Document:

Exhibit
      10.2

    FORM
      OF PacketVideo
      Corporation

     

    2005
      EQUITY INCENTIVE PLAN

     

    As
      Adopted Effective August 1, 2005

    Termination
      Date: July 31, 2015

    

    1.  PURPOSES.

     

    (a)  Effective
      Date.
      The
      PacketVideo Corporation 2005 Equity Incentive Plan has been adopted effective
      as
      of August 1, 2005.

     

    (b)  Eligible
      Stock Award Recipients.
      The
      persons eligible to receive Stock Awards are the Employees, Directors and
      Consultants of the Company and its Affiliates.

     

    (c)  Available
      Stock Awards.
      The
      purpose of the Plan is to provide a means by which eligible recipients of Stock
      Awards may be given an opportunity to benefit from increases in value of the
      Common Stock through the granting of the following Stock Awards: (i) Incentive
      Stock Options, (ii) Nonstatutory Stock Options, (iii) stock bonuses and (iv)
      rights to acquire restricted stock.

     

    (d)  General
      Purpose.
      The
      Company, by means of the Plan, seeks to retain the services of the group of
      persons eligible to receive Stock Awards, to secure and retain the services
      of
      new members of this group and to provide incentives for such persons to exert
      maximum efforts for the success of the Company and its Affiliates.

     

    2.  DEFINITIONS.

     

    (a)  “Adjusted
      Option”
      has the
      meaning ascribed to that term in Section 12(c).

     

    (b)  “Affiliate”
      means
      any parent corporation or subsidiary corporation of the Company, whether now
      or
      hereafter existing, as those terms are defined in Sections 424(e) and (f),
      respectively, of the Code.

     

    (c)  “Board”
      means
      the Board of Directors of the Company.

     

    (d)  “Capitalization
      Adjustment”
      has the
      meaning ascribed to that term in Section 11(a).

     

    (e)  “Cause”
      shall
      means any act or any failure to act on the part of a participant which
      constitutes (i) willful misconduct which is injurious to the Company, (ii)
      fraud, embezzlement, theft or dishonesty against the Company or any of its
      affiliates, or the Board of Directors of the Company or any of its affiliates,
      (iii) a willful or grossly negligent violation of law in connection with or
      in
      the course of the participant’s duties or employment with the Company or any of
      its affiliates, (iv) a felony for which the participant is convicted or pleads
      nolo
      contendere,
      (v)
      willful or grossly negligent engagement in any activity competitive with the
      business of the Company as to which the Company has notified the participant
      in
      writing and the participant has not ceased (other than for reasons beyond the
      control of participant), within 3 business days following receipt of such
      notice, his or her participation in such activity, (vi) a failure to follow
      reasonable directions or instructions of a more senior manager or the Board
      of
      Directors of the Company which are consistent with the participant’s position
      and responsibilities, and such failure shall have continued (other than for
      reasons beyond the control of the participant) for a period of 3 business days
      after receipt of written notice thereof from the Company, (vii) willful or
      grossly negligent breach of any stated employment policy of the Company, (viii)
      willful and wrongful damage to material property of the Company or any of its
      affiliates or (ix) willful and wrongful disclosure of confidential information
      of the Company or any of its affiliates.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (f)  “Code”
      means
      the Internal Revenue Code of 1986, as amended.

     

    (g)  “Committee”
      means a
      committee of one or more members of the Board appointed by the Board in
      accordance with subsection 3(c).

     

    (h)  “Common
      Stock”
      means
      the common stock of the Company, subject to subsection 12(f). 

     

    (i)  “Company”
      means
      PacketVideo Corporation, a Delaware corporation.

     

    (j)  “Consultant”
      means
      any person, including an advisor, (i) engaged by the Company or an Affiliate
      to
      render consulting or advisory services and who is compensated for such services
      or (ii) who is a member of the Board of Directors of an Affiliate. However,
      the
      term “Consultant” shall not include either Directors who are not compensated by
      the Company for their services as Directors or Directors who are merely paid
      a
      director’s fee by the Company for their services as Directors.

     

    (k)  “Continuous
      Service”
      means
      that the Participant’s service with the Company or an Affiliate, whether as an
      Employee, Director or Consultant, is not interrupted or terminated. The
      Participant’s Continuous Service shall not be deemed to have terminated merely
      because of a change in the capacity in which the Participant renders service
      to
      the Company or an Affiliate as an Employee, Consultant or Director or a change
      in the entity for which the Participant renders such service, provided that
      there is no interruption or termination of the Participant’s Continuous Service.
      For example, a change in status from an Employee of the Company to a Consultant
      of an Affiliate or a Director will not constitute an interruption of Continuous
      Service. The Board or the chief executive officer of the Company, in that
      party’s sole discretion, may determine whether Continuous Service shall be
      considered interrupted in the case of any leave of absence approved by that
      party, including sick leave, military leave or any other personal
      leave.

     

    (l)  “Conversion
      Ratio”
      has the
      meaning ascribed to that term in Section 12(b).

     

    (m)  “Conversion
      Time”
      has the
      meaning ascribed to that term in Section 12(a).

     

    (n)  “Corporate
      Parent”
      means
      Parent or any corporation that is beneficially owned by Parent and beneficially
      owns the Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (o)  “Corporate
      Transaction” means:
      (i) a sale or other disposition of all or substantially all of the assets of
      the
      Company; (ii) a merger or consolidation in which the Company is not the
      surviving entity; or (iii) a reverse merger in which the Company is the
      surviving entity but the shares of Common Stock outstanding immediately
      preceding the merger are converted by virtue of the merger into other property,
      whether in the form of securities, cash or otherwise.

     

    (p)  “Covered
      Employee”
      means
      the chief executive officer and the four (4) other highest compensated officers
      of the Company for whom total compensation is required to be reported to
      stockholders under the Exchange Act, as determined for purposes of Section
      162(m) of the Code.

     

    (q)  “Director”
      means a
      member of the Board of Directors of the Company.

     

    (r)  “Disability”
      means
      (i) before the Listing Date,
      the
      inability of a person, in the opinion of a qualified physician acceptable to
      the
      Company, to perform the major duties of that person’s position with the Company
      or an Affiliate of the Company because of the sickness or injury of the person
      and (ii) after the Listing Date, the permanent and total disability of a person
      within the meaning of Section 22(e)(3) of the Code.

     

    (s)  “Employee”
      means
      any person employed by the Company or an Affiliate. Mere service as a Director
      or payment of a director’s fee by the Company or an Affiliate shall not be
      sufficient to constitute “employment” by the Company or an Affiliate.

     

    (t)  “Exchange
      Act”
      means
      the Securities Exchange Act of 1934, as amended.

     

    (u)  “Fair
      Market Value”
      means,
      as of any date, the value of the Common Stock determined as
      follows:

     

    (i)  If
      the
      Common Stock is listed on any established stock exchange or traded on the Nasdaq
      National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share
      of Common Stock shall be the closing sales price for such stock (or the closing
      bid, if no sales were reported) as quoted on such exchange or market (or the
      exchange or market with the greatest volume of trading in the Common Stock)
      on
      the last market trading day prior to the day of determination, as reported
      in
The
      Wall Street Journal or
      such
      other source as the Board deems reliable.

     

    (ii)  In
      the
      absence of such markets for the Common Stock, the Fair Market Value shall be
      determined in good faith by the Board.

     

    (iii)  Prior
      to
      the Listing Date, the value of the Common Stock shall be determined in a manner
      consistent with Section 260.140.50 of Title 10 of the California Code of
      Regulations.

     

    (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)  “Listing
      Date” means
      the
      first date upon which any security of the Company or a Corporate Parent is
      listed (or approved for listing) upon notice of issuance on any securities
      exchange or designated (or approved for designation) upon notice of issuance
      as
      a national market security on an interdealer quotation system if such securities
      exchange or interdealer quotation system has been certified in accordance with
      the provisions of Section 25100(o) of the California Corporate Securities Law
      of
      1968. 

     

    (x)  “New
      Common Stock”
      has the
      meaning ascribed to that term in Section 12(a).

     

    (y)  “Non-Employee
      Director” means
      a
      Director who either (i) is not a current Employee or Officer of the Company
      or
      its parent or a subsidiary, does not receive compensation (directly or
      indirectly) from the Company or its parent or a subsidiary for services rendered
      as a consultant or in any capacity other than as a Director (except for an
      amount as to which disclosure would not be required under Item 404(a) of
      Regulation S-K promulgated pursuant to the Securities Act (“Regulation S-K”)),
      does not possess an interest in any other transaction as to which disclosure
      would be required under Item 404(a) of Regulation S-K and is not engaged in
      a
      business relationship as to which disclosure would be required under Item 404(b)
      of Regulation S-K; or (ii) is otherwise considered a “non-employee director” for
      purposes of Rule 16b-3.

     

    (z)  “Nonstatutory
      Stock Option”
      means an
      Option not intended to qualify as an Incentive Stock Option.

     

    (aa)  “Officer”
      means
      (i) before the Listing Date, any person designated by the Company as an officer
      and (ii) on and after the Listing Date, 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.

     

    (bb)  “Option”
      means an
      Incentive Stock Option or a Nonstatutory Stock Option granted pursuant to the
      Plan.

     

    (cc)  “Option
      Agreement”
      means a
      written agreement between the Company and an Optionholder evidencing the terms
      and conditions of an individual Option grant. Each Option Agreement shall be
      subject to the terms and conditions of the Plan.

     

    (dd)  “Optionholder” or
      “Optionee” means
      a
      person to whom an Option is granted pursuant to the Plan or, if applicable,
      such
      other person who holds an outstanding Option.

     

    (ee)  “Outside
      Director”
      means a
      Director who either (i) is not a current employee of the Company or an
“affiliated corporation” (within the meaning of Treasury Regulations promulgated
      under Section 162(m) of the Code), is not a former employee of the Company
      or an
“affiliated corporation” receiving compensation for prior services (other than
      benefits under a tax qualified pension plan), was not an officer of the Company
      or an “affiliated corporation” at any time and is not currently receiving direct
      or indirect remuneration from the Company or an “affiliated corporation” for
      services in any capacity other than as a Director or (ii) is otherwise
      considered an “outside director” for purposes of Section 162(m) of the
      Code.

     

    (ff)  “Parent”
      means
      Nextwave Wireless LLC or any successor thereto.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (gg)  “Parent
      Common Stock”
      means
      any common stock of Parent or any Corporate Parent.

     

    (hh)  “Participant”
      means a
      person to whom a Stock Award is granted pursuant to the Plan or, if applicable,
      such other person who holds an outstanding Stock Award.

     

    (ii)  “Plan”
      means
      this PacketVideo Corporation 2005 Equity Incentive Plan.

     

    (jj)  “Rule
      16b-3”
      means
      Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3,
      as
      in effect from time to time.

     

    (kk)  “Sale”
      has
      the
      meaning ascribed to that term in Section 12(a).

     

    (ll)  “Securities
      Act”
      means
      the Securities Act of 1933, as amended.

     

    (mm)  “Stock
      Award”
      means
      any right granted under the Plan, including an Option, a stock bonus and a
      right
      to acquire restricted stock.

