Document:

2004
        Stock Plan

      

      IQ
        BIOMETRIX, INC.

      

      2004
        STOCK 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
        and
        Restricted Stock.

      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 plans 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 or Restricted
        Stock.

      

      (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)

      

      (f) "Awarded
        Stock"
        means
        the Common Stock subject to an Award.

      

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

      

      (h) "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; or

      

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

      

      (iii) A
        change
        in the composition of the Board occurring within a one-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.

      

      (i) "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.

      

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

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (k) "Common
        Stock"
        means
        the Common Stock of the Company.

      

      (l) "Company"
        means
        IQ Biometrix, Inc., a Delaware corporation, or any successor
        thereto.

      

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

      

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

      

      (o) "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.

      

      (p) "Dividend
        Equivalent"
        means a
        credit, made at the discretion of the Administrator, to the account of a
        Participant in an amount equal to the cash dividends paid on one Share for
        each
        Share represented by an Award held by such Participant.

      

      (q) "Employee"
        means
        an "employee" (within the meaning of Section 3401(c) of the Code and
        the
        regulations thereunder) of the Company or any Parent or Subsidiary of the
        Company. Neither service as an Outside Director nor payment of a director's
        fee
        by the Company to an Outside Director will be sufficient to constitute
        "employment" by the Company.

      

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

      

      (s) "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, and/or cash, and/or (ii) the
        exercise price of an outstanding Award is reduced. The terms and conditions
        of
        any Exchange Program will be determined by the Administrator in its sole
        discretion.

      

      (t) "Fair
        Market Value"
        means,
        as of any date and unless the Administrator determines otherwise, 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 for 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
        for
        the day of determination, as reported in The
        Wall Street Journal
        or such
        other source as the Administrator deems reliable; or

      

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

      

      (u) "Fiscal
        Year"
        means
        the fiscal year of the Company.

      

      (v) "Incentive
        Stock Option"
        means
        an Option intended to qualify as an incentive stock option within the meaning
        of
        Section 422 of the Code and the regulations promulgated
        thereunder.

      

      (w) "Involuntary
        Termination"
        means
        the termination of the service of any Participant with the Company or any
        Parent
        or Subsidiary of the Company which occurs by reason of:

      

      (i) such
        Participant's involuntary dismissal or discharge by the Company or any Parent
        or
        Subsidiary of the Company for reasons other than Misconduct; or

      

      (ii) such
        Participant's voluntary resignation following (A) a change in his
        or her
        position with the Company or Parent or Subsidiary of the Company which
        materially reduces his or her duties and responsibilities or the level of
        management to which he or she reports, (B) a reduction in his or her
        level
        of compensation (including base salary, fringe benefits and target bonus
        under
        any corporate-performance based bonus or incentive programs) by more than
        fifteen percent (15%) or (C) a relocation of such Participant's place
        of
        employment by more than fifty (50) miles, provided and only if such
        change,
        reduction or relocation is effected by the Corporation without the Participant's
        consent.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (x) "Misconduct"
        means
        the commission of any act of fraud, embezzlement or dishonesty by a Participant,
        any unauthorized use or disclosure by such person of confidential information
        or
        trade secrets of the Company (or any Parent or Subsidiary of the Company),
        or
        any other intentional misconduct by such person adversely affecting the business
        or affairs of the Company (or any Parent or Subsidiary of the Company) in
        a
        material manner. The foregoing definition shall not be deemed to be inclusive
        of
        all the acts or omissions which the Company (or any Parent or Subsidiary
        of the
        Company) may consider as grounds for the dismissal or discharge of any
        Participant or other person in the service of the Company (or any Parent
        or
        Subsidiary of the Company).

      

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

      

      (z) "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.

      

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

      

      (bb) "Other
        Stock Based Awards"
        means
        Awards granted pursuant to Section 9 of the Plan.

      

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

      

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

      

      (ee) "Participant"
        means
        the holder of an outstanding Award granted under the Plan.

      

      (ff) "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.

      

      (gg) "Plan"
        means
        this 2004 Stock Plan.

      

      (hh) "Restricted
        Stock"
        means
        shares of Common Stock issued pursuant to a Restricted Stock award under
        Section 8 of the Plan or issued pursuant to the early exercise of
        an
        Option.

      

      (ii) "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.

      

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

      

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

      

      (ll) "Share"
        means a
        share of the Common Stock, as adjusted in accordance with Section 12
        of the
        Plan.

      

      (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 12 of the Plan, the initial maximum aggregate
        number of Shares that may be issued under the Plan is 2,000,000, all of which
        may be issued upon the exercise of Incentive Stock Options granted under
        the
        Plan. The Shares may be authorized, but unissued, or reacquired Common Stock.
        Upon payment in Shares pursuant to the exercise of an Award, the number of
        Shares available for issuance under the Plan shall be reduced only by the
        number
        of Shares actually issued in such payment. If a Participant pays the exercise
        price (or purchase price, if applicable) of an Award through the tender of
        Shares, or if Shares are tendered or withheld to satisfy any Company withholding
        obligations, the number of Shares so tendered or withheld shall again be
        available for issuance pursuant to future Awards under the Plan. The number
        of
        Shares reserved for issuance under the Plan (including Shares reserved for
        issuance upon the exercise of Incentive Stock Options granted under the Plan)
        shall increase annually during the term of the Plan beginning on the first
        day
        of the Company's fiscal year beginning in 2005 by an amount of Shares equal
        to
        the lesser of (i) 200,000 Shares, (ii) 5% of the outstanding
        Shares on
        such date or (iii) a lesser amount determined by the Board; provided,
        however, in no event shall the aggregate number of Shares reserved for issuance
        under the Plan (including Shares reserved for issuance upon the exercise
        of
        Incentive Stock Options granted under the Plan), as adjusted for all such
        annual
        increases, exceed 4,000,000 Shares. The Shares issued under the Plan may
        be
        authorized, but unissued, or reacquired Common Stock.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (b)
        Lapsed Awards.
        If any
        outstanding Award expires or is terminated or canceled without having been
        exercised or settled in full, or if Shares acquired pursuant to an Award
        subject
        to forfeiture or repurchase are forfeited or repurchased by the Company,
        the
        Shares allocable to the terminated portion of such Award or such forfeited
        or
        repurchased Shares shall again be available for grant under the
        Plan.

       

      (c)
        Section 162(m) Grant Limit.
        Subject
        to the provisions of Section 12 of the Plan, at any time that the
        Company
        is a "publicly held corporation" within the meaning of Section 162(m)
        of
        the Code, no Employee or prospective Employee may be granted one or more
        Options
        within any fiscal year of the Company which in the aggregate cover more than
        1,000,000 Shares. An Option which is canceled (or deemed to be canceled under
        Treasury Regulation Section 1.162-27(e)(2)(vi)(B)) within the same
        fiscal
        year of the Company in which it was granted shall continue to be counted
        against
        the Share limit set forth in this Section 3(c).

       

      
        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 desirable and necessary
        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
        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 in this Plan. Such delegation may be revoked at
        any
        time.

      

      (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 or purchase price for an Award, the time or
        times
        when Awards may be exercised (which may be based on performance criteria),
        the
        time or times when Awards or Shares become vested, any forfeiture or repurchase
        rights of the Company or any Parent or Subsidiary of the Company with respect
        to
        Shares or Awards held by a Participant, whether an Option may be exercisable
        for
        unvested Shares which are subject to repurchase by the Company or any Parent
        or
        Subsidiary of the Company if a Participant ceases to be a Service Provider
        while
        holding unvested Shares, any vesting acceleration or waiver of forfeiture
        or
        repurchase rights, 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 the 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 and/or qualifying for preferred
        tax treatment under applicable foreign tax laws;

      

      (x) to
        modify
        or amend each Award (subject to Section 15(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 by electing to have the
        Company withhold from the Shares or cash to be issued upon exercise or vesting
        of an Award that number of Shares or cash having a Fair Market Value equal
        to
        the minimum amount required to be withheld. The Fair Market Value of any
        Shares
        to be withheld will be determined on the date that the amount of tax to be
        withheld is to be determined. All elections by a Participant to have Shares
        or
        cash withheld for this purpose will be made in such form and under such
        conditions as the Administrator may deem necessary or advisable;

      

      (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;

      

      (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;

      

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

      

      (xvi) to
        determine whether Awards will be adjusted for Dividend Equivalents;

      

      (xvii) to
        create
        Other Stock Based Awards for issuance under the Plan;

      

      (xviii) to
        establish a program whereby Service Providers designated by the Administrator
        can reduce compensation otherwise payable in cash in exchange for Awards
        under
        the Plan;

      

      (xix) to
        impose
        such restrictions, conditions or limitations as it determines appropriate
        as to
        the timing and manner of any resales by a Participant or other subsequent
        transfers by the Participant of any Shares issued as a result of or under
        an
        Award, including without limitation, (A) restrictions under an insider
        trading policy, and (B) restrictions as to the use of a specified
        brokerage
        firm for such resales or other transfers; and

      

      (xx) 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 and Restricted Stock may be granted to Service
        Providers. Incentive Stock Options may be granted only to
        Employees.

       

      6.
        Limitations.

      

      (a)
        ISO
        $100,000 Rule.
        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)
        No
        Rights as a Service Provider.
        Neither
        the Plan nor any Award shall confer upon a Participant any right with respect
        to
        continuing his or her relationship as a Service Provider, nor shall they
        interfere in any way with the right of the Participant or the right of the
        Company or its Parent or Subsidiaries to terminate such relationship at any
        time, with or without cause.

