BORLAND SOFTWARE CORP
1998 NONSTATUTORY STOCK OPTION PLAN
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<TYPE>EX-10.12
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<DESCRIPTION>1998 NONSTATUTORY STOCK OPTION PLAN
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<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Exhibit 10.12 </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>BORLAND SOFTWARE CORPORATION </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>1998 NONSTATUTORY STOCK OPTION PLAN </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">1.<B></B></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B><U>E<SMALL>STABLISHMENT</SMALL>, P<SMALL>URPOSE</SMALL> <SMALL>AND</SMALL> T<SMALL>ERM</SMALL> <SMALL>OF</SMALL>
P<SMALL>LAN</SMALL></U><SMALL></SMALL></B><SMALL></SMALL>. </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2" COLOR="#000000">1.1<B>&nbsp;&nbsp;&nbsp;&nbsp;Establishment</B>.&nbsp;&nbsp;The Borland Software Corporation 1998 Nonstatutory Stock Option Plan (the <I>&#147;</I><B></B><B><I>Plan</I></B><B></B><I>&#148;</I>) is hereby established
effective as of January 28, 1998 (the <I>&#147;</I><B></B><I></I><B></B><B><I>Effective Date</I></B><B></B><I></I><B></B><I>&#148;</I>). </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">1.2<B>&nbsp;&nbsp;&nbsp;&nbsp;Purpose</B>.&nbsp;&nbsp;The purpose of the Plan is to advance the interests of the Participating Company
Group and its stockholders by providing an incentive to attract, retain and reward persons performing services for the Participating Company Group and by motivating such persons to contribute to the growth and profitability of the Participating
Company Group. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">1.3<B>&nbsp;&nbsp;&nbsp;&nbsp;Term of Plan</B>.&nbsp;&nbsp;The Plan shall continue in effect until the earlier of its termination by the Board or the date on which all of the shares of Stock available for issuance under the Plan have
been issued and all restrictions on such shares under the terms of the Plan and the agreements evidencing Options granted under the Plan have lapsed. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">2.<B><U></U></B></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B><U>D<SMALL>EFINITIONS</SMALL> <SMALL>AND</SMALL> C<SMALL>ONSTRUCTION</SMALL></U><SMALL></SMALL></B><SMALL></SMALL>. </FONT></TD></TR></TABLE><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">2.1<B>&nbsp;&nbsp;&nbsp;&nbsp;Definitions</B>.&nbsp;&nbsp;Whenever used herein, the following terms shall have their respective meanings set forth below: </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(a)<I>&nbsp;&nbsp;&nbsp;&nbsp;&#147;</I><B><I>Board</I></B><I>&#148;</I> means the Board of Directors of the
Company. If one or more Committees have been appointed by the Board to administer the Plan, <I>&#147;</I><B></B><B><I>Board</I></B><B></B><I>&#148;</I> also means such Committee(s). </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(b)<I>&nbsp;&nbsp;&nbsp;&nbsp;&#147;</I><B><I>Code</I></B><I>&#148;</I> means the Internal Revenue Code of
1986, as amended, and any applicable regulations promulgated thereunder. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman"
SIZE="2" COLOR="#000000">(c)<I>&nbsp;&nbsp;&nbsp;&nbsp;&#147;</I><B><I>Committee</I></B><I>&#148;</I> means the Compensation Committee or other committee of the Board duly appointed to administer the Plan and having such powers as shall be specified
by the Board. Unless the powers of the Committee have been specifically limited, the Committee shall have all of the powers of the Board granted herein, including, without limitation, the power to amend or terminate the Plan at any time, subject to
the terms of the Plan and any applicable limitations imposed by law. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman"
SIZE="2" COLOR="#000000">(d)<I>&nbsp;&nbsp;&nbsp;&nbsp;&#147;</I><B><I>Company</I></B><I>&#148;</I> means Borland Software Corporation, a Delaware corporation, or any successor corporation thereto. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">1 </FONT></P>


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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">(e)<I>&nbsp;&nbsp;&nbsp;&nbsp;&#147;</I><B><I>Consultant</I></B><I>&#148;</I> means any person, including an advisor, engaged by a Participating Company to render services other than as an Employee or a Director. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">(f)<I>&nbsp;&nbsp;&nbsp;&nbsp;&#147;</I><B><I>Director</I></B><I>&#148;</I> means a member of the Board. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(g)<I>&nbsp;&nbsp;&nbsp;&nbsp;&#147;</I><B><I>Disability</I></B><I>&#148;</I> means the permanent and total disability of the Optionee
within the meaning of Section 22(e)(3) of the Code. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">(h)<I>&nbsp;&nbsp;&nbsp;&nbsp;&#147;</I><B><I>Employee</I></B><I>&#148;</I> means any person treated as an employee in the records of a Participating Company. The Company shall determine in good faith and in the exercise of its
discretion whether an individual has become or has ceased to be an Employee and the effective date of such individual&#146;s employment or termination of employment, as the case may be. For purposes of an individual&#146;s rights, if any, under the
Plan as of the time of the Company&#146;s determination, all such determinations by the Company shall be final, binding and conclusive, notwithstanding that the Company or any governmental agency subsequently makes a contrary determination.