     

    (nn)  “Stock
      Award Agreement”
      means a
      written agreement between the Company and a holder of a Stock Award evidencing
      the terms and conditions of an individual Stock Award grant. Each Stock Award
      Agreement shall be subject to the terms and conditions of the Plan.

     

    (oo)  “Ten
      Percent Stockholder”
      means a
      person who owns (or is deemed to own pursuant to Section 424(d) of the Code)
      stock possessing more than ten percent (10%) of the total combined voting power
      of all classes of stock of the Company or of any of its Affiliates.

     

    3.  ADMINISTRATION.

     

    (a)  Administration
      by Board.
      The
      Board shall administer the Plan unless and until the Board delegates
      administration to a Committee, as provided in subsection 3(c).

     

    (b)  Powers
      of Board.
      The
      Board shall have the power, subject to, and within the limitations of, the
      express provisions of the Plan:

     

    (i)  To
      determine from time to time which of the persons eligible under the Plan shall
      be granted Stock Awards; when and how each Stock Award shall be granted; what
      type or combination of types of Stock Award shall be granted; the provisions
      of
      each Stock Award granted (which need not be identical), including the time
      or
      times when a person shall be permitted to receive Common Stock pursuant to
      a
      Stock Award; and the number of shares of Common Stock with respect to which
      a
      Stock Award shall be granted to each such person.

     

    (ii)  To
      construe and interpret the Plan and Stock Awards granted under it, and to
      establish, amend and revoke rules and regulations for its administration. The
      Board, in the exercise of this power, may correct any defect, omission or
      inconsistency in the Plan or in any Stock Award Agreement, in a manner and
      to
      the extent it shall deem necessary or expedient to make the Plan fully
      effective.

     

    (iii)  To
      amend
      the Plan or a Stock Award as provided in Section 13.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (iv)  To
      terminate or suspend the Plan as provided in Section 14.

     

    (v)  Generally,
      to exercise such powers and to perform such acts as the Board deems necessary
      or
      expedient to promote the best interests of the Company which are not in conflict
      with the provisions of the Plan.

     

    (c)  Delegation
      to Committee.

     

    (i)  General.
      The
      Board may delegate administration of the Plan to a Committee or Committees
      of
      one (1) or more members of the Board, and the term “Committee” shall apply to
      any person or persons to whom such authority has been delegated. If
      administration is delegated to a Committee, the Committee shall have, in
      connection with the administration of the Plan, the powers theretofore possessed
      by the Board, including the power to delegate to a subcommittee any of the
      administrative powers the Committee is authorized to exercise (and references
      in
      this Plan to the Board shall thereafter be to the Committee or subcommittee),
      subject, however, to such resolutions, not inconsistent with the provisions
      of
      the Plan, as may be adopted from time to time by the Board. The Board may
      abolish the Committee at any time and revest in the Board the administration
      of
      the Plan.

     

    (ii)  Committee
      Composition when Common Stock is Publicly Traded.
      At such
      time as the Common Stock is publicly traded, in the discretion of the Board,
      a
      Committee may consist solely of two or more Outside Directors, in accordance
      with Section 162(m) of the Code, and/or solely of two or more Non-Employee
      Directors, in accordance with Rule 16b-3. Within the scope of such authority,
      the Board or the Committee may (1) delegate to a committee of one or more
      members of the Board who are not Outside Directors the authority to grant Stock
      Awards to eligible persons who are either (a) not then Covered Employees and
      are
      not expected to be Covered Employees at the time of recognition of income
      resulting from such Stock Award or (b) not persons with respect to whom the
      Company wishes to comply with Section 162(m) of the Code and/or) (2) delegate
      to
      a committee of one or more members of the Board who are not Non-Employee
      Directors the authority to grant Stock Awards to eligible persons who are not
      then subject to Section 16 of the Exchange Act.

     

    (d)  Effect
      of Board’s Decision.
      All
      determinations, interpretations and constructions made by the Board in good
      faith shall not be subject to review by any person and shall be final, binding
      and conclusive on all persons.

     

    4.  SHARES
      SUBJECT TO THE PLAN.

     

    (a)  Share
      Reserve.
      Subject
      to the provisions of Section 11 relating to adjustments upon changes in Common
      Stock and Section 12 relating to certain initial public offerings, the Common
      Stock that may be issued pursuant to Stock Awards shall not exceed in the
      aggregate 8,250,000 shares of Common Stock; provided, however, that the Common
      Stock that may be issued pursuant to Stock Awards consisting of restricted
      stock
      shall not exceed in the aggregate 4,125,000 shares of Common Stock.

     

    (b)  Reversion
      of Shares to the Share Reserve.
      If any
      Stock Award shall for any reason expire or otherwise terminate, in whole or
      in
      part, without having been exercised in full, or if any shares of Common Stock
      issued to a Participant pursuant to a Stock Award are forfeited back to the
      Company, or are repurchased by the Company as a result of the failure to meet
      a
      contingency or condition required for the vesting of such shares, then the
      shares of Common Stock not acquired under such Stock Award shall revert to
      and
      again become available for issuance under the Plan. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c)  Source
      of Shares.
      The
      shares of Common Stock subject to the Plan may be unissued shares or reacquired
      shares, bought on the market or otherwise.

     

    (d)  Share
      Reserve Limitation.
      Prior to
      the Listing Date, at no time shall the total number of shares issuable upon
      exercise of all outstanding Options and the total number of shares provided
      for
      under any stock bonus or similar plan of the Company exceed the applicable
      percentage as calculated in accordance with the conditions and exclusions of
      Section 260.140.45 of Title 10 of the California Code of Regulations, based
      on
      the shares of the Company that are outstanding at the time the calculation
      is
      made.

     

    5.  ELIGIBILITY.

     

    (a)  Eligibility
      for Specific Stock Awards.
      Incentive Stock Options may be granted only to Employees. Stock Awards other
      than Incentive Stock Options may be granted to Employees, Directors and
      Consultants.

     

    (b)  Ten
      Percent Stockholders.
      

     

    (i)  A
      Ten
      Percent Stockholder shall not be granted an Incentive Stock Option unless the
      exercise price of such Option is at least one hundred ten percent (110%) of
      the
      Fair Market Value of the stock at the date of grant and the Option is not
      exercisable after the expiration of five (5) years from the date of grant.
      

     

    (ii)  Prior
      to
      the Listing Date, no Ten Percent Stockholder shall be eligible for the grant
      of
      a Nonstatutory Stock Option unless the exercise price of such Option is at
      least
      (i) one hundred ten percent (110%) of the Fair Market Value of the stock at
      the
      date of grant or (ii) such lower percentage of the Fair Market Value of the
      stock at the date of grant as is permitted by Section 260.140.41 of Title 10
      of
      the California Code of Regulations at the time of the grant of the Option.
      

     

    (iii)  Prior
      to
      the Listing Date, no Ten Percent Stockholder shall be eligible for a restricted
      stock award or stock bonus unless the purchase price of the restricted stock
      award (or the value of past services provided in consideration of the stock
      bonus) is at least (i) one hundred percent (100%) of the Fair Market Value
      of
      the stock at the date of grant of the award or (ii) such lower percentage of
      the
      Fair Market Value of the stock at the date of grant as is permitted by Section
      260.140.42 of Title 10 of the California Code of Regulations at the time of
      grant of the award.

     

    (c)  Section
      162(m) Limitation.
      Subject
      to the provisions of Section 11 relating to adjustments upon changes in the
      shares of Common Stock, no Employee shall be eligible to be granted Options
      covering more than four hundred thousand (400,000) shares of Common Stock of
      the
      Company during any calendar year; provided, however that to the extent that
      Options are granted in connection with the commencement of employment of any
      person, the total number of shares of the Company’s common stock covered under
      such Options shall not exceed seven hundred thousand (700,000) shares. This
      subsection 5(c) shall not apply prior to the Listing Date and, following the
      Listing Date, this subsection 5(c) shall not apply until (i) the earliest of:
      (1) the first material modification of the Plan (including any increase in
      the
      number of shares reserved for issuance under the Plan in accordance with Section
      4); (2) the issuance of all of the shares of Common Stock reserved for issuance
      under the Plan; (3) the expiration of the Plan; or (4) the first meeting of
      stockholders at which Directors are to be elected that occurs after the close
      of
      the third calendar year following the calendar year in which occurred the first
      registration of an equity security under Section 12 of the Exchange Act; or
      (ii)
      such other date required by Section 162(m) of the Code and the rules and
      regulations promulgated thereunder. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d)  Consultants.
      

     

    (i)  Prior
      to
      the Listing Date, a Consultant shall not be eligible for the grant of a Stock
      Award if, at the time of grant, either the offer or the sale of the Company’s
      securities to such Consultant is not exempt under Rule 701 of the Securities
      Act
      (“Rule 701”) because of the nature of the services that the Consultant is
      providing to the Company, or because the Consultant is not a natural person,
      or
      as otherwise provided by Rule 701, unless the Company determines that such
      grant
      need not comply with the requirements of Rule 701 and will satisfy another
      exemption under the Securities Act as well as comply with the securities laws
      of
      all other relevant jurisdictions.

     

    (ii)  From
      and
      after the Listing Date, a Consultant shall not be eligible for the grant of
      a
      Stock Award if, at the time of grant, a Form S-8 Registration Statement under
      the Securities Act (“Form S-8”) is not available to register either the offer or
      the sale of the Company’s securities to such Consultant because of the nature of
      the services that the Consultant is providing to the Company, or because the
      Consultant is not a natural person, or as otherwise provided by the rules
      governing the use of Form S-8, unless the Company determines both (i) that
      such
      grant (A) shall be registered in another manner under the Securities Act
      (e.g.,
      on a
      Form S-3 Registration Statement) or (B) does not require registration under
      the
      Securities Act in order to comply with the requirements of the Securities Act,
      if applicable, and (ii) that such grant complies with the securities laws of
      all
      other relevant jurisdictions.

     

    (iii)  Rule
      701
      and Form S-8 generally are available to consultants and advisors only if (i)
      they are natural persons; (ii) they provide bona fide services to the issuer,
      its parents, its majority-owned subsidiaries or majority-owned subsidiaries
      of
      the issuer’s parent; and (iii) the services are not in connection with the offer
      or sale of securities in a capital-raising transaction, and do not directly
      or
      indirectly promote or maintain a market for the issuer’s
      securities.

     

    6.  OPTION
      PROVISIONS.

     

    Each
      Option shall be in such form and shall contain such terms and conditions as
      the
      Board shall deem appropriate. All Options shall be separately designated
      Incentive Stock Options or Nonstatutory Stock Options at the time of grant,
      and,
      if certificates are issued, a separate certificate or certificates will be
      issued for shares of Common Stock purchased on exercise of each type of Option.
      The provisions of separate Options need not be identical, but each Option shall
      include (through incorporation of provisions hereof by reference in the Option
      or otherwise) the substance of each of the following provisions:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (a)  Term.
      Subject
      to the provisions of subsection 5(b) regarding Ten Percent Stockholders, no
      Option granted prior to the Listing Date shall be exercisable after the
      expiration of ten (10) years from the date it was granted, and no Incentive
      Stock Option granted on or after the
      Listing Date shall be exercisable after the expiration of ten (10) years from
      the date it was granted.