       

      7.
        Stock Options.

      

      (a)
        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.

      

      (b)
        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.

      

      (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.

      

      (3) 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 the date of
        grant
        pursuant to a merger or other corporate transaction.

      

      (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.

      

      (c)
        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 under
        Section 16(a) of the Plan and all other Applicable Laws may consist
        entirely of:

      

      (i) cash;

      

      (ii) check;

      

      (iii) promissory
        note on such terms and conditions as determined by the Administrator in its
        sole
        and absolute discretion;

      

      (iv) other
        Shares which meet the conditions established by the Administrator to avoid
        adverse accounting consequences (as determined by the
        Administrator);

      

      (v) consideration
        received by the Company under a cashless exercise program implemented by
        the
        Company in connection with the Plan;

      

      (vi) 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;

      

      (vii) any
        combination of the foregoing methods of payment; or

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (viii) 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) written or
        electronic notice of exercise (in accordance with the Award Agreement) from
        the
        person entitled to exercise the Option, and (y) full payment for the
        Shares
        with respect to which the Option is exercised. 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 12 of the Plan or the applicable Award Agreement.

      

      Exercising
        an Option in any manner will decrease the number of Shares thereafter available
        for sale 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 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 as of such termination date will revert
        to
        the Plan on the date one (1) month following the Participant's termination.
        If after termination the Participant does not exercise his or her Option
        within
        the time specified herein, in the Award Agreement or 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 as of such termination date will revert
        to
        the Plan on the date one (1) month following the Participant's termination.
        If after termination the Participant does not exercise his or her Option
        within
        the time specified herein, in the Award Agreement or by the Administrator,
        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 in
        writing
        prior to 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 Participant's death. Unless otherwise
        provided
        by the Administrator, if at the time of death Participant is not vested as
        to
        his or her entire Option, the Shares covered by the unvested portion of the
        Option as of the date of the Participant's death will revert to the Plan
        on the
        date one (1) month following the Participant's death. If the Option
        is not
        so exercised within the time specified herein, in the Award Agreement or
        by the
        Administrator, the Option will terminate, and the Shares covered by such
        Option
        will revert to the Plan.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (e)
        Buyout Provisions.
        The
        Administrator may at any time offer to buy out for a payment in cash or Shares
        an Option previously granted based on such terms and conditions as the
        Administrator shall establish and communicate to the Participant at the time
        that such offer is made.

       

      8.
        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. Subject
        to
        Section 16(a) of the Plan and any other Applicable Laws, the Administrator
        shall determine the form of consideration to be paid for such Shares. Such
        consideration to the extent permitted under Section 16(a) of the Plan
        and
        all other Applicable Laws may consist entirely of:

      

      (i) cash;

      

      (ii) check;

      

      (iii) past
        services rendered to the Company (or any Parent or Subsidiary);

      

      (iv) promissory
        note on such terms and conditions as determined by the Administrator in its
        sole
        and absolute discretion;

      

      (v) any
        combination of the foregoing methods of payment; or

      

      (vi) such
        other consideration and method of payment for the issuance of Shares to the
        extent permitted by Applicable Laws.

      

      (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 8, 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.

      

      (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 8, 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.

       

      9.
        Other Stock Based Awards.
        Other
        Stock Based Awards may be granted either alone, in addition to, or in tandem
        with, other Awards granted under the Plan and/or cash awards made outside
        of the
        Plan. The Administrator shall have authority to determine the Service Providers
        to whom and the time or times at which Other Stock Based Awards shall be
        made,
        the amount of such Other Stock Based Awards, and all other conditions of
        the
        Other Stock Based Awards including any dividend and/or voting
        rights.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      10.
        Leaves of Absence.
        Unless
        the Administrator provides otherwise, vesting of Awards granted hereunder
        will
        be suspended during any unpaid leave of absence and will resume on the date
        the
        Participant returns to work on a regular schedule as determined by the Company;
        provided, however, that no vesting credit will be awarded for the time vesting
        has been suspended during such 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 three (3) months, 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 and the leave of absence lasts longer than three
        (3) months, then three months following the day after the expiration
        of the
        initial three-month leave period, 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.

       

      11.
        Non-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.

       

      12.
        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 an adjustment is determined by the Administrator
        (in its
        sole discretion) to be 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 (i) the number and class of Shares which may be delivered under
        Section 3(a) of the Plan, (ii) the maximum number of Shares
        by which
        the Shares reserved under the Plan shall increase in each fiscal year of
        the
        Company under Section 3(a) of the Plan, (iii) the maximum number
        and
        class of Shares for which any Employee or prospective Employee may be granted
        Options per fiscal year of the Company under Section 3(c) of the Plan
        and
        (iv) the number, class, and exercise price of Shares subject to outstanding
        Awards. Notwithstanding the preceding, the number of Shares subject to any
        Award
        always shall be a whole number.

      

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

      

      (c)
        Merger or Change in Control.

      

      (i)
        Stock
        Options.In the event of a merger or Change in Control, each outstanding Option
        shall be assumed or an equivalent option substituted by the successor
        corporation or a Parent or Subsidiary of the successor corporation. With
        respect
        to Options granted to an Outside Director that are assumed or substituted
        for,
        if immediately prior to or after the merger or Change in Control 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 shall fully vest in and have the right
        to
        exercise such Options as to all of the Awarded Stock, including Shares as
        to
        which it would not otherwise be vested or exercisable. The Administrator
        shall
        also have the discretionary authority to structure one or more Option grants
        so
        that those Shares subject to such Options shall automatically vest, in whole
        or
        in part, upon the Involuntary Termination of the Participant's service with
        the
        Company or a Parent or Subsidiary of the Company within a designated period
        (not
        to exceed eighteen (18) months) following the effective date of any
        Change
        in Control in which those Shares do not otherwise vest. Unless determined
        otherwise by the Administrator, in the event that the successor corporation
        refuses to assume or substitute for the Option, the Participant shall fully
        vest
        in and have the right to exercise the Option as to all of the Awarded Stock,
        including Shares as to which it would not otherwise be vested or exercisable.
        If
        an Option 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 shall be exercisable, to the extent vested
        (taking into account any acceleration of vesting applicable to such option),
        for
        a period of up to fifteen (15) days from the date of such notice,
        and the
        Option shall terminate upon the expiration of such period. For the purposes
        of
        this paragraph, the Option 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
        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,
        for each Share of Awarded Stock subject to the Option, 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 and Other Stock Based Awards.In the event of a merger or
        Change
        in Control, each outstanding Restricted Stock award shall be assumed or an
        equivalent Restricted Stock award substituted by the successor corporation
        or a
        Parent or Subsidiary of the successor corporation. With respect to Awards
        granted to an Outside Director that are assumed or substituted for, if
        immediately prior to or after the merger or Change in Control 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 shall fully vest in such Awards, including Shares as to which
        the Participant would not otherwise be vested. Unless determined otherwise
        by
        the Administrator, in the event that the successor corporation refuses to
        assume
        or substitute for the Restricted Stock award, the Participant shall fully
        vest
        in the Restricted Stock including as to Shares which would not otherwise
        be
        vested. The Administrator shall also have the discretionary authority to
        structure one or more grants of Restricted Stock so that those Shares of
        Restricted Stock shall automatically vest, in whole or in part, upon the
        Involuntary Termination of the Participant's service with the Company or
        a
        Parent or Subsidiary of the Company within a designated period (not to exceed
        eighteen (18) months) following the effective date of any Change in
        Control
        in which those shares of Restricted Stock do not otherwise vest. For the
        purposes of this paragraph, a Restricted Stock 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) 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, for each Share and each unit/right
        to acquire a Share subject to the Award, 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.

       

      13.
        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.

       

      14.
        Term
        of Plan.
        Subject
        to Section 19 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 15 of the Plan.

       

      15.
        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.
        Subject
        to Section 17 of the Plan, 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.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      16.
        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. Notwithstanding any other provision
        of
        the Plan, the Company shall not be required to take or permit any action
        under
        the Plan or any agreement which, in the good faith determination of the
        Administrator, would result in a material risk of violation by the Company
        of
        Section 13(k) of the Exchange Act.

      

      (b)
        Investment Representations.
        As a
        condition to the exercise or receipt of an Award, the Company may require
        the
        person exercising or receiving such Award 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.

       

      17.
        Severability.
        Notwithstanding any contrary provision of the Plan or an Award to the contrary,
        if any one or more of the provisions (or any part thereof) of this Plan or
        the
        Awards shall be held invalid, illegal or unenforceable in any respect, such
        provision shall be modified so as to make it valid, legal and enforceable,
        and
        the validity, legality and enforceability of the remaining provisions (or
        any
        part thereof) of the Plan or Award, as applicable, shall not in any way be
        affected or impaired thereby.

       

      18.
        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.

       

      19.
        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.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      IQ
        BIOMETRIX, INC.

      2004
        STOCK PLAN

      STOCK
        OPTION AGREEMENT

      

      Unless
        otherwise defined herein, the terms defined in the 2004 Stock Plan (the "Plan")
        shall have the same defined meanings in this Stock Option Agreement (the
        "Option
        Agreement").

