Document:

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                                                                    Exhibit 10.1

                               ALTUS MEDICAL, INC.

                            INDEMNIFICATION AGREEMENT

     This Indemnification Agreement ("Agreement") is effective as of
_______________, 2002 by and between Altus Medical, Inc., a Delaware corporation
(the "Company"), and __________________ ("Indemnitee").

     WHEREAS, the Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve the Company and its related
entities;

     WHEREAS, in order to induce Indemnitee to continue to provide services to
the Company, the Company wishes to provide for the indemnification of, and the
advancement of expenses to, Indemnitee to the maximum extent permitted by law;

     WHEREAS, the Company and Indemnitee recognize the continued difficulty in
obtaining liability insurance for the Company's directors, officers, employees,
agents and fiduciaries, the significant increases in the cost of such insurance,
and the general reductions in the coverage of such insurance;

     WHEREAS, the Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees, agents and fiduciaries to expensive litigation risks at the same time
as the availability and coverage of liability insurance has been severely
limited; and

     WHEREAS, the Company and Indemnitee desire to have in place the additional
protection provided by an indemnification agreement to provide indemnification
and advancement of expenses to the Indemnitee to the maximum extent permitted by
Delaware law;

     WHEREAS, in view of the considerations set forth above, the Company desires
that Indemnitee shall be indemnified and advanced expenses by the Company as set
forth herein;

     NOW, THEREFORE, the Company and Indemnitee hereby agree as set forth below.

     1.   Certain Definitions.
          -------------------

          (a)  "Change in Control" shall mean, and shall be deemed to have
occurred if, on or after the date of this Agreement, (i) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended) or group acting in concert, other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company acting in such
capacity or a corporation owned directly or indirectly by the stockholders of
the Company in substantially the same proportions as their ownership of stock of
the Company, becomes the "beneficial owner" (as defined in Rule 13d-3 under said
Act), directly or indirectly, of securities of the Company representing more
than 50% of the total voting power represented by the Company's then outstanding
Voting Securities, (ii) during any period of two consecutive years, individuals
who at the

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beginning of such period constitute the Board of Directors of the Company and
any new director whose election by the Board of Directors or nomination for
election by the Company's stockholders was approved by a vote of at least two
thirds (2/3) of the directors then still in office who either were directors at
the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof,
(iii) the stockholders of the Company approve a merger or consolidation of the
Company with any other corporation other than a merger or consolidation which
would result in the Voting Securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into Voting Securities of the surviving entity) at least 80% of
the total voting power represented by the Voting Securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation, or (iv) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of (in one transaction or a series of related transactions) all
or substantially all of the Company's assets.

          (b)  "Claim" shall mean with respect to a Covered Event: any
threatened, pending or completed action, suit, proceeding or alternative dispute
resolution mechanism, or any hearing, inquiry or investigation that Indemnitee
in good faith believes might lead to the institution of any such action, suit,
proceeding or alternative dispute resolution mechanism, whether civil, criminal,
administrative, investigative or other.

          (c)  References to the "Company" shall include, in addition to Altus
Medical, Inc. any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger to which Altus Medical, Inc.
(or any of its wholly-owned subsidiaries) is a party which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, employees, agents or fiduciaries, so that if Indemnitee is
or was a director, officer, employee, agent or fiduciary of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise,
Indemnitee shall stand in the same position under the provisions of this
Agreement with respect to the resulting or surviving corporation as Indemnitee
would have with respect to such constituent corporation if its separate
existence had continued.

          (d)  "Covered Event" shall mean any event or occurrence related to the
fact that Indemnitee is or was a director, officer, employee, agent or fiduciary
of the Company, or any subsidiary of the Company, or is or was serving at the
request of the Company as a director, officer, employee, agent or fiduciary of
another corporation, partnership, joint venture, trust or other enterprise, or
by reason of any action or inaction on the part of Indemnitee while serving in
such capacity.

          (e)  "Expenses" shall mean any and all expenses (including attorneys'
fees and all other costs, expenses and obligations incurred in connection with
investigating, defending, being a witness in or participating in (including on
appeal), or preparing to defend, to be a witness in or to participate in, any
action, suit, proceeding, alternative dispute resolution mechanism, hearing,
inquiry or investigation), judgments, fines, penalties and amounts paid in
settlement (if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) of any

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Claim and any federal, state, local or foreign taxes imposed on the Indemnitee
as a result of the actual or deemed receipt of any payments under this
Agreement.

          (f)  "Expense Advance" shall mean a payment to Indemnitee pursuant to
Section 3 of Expenses in advance of the settlement of or final judgment in any
action, suit, proceeding or alternative dispute resolution mechanism, hearing,
inquiry or investigation which constitutes a Claim.

          (g)  "Independent Legal Counsel" shall mean an attorney or firm of
attorneys, selected in accordance with the provisions of Section 2(d) hereof,
who shall not have otherwise performed services for the Company or Indemnitee
within the last three years (other than with respect to matters concerning the
rights of Indemnitee under this Agreement, or of other Indemnitees under similar
indemnity agreements).

          (h)  References to "other enterprises" shall include employee benefit
plans; references to "fines" shall include any excise taxes assessed on
Indemnitee with respect to an employee benefit plan; and references to "serving
at the request of the Company" shall include any service as a director, officer,
employee, agent or fiduciary of the Company which imposes duties on, or involves
services by, such director, officer, employee, agent or fiduciary with respect
to an employee benefit plan, its participants or its beneficiaries; and if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in the interest of the participants and beneficiaries of an employee benefit
plan, Indemnitee shall be deemed to have acted in a manner "not opposed to the
best interests of the Company" as referred to in this Agreement.