     

    (b)  Exercise
      Price of an Incentive Stock Option.
      Subject
      to the provisions of subsection 5(b) regarding Ten Percent Stockholders, the
      exercise price of each Incentive Stock Option shall be not less than one hundred
      percent (100%) of the Fair Market Value of the stock subject to the Option
      on
      the date the Option is granted. Notwithstanding the foregoing, an Incentive
      Stock Option may be granted with an exercise price lower than that set forth
      in
      the preceding sentence if such Option is granted pursuant to an assumption
      or
      substitution for another option in a manner satisfying the provisions of Section
      424(a) of the Code.

     

    (c)  Exercise
      Price of a Nonstatutory Stock Option.
      Subject
      to the provisions of subsection 5(b) regarding Ten Percent Stockholders, the
      exercise price of each Nonstatutory Stock Option granted prior to the Listing
      Date shall be not less than eighty-five percent (85%) of the Fair Market Value
      of the stock subject to the Option on the date the Option is granted. The
      exercise price of each Nonstatutory Stock Option granted on or after the Listing
      Date shall be not less than eighty-five percent (85%) of the Fair Market Value
      of the stock subject to the Option on the date the Option is granted.
      Notwithstanding the foregoing, a Nonstatutory Stock Option may be granted with
      an exercise price lower than that set forth in the preceding sentence if such
      Option is granted pursuant to an assumption or substitution for another option
      in a manner satisfying the provisions of Section 424(a) of the
      Code.

     

    (d)  Consideration.
      The
      purchase price of Common Stock acquired pursuant to an Option shall be paid,
      to
      the extent permitted by applicable statutes and regulations, either (i) in
      cash
      at the time the Option is exercised or (ii) at the discretion of the Board
      (1)
      by delivery to the Company of other Common Stock, (2) according to a deferred
      payment or other similar arrangement with the Optionholder, (3) by a “net
      exercise” arrangement (described below), or (4) in any other form of legal
      consideration that may be acceptable to the Board. Unless otherwise specifically
      provided in the Option, the purchase price of Common Stock acquired pursuant
      to
      an Option that is paid by delivery to the Company of other Common Stock
      acquired, directly or indirectly from the Company, shall be paid only by shares
      of the Common Stock of the Company that have been held for more than six (6)
      months (or such longer or shorter period of time required to avoid a charge
      to
      earnings for financial accounting purposes). At any time that the Company is
      incorporated in Delaware, payment of the Common Stock’s “par value,” as defined
      in the Delaware General Corporation Law, shall not be made by deferred
      payment.

     

    In
      the
      case of any deferred payment arrangement, interest shall be compounded at least
      annually and shall be charged at the minimum rate of interest necessary to
      avoid
      (1) the treatment as interest, under any applicable provisions of the Code,
      of
      any amounts other than amounts stated to be interest under the deferred payment
      arrangement, and (2) adverse financial accounting treatment of the
      Option.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    In
      the
      case of any “net exercise” payment arrangement, the Company will reduce the
      number of shares of Common Stock issued upon exercise by the largest whole
      number of shares with a Fair Market Value that does not exceed the aggregate
      exercise price; provided,
      however,
      that the
      Company shall accept a cash or other payment from the Participant to the extent
      of any remaining balance of the aggregate exercise price not satisfied by such
      holding back of whole shares; provided,
      further,
      that
      shares of Common Stock will no longer be outstanding under an Option and will
      not be exercisable thereafter to the extent that (A) shares are used to pay
      the
      exercise price pursuant to the “net exercise,” (B) shares are delivered to the
      Participant as a result of such exercise, and (C) shares are withheld to satisfy
      tax withholding obligations. No “net exercise” payment arrangement shall be
      permitted prior to the Company’s adoption of FAS 123, as revised.

     

    (e)  Transferability
      of an Incentive Stock Option.
      An
      Incentive Stock Option shall not be transferable except by will or by the laws
      of descent and distribution and shall be exercisable during the lifetime of
      the
      Optionholder only by the Optionholder. Notwithstanding the foregoing, the
      Optionholder may, by delivering written notice to the Company, in a form
      satisfactory to the Company, designate a third party who, in the event of the
      death of the Optionholder, shall thereafter be entitled to exercise the
      Option.

     

    (f)  Transferability
      of a Nonstatutory Stock Option.
      A
      Nonstatutory Stock Option granted prior to the Listing Date shall not be
      transferable except by will or by the laws of descent and distribution and,
      to
      the extent provided in the Option Agreement, to such further extent as permitted
      by Section 260.140.41(d) of Title 10 of the California Code of Regulations
      at
      the time of the grant of the Option, and shall be exercisable during the
      lifetime of the Optionholder only by the Optionholder. A Nonstatutory Stock
      Option granted on or after the Listing Date shall be transferable to the extent
      provided in the Option Agreement. If the Nonstatutory Stock Option does not
      provide for transferability, then the Nonstatutory Stock Option shall not be
      transferable except by will or by the laws of descent and distribution and
      shall
      be exercisable during the lifetime of the Optionholder only by the Optionholder.
      Notwithstanding the foregoing, the Optionholder may, by delivering written
      notice to the Company, in a form satisfactory to the Company, designate a third
      party who, in the event of the death of the Optionholder, shall thereafter
      be
      entitled to exercise the Option.

     

    (g)  Vesting
      Generally.
      The
      total number of shares of Common Stock subject to an Option may, but need not,
      vest and therefore become exercisable in periodic installments that may, but
      need not, be equal. The Option may be subject to such other terms and conditions
      on the time or times when it may be exercised (which may be based on performance
      or other criteria) as the Board may deem appropriate. The vesting provisions
      of
      individual Options may vary. The provisions of this subsection 6(g) are subject
      to any Option provisions governing the minimum number of shares of Common Stock
      as to which an Option may be exercised.

     

    (h)  Minimum
      Vesting Prior to the Listing Date. Notwithstanding
      the foregoing subsection 6(g), to the extent that the following restrictions
      on
      vesting are required by Section 260.140.41(f) of Title 10 of the California
      Code
      of Regulations at the time of grant of the Option, then:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (i)  Options
      granted prior to the Listing Date to an Employee who is not an Officer,
      Director or Consultant shall provide for vesting of the total number of shares
      of Common Stock at a rate of at least twenty percent (20%) per year over five
      (5) years from the date the Option was granted, subject to reasonable conditions
      such as continued employment; and

     

    (ii)  Options
      granted prior to the Listing Date 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 Company; for
      example, the vesting provision of the Option may provide for vesting of less
      than twenty percent (20%) per year of the total number of shares subject to
      the
      Option. 

     

    (i)  Termination
      of Continuous Service.
      In the
      event an Optionholder’s Continuous Service terminates for reasons other than for
      Cause or upon the Optionholder’s death or Disability), the Optionholder may
      exercise his or her Option (to the extent that the Optionholder was entitled
      to
      exercise such Option as of the date of termination) but only within such period
      of time ending on the earlier of (i) the date three (3) months following the
      termination of the Optionholder’s Continuous Service (or such longer or shorter
      period specified in the Option Agreement, which, for Options granted prior
      to
      the Listing Date, shall not be less than thirty (30) days, unless such
      termination is for cause), or (ii) the expiration of the term of the Option
      as
      set forth in the Option Agreement. If, after termination, the Optionholder
      does
      not exercise his or her Option within the time specified in the Option
      Agreement, the Option shall terminate.

     

    (j)  Extension
      of Termination Date.
      An
      Optionholder’s Option Agreement may also provide that if the exercise of the
      Option following the termination of the Optionholder’s Continuous Service (other
      than upon the Optionholder’s death or Disability) would be prohibited at any
      time solely because the issuance of shares of Common Stock would violate the
      registration requirements under the Securities Act, then the Option shall
      terminate on the earlier of (i) the expiration of the term of the Option set
      forth in subsection 6(a) or (ii) the expiration of a period of three (3) months
      after the termination of the Optionholder’s Continuous Service during which the
      exercise of the Option would not be in violation of such registration
      requirements.

     

    (k)  Disability
      of Optionholder.
      In the
      event that an Optionholder’s Continuous Service terminates as a result of the
      Optionholder’s Disability, the Optionholder may exercise his or her Option (to
      the extent that the Optionholder was entitled to exercise such Option as of
      the
      date of termination), but only within such period of time ending on the earlier
      of (i) the date twelve (12) months following such termination (or such longer
      or
      shorter period specified in the Option Agreement, which, for Options granted
      prior to the Listing Date, shall not be less than six (6) months) or (ii) the
      expiration of the term of the Option as set forth in the Option Agreement.
      If,
      after termination, the Optionholder does not exercise his or her Option within
      the time specified herein, the Option shall terminate.

     

    (l)  Death
      of Optionholder.
      In the
      event (i) an Optionholder’s Continuous Service terminates as a result of the
      Optionholder’s death or (ii) the Optionholder dies within the period (if any)
      specified in the Option Agreement after the termination of the Optionholder’s
      Continuous Service for a reason other than death, then the Option may be
      exercised (to the extent the Optionholder was entitled to exercise such Option
      as of the date of death) by the Optionholder’s estate, by a person who acquired
      the right to exercise the Option by bequest or inheritance or by a person
      designated to exercise the option upon the Optionholder’s death pursuant to
      subsection 6(e) or 6(f), but only within the period ending on the earlier of
      (1)
      the date eighteen (18) months following the date of death (or such longer or
      shorter period specified in the Option Agreement, which, for Options granted
      prior to the Listing Date, shall not be less than six (6) months) or (2) the
      expiration of the term of such Option as set forth in the Option Agreement.
      If,
      after death, the Option is not exercised within the time specified herein,
      the
      Option shall terminate.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (m)  Termination
      for Cause.
      In the
      event an Optionholder’s Continuous Service is terminated for Cause or was
      terminable for Cause, the Option shall terminate upon the termination date
      of
      such Optionholder’s Continuous Service and the Optionholder is prohibited from
      exercising his or her Option as of the time of such termination.

     

    (n)  Early
      Exercise.
      The
      Option may, but need not, include a provision whereby the Optionholder may
      elect
      at any time before the Optionholder’s Continuous Service terminates to exercise
      the Option as to any part or all of the shares of Common Stock subject to the
      Option prior to the full vesting of the Option. Subject to the “Repurchase
      Limitation” in subsection 10(h), any unvested shares of Common Stock so
      purchased may be subject to a repurchase option in favor of the Company or
      to
      any other restriction the Board determines to be appropriate. Provided that
      the
“Repurchase Limitation” in subsection 10(h) is not violated, the Company will
      not exercise its repurchase option until at least six (6) months (or such longer
      or shorter period of time required to avoid a charge to earnings for financial
      accounting purposes) have elapsed following exercise of the Option unless the
      Board otherwise specifically provides in the Option.