       

      1.
        Grant of Option.
        The
        Administrator of the Company hereby grants to the Optionee (the "Optionee")
        named in the Certificate of Stock Option Grant (the "Certificate"), an option
        (the "Option") to purchase the number of Shares set forth in the Certificate,
        at
        the exercise price per Share set forth in the Certificate (the "Exercise
        Price"), and subject to the terms and conditions of the Plan, which is
        incorporated herein by reference. Subject to Section 15 of the Plan,
        in the
        event of a conflict between the terms and conditions of the Plan and this
        Option
        Agreement, the terms and conditions of the Plan shall prevail. This Option
        shall
        expire at the close of business on the expiration date set forth in the
        Certificate (the "Expiration Date"), unless sooner terminated in accordance
        with
        the provisions of this Option Agreement or the Plan. The Certificate is
        incorporated herein by reference and is a part of this Option
        Agreement.

      

      If
        designated in the Certificate as an Incentive Stock Option ("ISO"), this
        Option
        is intended to qualify as an Incentive Stock Option as defined in
        Section 422 of the Code. Nevertheless, to the extent that it exceeds
        the
        $100,000 rule of Code Section 422(d), this Option shall be treated
        as a
        Nonstatutory Stock Option ("NSO").

       

      2.
        Exercise of Option.
        This
        Option shall be exercisable during its term in accordance with the provisions
        of
        Section 7 of the Plan as follows:

      

      (a)
        Right to Exercise.

      

      (i) Subject
        to subsections 2(a)(ii) and 2(a)(iii) below, this Option shall
        be
        exercisable cumulatively according to the vesting schedule set forth in the
        Certificate, subject to the Optionee's continuing as a Service Provider on
        such
        dates.

      

      (ii) This
        Option may not be exercised for a fraction of a Share.

      

      (iii) This
        Option may be exercised, to the extent it is then vested, for three months
        after
        Optionee ceases to be a Service Provider. Upon death or Disability of the
        Optionee, this Option may be exercised, to the extent it is then vested,
        for one
        year after Optionee ceases to be Service Provider. In no event shall this
        Option
        be exercised later than the Expiration Date as provided above.

      

      (b)
        Method of Exercise.
        This
        Option shall be exercisable by delivery of an Exercise Notice (the "Exercise
        Notice") in the form as set forth in Exhibit A
        hereto
        which shall state the election to exercise the Option, the number of Shares
        with
        respect to which the Option is being exercised, and such other representations
        and agreements as may be required by the Company. The Exercise Notice shall
        be
        accompanied by payment of the aggregate Exercise Price as to all exercised
        Shares. This Option shall be deemed to be exercised upon receipt by the Company
        of such fully executed Exercise Notice accompanied by the aggregate Exercise
        Price.

      

      No
        Shares
        shall be issued pursuant to the exercise of an Option unless such issuance
        and
        such exercise complies with Applicable Laws. Assuming such compliance, for
        income tax purposes the Shares shall be considered transferred to the Optionee
        on the date on which the Option is exercised with respect to such
        Shares.

       

      3.
        Optionee's Representations.
        In the
        event the Shares have not been registered under the Securities Act of 1933,
        as
        amended, at the time this Option is exercised, the Optionee shall, if required
        by the Company, concurrently with the exercise of all or any portion of this
        Option, make to the Company certain representations and warranties as set
        forth
        in the Exercise Notice.

       

      4.
        Lock-Up Period.
        Optionee
        hereby agrees that, if so requested by the Company or any representative
        of the
        underwriters (the "Managing Underwriter") in connection with any registration
        of
        the offering of any securities of the Company under the Securities Act, Optionee
        shall not sell or otherwise transfer any Shares or other securities of the
        Company during the 180-day period (or such other period as may be requested
        in
        writing by the Managing Underwriter and agreed to in writing by the Company
        not
        to exceed 180 days) (the "Market Standoff Period") following the effective
        date of a registration statement of the Company filed under the Securities
        Act.
        The Company may impose stop-transfer instructions with respect to securities
        subject to the foregoing restrictions until the end of such Market Standoff
        Period.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      5.
        Method of Payment.
        Payment
        of the aggregate Exercise Price shall be by any of the following, or a
        combination thereof, at the election of the Optionee (to the extent permitted
        under Section 16(a) of the Plan and all other Applicable
        Laws):

      

      (a) cash;

      

      (b) check;

      

      (c) consideration
        received by the Company under a formal cashless exercise program adopted
        by the
        Company in connection with the Plan; or

      

      (d) surrender
        of other Shares which, (i) have been owned by the Optionee for the
        requisite period necessary to avoid a charge to the Company's earnings for
        financial reporting purposes on the date of surrender, and (ii) have
        a Fair
        Market Value on the date of surrender equal to the aggregate Exercise Price
        of
        the exercised Shares.

       

      6.
        Restrictions on Exercise.
        This
        Option may not be exercised (i) until such time as the Plan has been
        approved by the stockholders of the Company, or (ii) if the issuance
        of
        such Shares upon such exercise or the method of payment of consideration
        for
        such shares would not be permitted under Section 16(a) of the Plan
        or would
        constitute a violation of any Applicable Law.

       

      7.
        Non-Transferability of Option.
        This
        Option may not be transferred in any manner otherwise than by will or by
        the
        laws of descent or distribution and may be exercised during the lifetime
        of
        Optionee only by Optionee. The terms of the Plan and this Option Agreement
        shall
        be binding upon the executors, administrators, heirs, successors and assigns
        of
        the Optionee.

       

      8.
        Term
        of Option.
        The term
        of this Option shall begin on the grant date set forth in the Certificate
        and
        shall expire on the Expiration Date. This Option may be exercised only within
        such term, and may be exercised during such term only in accordance with
        the
        Plan and the terms of this Option Agreement.

       

      9.
        Rights as Stockholder.
        Until
        the issuance of the Shares (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 shall exist
        with respect to the optioned stock, notwithstanding the exercise of the Option.
        The Shares shall be issued to the Optionee as soon as practicable after the
        Option is exercised. No adjustment shall be made for a dividend or other
        right
        for which the record date is prior to the date of issuance except as provided
        in
        Section 7(d) of the Plan.

       

      10.
        Restrictive Legends and Stop-Transfer Orders.

      

      (a)
        Legends.
        Optionee
        understands and agrees that the Company shall cause legends to be placed
        upon
        any certificate(s) evidencing ownership of the Shares in order to evidence
        any
        restrictions on the transfer of the Shares set forth in this Option Agreement
        or
        in the Plan, together with any other legends that may be required by the
        Company
        or by state or federal securities laws.

      

      (b)
        Stop-Transfer Notices.
        Optionee
        agrees that, in order to ensure compliance with the restrictions referred
        to
        herein, the Company may issue appropriate "stop transfer" instructions to
        its
        transfer agent, if any, and that, if the Company transfers its own Shares,
        it
        may make appropriate notations to the same effect in its own
        records.

      

      (c)
        Refusal to Transfer.
        The
        Company shall not be required (i) to transfer on its books any Shares
        that
        have been sold or otherwise transferred in violation of any of the provisions
        of
        this Option Agreement or (ii) to treat as owner of such Shares or
        to accord
        the right to vote or pay dividends to any purchaser or other transferee to
        whom
        such Shares shall have been so transferred.

       

      11.
        Tax
        Consequences.
        Set
        forth below is a brief summary as of the date of this Option of some of the
        federal tax consequences of exercise of this Option and disposition of the
        Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS
        ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE
        EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

      

      (a)
        Exercise of NSO.
        There
        may be a regular federal income tax liability upon the exercise of an NSO.
        The
        Optionee will be treated as having received compensation income (taxable
        at
        ordinary income tax rates) equal to the excess, if any, of the Fair Market
        Value
        of the exercised Shares on the date of exercise over the Exercise Price.
        If
        Optionee is an Employee or a former Employee, the Company will be required
        to
        withhold from Optionee's compensation or collect from Optionee and pay to
        the
        applicable taxing authorities an amount in cash equal to a percentage of
        this
        compensation income at the time of exercise, and may refuse to honor the
        exercise and refuse to deliver Shares if such withholding amounts are not
        delivered at the time of exercise.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (b)
        Exercise of ISO.
        If this
        Option qualifies as an ISO, there will be no regular federal income tax
        liability upon the exercise of the Option, although the excess, if any, of
        the
        Fair Market Value of the exercised Shares on the date of exercise over the
        Exercise Price will be treated as an adjustment to the alternative minimum
        tax
        for federal tax purposes and may subject the Optionee to the alternative
        minimum
        tax in the year of exercise.

      

      (c)
        Disposition of Shares.
        In the
        case of an NSO, if Shares are held for more than one year after the date
        of
        exercise of the Option, any gain realized on disposition of the Shares will
        be
        treated as long-term capital gain for federal income tax purposes. In the
        case
        of an ISO, if Shares transferred pursuant to the Option are held for more
        than
        one year after exercise and more than two years after the grant date of the
        Option, any gain realized on disposition of the Shares will also be treated
        as
        long-term capital gain for federal income tax purposes. If Shares purchased
        under an ISO are disposed of within one year after exercise or two years
        after
        the grant date of the Option, any gain realized on such disposition will
        be
        treated as compensation income in the year of such disposition (taxable at
        ordinary income rates) to the extent of the difference between the Exercise
        Price of the exercised Shares and the lesser of (i) the Fair Market
        Value
        of the exercised Shares on the date of exercise, or (ii) the sale
        price of
        the exercised Shares. Different rules may apply if the Shares are subject
        to a
        substantial risk of forfeiture (within the meaning of Section 83 of
        the
        Code) at the time of purchase. Any additional gain will be taxed as capital
        gain, which will be long-term or short-term depending on the period that
        the ISO
        Shares were held.

