualified Stock Option to purchase ______ shares (the “Shares”) of the common stock, $0.01 par value, of Ergo Science Corporation (the “Company”), at the exercise price of $_____ per share, pursuant to and subject to the terms of that certain Non-Qualified Stock Option Agreement between the undersigned and the Company dated _____________.

          I understand the nature of the investment I am making and the financial risks thereof.  I am aware that it is my responsibility to have consulted with competent lax and legal advisors about the relevant national, state and local income tax and securities laws affecting the exorcise of the Option and the purchase and subsequent sale of the Shares.

          I am paying the option exercise price for the Shares as follows:

          Please issue the stock certificate for the Shares (cheek one):

	
  
 
  	
  
o to me; or
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
o to me and __________________, as joint tenants with right of survivorship,
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
and mail the   certificate to me at the following address:
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  

  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  

  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  

  	
  
 
  

          My mailing address for shareholder communications, if different from the address listed above, is:

	
  
 
  	
  

  	
  
 
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  

  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  

  	
  
 
  

 

	
  
 
  	
  
Very truly   yours,
  
	
  
 
  	
  
 
  
	
  
 
  	
  
 
  
	
  
 
  	
  

  
	
   
  	
  
Participant   (signature)
  
	
  
 
  	
  
 
  
	
  
 
  	
  
 
  
	
  
 
  	
  

  
	
  
 
  	
  
Print Name
  
	
  
 
  	
  
 
  
	
  
 
  	
  
 
  
	
  
 
  	
  

  
	
  
 
  	
  
Date
  
	
  
 
  	
  
 
  
	
  
 
  	
  
 
  
	
   
  	
  

  
	
   
  	
  Social   Security Number

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