     

    (o)  Right
      of Repurchase. Subject
      to the “Repurchase Limitation” in subsection 10(h), the Option may, but need
      not, include a provision whereby the Company may elect, prior to the Listing
      Date, to repurchase all or any part of the vested shares acquired by the
      Optionholder pursuant to the exercise of the Option. Provided that the
“Repurchase Limitation” in subsection 10(h) is not violated, the Company will
      not exercise the repurchase option set forth in this paragraph (o) until at
      least six (6) months (or such longer or shorter period of time required to
      avoid
      a charge to earnings for financial accounting purposes) have elapsed following
      exercise of the Option unless the Board otherwise specifically provides in
      the
      Option.

     

    (p)  Right
      of First Refusal. The
      Option may, but need not, include a provision whereby the Company may elect,
      prior to the Listing Date, to exercise a right of first refusal following
      receipt of notice from the Optionholder of the intent to transfer all or any
      part of the shares of Common Stock received upon exercise of the Option. Except
      as expressly provided in this subsection 6(p) or the Stock Award Agreement
      for
      the Option, such right of first refusal shall otherwise comply with any
      applicable provisions of the Bylaws of the Company. 

     

    (q)  Re-Load
      Options.
      

     

    (i)  Without
      in any way limiting the authority of the Board to make or not to make grants
      of
      Options hereunder, the Board shall have the authority (but not an obligation)
      to
      include as part of any Option Agreement a provision entitling the Optionholder
      to a further Option (a “Re-Load Option”) in the event the Optionholder exercises
      the Option evidenced by the Option Agreement, in whole or in part, by
      surrendering other shares of Common Stock in accordance with this Plan and
      the
      terms and conditions of the Option Agreement. Unless otherwise specifically
      provided in the Option, the Optionholder shall not surrender shares of Common
      Stock acquired, directly or indirectly from the Company, unless such shares
      have
      been held for more than six (6) months (or such longer or shorter period of
      time
      required to avoid a charge to earnings for financial accounting purposes).
      

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (ii)  Any
      such
      Re-Load Option shall (1) provide for a number of shares of Common Stock equal
      to
      the number of shares of Common Stock surrendered as part or all of the exercise
      price of such Option; (2) have an expiration date which is the same as the
      expiration date of the Option the exercise of which gave rise to such Re-Load
      Option; and (3) have an exercise price which is equal to one hundred percent
      (100%) of the Fair Market Value of the stock subject to the Re-Load Option
      on
      the date of exercise of the original Option. Notwithstanding the foregoing,
      a
      Re-Load Option shall be subject to the same exercise price and term provisions
      heretofore described for Options under the Plan.

     

    (iii)  Any
      such
      Re-Load Option may be an Incentive Stock Option or a Nonstatutory Stock Option,
      as the Board may designate at the time of the grant of the original Option;
      provided, however, that the designation of any Re-Load Option as an Incentive
      Stock Option shall be subject to the one hundred thousand dollar ($100,000)
      annual limitation on the exercisability of Incentive Stock Options described
      in
      subsection 10(d) and in Section 422(d) of the Code. There shall be no Re-Load
      Options on a Re-Load Option. Any such Re-Load Option shall be subject to the
      availability of sufficient shares of Common Stock under subsection 4(a) and
      the
“Section 162(m) Limitation” on the grants of Options under subsection 5(c) and
      shall be subject to such other terms and conditions as the Board may determine
      which are not inconsistent with the express provisions of the Plan regarding
      the
      terms of Options.

     

    7.  PROVISIONS
      OF STOCK AWARDS OTHER THAN OPTIONS.

     

    (a)  Stock
      Bonus Awards.
      Each
      stock bonus agreement shall be in such form and shall contain such terms and
      conditions as the Board shall deem appropriate. The terms and conditions of
      stock bonus agreements may change from time to time, and the terms and
      conditions of separate stock bonus agreements need not be identical, but each
      stock bonus agreement shall include (through incorporation of provisions hereof
      by reference in the agreement or otherwise) the substance of each of the
      following provisions: 

     

    (i)  Consideration.
      A stock
      bonus may be awarded in consideration for past services actually rendered to
      the
      Company or an Affiliate for its benefit.

     

    (ii)  Vesting.
      Subject
      to the “Repurchase Limitation” in subsection 10(h), shares of Common Stock
      awarded under the stock bonus agreement may, but need not, be subject to a
      share
      repurchase option in favor of the Company in accordance with a vesting schedule
      to be determined by the Board.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (iii)  Termination
      of Participant’s Continuous Service.
      Subject
      to the “Repurchase Limitation” in subsection 10(h), in the event a Participant’s
      Continuous Service terminates, the Company may reacquire any or all of the
      shares of Common Stock held by the Participant which have not vested as of
      the
      date of termination under the terms of the stock bonus agreement.

     

    (iv)  Transferability.
      For a
      stock bonus award made before the Listing Date, rights to acquire shares of
      Common Stock under the stock bonus agreement shall not be transferable except
      by
      will or by the laws of descent and distribution and shall be exercisable during
      the lifetime of the Participant only by the Participant. For a stock bonus
      award
      made on or after the Listing Date, rights to acquire shares of Common Stock
      under the stock bonus agreement shall be transferable by the Participant only
      upon such terms and conditions as are set forth in the stock bonus agreement,
      as
      the Board shall determine in its discretion, so long as Common Stock awarded
      under the stock bonus agreement remains subject to the terms of the stock bonus
      agreement.

     

    (b)  Restricted
      Stock Awards.
      Each
      restricted stock purchase agreement shall be in such form and shall contain
      such
      terms and conditions as the Board shall deem appropriate. The terms and
      conditions of the restricted stock purchase agreements may change from time
      to
      time, and the terms and conditions of separate restricted stock purchase
      agreements need not be identical, but each restricted stock purchase agreement
      shall include (through incorporation of provisions hereof by reference in the
      agreement or otherwise) the substance of each of the following
      provisions:

     

    (i)  Purchase
      Price.
      At the
      time of grant of a Restricted Stock Award, the Board will determine the price
      to
      be paid by the Participant for each share subject to the Restricted Stock Award.
      Subject to the provisions of subsection 5(b) regarding Ten Percent Stockholders,
      the purchase price under each restricted stock purchase agreement shall be
      such
      amount as the Board shall determine and designate in such restricted stock
      purchase agreement. For restricted stock awards made prior to the Listing Date,
      the purchase price shall not be less than eighty-five
      percent (85%) of the stock’s Fair Market Value on the date such award is made or
      at the time the purchase is consummated. For restricted stock awards made on
      or
      after the Listing Date, the purchase price shall not be less than eighty-five
      percent (85%) of the stock’s Fair Market Value on the date such award is made or
      at the time the purchase is consummated.

     

    (ii)  Consideration.
      At the
      time of the grant of a Restricted Stock Award, the Board will determine the
      consideration permissible for the payment of the purchase price of the
      Restricted Stock Award. The purchase price of Common Stock acquired pursuant
      to
      the restricted stock purchase agreement shall be paid either: (i) in cash at
      the
      time of purchase; (ii) at the discretion of the Board, according to a deferred
      payment or other similar arrangement with the Participant; or (iii) in any
      other
      form of legal consideration that may be acceptable to the Board in its
      discretion; provided, however, that at any time that the Company is incorporated
      in Delaware, then payment of the Common Stock’s “par value,” as defined in the
      Delaware General Corporation Law, shall not be made by deferred
      payment.

     

    (iii)  Vesting.
      Subject
      to the “Repurchase Limitation” in subsection 10(h), shares of Common Stock
      acquired under the restricted stock purchase agreement may, but need not, be
      subject to a share repurchase option in favor of the Company in accordance
      with
      a vesting schedule to be determined by the Board.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (iv)  Termination
      of Participant’s Continuous Service.
      Subject
      to the “Repurchase Limitation” in subsection 10(h), in the event a Participant’s
      Continuous Service terminates, the Company may repurchase or otherwise reacquire
      any or all of the shares of Common Stock held by the Participant which have
      not
      vested as of the date of termination under the terms of the restricted stock
      purchase agreement.

     

    (v)  Transferability.
      For a
      restricted stock award made before the Listing Date, rights to acquire shares
      under the restricted stock purchase agreement shall not be transferable except
      by will or by the laws or descent and distribution and shall be exercisable
      during the lifetime of the Participant only by the Participant. For a restricted
      stock award made on or after the Listing Date, rights to acquire shares of
      Common Stock under the restricted stock purchase agreement shall be transferable
      by the Participant only upon such terms and conditions as are set forth in
      the
      restricted stock purchase agreement, as the Board shall determine in its
      discretion, so long as Common Stock awarded under the restricted stock purchase
      agreement remains subject to the terms of the restricted stock purchase
      agreement.

     

    8.  COVENANTS
      OF THE COMPANY.

     

    (a)  Availability
      of Shares.
      During
      the terms of the Stock Awards, the Company shall keep available at all times
      the
      number of shares of Common Stock required to satisfy such Stock
      Awards.

     

    (b)  Securities
      Law Compliance.
      The
      Company shall seek to obtain from each regulatory commission or agency having
      jurisdiction over the Plan such authority as may be required to grant Stock
      Awards and to issue and sell shares of Common Stock upon exercise of the Stock
      Awards; provided, however, that this undertaking shall not require the Company
      to register under the Securities Act the Plan, any Stock Award or any Common
      Stock issued or issuable pursuant to any such Stock Award. If, after reasonable
      efforts, the Company is unable to obtain from any such regulatory commission
      or
      agency the authority which counsel for the Company deems necessary for the
      lawful issuance and sale of Common Stock under the Plan, the Company shall
      be
      relieved from any liability for failure to issue and sell Common Stock upon
      exercise of such Stock Awards unless and until such authority is
      obtained.

     

    9.  USE
      OF PROCEEDS FROM STOCK.

     

    Proceeds
      from the sale of Common Stock pursuant to Stock Awards shall constitute general
      funds of the Company.

     

    10.  MISCELLANEOUS.

     

    (a)  Acceleration
      of Exercisability and Vesting.
      The
      Board shall have the power to accelerate the time at which a Stock Award may
      first be exercised or the time during which a Stock Award or any part thereof
      will vest in accordance with the Plan, notwithstanding the provisions in the
      Stock Award stating the time at which it may first be exercised or the time
      during which it will vest.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)  Stockholder
      Rights.
      No
      Participant shall be deemed to be the holder of, or to have any of the rights
      of
      a holder with respect to, any shares of Common Stock subject to such Stock
      Award
      unless and until such Participant has satisfied all requirements for exercise
      of
      the Stock Award pursuant to its terms.

     

    (c)  No
      Employment or other Service Rights.
      Nothing
      in the Plan or any instrument executed or Stock Award granted pursuant thereto
      shall confer upon any Participant any right to continue to serve the Company
      or
      an Affiliate in the capacity in effect at the time the Stock Award was granted
      or shall affect the right of the Company or an Affiliate to terminate (i) the
      employment of an Employee with or without notice and with or without cause,
      (ii)
      the service of a Consultant pursuant to the terms of such Consultant’s agreement
      with the Company or an Affiliate or (iii) the service of a Director pursuant
      to
      the Bylaws of the Company or an Affiliate, and any applicable provisions of
      the
      corporate law of the state in which the Company or the Affiliate is
      incorporated, as the case may be.