      

      (d)
        Notice of Disqualifying Disposition of ISO Shares.
        If the
        Option granted to Optionee herein is an ISO, and if Optionee sells or otherwise
        disposes of any of the Shares acquired pursuant to the ISO on or before the
        later of (i) the date two years after the grant date of the Option,
        or
        (ii) the date one year after the date of exercise, the Optionee shall
        immediately notify the Company in writing of such disposition. Optionee agrees
        that Optionee may be subject to income tax withholding by the Company on
        the
        compensation income recognized by the Optionee as a result of such disqualifying
        disposition.

      

      (e)
        Withholding Taxes.
        Optionee
        agrees to make appropriate arrangements with the Company (or any parent or
        subsidiary of the Company employing or retaining Optionee) for the satisfaction
        of all Federal, state, local and foreign income and employment tax withholding
        requirements applicable to the Option exercise. Optionee acknowledges and
        agrees
        that the Company may refuse to honor the exercise and refuse to deliver the
        Shares if such withholding amounts are not delivered at the time of
        exercise.

       

      12.
        Entire Agreement; Governing Law.
        The Plan
        is incorporated herein by reference. The Plan and this Option Agreement
        (including the Certificate and all of the exhibits, which are parts of this
        Agreement) constitute the entire agreement of the parties with respect to
        the
        subject matter hereof and supersede in their entirety all prior undertakings
        and
        agreements of the Company and Optionee with respect to the subject matter
        hereof, and may not be modified adversely to the Optionee's interest except
        by
        means of a writing signed by the Company and Optionee. This Option Agreement
        is
        governed by the internal substantive laws but not the choice of law rules
        of
        California.

       

      13.
        No
        Guarantee of Continued Service.
        OPTIONEE
        ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING
        SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE
        WILL
        OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION
        OR
        ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT
        THIS
        AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE
        SET
        FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
        ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD,
        OR AT
        ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S
        RIGHT TO TERMINATE OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME,
        WITH OR WITHOUT CAUSE.

       

      14.
        Acknowledgement.
        By
        accepting this Option, Optionee acknowledges receipt of a copy of the Plan
        and
        represents that he or she is familiar with the terms and provisions thereof,
        and
        accepts this Option subject to all of the terms and provisions thereof. Further,
        Optionee acknowledges that Optionee has reviewed the Plan and this Option
        Agreement (including the Certificate and all of the exhibits, which are parts
        of
        this Agreement) in their entirety, has had an opportunity to obtain the advice
        of counsel prior accepting this Option and fully understands all provisions
        of
        the Option. Further, Optionee agrees to accept as binding, conclusive and
        final
        all decisions or interpretations of the Administrator upon any questions
        arising
        under the Plan or this Option. Optionee further agrees to notify the Company
        upon any change in his or her residence address.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      EXHIBIT
        A

      

      EXERCISE
        NOTICE

      

      
        	 	
                To:

              	
                IQ BIOMETRIX, INC. (the "Company")

              	 
	 	
                From:

              	 	 
	 	
                Date:

              	 	 
	 	
                 

                 

                (Last
                  Name) First Name) (M.I.)

              

      

      

      Pursuant
        to the provisions of the IQ Biometrix, Inc. 2004 Stock Plan (the "Plan"),
        Certificate of Stock Option Grant and Option Agreement under which the following
        stock option(s) was/were granted, I hereby elect to exercise the following
        stock
        option(s) granted to me by the Company (as defined in the Plan) to purchase
        shares of Company Common Stock (the "Shares"):

      

      Grant
        Exercise Information:

      

      
        	
                1

              	
                2

              	
                3

              	
                4

              	
                5

              	
                6

              	
                7

              
	
                Grant

                Number
                  (if

                applicable)

              	
                Grant Date

              	
                Grant
                  Type

                (Check One)

              	
                Grant

                Price Per

                Share

              	
                # of Shares

                to
                  Exercise

              	
                Amount Due

                For
                  Stock

              	
                Amount Due

                for
                  Taxes

              
	 	 	
                o ISO
                  o NSO

              	 	 	 	 
	 	 	
                o ISO
                  o NSO

              	 	 	 	 
	 	 	
                o ISO
                  o NSO

              	 	 	 	 
	 	 	
                o ISO
                  o NSO

              	 	 	 	 
	 	 	
                o ISO
                  o NSO

              	 	 	 	 
	 	 	
                o ISO
                  o NSO

              	
                Totals

              	
                (A)

              	
                (B)

              	
                (C)

              

      

      Method
        Of
        Payment: o Check

      ***If
        check not enclosed, please indicate:

      Method
        of Payment 
         
        Total Due for Exercise (B+C): $

      

      TO
        COMPLETE YOUR STOCK OPTION EXERCISE, YOU MUST DO THE FOLLOWING:

      

      1. Review
        the Terms and Conditions of Stock Option Exercise attached as Exhibit B
        to
        this document.

      

      2. Review
        and complete the terms of purchase set forth below.

      

      Terms
        of
        Purchase:

      

      By
        signing this Exercise Notice, I hereby represent and warrant to the Company
        that
        I have read and agree to (i) all of the Terms and Conditions of Stock
        Option Exercise attached hereto as Exhibit B and (ii) all of
        the terms
        and conditions of the Option Agreement (including exhibits).

      

      I
        am
        hereby delivering to the Company: (i) this fully completed and executed
        Exercise Notice and (ii) the full purchase price for the
        Shares.

      

      I
        understand that, if I am an officer or director of the Company, I may be
        subject
        to additional requirements under Federal securities regulations which pertain
        to
        this type of transaction.

      

      
        	
                 

                 

                Signature

              	 

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
        B

      

      TERMS
        AND CONDITIONS OF STOCK OPTION EXERCISE

       

      1.
        Exercise.
        The
        Optionee (the "Optionee") identified on the Exercise Notice to which these
        Terms
        and Conditions of Stock Option Exercise (these "Terms and Conditions") are
        attached has elected to exercise the option (the "Option") to purchase shares
        of
        Common Stock of the Company (as defined in the IQ Biometrix, Inc.
        2004
        Stock Plan) identified on the Exercise Notice, and thereby purchase from
        the
        Company that number of shares of the Company's Common Stock identified on
        the
        Exercise Notice (the "Shares") at the applicable exercise price per share
        set
        forth in the Option Agreement (the "Exercise Price"), and subject to the
        terms
        and conditions of: (i) the 2004 Stock Plan (the "Plan"), (ii) the
        Stock Option Agreement (including all exhibits thereto and the Certificate
        of
        Stock Option Grant (the "Certificate")) pursuant to which the Company granted
        the Option to Optionee (the "Option Agreement"), and (iii) the Exercise
        Notice, including these Terms and Conditions. Unless otherwise defined herein,
        the terms defined in the Plan shall have the same defined meanings in these
        Terms and Conditions.

       

      2.
        Delivery of Payment.
        Purchaser herewith delivers to the Company the full purchase price of the
        Shares, as set forth in the Option Agreement and any and all withholding
        taxes
        due in connection with the exercise of the Option.

       

      3.
        Representations of Optionee.
        Optionee
        acknowledges that Optionee has received, read and understood the Plan and
        the
        Option Agreement (including the Certificate and all of the exhibits, which
        are
        part of the Option Agreement) and agrees to abide by and be bound by their
        terms
        and conditions. Optionee understands that Optionee may suffer adverse tax
        consequences as a result of Optionee's purchase or disposition of the Shares.
        Optionee represents that Optionee has consulted with any tax consultants
        Optionee deems advisable in connection with the purchase or disposition of
        the
        Shares and that Optionee is not relying on the Company for any tax advice.
        Optionee understands and agrees that the Company shall cause the legends
        to be
        placed upon any certificate(s) evidencing ownership of the Shares in order
        to
        evidence any restrictions on the transfer of the Shares set forth in the
        Option
        Agreement or in the Plan, together with any other legends that may be required
        by the Company or by state or federal securities laws.

       

      4.
        Investment Representations.
        In the
        event that the Shares have not been registered under the Securities Act of
        1933,
        as amended (the "Securities Act"), at the time of exercise, then in connection
        with the purchase of the Shares, the Optionee represents to the Company the
        following:

      

      (a) Optionee
        is aware of the Company's business affairs and financial condition and has
        acquired sufficient information about the Company to reach an informed and
        knowledgeable decision to acquire the Shares. Optionee is acquiring these
        Shares
        for investment for Optionee's own account only and not with a view to, or
        for
        resale in connection with, any "distribution" thereof within the meaning
        of the
        Securities Act.

      

      (b) Optionee
        acknowledges and understands that the Shares constitute "restricted securities"
        under the Securities Act and have not been registered under the Securities
        Act
        in reliance upon a specific exemption therefrom, which exemption depends
        upon,
        among other things, the bona fide nature of Optionee's investment intent
        as
        expressed herein. In this connection, Optionee understands that, in the view
        of
        the Securities and Exchange Commission, the statutory basis for such exemption
        may be unavailable if Optionee's representation was predicated solely upon
        a
        present intention to hold these Shares for the minimum capital gains period
        specified under tax statutes, for a deferred sale, for or until an increase
        or
        decrease in the market price of the Shares, or for a period of one year or
        any
        other fixed period in the future. Optionee further understands that the Shares
        must be held indefinitely unless they are subsequently registered under the
        Securities Act or an exemption from such registration is available. Optionee
        further acknowledges and understands that the Company is under no obligation
        to
        register the Shares. Optionee understands that the certificate evidencing
        the
        Shares will be imprinted with a legend which prohibits the transfer of the
        Shares unless they are registered or such registration is not required in
        the
        opinion of counsel satisfactory to the Company and with any other legend
        required under applicable state securities laws.