          (i)  "Reviewing Party" shall mean, subject to the provisions of
Section 2(d), any person or body appointed by the Company's Board of Directors
in accordance with applicable law to review the Company's obligations hereunder
and under applicable law, which may include a member or members of the Company's
Board of Directors, Independent Legal Counsel or any other person or body not a
party to the particular Claim for which Indemnitee is seeking indemnification.

          (j)  "Section" refers to a section of this Agreement unless otherwise
indicated.

          (k)  "Voting Securities" shall mean any securities of the Company that
vote generally in the election of directors.

     2.   Indemnification.
          ---------------

          (a)  Indemnification of Expenses. Subject to the provisions of Section
               ---------------------------
2(b) below, the Company shall indemnify Indemnitee for Expenses to the fullest
extent permitted by law if Indemnitee was or is or becomes a party to or witness
or other participant in, or is threatened to be made a party to or witness or
other participant in, any Claim (whether by reason of or arising in part out of
a Covered Event), including all interest, assessments and other charges paid or
payable in connection with or in respect of such Expenses.

          (b)  Review of Indemnification Obligations. Notwithstanding the
               -------------------------------------
foregoing, in the event any Reviewing Party shall have determined (in a written
opinion, in any case in which Independent Legal Counsel is the Reviewing Party)
that Indemnitee is not entitled to be indemnified

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hereunder under applicable law, (i) the Company shall have no further obligation
under Section 2(a) to make any payments to Indemnitee not made before such
determination by such Reviewing Party, and (ii) the Company shall be entitled to
be reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all
Expenses theretofore paid to Indemnitee to which Indemnitee is not entitled
hereunder under applicable law; provided, however, that if Indemnitee has
                                --------  -------
commenced or thereafter commences legal proceedings in a court of competent
jurisdiction to secure a determination that Indemnitee is entitled to be
indemnified hereunder under applicable law, any determination made by any
Reviewing Party that Indemnitee is not entitled to be indemnified hereunder
under applicable law shall not be binding and Indemnitee shall not be required
to reimburse the Company for any Expenses theretofore paid in indemnifying
Indemnitee until a final judicial determination is made with respect thereto (as
to which all rights of appeal therefrom have been exhausted or lapsed).
Indemnitee's obligation to reimburse the Company for any Expenses shall be
unsecured and no interest shall be charged thereon.

          (c)  Indemnitee Rights on Unfavorable Determination; Binding Effect.
               --------------------------------------------------------------
If any Reviewing Party determines that Indemnitee substantively is not entitled
to be indemnified hereunder in whole or in part under applicable law, Indemnitee
shall have the right to commence litigation seeking an initial determination by
the court or challenging any such determination by such Reviewing Party or any
aspect thereof, including the legal or factual bases therefor, and, subject to
the provisions of Section 15, the Company hereby consents to service of process
and to appear in any such proceeding. Absent such litigation, any determination
by any Reviewing Party shall be conclusive and binding on the Company and
Indemnitee.

          (d)  Selection of Reviewing Party; Change in Control. If there has not
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been a Change in Control, any Reviewing Party shall be selected by the Board of
Directors, and if there has been such a Change in Control (other than a Change
in Control which has been approved by a majority of the Company's Board of
Directors who were directors immediately before such Change in Control), any
Reviewing Party with respect to all matters thereafter arising concerning the
rights of Indemnitee to indemnification of Expenses under this Agreement or any
other agreement or under the Company's Certificate of Incorporation or Bylaws as
now or hereafter in effect, or under any other applicable law, if desired by
Indemnitee, shall be Independent Legal Counsel selected by Indemnitee and
approved by the Company (which approval shall not be unreasonably withheld).
Such counsel, among other things, shall render its written opinion to the
Company and Indemnitee as to whether and to what extent Indemnitee would be
entitled to be indemnified hereunder under applicable law and the Company agrees
to abide by such opinion. The Company agrees to pay the reasonable fees of the
Independent Legal Counsel referred to above and to indemnify fully such counsel
against any and all expenses (including attorneys' fees), claims, liabilities
and damages arising out of or relating to this Agreement or its engagement
pursuant hereto. Notwithstanding any other provision of this Agreement, the
Company shall not be required to pay Expenses of more than one Independent Legal
Counsel in connection with all matters concerning a single Indemnitee, and such
Independent Legal Counsel shall be the Independent Legal Counsel for any or all
other Indemnitees unless (i) the employment of separate counsel by one or more
Indemnitees has been previously authorized by the Company in writing, or (ii) an
Indemnitee shall have provided to the Company a written statement that such
Indemnitee has reasonably concluded that there may be a conflict of interest
between such Indemnitee and the other Indemnitees with respect to the matters
arising under this Agreement.

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          (e)  Mandatory Payment of Expenses. Notwithstanding any other
               -----------------------------
provision of this Agreement other than Section 10 hereof, to the extent that
Indemnitee has been successful on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice, in defense of any
Claim, Indemnitee shall be indemnified against all Expenses incurred by
Indemnitee in connection therewith.

     3.   Expense Advances.
          ----------------

          (a)  Obligation to Make Expense Advances. Upon receipt of a written
               -----------------------------------
undertaking by or on behalf of the Indemnitee to repay such amounts if it shall
ultimately be determined that the Indemnitee is not entitled to be indemnified
therefore by the Company hereunder under applicable law, the Company shall make
Expense Advances to Indemnitee.

          (b)  Form of Undertaking. Any obligation to repay any Expense Advances
               -------------------
hereunder pursuant to a written undertaking by the Indemnitee shall be unsecured
and no interest shall be charged thereon.