     

    (d)  Incentive
      Stock Option $100,000 Limitation.
      To the
      extent that the aggregate Fair Market Value (determined at the time of grant)
      of
      the stock with respect to which Incentive Stock Options are exercisable for
      the
      first time by any Optionholder during any calendar year (under all plans of
      the
      Company and its Affiliates) exceeds one hundred thousand dollars ($100,000),
      the
      Options or portions thereof which exceed such limit (according to the order
      in
      which they were granted) shall be treated as Nonstatutory Stock
      Options.

     

    (e)  Investment
      Assurances.
      The
      Company may require a Participant, as a condition of exercising or acquiring
      Common Stock under any Stock Award, (i) to give written assurances satisfactory
      to the Company as to the Participant’s knowledge and experience in financial and
      business matters and/or to employ a purchaser representative reasonably
      satisfactory to the Company who is knowledgeable and experienced in financial
      and business matters and that he or she is capable of evaluating, alone or
      together with the purchaser representative, the merits and risks of exercising
      the Stock Award; and (ii) to give written assurances satisfactory to the Company
      stating that the Participant is acquiring Common Stock subject to the Stock
      Award for the Participant’s own account and not with any present intention of
      selling or otherwise distributing the Common Stock. The foregoing requirements,
      and any assurances given pursuant to such requirements, shall be inoperative
      if
      (1) the issuance of the shares of Common Stock upon the exercise or acquisition
      of Common Stock under the Stock Award has been registered under a then currently
      effective registration statement under the Securities Act or (2) as to any
      particular requirement, a determination is made by counsel for the Company
      that
      such requirement need not be met in the circumstances under the then applicable
      securities laws. The Company may, upon advice of counsel to the Company, place
      legends on stock certificates issued under the Plan as such counsel deems
      necessary or appropriate in order to comply with applicable securities laws,
      including, but not limited to, legends restricting the transfer of the Common
      Stock.

     

    (f)  Withholding
      Obligations.
      To the
      extent provided by the terms of a Stock Award Agreement, the Participant may
      satisfy any federal, state or local tax withholding obligation relating to
      the
      exercise or acquisition of Common Stock under a Stock Award by any of the
      following means (in addition to the Company’s right to withhold from any
      compensation paid to the Participant by the Company) or by a combination of
      such
      means: (i) tendering a cash payment; (ii) authorizing the Company to withhold
      shares of Common Stock from the shares of Common Stock otherwise issuable to
      the
      Participant as a result of the exercise or acquisition of Common Stock under
      the
      Stock Award, provided, however, that no shares of Common Stock are withheld
      with
      a value exceeding the minimum amount of tax required to be withheld by law
      (or
      such lower amount as may be necessary to avoid adverse financial accounting
      consequences); or (iii) delivering to the Company owned and unencumbered shares
      of Common Stock.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (g)  Information
      Obligation. Prior
      to
      the Listing Date, to the extent required by Section 260.140.46 of Title 10
      of
      the California Code of Regulations, the Company shall deliver financial
      statements to Participants at least annually. This subsection 10(g) shall not
      apply to key Employees whose duties in connection with the Company assure them
      access to equivalent information. 

     

    (h)  Repurchase
      Limitation. The
      terms
      of any repurchase option shall be specified in the Stock Award and may be either
      at Fair Market Value at the time of repurchase or at not less than the original
      purchase price. To the extent required by Section 260.40.41 and Section
      26.140.42 of Title 10 of the California Code of Regulations at the time a Stock
      Award is made, any repurchase option contained in a Stock Award granted prior
      to
      the Listing Date to a person who is not an Officer, Director or Consultant
      shall
      be upon the terms described below: 

     

    (i)  Fair
      Market Value. If
      the
      repurchase option gives the Company the right to repurchase the shares of Common
      Stock upon termination of employment at not less than the Fair Market Value
      of
      the shares to be purchased on the date of termination of Continuous Service,
      then (i) the right to repurchase shall be exercised for cash or cancellation
      of
      purchase money indebtedness for the shares of Common Stock within ninety (90)
      days of termination of Continuous Service (or in the case of shares of Common
      Stock issued upon exercise of Stock Awards after such date of termination,
      within ninety (90) days after the date of the exercise) or such longer period
      as
      may be agreed to by the Company and the Participant (for example, for purposes
      of satisfying the requirements of Section 1202(c)(3) of the Code regarding
      “qualified small business stock”) and (ii) the right terminates when the shares
      of Common Stock become publicly traded.

     

    (ii)  Original
      Purchase Price. If
      the
      repurchase option gives the Company the right to repurchase the shares of Common
      Stock upon termination of Continuous Service at the original purchase price,
      then (i) the right to repurchase at the original purchase price shall lapse
      at
      the rate of at least twenty percent (20%) of the shares of Common Stock per
      year
      over five (5) years from the date the Stock Award is granted (without respect
      to
      the date the Stock Award was exercised or became exercisable) and (ii) the
      right
      to repurchase shall be exercised for cash or cancellation of purchase money
      indebtedness for the shares of Common Stock within ninety (90) days of
      termination of Continuous Service (or in the case of shares of Common Stock
      issued upon exercise of Options after such date of termination, within ninety
      (90) days after the date of the exercise) or such longer period as may be agreed
      to by the Company and the Participant (for example, for purposes of satisfying
      the requirements of Section 1202(c)(3) of the Code regarding “qualified small
      business stock”). 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    11.  ADJUSTMENTS
      UPON CHANGES IN STOCK.

     

    (a)  Capitalization
      Adjustments.
      If any
      change is made in, or other event occurs with respect to, the Common Stock
      subject to the Plan, or subject to any Stock Award, without the receipt of
      consideration by the Company (through merger, consolidation, reorganization,
      recapitalization, reincorporation, stock dividend, dividend in property other
      than cash, stock split, liquidating distribution, combination of shares,
      exchange of shares, change in corporate structure or other transaction not
      involving the receipt of consideration by the Company but excluding any merger
      or consolidation of Company and Parent or its sucessors (each a “Capitalization
      Adjustment”)),
      the
      Plan will be appropriately adjusted in the class(es) and maximum number of
      securities subject to the Plan pursuant to Sections 4(a) and 4(b), and the
      maximum number of securities subject to award to any person pursuant to
      subsection 5(c), and the outstanding Stock Awards will be appropriately adjusted
      in the class(es) and number of securities and price per share of Common Stock
      subject to such outstanding Stock Awards. The Board shall make such adjustments,
      and its determination shall be final, binding and conclusive. (The conversion
      of
      any convertible securities of the Company shall not be treated as a transaction
      “without receipt of consideration” by the Company.)

     

    (b)  Dissolution
      or Liquidation.
      In the
      event of a dissolution or liquidation of the Company, then all outstanding
      Stock
      Awards shall terminate immediately prior to the completion of such dissolution
      or liquidation, and shares of Common Stock subject to the Company’s repurchase
      option may be repurchased by the Company notwithstanding the fact that the
      holder of such stock is still in Continuous Service.

     

    (c)  Asset
      Sale, Merger, Consolidation or Reverse Merger.
      In the
      event of a Corporate Transaction, then any surviving corporation or acquiring
      corporation shall assume any Stock Awards outstanding under the Plan or shall
      substitute similar stock awards (including an award to acquire the same
      consideration paid to the stockholders in the Corporate Transaction for those
      outstanding under the Plan), and any reacquisition or repurchase rights held
      by
      the Company in respect of Common Stock issued pursuant to Stock Awards may
      be
      assigned by the Company to the successor of the Company (or such successor’s
      parent company), if any, in connection with such Corporate Transaction. In
      the
      event any surviving corporation or acquiring corporation refuses to assume
      such
      Stock Awards or to substitute similar stock awards for those outstanding under
      the Plan, then with respect to Stock Awards held by Participants whose
      Continuous Service has not terminated, the vesting of such Stock Awards (and,
      if
      applicable, the time during which such Stock Awards may be exercised) shall
      (contingent upon the effectiveness of the Corporate Transaction) be accelerated
      in full, and the Stock Awards shall terminate if not exercised (if applicable)
      at or prior to such Corporate Transaction and any reacquisition or repurchase
      rights held by the Company under the Plan or any Stock Award Agreement with
      respect to such Stock Awards held by Participants whose Continuous Service
      has
      not terminated shall (contingent upon the effectiveness of the Corporate
      Transaction) lapse. With respect to any other Stock Awards outstanding under
      the
      Plan, such Stock Awards shall terminate if not exercised (if applicable) prior
      to the effective time of the Corporate Transaction.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    12.  CONVERSION
      OF OPTIONS UPON A SALE OF PARENT OR
      AN INITIAL PUBLIC OFFERING OF PARENT COMMON STOCK.

     

    (a)  Conversion
      of Options.
      Subject
      to satisfaction of the condition set forth in subparagraph (g) below,
(i)
      in
      the event of (1) any sale, consolidation, combination or merger involving Parent
      or any Corporate Parent in which holders of the outstanding voting equity of
      Parent or any Corporate Parent immediately prior to such event do not own at
      least a majority of the outstanding voting equity of the surviving corporation
      or other acquiring entity, or (2) the sale of all or substantially all of the
      assets of Parent and its direct and indirect subsidiaries (other than to an
      affiliate of Parent), or (3) a sale or related series of sales of the shares
      of
      Parent or Corporate Parent, by the holders thereof, which results in a majority
      of the shares of Parent or Corporate Parent, as the case may be, (on a fully
      diluted basis) being transferred to persons who are not affiliates of Parent
      or
      its stockholders or (4) the voluntary or involuntary liquidation, dissolution
      and winding up of Parent (each of (1) through (4), a “Sale”); or
      (ii) if
      Parent
      or any Corporate Parent consummates a public offering of its common stock by
      filing a registration statement on Form S-1 (or comparable replacement form)
      pursuant to the Securities Act prior to the date the Company completes a similar
      public offering of its common stock, then each outstanding Option, whether
      or
      not vested, shall be automatically converted into an option or other award
      to
      purchase shares of common stock of the Parent or Corporate Parent, as the case
      may be, upon consummation of such Sale
      or
public
      offering (in either case, the “New
      Common Stock”).
      Parent
      or Corporate Parent shall provide each Participant holding an outstanding Option
      with reasonable prior notice of the date of consummation of any Sale
      or
      public
      offering by Parent or any Corporate Parent and all conversions pursuant to
      this
      Section 12 shall be effective immediately prior to the effectiveness of
      such
      Sale or
      public offering (the “Conversion
      Time”).
      

     

    (b)  Conversion
      Ratio.
      Subject
      to adjustment as provided in subparagraph (e) below, each Option outstanding
      at
      the Conversion Time shall be converted into an Option to purchase shares of
      New
      Common Stock, at an initial conversion ratio of one share of Common Stock
      converting into one share of New Common Stock (the “Conversion
      Ratio”).