      

      (c) Optionee
        is familiar with the provisions of Rule 701 and Rule 144, each
        promulgated under the Securities Act, which, in substance, permit limited
        public
        resale of "restricted securities" acquired, directly or indirectly from the
        issuer thereof, in a non-public offering subject to the satisfaction of certain
        conditions. Rule 701 provides that if the issuer qualifies under
        Rule 701 at the time of the grant of the Option to the Optionee, the
        exercise will be exempt from registration under the Securities Act. In the
        event
        the Company becomes subject to the reporting requirements of Section 13
        or
        15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter
        (or such longer period as any market stand-off agreement may require) the
        Shares
        exempt under Rule 701 may be resold, subject to the satisfaction of
        certain
        of the conditions specified by Rule 144, including: (1) the
        resale
        being made through a broker in an unsolicited "broker's transaction" or in
        transactions directly with a market maker (as said term is defined under
        the
        Securities Exchange Act of 1934); and, in the case of an affiliate, (2) the
        availability of certain public information about the Company, (3) the
        amount of Shares being sold during any three month period not exceeding the
        limitations specified in Rule 144(e), and (4) the timely filing
        of a
        Form 144, if applicable.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      In
        the
        event that the Company does not qualify under Rule 701 at the time
        of grant
        of the Option, then the Shares may be resold in certain limited circumstances
        subject to the provisions of Rule 144, which requires the resale to
        occur
        not less than one year after the later of the date the Shares were sold by
        the
        Company or the date the Shares were sold by an affiliate of the Company,
        within
        the meaning of Rule 144; and, in the case of acquisition of the Shares
        by
        an affiliate, or by a non-affiliate who subsequently holds the Shares less
        than
        two years, the satisfaction of the conditions set forth in sections (1),
        (2),
        (3) and (4) of the paragraph immediately above.

      

      (d) Optionee
        further understands that in the event all of the applicable requirements
        of
        Rule 701 or 144 are not satisfied, registration under the Securities
        Act,
        compliance with Regulation A, or some other registration exemption
        will be
        required; and that, notwithstanding the fact that Rules 144 and 701
        are not
        exclusive, the Staff of the Securities and Exchange Commission has expressed
        its
        opinion that persons proposing to sell private placement Shares other than
        in a
        registered offering and otherwise than pursuant to Rules 144 or 701
        will
        have a substantial burden of proof in establishing that an exemption from
        registration is available for such offers or sales, and that such persons
        and
        their respective brokers who participate in such transactions do so at their
        own
        risk. Optionee understands that no assurances can be given that any such
        other
        registration exemption will be available in such event.

       

      5.
        Lock-Up Period.
        Optionee
        hereby agrees that, if so requested by the Company or any representative
        of the
        underwriters (the "Managing Underwriter") in connection with any registration
        of
        the offering of any securities of the Company under the Securities Act, Optionee
        shall not sell or otherwise transfer any Shares or other securities of the
        Company during the 180-day period (or such other period as may be requested
        in
        writing by the Managing Underwriter and agreed to in writing by the Company
        not
        to exceed 180 days) (the "Market Standoff Period") following the effective
        date of a registration statement of the Company filed under the Securities
        Act.
        The Company may impose stop-transfer instructions with respect to securities
        subject to the foregoing restrictions until the end of such Market Standoff
        Period.

       

      6.
        Successors and Assigns.
        The
        Company may assign any of its rights under this Exercise Notice to single
        or
        multiple assignees, and the terms and conditions of this Exercise Notice
        shall
        inure to the benefit of the successors and assigns of the Company. Subject
        to
        the restrictions on transfer herein set forth, the terms and conditions of
        this
        Exercise Notice shall be binding upon Optionee and his or her heirs, executors,
        administrators, successors and assigns.

       

      7.
        Interpretation.
        Any
        dispute regarding the interpretation of this Exercise Notice shall be submitted
        by Optionee or by the Company forthwith to the Administrator which shall
        review
        such dispute at its next regular meeting. The resolution of such a dispute
        by
        the Administrator shall be final and binding on all parties.

       

      8.
        Governing Law; Severability.
        This
        Exercise Notice is governed by the internal substantive laws, but not the
        choice
        of law rules, of California.

       

      9.
        Entire Agreement.
        The Plan
        and Option Agreement (including the Certificate and all exhibits, which are
        parts of the Option Agreement) are incorporated herein by reference. This
        Exercise Notice, the Plan, the Certificate, and the Option Agreement constitute
        the entire agreement of the parties with respect to the subject matter hereof
        and supersede in their entirety all prior undertakings and agreements of
        the
        Company and Optionee with respect to the subject matter hereof, and may not
        be
        modified adversely to the Optionee's interest except by means of a writing
        signed by the CompanyAmended
        and Restated

      1999
        Stock Option Plan

      of

      Wherify
        Wireless, Inc.

       

      1.  PURPOSES
        OF THE PLAN

       

      The
        purposes of this Amended and Restated 1999
        Stock
        Option Plan (the “Plan”)
        of
        Wherify Wireless, Inc., a California corporation (the “Company”),
        are
        to:

       

      (a)  Encourage
        selected employees, directors and consultants to improve operations and increase
        profits of the Company;

       

      (b)  Encourage
        selected employees, directors and consultants to accept or continue employment
        or association with the Company or its Affiliates; and

       

      (c)  Increase
        the interest of selected employees, directors and consultants in the Company’s
        welfare through participation in the growth in value of the common stock
        of the
        Company (the “Common
        Stock”).

       

      Options
        granted under this Plan (“Options”)
        may be
“incentive stock options” (“ISOs”)
        intended to satisfy the requirements of Section 422 of the Internal Revenue
        Code
        of 1986, as amended (the “Code”),
        or
“nonqualified options” (“NQOs”).

       

      2.  ELIGIBLE
        PERSONS

       

      Every
        person who at the date of grant of an Option is an employee of the Company
        or of
        any Affiliate (as defined below) of the Company is eligible to receive NQOs
        or
        ISOs under this Plan. Every person who at the date of grant is a consultant
        to,
        or nonemployee director of, the Company or any Affiliate (as defined below)
        of
        the Company is eligible to receive NQOs under this Plan. The term “Affiliate”
        as used
        in the Plan means a parent or subsidiary corporation as defined in the
        applicable provisions (currently Sections 424(e) and (f), respectively) of
        the
        Code. The term “employee”
        includes an officer or director who is an employee of the Company. The term
        “consultant”
        includes persons employed by, or otherwise affiliated with, a
        consultant.

       

      3.  STOCK
        SUBJECT TO THIS PLAN

       

      Subject
        to the provisions of Section 6.1.1 of the Plan, the total number of shares
        of
        stock which may be issued under options granted pursuant to this Plan and
        the
        total number of shares provided for issuance under this Plan shall be 1,150,000
        shares of Common Stock and shall at no time exceed the applicable percentage
        as
        calculated in accordance with Section 260.140.45 of Chapter 3 of Title 10
        of the
        California Code of Regulations. The shares covered by the portion of any
        grant
        under the Plan which expires unexercised shall become available again for
        grants
        under the Plan.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      4.  ADMINISTRATION

       

      4.1  General.
        This
        Plan shall be administered by the Board of Directors of the Company (the
        “Board”)
        or,
        either in its entirety or only insofar as required pursuant to Section 4.2
        hereof, by a committee (the “Committee”)
        of at
        least two Board members to which administration of the Plan, or of part of
        the
        Plan, is delegated (in either case, the “Administrator”).

       

      4.2  Public
        Company. From
        and
        after such time as the Company registers a class of equity securities under
        Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange
        Act”),
        the
        Committee shall consist of Board members who are “Non-Employee Directors” as
        defined under Rule 16b-3 promulgated by the Securities and Exchange Commission
        (“Rule
        16b-3”),
        or
        any successor rule thereto.

       

      4.3  Authority
        of Administrator.
        Subject
        to the other provisions of this Plan, the Administrator shall have the
        authority, in its discretion: (i) to grant Options; (ii) to determine
        the
        fair market value of the Common Stock subject to Options; (iii) to determine
        the
        exercise price of Options granted; (iv) to determine the persons (each an
        “Optionee”)
        to
        whom, and the time or times at which, Options shall be granted, and the number
        of shares subject to each Option; (v) to interpret this Plan; (vi) to prescribe,
        amend, and rescind rules and regulations relating to this Plan; (vii) to
        determine the terms and provisions of each Option granted (which need not
        be
        identical), including but not limited to, the time or times at which Options
        shall be exercisable; (viii) with the consent of the Optionee, to modify
        or
        amend any Option; (ix) to defer (with the consent of the Optionee) the exercise
        date of any Option; (x) to authorize any person to execute on behalf
        of the
        Company any instrument evidencing the grant of an Option; and (xi) to make
        all
        other determinations deemed necessary or advisable for the administration
        of
        this Plan. The Administrator may delegate nondiscretionary administrative
        duties
        to such employees of the Company as it deems proper.

       

      4.4  Interpretation
        by Administrator.
        All
        questions of interpretation, implementation, and application of this Plan
        shall
        be determined by the Administrator. Such determinations shall be final and
        binding on all persons.