          (c)  Determination of Reasonable Expense Advances. The parties agree
               --------------------------------------------
that for the purposes of any Expense Advance for which Indemnitee has made
written demand to the Company in accordance with this Agreement, all Expenses
included in such Expense Advance that are certified by affidavit of Indemnitee's
counsel as being reasonable shall be presumed conclusively to be reasonable.

     4.   Procedures for Indemnification and Expense Advances.
          ---------------------------------------------------

          (a)  Timing of Payments. All payments of Expenses (including without
               ------------------
limitation Expense Advances) by the Company to the Indemnitee pursuant to this
Agreement shall be made to the fullest extent permitted by law as soon as
practicable after written demand by Indemnitee therefor is presented to the
Company, but in no event later than thirty (30) business days after such written
demand by Indemnitee is presented to the Company, except in the case of Expense
Advances, which shall be made no later than ten (10) business days after such
written demand by Indemnitee is presented to the Company.

          (b)  Notice/Cooperation by Indemnitee. Indemnitee shall, as a
               --------------------------------
condition precedent to Indemnitee's right to be indemnified or Indemnitee's
right to receive Expense Advances under this Agreement, give the Company notice
in writing as soon as practicable of any Claim made against Indemnitee for which
indemnification will or could be sought under this Agreement. Notice to the
Company shall be directed to the Chief Executive Officer of the Company at the
address shown on the signature page of this Agreement (or such other address as
the Company shall designate in writing to Indemnitee). In addition, Indemnitee
shall give the Company such information and cooperation as it may reasonably
require and as shall be within Indemnitee's power.

          (c)  No Presumptions; Burden of Proof. For purposes of this Agreement,
               --------------------------------
the termination of any Claim by judgment, order, settlement (whether with or
without court approval) or conviction, or upon a plea of nolo contendere, or its
                                                         ---------------
equivalent, shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a

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court has determined that indemnification is not permitted by this Agreement or
applicable law. In addition, neither the failure of any Reviewing Party to have
made a determination as to whether Indemnitee has met any particular standard of
conduct or had any particular belief, nor an actual determination by any
Reviewing Party that Indemnitee has not met such standard of conduct or did not
have such belief, before the commencement of legal proceedings by Indemnitee to
secure a judicial determination that Indemnitee should be indemnified under this
Agreement under applicable law, shall be a defense to Indemnitee's claim or
create a presumption that Indemnitee has not met any particular standard of
conduct or did not have any particular belief. In connection with any
determination by any Reviewing Party or otherwise as to whether the Indemnitee
is entitled to be indemnified hereunder under applicable law, the burden of
proof shall be on the Company to establish that Indemnitee is not so entitled.

          (d)  Notice to Insurers. If, at the time of the receipt by the Company
               ------------------
of a notice of a Claim pursuant to Section 4(b) hereof, the Company has
liability insurance in effect which may cover such Claim, the Company shall give
prompt notice of the commencement of such Claim to the insurers in accordance
with the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of the Indemnitee, all amounts payable as a result of such Claim in
accordance with the terms of such policies.

          (e)  Selection of Counsel. In the event the Company shall be obligated
               --------------------
hereunder to provide indemnification for or make any Expense Advances with
respect to the Expenses of any Claim, the Company, if appropriate, shall be
entitled to assume the defense of such Claim with counsel approved by Indemnitee
(which approval shall not be unreasonably withheld) upon the delivery to
Indemnitee of written notice of the Company's election to do so. After delivery
of such notice, approval of such counsel by Indemnitee and the retention of such
counsel by the Company, the Company will not be liable to Indemnitee under this
Agreement for any fees or expenses of separate counsel subsequently retained by
or on behalf of Indemnitee with respect to the same Claim; provided that, (i)
Indemnitee shall have the right to employ Indemnitee's separate counsel in any
such Claim at Indemnitee's expense and (ii) if (A) the employment of separate
counsel by Indemnitee has been previously authorized by the Company, (B)
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any such defense,
or (C) the Company shall not continue to retain such counsel to defend such
Claim, then the fees and expenses of Indemnitee's separate counsel shall be
Expenses for which Indemnitee may receive indemnification or Expense Advances
hereunder.

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5.   Additional Indemnification Rights; Nonexclusivity.
     -------------------------------------------------

          (a)  Scope. The Company hereby agrees to indemnify the Indemnitee to
               -----
the fullest extent permitted by law, notwithstanding that such indemnification
is not specifically authorized by the other provisions of this Agreement, the
Company's Certificate of Incorporation, the Company's Bylaws or by statute. In
the event of any change after the date of this Agreement in any applicable law,
statute or rule which expands the right of a Delaware corporation to indemnify a
member of its board of directors or an officer, employee, agent or fiduciary, it
is the intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits afforded by such change. In the event of any
change in any applicable law, statute or rule which narrows the right of a
Delaware corporation to indemnify a member of its board of directors or an
officer, employee, agent or fiduciary, such change, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement, shall
have no effect on this Agreement or the parties' rights and obligations
hereunder except as set forth in Section 10(a) hereof.

          (b)  Nonexclusivity. The indemnification and the payment of Expense
               ---------------
Advances provided by this Agreement shall be in addition to any rights to which
Indemnitee may be entitled under the Company's Certificate of Incorporation, its
Bylaws, any other agreement, any vote of stockholders or disinterested
directors, the General Corporation Law of the State of Delaware, or otherwise.
The indemnification and the payment of Expense Advances provided under this
Agreement shall continue as to Indemnitee for any action taken or not taken
while serving in an indemnified capacity even though subsequent thereto
Indemnitee may have ceased to serve in such capacity.