     

    (c)  Conversion.
      Upon
      conversion of an Option, pursuant to this Section 12, such Option shall be
      amended and converted into an option to acquire, on the same terms and
      conditions as were applicable under such Option, the number of shares of New
      Common Stock (rounded down to the nearest whole share) determined by multiplying
      the number of shares of Common Stock subject to such Option by the Conversion
      Ratio, at a price per share of New Common Stock equal to (A) the aggregate
      exercise price for the shares of Common Stock otherwise purchasable or issuable
      pursuant to such Option divided by (B) the aggregate number of shares of New
      Common Stock deemed purchasable or issuable pursuant to such Option, as the
      case
      may be (each, as so adjusted, an “Adjusted
      Option”),
      provided
      that
      such exercise price shall be rounded up to the nearest whole cent. The
      adjustments provided herein with respect to any Options that are “incentive
      stock options” as defined in Section 422 of the Code shall be and are intended
      to be effected in a manner which is consistent with Section 424(a) of the Code
      to the extent the ratio conversion requirements under Section 424(a) can be
      satisfied.

     

    (d)  Other
      Terms.
      The
      aggregate exercise price under any Participant’s Adjusted Options shall be the
      same as the aggregate exercise price of such Participant’s Options being
      converted pursuant to this Section 12. Except as otherwise contemplated by
      this
      Section 12 and except to the extent required under the respective terms of
      the
      Options, all restrictions or limitations on transfer and vesting with respect
      to
      Options awarded under the Plan, to the extent that such restrictions or
      limitations shall not have already lapsed, shall remain in full force and effect
      with respect to such Adjusted Options.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (e)  Conversion
      Ratio Adjustments.
      Notwithstanding any other provision to the contrary, if prior to the Conversion
      Time the outstanding shares of Common Stock or Parent Common Stock shall have
      been changed into a different number of shares or a different class by reason
      of
      the occurrence or record date of any stock dividend, subdivision,
      reclassification, recapitalization, split, combination, exchange of shares
      or
      similar transaction, or any other change is made in such shares without the
      receipt of consideration by the Company or Corporate Parent (through merger,
      consolidation, reorganization, reincorporation, or other transaction not
      involving the receipt of consideration), as the case may be, the Conversion
      Ratio shall be appropriately adjusted to reflect such event or
      transaction.

     

    (f)  Adjustments
      to Common Stock.
      Upon any
      conversion of an Option pursuant to this Section 12 by amending and converting
      such Option such that the resulting Adjusted Option remains subject to the
      terms
      of the Plan, any references to Common Stock in the Plan shall be deemed to
      include New Common Stock unless the context indicates otherwise.

     

    (g)  Compliance
      with Section 409A of the Code.
      Notwithstanding anything to the contrary set forth herein, the conversion of
      the
      Options will occur pursuant to this Section 12 to the fullest extent permitted
      without the Options becoming subject to the provisions of Section 409A of the
      Code. To the extent the conversion of the Options pursuant to this Section
      12
      would not occur as a result of this subsection 12(g), then Parent shall have
      the
      right to establish an arrangement subject to and consistent with Section 409A
      of
      the Code that provides the same value as the Options that could not be converted
      and permits distribution upon any of the events described in Section 409A of
      the
      Code.

     

    13.  AMENDMENT
      OF THE PLAN AND STOCK AWARDS.

     

    (a)  Amendment
      of Plan.
      The
      Board at any time, and from time to time, may amend the Plan. However, except
      as
      provided in Section 11 (a) relating to Capitalization Adjustments, no amendment
      shall be effective unless approved by the stockholders of the Company to the
      extent stockholder approval is necessary to satisfy the requirements of Section
      422 of the Code, Rule 16b-3 or any Nasdaq or securities exchange listing
      requirements.

     

    (b)  Stockholder
      Approval.
      The
      Board may, in its sole discretion, submit any other amendment to the Plan for
      stockholder approval, including, but not limited to, amendments to the Plan
      intended to satisfy the requirements of Section 162(m) of the Code and the
      regulations thereunder regarding the exclusion of performance-based compensation
      from the limit on corporate deductibility of compensation paid to certain
      executive officers.

     

    (c)  Contemplated
      Amendments.
      It is
      expressly contemplated that the Board may amend the Plan in any respect the
      Board deems necessary or advisable to provide eligible Employees with the
      maximum benefits provided or to be provided under the provisions of the Code
      and
      the regulations promulgated thereunder relating to Incentive Stock Options
      and/or to bring the Plan and/or Incentive Stock Options granted under it into
      compliance therewith.

     

    (d)  No
      Impairment of Rights.
      Rights
      under any Stock Award granted before amendment of the Plan shall not be impaired
      by any amendment of the Plan unless (i) the Company requests the consent of
      the
      Participant and (ii) the Participant consents in writing.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (e)  Amendment
      of Stock Awards.
      The
      Board at any time, and from time to time, may amend the terms of any one or
      more
      Stock Awards; provided, however, that the rights under any Stock Award shall
      not
      be impaired by any such amendment unless (i) the Company requests the consent
      of
      the Participant and (ii) the Participant consents in writing.

     

    14.  TERMINATION
      OR SUSPENSION OF THE PLAN.

     

    (a)  Plan
      Term.
      The
      Board may suspend or terminate the Plan at any time. Unless sooner terminated,
      the Plan shall terminate on the day before the tenth (10th) anniversary of
      the
      date the Plan is adopted by the Board or approved by the stockholders of the
      Company, whichever is earlier. No Stock Awards may be granted under the Plan
      while the Plan is suspended or after it is terminated.

     

    (b)  No
      Impairment of Rights.
      Suspension or termination of the Plan shall not impair rights and obligations
      under any Stock Award granted while the Plan is in effect except with the
      written consent of the Participant.

     

    15.  EFFECTIVE
      DATE OF PLAN.

     

    The
      Plan
      shall become effective as determined by the Board, but no Stock Award shall
      be
      exercised (or, in the case of a stock bonus, shall be granted) unless and until
      the Plan has been approved by the stockholders of the Company, which approval
      shall be within twelve (12) months before or after the date the Plan is adopted
      by the Board.

     

    16.  CHOICE
      OF LAW.

     

    The
      law
      of the State of California shall govern all questions concerning the
      construction, validity and interpretation of this Plan, without regard to such
      state’s conflict of laws rules.Exhibit
      10.3

    
 

    CYGNUS
      COMMUNICATIONS, INC.

    

    2004
      STOCK OPTION PLAN

    

    

    1.  PURPOSES.

     

    The
      purposes of the Plan are as follows:

    

    (a)  To
      provide additional incentive for selected Employees, Directors and Consultants
      to further the growth, development and financial success of the Company by
      providing a means by which such persons can personally benefit through the
      ownership of capital stock of the Company; and

     

    (b)  To
      enable
      the Company to secure and retain key Employees, Directors and Consultants
      considered important to the long-range success of the Company by offering such
      persons an opportunity to own capital stock of the Company.

     

    2.  DEFINITIONS.

     

    (a)  “Affiliate”
      means
      any parent corporation or subsidiary corporation, whether now or hereafter
      existing, as those terms are defined in Sections 424(e) and (f), respectively,
      of the Code, and the regulations promulgated thereunder.

     

    (b)  “Board”
      means
      the Board of Directors of the Company.

     

    (c)  “Cause”
      means an
      Optionee's personal dishonesty, misconduct, breach of fiduciary duty,
      incompetence, intentional failure to perform stated obligations, willful
      violation of any law, rule, regulation or final cease and desist order, or
      any
      material breach of any provision of the Plan, any Option Agreement, any
      employment or consulting agreement, or any proprietary information
      agreement.

     

    (d)  “Code”
      means
      the Internal Revenue Code of 1986, as amended.

     

    (e)  “Committee”
      means a
      committee appointed by the Board in accordance with Section 3(c).

     

    (f)  “Common
      Stock”
      means
      the common stock, without par value, of the Company; provided, however, that
      if
      the Company’s articles of incorporation authorize the issuance of only one class
      of stock, “Common Stock” shall mean such class of stock.

     

    (g)  “Company”
      means
      Cygnus Communications, Inc., a Delaware corporation (formerly Cygnus Multimedia
      Communications, Inc.).

     

    (h)  “Consultant”
      means
      any natural person, including an advisor, engaged by the Company or an Affiliate
      to render bona fide services and who is providing such services at the time
      an
      Option is granted; provided that the term “Consultant” shall not include a
      person who provides services in connection with the offer and sale of securities
      in a capital-raising transaction or in connection with promoting or maintaining
      a market for the Company’s securities.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (i)  “Director”
      means a
      member of the Board.

     

    (j)  “Disability”
      means
      total and permanent disability as defined in Section 22(e)(3) of the Code and
      as
      interpreted by the Board in each case.

     

    (k)  “Employee”
      means
      any person, including officers and Directors, employed by the Company or any
      Affiliate of the Company; provided, however, that neither service as a Director
      nor payment of a director’s fee by the Company shall be sufficient to constitute
“employment” by the Company.

     

    (l)  “Fair
      Market Value”
      means,
      as of any date, the value of the Common Stock of the Company determined as
      follows:

     

    (i)  If
      the
      Common Stock is listed on any established stock exchange, or is traded on the
      Nasdaq National Market or the Nasdaq SmallCap Market, or any successor thereto,
      the Fair Market Value of a share of Common Stock 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 exchange with the greatest volume of trading
      in common stock) on the last market trading day prior to the date of
      determination, as reported in the Wall
      Street Journal
      or such
      other source as the Board deems reliable;

     

    (ii)  If
      the
      Common Stock is quoted on the National Market System of the National Association
      of Securities Dealers, Inc. Automated Quotation System (but not on the National
      Market or SmallCap Market thereof) or is regularly quoted by a recognized
      securities dealer but selling prices are not reported, the Fair Market Value
      of
      a share of Common Stock shall be the mean between the high bid and high asked
      prices for the Common Stock on the last market trading day prior to the date
      of
      determination, as reported in the Wall
      Street Journal
      or such
      other source as the Board deems reliable; or

     

    (iii)  In
      the
      absence of an established market for the Common Stock, the Fair Market Value
      shall be determined in good faith by the Board, and in accordance with
      regulations promulgated under Section 422 of the code, all in the sole and
      absolute discretion of the Board.

     

    (m)  “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.

     

    (n)  “Nonstatutory
      Stock Option”
      means an
      Option not intended to qualify as an Incentive Stock Option.

     

    (o)  “Option”
      means a
      stock option granted pursuant to the Plan.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (p)  “Option
      Agreement”
      means a
      written agreement between the Company and an Optionee evidencing the terms
      and
      conditions of an individual Option grant. Each Option Agreement shall be subject
      to the terms and conditions of the Plan and any rules and regulations adopted
      by
      the Board and incorporated therein.

     

    (q)  “Option
      Shares”
      means
      the shares of Common Stock of the Company issued or issuable pursuant to the
      exercise of an Option.

     

    (r)  “Optionee”
      means an
      Employee, Director or Consultant who holds an outstanding Option.

     

    (s)  “Plan”
      means
      this 2004 Stock Option Plan.

     

    (t)  “Securities
      Act”
      means
      the Securities Act of 1933, as amended.