       

      4.5  Rule
        16b-3.
         With
        respect to persons subject to Section 16 of the Exchange Act, if any,
        transactions under this Plan are intended to comply with the applicable
        conditions of Rule 16b-3, or any successor rule thereto. To the extent any
        provision of this Plan or action by the Administrator fails to so comply,
        it
        shall be deemed null and void, to the extent permitted by law and deemed
        advisable by the Administrator. Notwithstanding the above, it shall be the
        responsibility of such persons, not of the Company or the Administrator,
        to
        comply with the requirements of Section 16 of the Exchange Act; and
        neither
        the Company nor the Administrator shall be liable if this Plan or any
        transaction under this Plan fails to comply with the applicable conditions
        of
        Rule 16b-3 or any successor rule thereto, or if any such person incurs any
        liability under Section 16 of the Exchange Act.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      5.  GRANTING
        OF OPTIONS; OPTION AGREEMENT

       

      5.1  Termination
        of Plan.
        No
        options shall be granted under this Plan after ten years from the date of
        adoption of this Plan by the Board.

       

      5.2  Stock
        Option Agreement. Each
        Option shall be evidenced by a written stock option agreement (the “Option
        Agreement”),
        in
        form satisfactory to the Company, executed by the Company and the person
        to whom
        such Option is granted; provided, however, that the failure by the Company,
        the
        Optionee, or both, to execute the Option Agreement shall not invalidate the
        granting of an Option, although the exercise of each option shall be subject
        to
        Section 6.1.3.

       

      5.3  Type
        of Option.
        The
        Option Agreement shall specify whether each Option it evidences is an NQO
        or an
        ISO. 

       

      5.4  Early
        Approval of Grants.
        The
        Administrator may approve the grant of Options under this Plan to persons
        who
        are expected to become employees, directors or consultants of the Company,
        but
        are not employees, directors or consultants at the date of approval, with
        such
        grant to specify whether it is effective immediately or effective only on
        such
        person becoming an employee, director or consultant.

       

      6.  TERMS
        AND CONDITIONS OF OPTIONS

       

      Each
        Option granted under this Plan shall be subject to the terms and conditions
        set
        forth in Section 6.1. NQOs shall be also subject to the terms and conditions
        set
        forth in Section 6.2, but not those set forth in Section 6.3. ISOs
        shall
        also be subject to the terms and conditions set forth in Section 6.3,
        but
        not those set forth in Section 6.2.

       

      6.1  Terms
        and Conditions to Which All Options Are Subject.
        Options
        granted under this Plan shall be subject to the following terms and
        conditions:

       

      6.1.1  Changes
        in Capital Structure.
        Subject
        to Section 6.1.2, if the stock of the Company is changed by reason of a stock
        split, reverse stock split, stock dividend, or recapitalization, combination
        or
        reclassification, appropriate adjustments shall be made by the Board in (a)
        the
        number and class of shares of stock subject to this Plan and each Option
        outstanding under this Plan, and (b) the exercise price of each outstanding
        Option; provided, however, that the Company shall not be required to issue
        fractional shares as a result of any such adjustments. Each such adjustment
        shall be subject to approval by the Board in its absolute
        discretion.

       

      6.1.2  Corporate
        Transactions.

       

      (a)  Dissolution
        or Liquidation.
        In the
        event of the proposed dissolution or liquidation of the Company, the
        Administrator shall notify each Optionee at least 30 days prior to such proposed
        action. To the extent not previously exercised, all Options will terminate
        immediately prior to the consummation of such proposed action.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      (b)  Merger
        or Asset Sale.
        In the
        event of a merger of the Company with or into another corporation, or the
        sale
        of substantially all of the assets of the Company:

       

      (i)  Options.
        Each
        Option shall be assumed or an equivalent option substituted by the successor
        corporation (including as a “successor” any purchaser of substantially all of
        the assets of the Company) or a parent or subsidiary of the successor
        corporation. In the event that the successor corporation refuses to assume
        or
        substitute for the Option, the Optionee shall have the right to exercise
        the
        Option as to all of the shares of Common Stock covered by the Option, including
        Shares as to which it would not otherwise be exercisable. If an Option is
        exercisable in lieu of assumption or substitution in the event of a merger
        or
        sale of assets, the Administrator shall notify the Optionee that the Option
        shall be fully exercisable for a period of 15 days from the date of such
        notice,
        and the Option shall terminate upon the expiration of such period. For the
        purposes of this paragraph, the Option shall be considered assumed if, following
        the merger or sale of assets, the option confers the right to purchase or
        receive, for each share of Common Stock subject to the Option immediately
        prior
        to the merger or sale of assets, the consideration (whether stock, cash,
        or
        other securities or property) received in the merger or sale of assets 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 sale
        of
        assets was not solely common stock of the successor corporation or its parent
        entity, the Administrator may, with the consent of the successor corporation,
        provide for the consideration to be received upon the exercise of the Option,
        for each Share of Common Stock subject to the Option, to be solely common
        stock
        of the successor corporation or its parent entity equal in fair market value
        to
        the per share consideration received by holders of Common Stock in the merger
        or
        sale of assets.

       

      (ii)  Shares
        Subject to Right of Repurchase.
        Any
        Shares subject to a Right of Repurchase of the Company shall be exchanged
        for
        the consideration (whether stock, cash, or other securities or property)
        received in the merger or asset sale by the holders of Common Stock for each
        share held on the effective date of the transaction, as described in the
        preceding paragraph. If in such exchange the Optionee receives shares of
        stock
        of the successor corporation or a parent or subsidiary of such successor
        corporation, and if the successor corporation has agreed to assume or substitute
        for Options as provided in the preceding paragraph, such exchanged shares
        shall
        continue to be subject to a Right of Repurchase as provided in the Optionee’s
        Stock Option Plan stock purchase agreement. If, as provided in the preceding
        paragraph, the Optionee shall have the right to exercise an Option as to
        all of
        the shares of Common Stock covered thereby, all Shares that are subject to
        a
        Right of Repurchase of the Company shall be released from such Right of
        Repurchase and shall be fully vested.

       

      6.1.3  Time
        of Option Exercise.
        Subject
        to Section 5 and Section 6.3.4, Options granted under this Plan shall be
        exercisable (a) immediately as of the effective date of the Option Agreement
        granting the Option, or (b) in accordance with a schedule related to the
        date of
        the grant of the Option, the date of first employment, or such other date
        as may
        be set by the Administrator (in any case, the “Vesting
        Base Date”)
        and
        specified in the Option Agreement relating to such Option; provided, however,
        that with respect to Options granted to employees who are not officers or
        directors, the right to exercise an Option must vest at the rate of at least
        20%
        per year over five years from the date the Option was granted. Options granted
        to officers, directors or consultants may become fully exercisable, subject
        to
        reasonable conditions such as continued employment, at any time or during
        any
        period established by the Board of the Administrator in accordance with this
        Plan. In any case, no Option shall be exercisable until a written Option
        Agreement in form satisfactory to the Company is executed by the Company
        and the
        Optionee, and the person exercising the option executes an appropriate stock
        purchase agreement with the Company. Further, if at any time the Company
        is an
“S corporation” under Section 1361 of the Code, the Company may, if the
        Administrator determines that the exercise of an option would cause the Company
        to cease to qualify as an “S corporation,” either defer the exercise of such
        option until such time as the exercise would no longer cause the Company
        to
        cease to so qualify or permit the exercise of such option with the stock
        to be
        acquired to be subject to simultaneous repurchase by the Company at its fair
        market value, so that the Optionee never has rights as a shareholder of the
        Company.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      6.1.4  Option
        Grant Date.
        Except
        in the case of grants contingent on the beginning of employment or other
        service, as described in Section 5.4, the date of grant of an Option under
        this
        Plan shall be the date as of which the Administrator approves the grant.
        

       

      6.1.5  Nonassignability
        of Option Rights.
        Except
        as otherwise determined by the Administrator and expressly set forth in the
        Option Agreement, no Option granted under this Plan shall be assignable or
        otherwise transferable by the Optionee except by will or by the laws of descent
        and distribution. During the life of the Optionee, except as otherwise
        determined by the Administrator and expressly set forth in the Option Agreement,
        an Option shall be exercisable only by the Optionee.

       

      6.1.6  Payment.
        Except
        as provided below, payment in full, in cash, shall be made for all stock
        purchased at the time written notice of exercise of an Option is given to
        the
        Company, and proceeds of any payment shall constitute general funds of the
        Company. At the time an Option is granted or exercised, the Administrator,
        in
        the exercise of its absolute discretion after considering any tax or accounting
        consequences, may authorize any one or more of the following additional methods
        of payment:

       

      (a)  Acceptance
        of the Optionee’s full recourse promissory note for all or part of the Option
        price, payable on such terms and bearing such interest rate as determined
        by the
        Administrator (but in no event less than the minimum interest rate specified
        under the Code at which no additional interest would be imputed and in no
        event
        more than the maximum interest rate allowed under applicable usury laws),
        which
        promissory note may be either secured or unsecured in such manner as the
        Administrator shall approve (including, without limitation, by a security
        interest in the shares of the Company); and

       

      (b)  Delivery
        (actual or constructive) by the Optionee of Common Stock already owned by
        the
        Optionee for all or part of the Option price, provided the value (determined
        as
        set forth in Section 6.1.11) of such Common Stock is equal on the
        date of
        exercise to the Option price, or such portion thereof as the Optionee is
        authorized to pay by delivery of such stock; provided, however, that if an
        Optionee has exercised any portion of any Option granted by the Company by
        delivery of Common Stock, the Optionee may not, within six months following
        such
        exercise, exercise any Option granted under this Plan by delivery of Common
        Stock without the consent of the Administrator.