     6.   No Duplication of Payments. The Company shall not be liable under this
          --------------------------
Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, provision of the Company's Certificate of
Incorporation, Bylaws or otherwise) of the amounts otherwise payable hereunder.

     7.   Partial Indemnification. If Indemnitee is entitled under any provision
          -----------------------
of this Agreement to indemnification by the Company for some or a portion of
Expenses incurred in connection with any Claim, but not, however, for all of the
total amount thereof, the Company shall nevertheless indemnify Indemnitee for
the portion of such Expenses to which Indemnitee is entitled.

     8.   Mutual Acknowledgment. Both the Company and Indemnitee acknowledge
          ---------------------
that in certain instances, federal law or applicable public policy may prohibit
the Company from indemnifying its directors, officers, employees, agents or
fiduciaries under this Agreement or otherwise. Indemnitee understands and
acknowledges that the Company has undertaken or may be required in the future to
undertake with the Securities and Exchange Commission to submit the question of
indemnification to a court in certain circumstances for a determination of the
Company's right under public policy to indemnify Indemnitee.

     9.   Liability Insurance. To the extent the Company maintains liability
          -------------------
insurance applicable to directors, officers, employees, agents or fiduciaries,
Indemnitee shall be covered by such policies in such a manner as to provide
Indemnitee the same rights and benefits as are provided to the most favorably
insured of the Company's directors, if Indemnitee is a director; or of the
Company's officers,

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if Indemnitee is not a director of the Company but is an officer; or of the
Company's key employees, agents or fiduciaries, if Indemnitee is not an officer
or director but is a key employee, agent or fiduciary.

     10.  Exceptions. Notwithstanding any other provision of this Agreement, the
          ----------
Company shall not be obligated pursuant to the terms of this Agreement:

          (a)  Excluded Action or Omissions. To indemnify or make Expense
               ----------------------------
Advances to Indemnitee with respect to Claims arising out of acts, omissions or
transactions for which Indemnitee is prohibited from receiving indemnification
under applicable law.

          (b)  Claims Initiated by Indemnitee. To indemnify or make Expense
               ------------------------------
Advances to Indemnitee with respect to Claims initiated or brought voluntarily
by Indemnitee and not by way of defense, counterclaim or crossclaim, except (i)
with respect to actions or proceedings brought to establish or enforce a right
to indemnification under this Agreement or any other agreement or insurance
policy or under the Company's Certificate of Incorporation or Bylaws now or
hereafter in effect relating to Claims for Covered Events, (ii) in specific
cases if the Company's Board of Directors has approved the initiation or
bringing of such Claim, or (iii) as otherwise required under Section 145 of the
Delaware General Corporation Law, regardless of whether Indemnitee ultimately is
determined to be entitled to such indemnification, Expense Advances, or
insurance recovery, as the case may be.

          (c)  Lack of Good Faith. To indemnify Indemnitee for any Expenses
               ------------------
incurred by the Indemnitee with respect to any action instituted (i) by
Indemnitee to enforce or interpret this Agreement, if a court having
jurisdiction over such action determines as provided in Section 13 that each of
the material assertions made by the Indemnitee as a basis for such action was
not made in good faith or was frivolous, or (ii) by or in the name of the
Company to enforce or interpret this Agreement, if a court having jurisdiction
over such action determines as provided in Section 13 that each of the material
defenses asserted by Indemnitee in such action was made in bad faith or was
frivolous.

          (d)  Claims Under Section 16(b). To indemnify Indemnitee for Expenses
               --------------------------
and the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute.

     11.  Counterparts. This Agreement may be executed in one or more
          ------------
counterparts, each of which shall constitute an original.

     12.  Binding Effect; Successors and Assigns. This Agreement shall be
          --------------------------------------
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns (including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company), spouses, heirs and
personal and legal representatives. The Company shall require and cause any
successor (whether direct or indirect, and whether by purchase, merger,
consolidation or otherwise) to all, substantially all, or a substantial part, of
the business or assets of the Company, by written agreement in form and
substance satisfactory to Indemnitee, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform if no such succession had taken place.

                                      -8-

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This Agreement shall continue in effect regardless of whether Indemnitee
continues to serve as a director, officer, employee, agent or fiduciary (as
applicable) of the Company or of any other enterprise at the Company's request.

     13.  Expenses Incurred in Action Relating to Enforcement or Interpretation.
          ---------------------------------------------------------------------
In the event that any action is instituted by Indemnitee under this Agreement or
under any liability insurance policies maintained by the Company to enforce or
interpret any of the terms hereof or thereof, Indemnitee shall be entitled to be
indemnified for all Expenses incurred by Indemnitee with respect to such action
(including without limitation attorneys' fees), regardless of whether Indemnitee
is ultimately successful in such action, unless as a part of such action a court
having jurisdiction over such action makes a final judicial determination (as to
which all rights of appeal therefrom have been exhausted or lapsed) that each of
the material assertions made by Indemnitee as a basis for such action was not
made in good faith or was frivolous; provided, however, that until such final
judicial determination is made, Indemnitee shall be entitled under Section 3 to
receive payment of Expense Advances hereunder with respect to such action. In
the event of an action instituted by or in the name of the Company under this
Agreement to enforce or interpret any of the terms of this Agreement, Indemnitee
shall be entitled to be indemnified for all Expenses incurred by Indemnitee in
defense of such action (including without limitation costs and expenses incurred
with respect to Indemnitee's counterclaims and cross-claims made in such
action), unless as a part of such action a court having jurisdiction over such
action makes a final judicial determination (as to which all rights of appeal
therefrom have been exhausted or lapsed) that each of the material defenses
asserted by Indemnitee in such action was made in bad faith or was frivolous;
provided, however, that until such final judicial determination is made,
Indemnitee shall be entitled under Section 3 to receive payment of Expense
Advances hereunder with respect to such action.