     

    (u)  “Termination
      of Employment or Consulting Relationship”
      means:

     

    (i)  With
      respect to Options granted to an Optionee in his or her capacity as an Employee,
      the time when the employer-employee relationship between the Optionee and the
      Company (or an Affiliate) is terminated for any reason, including without
      limitation a termination by resignation, discharge, death or retirement. The
      Board, in its sole discretion, may determine whether a Termination of Employment
      or Consulting Relationship has occurred in the case of any leave of absence
      approved by the Board, including sick leave, personal leave and military leave;
      provided, however, that any such leave for purposes of an Incentive Stock Option
      shall not exceed three (3) months (A) unless the Board determines to extend
      such
      period upon the acknowledgment of the Optionee that such an Option would become
      a Nonstatutory Stock Option, or (B) if longer, so long as the Optionee’s right
      to re-employment upon the expiration of such leave is guaranteed by contract
      (including by Company policy) or statute;

     

    (ii)  With
      respect to Options granted to an Optionee in his or her capacity as a Director,
      the time when the Optionee ceases to be a Director for any reason, including
      without limitation a cessation by resignation, removal, failure to be reelected,
      death or retirement, but excluding cessations where there is a simultaneous
      or
      continuing employment or consulting relationship of the former Director by
      the
      Company (or an Affiliate) and the Board expressly deems such cessation not
      to be
      a Termination of Employment or Consulting Relationship; and

     

    (iii)  With
      respect to Options granted to an Optionee in his or her capacity as a
      Consultant, the time when the contractual relationship between the Optionee
      and
      the Company (or an Affiliate) is terminated for any reason.

     

    The
      Board, in its absolute discretion, shall determine the effect of all other
      matters and questions relating to a Termination of Employment or Consulting
      Relationship.

    

    3.  ADMINISTRATION.

     

    (a)  The
      Plan
      shall be administered by the Board unless and until the Board delegates
      administration to a Committee, as provided in Section 3(c) below.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (b)  The
      Board
      shall have the power, except as otherwise provided in the Plan:

     

    (i)  To
      determine from time to time (A) which of the persons eligible under the Plan
      shall be granted Options, (B) when and how the Options shall be granted, (C)
      whether an Option will be an Incentive Stock Option or a Nonstatutory Stock
      Option, (D) the provisions of each Option granted (which need not be identical),
      including the time or times such Option may be exercised in whole or in part,
      and (E) the number of shares for which an Option shall be granted to each such
      person.

     

    (ii)  To
      construe and interpret the Plan and Options granted under it, and to establish,
      amend and revoke rules and regulations for the Plan’s administration. The Board,
      in the exercise of its power, may correct any defect, omission or inconsistency
      in the Plan or in any Option Agreement in a manner and to the extent it shall
      deem necessary or expedient to make the Plan fully effective.

     

    (iii)  To
      amend
      the Plan as provided in Section 12.

     

    (iv)  To
      place
      such restrictions on the sale or other disposition of Option Shares as may
      be
      deemed appropriate by the Board.

     

    (v)  Generally,
      to exercise such powers and to perform such acts as the Board deems necessary
      or
      expedient to promote the best interests of the Company.

     

    (c)  The
      Board
      may delegate administration of the Plan to a committee of the Board composed
      of
      not fewer than two (2) members (the “Committee”). If administration is delegated
      to a Committee, the Committee shall have, in connection with the administration
      of the Plan, the powers theretofore possessed by the Board (and references
      in
      the Plan to the Board shall thereafter be deemed to be references to the
      Committee), subject, however, to such resolutions, not inconsistent with the
      provisions of the Plan, as may be adopted from time to time by the Board. The
      Board may abolish the Committee at any time and revest in the Board the
      administration of the Plan.

     

    4.  SHARES
      SUBJECT TO THE PLAN.

     

    Subject
      to the provisions of Section 9 relating to adjustments upon changes in stock,
      the stock that may be sold pursuant to the exercise of Options shall not exceed
      7,966,501 of the outstanding shares of the Company's Common Stock, and the
      number of shares of stock which may be issued as incentive stock options shall
      not exceed such number. If any Option shall for any reason expire or otherwise
      terminate without having been exercised in full, the stock not purchased
      pursuant to such Option shall again become available under the
      Plan.

    

    5.  ELIGIBILITY.

     

    Incentive
      Stock Options may be granted only to Employees. Nonstatutory Stock Options
      may
      be granted only to Employees, Directors and Consultants. In the event an
      Optionee is both an Employee and a Director, or an Optionee is both a Director
      and a Consultant, the Option Agreement shall specify the capacity in which
      the
      Optionee is granted the Option; provided, however, if the Option Agreement
      is
      silent as to such capacity, the Option shall be deemed to be granted to the
      Optionee as an Employee or as a Consultant, as applicable. 

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    6.  OPTION
      AGREEMENT PROVISIONS.

     

    Each
      Option shall be granted pursuant to a written Option Agreement which shall
      be in
      such form and shall contain such terms and conditions as the Board shall deem
      appropriate. The provisions of separate Option Agreements need not be identical,
      but each Option Agreement shall include (through incorporation of the provisions
      hereof by reference in the Option Agreement or otherwise) the substance of
      each
      of the following provisions:

    

    (a)  Term.
      No
      Option shall be exercisable after the expiration of ten (10) years from the
      date
      it was granted.

     

    (b)  Price.
      The
      exercise price of each Option shall be set forth in the applicable Option
      Agreement; provided, however, that the exercise price of each Incentive Stock
      Option shall be not less than one hundred percent (100%) of the Fair Market
      Value of the Common Stock subject to the Option on the date such Option is
      granted.

     

    (c)  Consideration.
      The
      purchase price of Common Stock acquired pursuant to an Option shall be paid
      in
      cash at the time the Option, or portion thereof, is exercised; provided,
      however, at the discretion of the Board, the Option Agreement may allow (i)
      a
      delay in payment up to thirty (30) days from the date the Option, or portion
      thereof, is exercised, (ii) payment, in whole or in part, through the delivery
      of shares of Common Stock owned by the Optionee; (iii) payment, in whole or
      in
      part, through the surrender of Option Shares then issuable upon exercise of
      the
      Option; (iv) payment, in whole or in part, through the delivery of property
      of
      any kind which constitutes good and valuable consideration; or (v) any other
      method of “cashless exercise” permitted by the Board; provided, however, that at
      any time that the Company is incorporated in the State of Delaware, payment
      of
      the Common Stock’s “par value,” as defined in the Delaware General Corporation
      Law, shall not be made by deferred payment, whether by way of promissory note
      or
      otherwise.

     

    (d)  Transferability.
      An
      Incentive Stock Option shall not be transferable except by will or by the laws
      of descent and distribution, and shall be exercisable during the Optionee’s
      lifetime only by the Optionee. A Nonstatutory Stock Option shall not be
      transferable except by will or by the laws of descent and distribution, by
      instrument to an intervivos trust or testamentary trust in which the Option
      is
      to be passed to beneficiaries upon death of the trustor (settlor), or by gift
      to
      an Optionee’s “immediate family,” as defined in Rule 16a-1(e) of the Securities
      Exchange Act of 1934, as amended, or any successor rule.

     

    (e)  Vesting.
      The
      total number of Option Shares subject to an Option may, but need not, be
      allotted in periodic installments (which may, but need not, be equal). The
      Option Agreement may provide that, from time to time during each of such
      installment periods, the Option may become exercisable (“vest”) with respect to
      some or all of the Option Shares allotted to any period, and may be exercised
      with respect to some or all of the Option Shares allotted to such period and/or
      any prior period as to which the Option became vested but was not fully
      exercised. During the remainder of the term of the Option (if its term extends
      beyond the end of the installment periods), the Option may be exercised from
      time to time with respect to any Option Shares then remaining subject to the
      Option.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (f)  Securities
      Law Compliance.
      The
      Company may require any Optionee, or any person to whom an Option is transferred
      under Section 6(d), as a condition of exercising any such Option, (i) to give
      written assurances satisfactory to the Company as to the Optionee’s knowledge
      and experience in financial and business matters and/or to employ a purchaser
      representative reasonably satisfactory to the Company who is knowledgeable
      and
      experienced in financial and business matters, and that he or she is capable
      of
      evaluating, alone or together with the purchaser representative, the merits
      and
      risks of exercising the Option, and (ii) to give written assurances satisfactory
      to the Company stating that such person is acquiring the Option Shares subject
      to the Option for such person’s own account and not with any present intention
      of selling or otherwise distributing the Option Shares. These requirements,
      and
      any assurances given pursuant to such requirements, shall be inoperative if the
      issuance of the Option Shares upon the exercise of the Option has been
      registered under a then currently effective registration statement under the
      Securities Act or, as to any particular requirement, a determination is made
      by
      counsel for the Company that such requirement need not be met in the
      circumstances under the then applicable securities laws.

     

    (g)  Termination
      of Employment or Consulting Relationship.
      In the
      event of the Termination of Employment or Consulting Relationship of an Optionee
      for any reason (other than for Cause or upon the Optionee’s death or
      Disability), the Optionee may exercise his or her Option within three (3) months
      of such date of termination, and only to the extent that the Optionee was
      entitled to exercise the Option at the date of such termination (but in no
      event
      later than the expiration of the term of such Option as set forth in the Option
      Agreement) (and in the case of Nonstatutory Stock Options, such period may
      be
      less than three (3) months). In the event of the Termination of Employment
      or
      Consulting Relationship of an Optionee for Cause, except as otherwise determined
      by the Board, all Options granted hereunder to such Optionee shall expire as
      of
      the date of the occurrence giving rise to such termination or upon the date
      such
      options expire by their terms, whichever is earlier, and such Optionee shall
      have no rights with respect to any unexercised Options. If, at the date of
      a
      Termination of Employment or Consulting Relationship, the Optionee is not
      entitled to exercise his or her entire Option, the Option Shares covered by
      the
      unexercisable portion of the Option shall revert to the Plan. If, after a
      Termination of Employment or Consulting Relationship, the Optionee does not
      exercise his or her Option within the period specified in the Option Agreement,
      the Option shall terminate, and the Option Shares covered by such Option shall
      revert to the Plan.

     

    (h)  Disability
      of Optionee.
      In the
      event of a Termination of Employment or Consulting Relationship of an Optionee
      as a result of the Optionee’s Disability, the Optionee may exercise his or her
      Option before the date twelve (12) months from the date of such termination,
      and
      only to the extent that the Optionee was entitled to exercise the Option at
      the
      date of such termination (but in no event later than the expiration of the
      term
      of such Option as set forth in the Option Agreement). If, at the date of a
      Termination of Employment or Consulting Relationship, the Optionee is not
      entitled to exercise his or her entire Option, the Option Shares covered by
      the
      unexercisable portion of the Option shall revert to the Plan. If, after a
      Termination of Employment or Consulting Relationship, the Optionee does not
      exercise his or her Option within the period specified in the Option Agreement,
      the Option shall terminate, and the Option Shares covered by such Option shall
      revert to the Plan.