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      6.1.7  Termination
        of Employment.

       

      (a)  If,
        for
        any reason other than death, disability or termination for “cause” (as defined
        below), an Optionee ceases to be employed by the Company or any of its
        Affiliates (such event being called a “Termination”),
        Options held at the date of Termination (to the extent then exercisable)
        may be
        exercised in whole or in part at any time within three months of the date
        of
        such Termination, or such other period of not less than 30 days after the
        date
        of such Termination as is specified in the Option Agreement (but in no event
        after the Expiration Date); provided,
        that if
        such exercise of the Option would result in liability for the Optionee under
        Section 16(b) of the Exchange Act, then such 90-day period automatically
        shall be extended until the tenth day following the last date upon which
        Optionee has any liability under Section 16(b) (but in no event after
        the
        Expiration Date, as defined below).

       

      (b)  If
        an
        Optionee dies while employed by the Company or an Affiliate or within the
        period
        that the Option remains exercisable after Termination, Options then held
        (to the
        extent then exercisable) may be exercised, in whole or in part, by the Optionee,
        by the Optionee’s personal representative, or by the person to whom the Option
        is transferred by devise or the laws of descent and distribution, at any
        time
        within 12 months after the death of the Optionee, or such other period of
        not
        less than six months from the date of Termination as is specified in the
        Option
        Agreement (but in no event after the Expiration Date). 

       

      (c)  If
        an
        Optionee ceases to be employed by the Company as a result of his or her
        disability, the Optionee may, but only within six months after the date of
        Termination (and in no event after the Expiration Date), exercise the Option
        to
        the extent otherwise entitled to exercise it at the date of Termination;
        provided, however, that if such disability is not a “disability” as such term is
        defined in Section 22(e)(3) of the Code, in the case of an ISO such ISO shall
        automatically convert to an NQO on the day three months and one day following
        such Termination. To the extent that the Optionee was not entitled to exercise
        the Option at the date of Termination or if the Optionee does not exercise
        such
        Option to the extent so entitled within the time specified herein, the Option
        shall terminate, and the Shares covered by such Option shall revert to the
        Plan.

       

      (d)  If
        an
        Optionee is terminated for “cause” all Options then held by such Optionee shall
        terminate and no longer be exercisable 30 days after the date of
        Termination.

       

      (e)  For
        purposes of this Section 6.1.7, “employment”
        includes service as an employee, a director or as a consultant.

       

      (f)  For
        purposes of this Section 6.1.7, an Optionee’s employment shall not be deemed to
        terminate by reason of sick leave, military leave or other leave of absence
        approved by the Administrator, if the period of any such leave does not exceed
        three months or, if longer, if the Optionee’s right to reemployment by the
        Company or any Affiliate is guaranteed either contractually or by
        statute.

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      (g)  For
        purposes of this Section 6.1.7, “cause”
        shall
        mean Termination (i) by reason of Optionee’s commission of a felony,
        misdemeanor or other illegal conduct involving dishonesty, fraud or other
        matters of moral turpitude, (ii) by reason of Optionee’s dishonesty
        towards, fraud upon, or deliberate injury or attempted injury to the Company
        or
        any of its Affiliates, or (iii) by reason of Optionee’s willfully engaging
        in misconduct which is materially and demonstrably injurious to the Company
        or
        any of its Affiliates.

       

      6.1.8  Repurchase
        of Stock.
        At the
        option of the Administrator, the stock to be delivered pursuant to the exercise
        of any Option granted to an employee, director or consultant under this Plan
        may
        be subject to a right of repurchase in favor of the Company with respect
        to any
        employee, or director or consultant whose employment, or director or consulting
        relationship with the Company is terminated. Such right of repurchase shall
        be
        exercisable as the Administrator may determine in the grant of Option, either
        or
        both:

       

      (a)  at
        the
        Option exercise price and (i) shall lapse at the rate of at least 20% per
        year
        over five years from the date the Option is granted (without regard to the
        date
        it was exercised or becomes exercisable), and must be exercised for cash
        or
        cancellation of purchase money indebtedness within three months of such
        termination and (ii) if the right is assignable by the Company, the assignee
        must pay the Company upon assignment of the right (unless the assignee is
        a 100%
        owned subsidiary of the Company or is an Affiliate) cash equal to the difference
        between the Option exercise price and the value (determined as set forth
        in
        Section 6.1.11) of the stock to be purchased if the Option exercise price
        is
        less than such value; and

       

      (b)  at
        the
        higher of the Option exercise price or the value (determined as set forth
        in
        Section 6.1.11) of the stock being purchased on the date of termination,
        and
        must be exercised for cash or cancellation of purchase money indebtedness
        within
        three months of termination of employment (or in the case of securities issued
        upon exercise of options after the date of termination, within three months
        after the date of exercise), and such right shall terminate when the Company’s
        securities become publicly traded. 

       

      In
        addition to the restrictions set forth in subparagraphs (a) and (b) above,
        the
        shares held by an officer, director or consultant of the issuer or by an
        affiliate of the issuer may be subject to additional or greater restrictions,
        in
        the absolute discretion of the Administrator.

       

      Determination
        of the number of shares subject to any such right of repurchase shall be
        made as
        of the date the employee’s employment by, director’s director relationship with,
        or consultant’s consulting relationship with, the Company terminates, not as of
        the date that any Option granted to such employee, director or consultant
        is
        thereafter exercised.

       

      6.1.9  Withholding
        and Employment Taxes.
        At the
        time of exercise of an Option or at such other time or times as the amount
        of
        such obligations become determinable (the “Tax
        Date”),
        the
        Optionee shall remit to the Company in cash all applicable federal and state
        withholding and employment taxes due by reason of the exercise of an Option,
        the
        disposition of Common Stock acquired through exercise of an Option, or the
        lapse
        of rights to repurchase Common Stock. The Administrator may, in its absolute
        discretion after considering any tax or accounting consequences, permit an
        Optionee to (i) deliver a full recourse promissory note on such terms as
        the
        Administrator deems appropriate, (ii) tender to the Company previously owned
        shares of Stock or other securities of the Company, or (iii) have shares
        of
        Common Stock which are acquired upon exercise of the Option withheld by the
        Company to pay some or all of the amount of tax that is required by law to
        be
        withheld by the Company as a result of the exercise of such Option, the
        disposition of Common Stock acquired through exercise of an Option, or the
        lapse
        of rights to repurchase Common Stock, subject to the following
        limitations:

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      (a)  Any
        election pursuant to clause (ii) above, where the Optionee is tendering Common
        Stock issued pursuant to the exercise of an Option, shall require that such
        shares be held at least six months prior to the Tax Date.

       

      (b)  Any
        of
        the foregoing limitations may be waived (or additional limitations may be
        imposed) by the Administrator, in its absolute discretion, if the Administrator
        determines that such foregoing limitations are not required (or that such
        additional limitations are required) in order that the transaction shall
        be
        exempt from Section 16(b) of the Exchange Act pursuant to Rule 16b-3, or
        any
        successor rule thereto. In addition, any of the foregoing limitations may
        be
        waived by the Administrator, in its sole discretion, if the Administrator
        determines that Rule 16b-3, or any successor rule thereto, is not applicable
        to
        the exercise of the Option by the Optionee or for any other reason.

       

      (c)  Any
        securities tendered or withheld in accordance with this Section 6.1.9 shall
        be
        valued by the Company as of the Tax Date.

       

      6.1.10  Other
        Provisions.
        Each
        Option granted under this Plan may contain such other terms, provisions,
        and
        conditions not inconsistent with this Plan as may be determined by the
        Administrator, and each ISO granted under this Plan shall include such
        provisions and conditions as are necessary to qualify the Option as an
“incentive stock option” within the meaning of Section 422 of the Code. If
        Options provide for a right of first refusal in favor of the Company with
        respect to stock acquired by employees, directors or consultants, such Options
        shall provide that the right of first refusal shall terminate upon the closing
        of the Company’s initial registered public offering to the public
        generally.

       

      6.1.11  Determination
        of Value.
        For
        purposes of the Plan, the value of Common Stock or other securities of the
        Company shall be determined as follows:

       

      (a)  If
        the
        stock of the Company is listed on any established stock exchange or a national
        market system, including without limitation the National Market System of
        the
        National Association of Securities Dealers, Inc. Automated Quotation System,
        its
        fair market value shall be the closing sales price for such stock or the
        closing
        bid if no sales were reported, as quoted on such system or exchange (or the
        largest such exchange) for the date the value is to be determined (or if
        there
        are no sales for such date, then for the last preceding business day on which
        there were sales), as reported in the Wall
        Street Journal
        or
        similar publication.

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      (b)  If
        the
        stock of the Company is regularly quoted by a recognized securities dealer
        but
        selling prices are not reported, its fair market value shall be the mean
        between
        the high bid and low asked prices for the stock on the date the value is
        to be
        determined (or if there are no quoted prices for the date of grant, then
        for the
        last preceding business day on which there were quoted prices).

       

      (c)  In
        the
        absence of an established market for the stock, the fair market value thereof
        shall be determined in good faith by the Administrator, by consideration
        of such
        factors as the Administrator in its discretion deems appropriate among the
        recent issue price of other securities of the Company, the Company’s net worth,
        prospective earning power, dividend-paying capacity, and other relevant factors,
        including the goodwill of the Company, the economic outlook in the Company’s
        industry, the Company’s position in the industry and its management, and the
        values of stock of other corporations in the same or a similar line of
        business.