     14.  Period of Limitations. No legal action shall be brought and no cause
          ---------------------
of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's estate, spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such two year period; provided, however, that if any shorter
period of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.

     15.  Notice. All notices, requests, demands and other communications under
          ------
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and signed for by the party addressed, on the date of such
delivery, or (ii) if mailed by domestic certified or registered mail with
postage prepaid, on the third business day after the date postmarked. Addresses
for notice to either party are as shown on the signature page of this Agreement,
or as subsequently modified by written notice.

     16.  Consent to Jurisdiction. The Company and Indemnitee each hereby
          -----------------------
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be commenced, prosecuted and continued only in the Court of
Chancery of the State of Delaware in and for New Castle County, which shall be
the exclusive and only proper forum for adjudicating such a claim.

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     17.  Severability. The provisions of this Agreement shall be severable in
          ------------
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including without limitation each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, illegal or
unenforceable.

     18.  Choice of Law. This Agreement, and all rights, remedies, liabilities,
          -------------
powers and duties of the parties to this Agreement, shall be governed by and
construed in accordance with the laws of the State of Delaware as applied to
contracts between Delaware residents entered into and to be performed entirely
in the State of Delaware without regard to principles of conflicts of laws.

     19.  Subrogation. In the event of payment under this Agreement, the Company
          -----------
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.

     20.  Amendment and Termination. No amendment, modification, termination or
          -------------------------
cancellation of this Agreement shall be effective unless it is in writing signed
by both the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed to be or shall constitute a waiver of any other provisions
hereof (whether or not similar), nor shall such waiver constitute a continuing
waiver.

     21.  Integration and Entire Agreement. This Agreement sets forth the entire
          --------------------------------
understanding between the parties hereto and supersedes and merges all previous
written and oral negotiations, commitments, understandings and agreements
relating to the subject matter hereof between the parties hereto.

     22.  No Construction as Employment Agreement. Nothing contained in this
          ---------------------------------------
Agreement shall be construed as giving Indemnitee any right to be retained in
the employ of the Company or any of its subsidiaries or affiliated entities.

                                      -10-

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Indemnification
Agreement as of the date first above written.

ALTUS MEDICAL, INC.

By:         _________________________________    AGREED TO AND ACCEPTED

Print Name: _________________________________    INDEMNITEE:

Title:      _________________________________
                                                 _______________________________
Address:    821 Cowan Road                       (signature)
            Burlingame, CA 94010
                                                 Print Name:____________________

                                                 Address:_______________________<PAGE>

                                                                    Exhibit 10.3

                               ALTUS MEDICAL, INC.

                                 2002 STOCK PLAN

     1. Purposes of the Plan. The purposes of this 2002 Stock Plan are:
        --------------------
        o to attract and retain the best available personnel for
          positions of substantial responsibility,

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

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

     Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.
     2. Definitions. As used herein, the following definitions shall apply:
        -----------
       (a) "Administrator" means the Board or any of its Committees as shall be
            --------------
administering the Plan, in accordance with Section 4 of the Plan.

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

       (c)      "Board" means the Board of Directors of the Company.
                 -----
       (d)      "Change in Control" means the occurrence of any of the
                 -----------------
following events:

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

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

<PAGE>

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

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

  (e)      "Code" means the Internal Revenue Code of 1986, as amended.
            ----
  (f)      "Committee" means a committee of Directors appointed by the Board in
            ----------
accordance with Section 4 of the Plan.

  (g)      "Common Stock" means the common stock of the Company.
            ------------
  (h)      "Company" means Altus Medical, Inc., a Delaware corporation.
            -------
  (i)      "Consultant"  means any natural  person,  including  an advisor,
          -----------
engaged by the Company or a Parent or  Subsidiary  to render

services to such entity.
  (j)      "Director" means a member of the Board.
          --------
  (k)      "Disability" means total and permanent disability as defined in
          -----------
Section 22(e)(3) of the Code.

  (l) "Employee" means any person, including Officers and Directors, employed by
       --------
the Company or any Parent or Subsidiary of the Company. A Service Provider shall
not cease to be an Employee in the case of (i) any leave of absence approved by
the Company or (ii) transfers between locations of the Company or between the
Company, its Parent, any Subsidiary, or any successor. For purposes of Incentive
Stock Options, no such leave may exceed ninety days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract. If reemployment
upon expiration of a leave of absence approved by the Company is not so
guaranteed, then three (3) months following the 90th day of such leave, any
Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory
Stock Option. Neither service as a Director nor payment of a director's fee by
the Company shall be sufficient to constitute "employment" by the Company.

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

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

          (i)   If the Common Stock is listed on any established stock exchange
or a national market system, including without limitation the Nasdaq National
Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair
Market Value shall be the closing sales price

<PAGE>

for such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the day of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable;

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

     (iii) For purposes of any awards granted on the first day the Company
initially offers it equity securities to the public, the Fair Market Value shall
be the initial price to the public as set forth in the final prospectus included
within the registration statement in Form S-1 filed with the Securities and
Exchange Commission for the initial public offering of the Company's Common
Stock.

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

     (o) "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.

     (p) "Nonstatutory Stock Option" means an Option not intended to qualify as
          --------------------------
an Incentive Stock Option.