     

    
      
         

      

      
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    (i)  Death
      of Optionee.
      In the
      event of the death of an Optionee, the Option may be exercised before the date
      twelve (12) months after the date of such death by the Optionee’s estate or by a
      person who acquired the right to exercise the Option by bequest or inheritance,
      but only to the extent the Optionee was entitled to exercise the Option at
      the
      date of death. If, at the time of death, the Optionee was not entitled to
      exercise his or her entire Option, the Option Shares covered by the
      unexercisable portion of the Option shall revert to the Plan. If, after death,
      the Optionee’s estate or a person who acquired the right to exercise the Option
      by bequest or inheritance does not exercise the Option within the time specified
      in the Option Agreement, the Option shall terminate, and the Option Shares
      covered by such Option shall revert to the Plan.

     

    (j)  Early
      Exercise.
      The
      Option may, but need not, include a provision whereby the Optionee may elect
      at
      any time prior to a Termination of Employment or Consulting Relationship to
      exercise the Option as to any part or all of the Option Shares prior to the
      full
      vesting of the Option. Any unvested Option Shares so purchased may be subject
      to
      an unvested share repurchase option in favor of the Company or to any other
      restriction the Board determines to be appropriate.

     

    7.  COVENANTS
      OF THE COMPANY.

     

    (a)  During
      the terms of the Options, the Company shall keep available at all times the
      number of shares of Common Stock required to satisfy such Options.

     

    (b)  The
      Company shall seek to obtain from each regulatory commission or agency having
      jurisdiction over the Plan such authority as may be required to issue and sell
      Option Shares upon exercise of the Options; provided, however, that this
      undertaking shall not require the Company to register under the Securities
      Act
      either the Plan, any Option or any Option Shares. If, after reasonable efforts
      or without unreasonable expense, the Company is unable to obtain from any such
      regulatory commission or agency the authority which counsel for the Company
      deems necessary for the lawful issuance and sale of Option Shares under the
      Plan, the Company shall be relieved from any liability for failure to issue
      and
      sell Option Shares upon exercise of such Options unless and until such authority
      is obtained.

     

    8.  USE
      OF PROCEEDS.

     

    Proceeds
      from the sale of Option Shares shall be used for general operating capital
      of
      the Company.

    

    9.  ADJUSTMENTS
      UPON CHANGES IN COMMON STOCK.

     

    (a)  If
      any
      change is made in the Common Stock subject to the Plan or subject to any Option
      without the receipt of consideration by the Company (through merger,
      consolidation, reorganization, recapitalization, stock dividend, dividend in
      property other than cash, stock split, liquidating dividend, combination of
      shares, exchange of shares, change in corporate structure or otherwise), the
      Plan and all outstanding Options will be appropriately adjusted in the class
      and
      maximum number of shares subject to the Plan and the class and number of shares
      and price per share of Common Stock subject to outstanding Options. Such
      adjustment shall be made by the Board, the determination of which shall be
      final, binding and conclusive.

     

    
      
         

      

      
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    (b)  In
      the
      event of a merger or consolidation in which the Company is not the surviving
      corporation, then any surviving corporation or acquiring corporation shall
      assume any Options outstanding under the Plan or shall substitute similar stock
      options (including an option to acquire the same consideration paid to the
      stockholders in the transaction described in this subsection 9(b)) for those
      outstanding under the Plan. In the event any surviving corporation or acquiring
      corporation refuses to assume such Options or to substitute similar stock
      options for those outstanding under the Plan, then, with respect to Options
      held
      by Optionees with respect to whom a Termination of Employment or Consulting
      Relationship has not occurred prior to such merger or consolidation, the vesting
      of such Options (and, if applicable, the time during which such Options may
      be
      exercised) shall be accelerated in full, and the Options shall terminate if
      not
      exercised at or prior to such event. With respect to any other Options
      outstanding under the Plan, such Options shall terminate if not exercised (if
      applicable) prior to such event.

     

    (c)  In
      the
      event of a reverse merger in which the Company is the surviving corporation
      but
      the shares of Common Stock outstanding immediately preceding the merger are
      converted by virtue of the merger into other property, whether in the form
      of
      securities, cash or otherwise, then any acquiring corporation (or a corporation
      which directly or indirectly controls such an acquiring corporation) shall
      assume any Options outstanding under the Plan or shall substitute similar
      options (including an option to acquire the same consideration paid to the
      stockholders in the transaction described in this subsection 9(c)) for those
      outstanding under the Plan. In the event any acquiring corporation or
      corporation controlling such an acquiring corporation refuses to assume such
      Options or to substitute similar Options for those outstanding under the Plan,
      then with respect to Options held by Optionees with respect to whom a
      Termination of Employment or Consulting Relationship has not occurred prior
      to
      such merger or consolidation, the vesting of such Options (and, if applicable,
      the time during which such Options may be exercised) shall be accelerated in
      full, and the Options shall terminate if not exercised (if applicable) at or
      prior to such event. With respect to any other Options outstanding under the
      Plan, such Options shall terminate if not exercised (if applicable) prior to
      such event.

     

    10.  FINANCIAL
      INFORMATION. 

     

    The
      Company shall provide to each Optionee on an annual basis a copy of the annual
      financial report prepared by the Company’s independent certified public
      accountants, or such other periodic financial report which conforms with Section
      260.140.46 of Title 10 of the California Code of Regulations.

    

    11.  MISCELLANEOUS.

     

    (a)  Neither
      an Optionee nor any person to whom an Option is transferred under Section 6(d)
      shall be deemed to be the holder of, or to have any of the rights of a holder
      with respect to, any Option Shares unless and until such person has satisfied
      all requirements for exercise of the Option pursuant to its terms.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    (b)  Nothing
      in the Plan or any instrument executed or Option granted pursuant thereto shall
      confer upon any Employee or Consultant or Optionee any right to continue in
      the
      employ of the Company or any Affiliate (or to continue acting as a Consultant)
      or shall restrict the right of the Company or any Affiliate to terminate the
      employment or consulting relationship of any Employee or Consultant or Optionee
      with or without cause.

     

    (c)  To
      the
      extent that the aggregate Fair Market Value (determined at the time of grant)
      of
      Common Stock with respect to which Incentive Stock Options are exercisable
      for
      the first time by any Optionee during any calendar year under all plans of
      the
      Company and its Affiliates exceeds One Hundred Thousand Dollars ($100,000),
      the
      Options or portions thereof which exceed such limit (according to the order
      in
      which they were granted) shall be treated as Nonstatutory Stock
      Options.

     

    (d)  The
      Company and the members of the Board shall be relieved from any liability for
      the non-issuance or non-transfer, or any delay of issuance or transfer, of
      any
      Option Shares which results from the inability of the Company to comply with,
      or
      to obtain, or from any delay in obtaining from any regulatory body having
      jurisdiction, all requisite authority to issue or transfer Option Shares if
      counsel for the Company deems such authority reasonably necessary for lawful
      issuance or transfer of any such shares. Appropriate legends may be placed
      on
      the stock certificates evidencing Option Shares to reflect such transfer
      restrictions.

     

    12.  AMENDMENT
      OF THE PLAN.

     

    (a)  The
      Board
      at any time, and from time to time, may amend the Plan. However, no amendment
      shall be effective unless approved by the shareholders of the Company within
      twelve (12) months before or after the adoption of the amendment where the
      amendment will:

     

    (i)  Increase
      the number of shares reserved for Options under the Plan, except as provided
      in
      Section 9 relating to adjustments upon changes in Common Stock;

     

    (ii)  Modify
      the requirements as to eligibility for participation in the Plan (to the extent
      such modification requires shareholder approval in order for the Plan to satisfy
      the requirements of Section 422 of the Code); or

     

    (iii)  Modify
      the Plan in any other way if such modification requires shareholder approval
      in
      order for the Plan to satisfy the requirements of Section 422 of the
      Code.

     

    (b)  It
      is
      expressly contemplated that the Board may amend the Plan in any respect the
      Board deems necessary or advisable to provide Optionees with the maximum
      benefits provided or to be provided under the provisions of the Code and the
      regulations promulgated thereunder relating to Incentive Stock Options and/or
      to
      bring the Plan and/or Incentive Stock Options granted under the Plan into
      compliance therewith.

     

    (c)  The
      rights and obligations under any Option granted before any amendment of the
      Plan
      shall not be altered or impaired by such amendment unless the Company requests
      the consent of the person to whom the Option was granted and such person
      consents in writing.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    13.  TERMINATION
      OR SUSPENSION OF THE PLAN.

     

    (a)  The
      Board
      may suspend or terminate the Plan at any time. Unless sooner terminated, the
      Plan shall terminate on August 15, 2014 (which shall be within ten (10) years
      from the date the Plan is adopted by the Board or approved by the shareholders
      of the Company, whichever is earlier.) No Options may be granted under the
      Plan
      while the Plan is suspended or after it is terminated.

     

    (b)  Rights
      and obligations under any Option granted while the Plan is in effect shall
      not
      be altered or impaired by suspension or termination of the Plan, except with
      the
      consent of the person to whom the Option was granted.

     

    14.  EFFECTIVE
      DATE OF PLAN.

     

    The
      Plan
      shall become effective on such date as the Plan is adopted by the Board,
      provided that the shareholders of the Company approve or have approved the
      Plan
      within twelve (12) months of such date. No Options granted under the Plan shall
      be exercised unless and until the Plan has been approved by the shareholders
      of
      the Company.

    

 

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    
 

    

    

    

    
      
        

      

    

    

    

    

    2004

    

    STOCK
      OPTION PLAN

    

    OF

    

    

    CYGNUS
      COMMUNICATIONS, INC.

    

    

    

    

    

    

    
      
        

      

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

       

      TABLE
        OF CONTENTS

    

    

      
        	 	
                Page

              
	
                1.
                  PURPOSES

              	
                 

              	
                1

              	
                 

              
	
                2.
                  DEFINITIONS

              	
                 

              	
                1

              	
                 

              
	
                3.
                  ADMINISTRATION

              	
                 

              	
                3

              	
                 

              
	
                4.
                  SHARES SUBJECT TO THE PLAN

              	
                 

              	
                4

              	
                 

              
	
                5.
                  ELIGIBILITY

              	
                 

              	
                4

              	
                 

              
	
                6.
                  OPTION AGREEMENT PROVISIONS

              	
                 

              	
                5

              	
                 

              
	
                7.
                  COVENANTS OF THE COMPANY

              	
                 

              	
                7

              	
                 

              
	
                8.
                  USE OF PROCEEDS

              	
                 

              	
                7

              	
                 

              
	
                9.
                  ADJUSTMENTS UPON CHANGES IN COMMON STOCK

              	
                 

              	
                7

              	
                 

              
	
                10.
                  FINANCIAL INFORMATION

              	
                 

              	
                8

              	
                 

              
	
                11.
                  MISCELLANEOUS

              	
                 

              	
                8

              	
                 

              
	
                12.
                  AMENDMENT OF THE PLAN

              	
                 

              	
                9

              	
                 

              
	
                13.
                  TERMINATION OR SUSPENSION OF THE PLAN

              	
                 

              	
                10

              	
                 

              
	
                14.
                  EFFECTIVE DATE OF PLAN

              	
                 

              	
                10

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