       

      6.1.12  Option
        Term.
        Subject
        to Section 6.3.5, no Option shall be exercisable more than ten years after
        the
        date of grant, or such lesser period of time as is set forth in the Option
        Agreement (the end of the maximum exercise period stated in the stock option
        agreement is referred to in this Plan as the “Expiration
        Date”).

       

      6.1.13  Exercise
        Price.
        The
        exercise price of any Option granted to any person who owns, directly or
        by
        attribution under Section 424(d) of the Code, stock possessing more than
        ten
        percent of the total combined voting power of all classes of stock of the
        Company or of any Affiliate (a “Ten
        Percent Shareholder”)
        shall
        in no event be less than 110% of the fair market value (determined in accordance
        with Section 6.1.11) of the stock covered by the Option at the time the Option
        is granted.

       

      6.1.14  Limits
        on Grants for Qualified Incentive-Based Compensation.
        The
        Company may not issue Options with a fair market value exercise price as
        of the
        date of grant covering in the aggregate more than 407,750 shares of Common
        Stock
        to any one participant in any calendar year.

       

      6.2  Exercise
        Price of NQOs.
        Except
        as set forth in Section 6.1.13, the exercise price of any NQO granted under
        this
        Plan shall be not less than 85% of the fair market value (determined in
        accordance with Section 6.1.11) of the stock subject to the Option on the
        date
        of grant.

       

      6.3  Terms
        and Conditions to Which Only ISOs Are Subject.
        Options
        granted under this Plan which are designated as ISOs shall be subject to
        the
        following terms and conditions:

       

      6.3.1  Exercise
        Price.
        Except
        as set forth in Section 6.1.13, the exercise price of an ISO shall
        be
        determined in accordance with the applicable provisions of the Code and shall
        in
        no event be less than the fair market value (determined in accordance with
        Section 6.1.11) of the stock covered by the Option at the time the Option
        is
        granted or deemed granted under Section 6.3.3.

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      6.3.2  Disqualifying
        Dispositions.
        If
        stock acquired by exercise of an ISO granted pursuant to this Plan is disposed
        of in a “disqualifying disposition” within the meaning of Section 422 of the
        Code, the holder of the stock immediately before the disposition shall promptly
        notify the Company in writing of the date and terms of the disposition and
        shall
        provide such other information regarding the Option as the Company may
        reasonably require.

       

      6.3.3  Grant
        Date.
        If an
        ISO is granted in anticipation of employment as provided in Section 5.4,
        the
        Option shall be deemed granted, without further approval, on the date the
        grantee assumes the employment relationship forming the basis for such grant,
        and, in addition, satisfies all requirements of this Plan for Options granted
        on
        that date.

       

      6.3.4  Vesting.
        Notwithstanding any other provision of this Plan, ISOs granted under all
        incentive stock option plans of the Company and its subsidiaries may not
“vest”
        for more than $100,000 in fair market value of stock (measured on the grant
        dates(s)) in any calendar year. For purposes of the preceding sentence, an
        option “vests” when it first becomes exercisable. If, by their terms, such ISOs
        taken together would vest to a greater extent in a calendar year, including
        vesting resulting from a change in control of the Company, such ISOs shall
        be
        treated as NQOs to the extent such $100,000 limit is exceeded. In no event
        shall
        more than $100,000 in fair market value of stock (measured on the grant date(s))
        vest in any calendar year with respect to the ISOs. Additionally, in no event,
        will the operation of this Section 6.3.4 cause an ISO to vest before its
        terms
        or, having vested, cease to be vested.

       

      6.3.5  Term.
        Notwithstanding Section 6.1.12, no ISO granted to any Ten Percent Shareholder
        shall be exercisable more than five years after the date of grant.

       

      7.  MANNER
        OF EXERCISE

       

      7.1  Written
        Notice; Payment.
        An
        Optionee wishing to exercise an Option shall give written notice to the Company
        at its principal executive office, to the attention of the officer of the
        Company designated by the Administrator, accompanied by payment of the exercise
        price as provided in Section 6.1.6. The date the Company receives written
        notice
        of an exercise hereunder accompanied by payment of the exercise price will
        be
        considered as the date such Option was exercised.

       

      7.2  Delivery
        of Stock.
        Promptly after receipt of written notice of exercise of an Option, the Company
        shall, without stock issue or stock transfer taxes to the Optionee or other
        person entitled to exercise the Option, deliver to the Optionee or such other
        person a certificate or certificates for the requisite number of shares of
        stock
        or register such Optionee as a shareholder by book entry. An Optionee or
        permitted transferee of an Optionee shall not have any privileges as a
        shareholder with respect to any shares of stock covered by the Option until
        the
        date of issuance (as evidenced by the appropriate entry on the books of the
        Company or a duly authorized transfer agent) of such shares.

       

      
        
           

        

        
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      8.  EMPLOYMENT
        OR CONSULTING RELATIONSHIP

       

      Nothing
        in this Plan or any Option granted thereunder shall interfere with or limit
        in
        any way the right of the Company or of any of its Affiliates to terminate
        any
        Optionee’s employment or consulting at any time, nor confer upon any Optionee
        any right to continue in the employ of, or consult with, the Company or any
        of
        its Affiliates, nor interfere in any way with provisions in the Company’s
        charter documents or applicable law relating to the election, appointment,
        terms
        of office, and removal of members of the Board.

       

      9.  FINANCIAL
        INFORMATION

       

      The
        Company shall provide to each Optionee during the period such Optionee holds
        an
        outstanding Option, and to each holder of Common Stock acquired upon exercise
        of
        Options granted under the Plan for so long as such person is a holder of
        such
        Common Stock, annual financial statements of the Company as prepared either
        by
        the Company or independent certified public accountants of the Company. Such
        financial statements shall include, at a minimum, a balance sheet and an
        income
        statement, and shall be delivered as soon as practicable following the end
        of
        the Company’s fiscal year. The provisions of this Section 9 shall not apply
        with respect to Optionees who are key employees of the Company whose duties
        in
        connection with the Company assures them access to information equivalent
        to the
        information provided in the financial statements.

       

      10.  CONDITIONS
        UPON ISSUANCE OF SHARES

       

      Shares
        of
        Common Stock shall not be issued pursuant to the exercise of an Option unless
        the exercise of such Option and the issuance and delivery of such shares
        pursuant thereto shall comply with all relevant provisions of law, including,
        without limitation, the Securities Act of 1933, as amended (the “Securities
        Act”).

       

      11.  NONEXCLUSIVITY
        OF THE PLAN

       

      The
        adoption of the Plan shall not be construed as creating any limitations on
        the
        power of the Company to adopt such other incentive arrangements as it may
        deem
        desirable, including, without limitation, the granting of stock options other
        than under the Plan.

       

      12.  MARKET
        STANDOFF

       

      Each
        Optionee, if so requested by the Company or any representative of the
        underwriters in connection with any registration of the offering of any
        securities of the Company under the Securities Act shall not sell or otherwise
        transfer any shares of Common Stock acquired upon exercise of Options during
        the
        180-day period following the effective date of a registration statement of
        the
        company filed under the Securities Act; provided, however, that such restriction
        shall apply only to the first two registration statements of the Company
        to
        become effective under the Securities Act which includes securities to be
        sold
        on behalf of the Company to the public in an underwritten public offering
        under
        the Securities Act. The Company may impose stop-transfer instructions with
        respect to securities subject to the foregoing restriction until the end
        of such
        180-day period.

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      13.  AMENDMENTS
        TO PLAN

       

      The
        Board
        may at any time amend, alter, suspend or discontinue this Plan. Without the
        consent of an Optionee, no amendment, alteration, suspension or discontinuance
        may adversely affect outstanding Options except to conform this Plan and
        ISOs
        granted under this Plan to the requirements of federal or other tax laws
        relating to incentive stock options. No amendment, alteration, suspension
        or
        discontinuance shall require shareholder approval unless (a) shareholder
        approval is required to preserve incentive stock option treatment for federal
        income tax purposes, (b) shareholder approval is required to preserve option
        grants as “qualified performance-based compensation” under Section 162(m) of the
        Code, or (c) the Board otherwise concludes that shareholder approval is
        advisable.

       

      14.  EFFECTIVE
        DATE OF PLAN

       

      This
        Plan
        shall become effective upon adoption by the Board provided, however, that
        no
        Option shall be exercisable unless and until written consent of the shareholders
        of the Company, or approval of shareholders of the Company voting at a validly
        called shareholders’ meeting, is obtained within 12 months after adoption by the
        Board. If such shareholder approval is not obtained within such time, Options
        granted hereunder shall terminate and be of no force and effect from and
        after
        expiration of such 12-month period. Options may be granted and exercised
        under
        this Plan only after there has been compliance with all applicable federal
        and
        state securities laws.

       

      Plan
        adopted by the Board of Directors
        on:              
        June
        1,
        1999

      Plan
        approved by Shareholders on:  
June
        1,
        1999

      

      Plan
        amended by the Board of Directors
        on:            
        March
        8,
        2002

      Plan
        amended by Shareholders
        on:                            
        March
        8,
        2002

      

      Plan
        amended by the Board of Directors
        on:            
        August
        16, 2004

      Plan
        amended by Shareholders
        on:                            
        August
        16, 2004

       

      
 

      
        
           

        

        
          12

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