     (q) "Notice of Grant" means a written or electronic notice evidencing
          ---------------
certain terms and conditions of an individual Option or Stock Purchase Right
grant. The Notice of Grant is part of the Option Agreement.

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

     (s) "Option" means a stock option granted pursuant to the Plan.
          -------
     (t) "Option Agreement" means an agreement between the Company and an
          ----------------
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.

     (u) "Option Exchange Program" means a program whereby outstanding Options
          ------------------------
are surrendered in exchange for Options with a lower exercise price.

     (v) "Optioned Stock" means the Common Stock subject to an Option or Stock
          ---------------
Purchase Right.

     (w) "Optionee" means the holder of an outstanding
        ---------
     Option or Stock Purchase Right granted under the Plan.

<PAGE>

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

     (y) "Plan" means this 2002 Stock Plan, as amended and restated.
          ----
     (z) "Restricted Stock" means shares of Common Stock acquired pursuant to a
          -----------------
grant of Stock Purchase Rights under Section 11 of the Plan.

     (aa) "Restricted Stock Purchase Agreement" means a written agreement
           ------------------------------------
between the Company and the Optionee evidencing the terms and restrictions
applying to stock purchased under a Stock Purchase Right. The Restricted Stock
Purchase Agreement is subject to the terms and conditions of the Plan and the
Notice of Grant.

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

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

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

     (ee) "Share" means a share of the Common Stock, as adjusted in accordance
           ------
with Section 13 of the Plan.

     (ff) "Stock Purchase Right" means the right to purchase Common Stock
           ---------------------
pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.

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

     3. Stock Subject to the Plan. Subject to the provisions of Section 13 of
        --------------------------
the Plan, the maximum aggregate number of Shares that may be optioned and sold
under the Plan is 1,600,000 Shares plus (a) any Shares which have been
reserved but not issued under the Company's 1998 Stock Option Plan (the "1998
Plan") as of the date of stockholder approval of this Plan, (b) any Shares
returned to the 1998 Plan as a result of termination of options or repurchase of
Shares issued under the 1998 Plan and (c) an annual increase to be added on the
first day of the Company's fiscal year beginning in 2003, equal to the lesser of
(i) 2,000,000 Shares, (ii) 5% of the outstanding Shares on such date or (iii) an
amount determined by the Board. The Shares may be authorized, but unissued, or
reacquired Common Stock.

     If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan, whether upon exercise of an Option or Right, shall not be returned to
the Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company at
their original purchase price, such Shares shall become available for future
grant under the Plan.

<PAGE>

     4. Administration of the Plan.
        --------------------------

     (a) Procedure.
         ---------

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

     (ii) Section 162(m). To the extent that the Administrator determines it to
          --------------
be desirable to qualify Options granted hereunder as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the Plan shall
be administered by a Committee of two or more "outside directors" within the
meaning of Section 162(m) of the Code.

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

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

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

     (i) to determine the Fair Market Value;

     (ii) to select the Service Providers to whom Options and Stock Purchase
Rights may be granted hereunder;

     (iii) to determine the number of shares of Common Stock to be covered by
each Option and Stock Purchase Right granted hereunder;

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

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

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

     (vii) to institute an Option Exchange Program;

<PAGE>

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

               (ix) to establish, amend and rescind rules and regulations
          relating to the Plan, including rules and regulations relating to
          sub-plans established for the purpose of satisfying applicable foreign
          laws;

               (x) to modify or amend each Option or Stock Purchase Right
          (subject to Section 15(c) of the Plan), including the discretionary
          authority to extend the post-termination exercisability period of
          Options longer than is otherwise provided for in the Plan;

               (xi) to allow Optionees to satisfy withholding tax obligations by
          electing to have the Company withhold from the Shares to be issued
          upon exercise of an Option or Stock Purchase Right that number of
          Shares having a Fair Market Value equal to the minimum amount required
          to be withheld. The Fair Market Value of the Shares to be withheld
          shall be determined on the date that the amount of tax to be withheld
          is to be determined. All elections by an Optionee to have Shares
          withheld for this purpose shall be made in such form and under such
          conditions as the Administrator may deem necessary or advisable;

               (xii) to authorize any person to execute on behalf of the Company
          any instrument required to effect the grant of an Option or Stock
          Purchase Right previously granted by the Administrator;

               (xiii) to correct any defect, supply any omission, or reconcile
          any inconsistency in the Plan, or in any Option Agreement, in a manner
          and to the extent it shall deem necessary, all of which determinations
          and interpretations made by the Administrator shall be conclusive and
          binding on all Optionees, any other holders of Options and on their
          legal representatives and beneficiaries; and

               (xiv) except to the extent prohibited by, or impermissible in
          order to obtain treatment desired by the Administrator under,
          applicable law or rule, to allocate or delegate all or any portion of
          its powers and responsibilities to any one or more of its members or
          to any person(s) selected by it, subject to revocation or modification
          by the Administrator of such allocation or delegation.

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

          (c) Effect of Administrator's Decision. The Administrator's decisions,
     determinations and interpretations shall be final and binding on all
     Optionees and any other holders of Options or Stock Purchase Rights.

     5. Eligibility. Nonstatutory Stock Options and Stock Purchase Rights may be
granted to Service Providers. Incentive Stock Options may be granted only to
Employees.

<PAGE>

     6. Limitations.

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

          (b) Neither the Plan nor any Option or Stock Purchase Right shall
     confer upon an Optionee any right with respect to continuing the Optionee's
     relationship as a Service Provider with the Company, nor shall they
     interfere in any way with the Optionee's right or the Company's right to
     terminate such relationship at any time, with or without cause.

          (c) The following limitations shall apply to grants of Options:

               (i) No Service Provider shall be granted, in any fiscal year of
          the Company, Options to purchase more than 500,000 Shares.

               (ii) In connection with his or her initial service, a Service
          Provider may be granted Options to purchase up to an additional
          500,000 Shares, which shall not count against the limit set forth in
          subsection (i) above.

               (iii) The foregoing limitations shall be adjusted proportionately
          in connection with any change in the Company's capitalization as
          described in Section 13.

               (iv) If an Option is cancelled in the same fiscal year of the
          Company in which it was granted (other than in connection with a
          transaction described in Section 13), the cancelled Option will be
          counted against the limits set forth in subsections (i) and (ii)
          above. For this purpose, if the exercise price of an Option is
          reduced, the transaction will be treated as a cancellation of the
          Option and the grant of a new Option.

     7. Term of Plan. Subject to Section 19 of the Plan, the Plan shall become
effective upon its adoption by the Board. It shall continue in effect for a term
of ten (10) years unless terminated earlier under Section 15 of the Plan.

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

<PAGE>

     9. Option Exercise Price and Consideration.

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

               (i) In the case of an Incentive Stock Option

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

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

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

               (iii) Notwithstanding the foregoing, Options may be granted with
          a per Share exercise price of less than 100% of the Fair Market Value
          per Share on the date of grant pursuant to a merger or other corporate
          transaction.

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

          (c) Form of Consideration. The Administrator shall determine the
     acceptable form of consideration for exercising an Option, including the
     method of payment. In the case of an Incentive Stock Option, the
     Administrator shall determine the acceptable form of consideration at the
     time of grant. Such consideration may consist entirely of:

               (i) cash;

               (ii) check;

               (iii) promissory note;

               (iv) other Shares, provided Shares acquired directly or
          indirectly from the Company, (A) have been owned by the Optionee for
          more than six (6) months on the date of surrender, and (B) have a Fair
          Market Value on the date of surrender equal to the aggregate exercise
          price of the Shares as to which said Option shall be exercised;

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

<PAGE>

               (vi) a reduction in the amount of any Company liability to the
          Optionee, including any liability attributable to the Optionee's
          participation in any Company-sponsored deferred compensation program
          or arrangement;

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

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

     10. Exercise of Option.

          (a) Procedure for Exercise; Rights as a Stockholder. Any Option
     granted hereunder shall be exercisable according to the terms of the Plan
     and at such times and under such conditions as determined by the
     Administrator and set forth in the Option Agreement. Unless the
     Administrator provides otherwise, vesting of Options granted hereunder
     shall be suspended during any unpaid leave of absence. An Option may not be
     exercised for a fraction of a Share.

          An Option shall be deemed exercised when the Company receives: (i)
     written or electronic notice of exercise (in accordance with the Option
     Agreement) from the person entitled to exercise the Option, and (ii) full
     payment for the Shares with respect to which the Option is exercised. Full
     payment may consist of any consideration and method of payment authorized
     by the Administrator and permitted by the Option Agreement and the Plan.
     Shares issued upon exercise of an Option shall be issued in the name of the
     Optionee or, if requested by the Optionee, in the name of the Optionee and
     his or her spouse or in the name of a family trust of which the Optionee is
     a trustee. Until the Shares are issued (as evidenced by the appropriate
     entry on the books of the Company or of a duly authorized transfer agent of
     the Company), no right to vote or receive dividends or any other rights as
     a stockholder shall exist with respect to the Optioned Stock,
     notwithstanding the exercise of the Option. The Company shall issue (or
     cause to be issued) such Shares promptly after the Option is exercised;
     provided that if the Company shall be advised by counsel that certain
     requirements under the Federal, state or foreign securities laws must be
     met before Shares may be issued under this Plan, the Company shall notify
     all persons who have been issued Options, and the Company shall have no
     liability for failure to issue Shares under any exercise of Options because
     of delay while such requirements are being met or the inability of the
     Company to comply with such requirements. No adjustment will be made for a
     dividend or other right for which the record date is prior to the date the
     Shares are issued, except as provided in Section 13 of the Plan.

          Exercising an Option in any manner shall decrease the number of Shares
     thereafter available, both for purposes of the Plan and for sale under the
     Option, by the number of Shares as to which the Option is exercised.

          (b) Termination of Relationship as a Service Provider. If an Optionee
     ceases to be a Service Provider, other than upon the Optionee's death or
     Disability, the Optionee may exercise his or her Option within such period
     of time as is specified in the Option Agreement to the extent that the
     Option is vested on the date of termination (but in no event later than the
     expiration of the term of such Option as set forth in the Option
     Agreement). In the absence of a specified time in the Option Agreement, the
     Option shall remain exercisable for three (3) months following the

<PAGE>

Optionee's termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified by the
Administrator, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.

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

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

     11. Stock Purchase Rights.

          (a) Rights to Purchase. Stock Purchase Rights may be issued either
     alone, in addition to, or in tandem with other awards granted under the
     Plan and/or cash awards made outside of the Plan. After the Administrator
     determines that it will offer Stock Purchase Rights under the Plan, it
     shall advise the offeree in writing or electronically, by means of a Notice
     of Grant, of the terms, conditions and restrictions related to the offer,
     including the number of Shares that the offeree shall be entitled to
     purchase, the price to be paid, and the time within which the offeree must
     accept such offer. The offer shall be accepted by execution of a Restricted
     Stock Purchase Agreement in the form determined by the Administrator.

          (b) Repurchase Option. Unless the Administrator determines otherwise,
     the Restricted Stock Purchase Agreement shall grant the Company a
     repurchase option exercisable upon the voluntary or involuntary termination
     of the purchaser's service with the Company for any reason (including death
     or Disability). The purchase price for Shares repurchased pursuant to the
     Restricted

<PAGE>

Stock Purchase Agreement shall be the original price paid by the purchaser and
may be paid by cancellation of any indebtedness of the purchaser to the Company.
The repurchase option shall lapse at a rate determined by the Administrator.

          (c) Other Provisions. The Restricted Stock Purchase Agreement shall
     contain such other terms, provisions and conditions not inconsistent with
     the Plan as may be determined by the Administrator in its sole discretion.

          (d) Rights as a Stockholder. Once the Stock Purchase Right is
     exercised, the purchaser shall have the rights equivalent to those of a
     stockholder, and shall be a stockholder when his or her purchase is entered
     upon the records of the duly authorized transfer agent of the Company. No
     adjustment will be made for a dividend or other right for which the record
     date is prior to the date the Stock Purchase Right is exercised, except as
     provided in Section 13 of the Plan.

     12. Transferability of Options and Stock Purchase Rights. Unless determined
otherwise by the Administrator, an Option or Stock Purchase Right may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate.

     13. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Change in Control.

          (a) Changes in Capitalization. Subject to any required action by the
     stockholders of the Company, the number of shares of Common Stock that have
     been authorized for issuance under the Plan but as to which no Options or
     Stock Purchase Rights have yet been granted or which have been returned to
     the Plan upon cancellation or expiration of an Option or Stock Purchase
     Right, the number of shares that may be added annually to the shares
     reserved under the Plan (pursuant to Section 3(a)(i)), the number of Shares
     as well as the price per share of Common Stock covered by each such
     outstanding Option or Stock Purchase Right, shall be proportionately
     adjusted for any increase or decrease in the number of issued shares of
     Common Stock resulting from a stock split, reverse stock split, stock
     dividend, combination or reclassification of the Common Stock, or any other
     increase or decrease in the number of issued shares of Common Stock
     effected without receipt of consideration by the Company; provided,
     however, that conversion of any convertible securities of the Company shall
     not be deemed to have been "effected without receipt of consideration."
     Such adjustment shall be made by the Board, whose determination in that
     respect shall be final, binding and conclusive. Except as expressly
     provided herein, no issuance by the Company of shares of stock of any
     class, or securities convertible into shares of stock of any class, shall
     affect, and no adjustment by reason thereof shall be made with respect to,
     the number or price of shares of Common Stock subject to an Option or Stock
     Purchase Right.

          (b) Dissolution or Liquidation. In the event of the proposed
     dissolution or liquidation of the Company, the Administrator shall notify
     each Optionee as soon as practicable prior to the effective date of such
     proposed transaction. The Administrator in its discretion may provide for
     an Optionee to have the right to exercise his or her Option until ten (10)
     days prior to

<PAGE>

such transaction as to all of the Optioned Stock covered thereby, including
Shares as to which the Option would not otherwise be exercisable. In addition,
the Administrator may provide that any Company repurchase option applicable to
any Shares purchased upon exercise of an Option or Stock Purchase Right shall
lapse as to all such Shares, provided the proposed dissolution or liquidation
takes place at the time and in the manner contemplated. To the extent it has not
been previously exercised, an Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.

          (c) Merger or Change in Control. In the event of a merger of the
     Company with or into another corporation, or a Change in Control, each
     outstanding Option and Stock Purchase Right shall be assumed or an
     equivalent option or right substituted by the successor corporation or a
     Parent or Subsidiary of the successor corporation. In the event that the
     successor corporation refuses to assume or substitute for the Option or
     Stock Purchase Right, the Optionee shall fully vest in and have the right
     to exercise the Option or Stock Purchase Right as to all of the Optioned
     Stock, including Shares as to which it would not otherwise be vested or
     exercisable. If an Option or Stock Purchase Right becomes fully vested and
     exercisable in lieu of assumption or substitution in the event of a merger
     or Change in Control, the Administrator shall notify the Optionee in
     writing or electronically that the Option or Stock Purchase Right shall be
     fully vested and exercisable for a period of fifteen (15) days from the
     date of such notice, and the Option or Stock Purchase Right shall terminate
     upon the expiration of such period.

          For the purposes of this subsection (c), the Option or Stock Purchase
     Right shall be considered assumed if, following the merger or Change in
     Control, the option or right confers the right to purchase or receive, for
     each Share of Optioned Stock subject to the Option or Stock Purchase Right
     immediately prior to the merger or Change in Control, the consideration
     (whether stock, cash, or other securities or property) received in the
     merger or Change in Control by holders of Common Stock for each Share held
     on the effective date of the transaction (and if holders were offered a
     choice of consideration, the type of consideration chosen by the holders of
     a majority of the outstanding Shares); provided, however, that if such
     consideration received in the merger or Change in Control is not solely
     common stock of the successor corporation or its Parent, the Administrator
     may, with the consent of the successor corporation, provide for the
     consideration to be received upon the exercise of the Option or Stock
     Purchase Right, for each Share of Optioned Stock subject to the Option or
     Stock Purchase Right, to be solely common stock of the successor
     corporation or its Parent equal in fair market value to the per share
     consideration received by holders of Common Stock in the merger or Change
     in Control.

     14. Date of Grant. The date of grant of an Option or Stock Purchase Right
shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the determination shall be
provided to each Optionee within a reasonable time after the date of such grant.

     15. Amendment and Termination of the Plan.

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

<PAGE>

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

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

     16. Conditions Upon Issuance of Shares.

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

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

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

     18. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

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

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