</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">(i)<I>&nbsp;&nbsp;&nbsp;&nbsp;&#147;</I><B><I>Exchange Act</I></B><I>&#148;</I> means the Securities Exchange Act of 1934, as amended. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(j)<I>&nbsp;&nbsp;&nbsp;&nbsp;&#147;</I><B><I>Fair Market Value</I></B><I>&#148;</I> means, as of any date, the value of a share of Stock
or other property as determined by the Board, in its sole discretion, or by the Company, in its sole discretion, if such determination is expressly allocated to the Company herein, subject to the following: </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(i)&nbsp;&nbsp;&nbsp;&nbsp;If, on such date, there is a
public market for the Stock, the Fair Market Value of a share of Stock shall be the closing price of a share of Stock (or the mean of the closing bid and asked prices of a share of Stock if the Stock is so quoted instead) as quoted on the Nasdaq
National Market, the Nasdaq Small-Cap Market or such other national or regional securities exchange or market system constituting the primary market for the Stock, as reported in the <U>Wall Street Journal</U> or such other source as the Company
deems reliable. If the relevant date does not fall on a day on which the Stock has traded on such securities exchange or market system, the date on which the Fair Market Value shall be established shall be the last day on which the Stock was so
traded prior to the relevant date, or such other appropriate day as shall be determined by the Board, in its sole discretion. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(ii)&nbsp;&nbsp;&nbsp;&nbsp;If, on such date, there is no public market for the Stock, the Fair Market Value of a share of Stock shall be
as determined by the Board without regard to any restriction other than a restriction which, by its terms, will never lapse. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(k)<I>&nbsp;&nbsp;&nbsp;&nbsp;&#147;</I><B><I>Insider</I></B><I>&#148;</I> means an officer or a Director of the Company or any other
person whose transactions in Stock are subject to Section 16 of the Exchange Act. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT
FACE="Times New Roman" SIZE="2" COLOR="#000000">(l)<I>&nbsp;&nbsp;&nbsp;&nbsp;&#147;</I><B><I>Nonstatutory Stock Option</I></B><I>&#148;</I> means an Option not intended to be an incentive stock option within the meaning of Section 422(b) of the
Code. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">2 </FONT></P>


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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">(m)<I>&nbsp;&nbsp;&nbsp;&nbsp;&#147;</I><B><I>Option</I></B><I>&#148;</I> means a right to purchase Stock (subject to adjustment as provided in Section 4.2) pursuant to the terms and conditions of the Plan. All Options shall be
Nonstatutory Stock Options. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">(n)&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B><I>Option Agreement</I></B><I>&#148;</I> means a written agreement between the Company and an Optionee setting forth the terms, conditions and restrictions of the Option granted to the Optionee and
any shares acquired upon the exercise thereof. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">(o)<I>&nbsp;&nbsp;&nbsp;&nbsp;&#147;</I><B><I>Optionee</I></B><I>&#148;</I> means a person who has been granted one or more Options. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(p)<I>&nbsp;&nbsp;&nbsp;&nbsp;&#147;</I><B><I>Parent Corporation</I></B><I>&#148;</I> means any present or future &#147;parent
corporation&#148; of the Company, as defined in Section 424(e) of the Code. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT
FACE="Times New Roman" SIZE="2" COLOR="#000000">(q)<I>&nbsp;&nbsp;&nbsp;&nbsp;&#147;</I><B><I>Participating Company</I></B><I>&#148;</I> means the Company or any Parent Corporation or Subsidiary Corporation. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(r)<I>&nbsp;&nbsp;&nbsp;&nbsp;&#147;</I><B><I>Participating
Company Group</I></B><I>&#148;</I> means, at any point in time, all corporations collectively which are then Participating Companies. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(s)<I>&nbsp;&nbsp;&nbsp;&nbsp;&#147;</I><B><I>Securities Act</I></B><I>&#148;</I> means the Securities Act of 1933, as amended.
</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">(t)<I>&nbsp;&nbsp;&nbsp;&nbsp;&#147;</I><B><I>Service</I></B><I>&#148;</I> means an Optionee&#146;s employment or service with the Participating Company Group, whether in the capacity of an Employee, a Director or a Consultant. An
Optionee&#146;s Service shall not be deemed to have terminated merely because of a change in the capacity in which the Optionee renders Service to the Participating Company Group or a change in the Participating Company for which the Optionee
renders such Service, provided that there is no interruption or termination of the Optionee&#146;s Service. An Optionee&#146;s Service with the Participating Company Group shall not be deemed to have terminated if the Optionee takes any military
leave, sick leave, or other bona fide leave of absence approved by the Company; provided, however, that, unless otherwise designated by the Company or required by law, a leave of absence shall not be treated as Service for purposes of determining
vesting under the Optionee&#146;s Option Agreement. An Optionee&#146;s Service shall be deemed to have terminated either upon an actual termination of Service or upon the corporation for which the Optionee performs Service ceasing to be a
Participating Company. Subject to the foregoing, the Company, in its sole discretion, shall determine whether an Optionee&#146;s Service has terminated and the effective date of such termination. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">(u)&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B><I>Stock</I></B><I>&#148;</I> means the common stock of the Company, as adjusted from time to time in accordance with Section 4.2. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(v)<I>&nbsp;&nbsp;&nbsp;&nbsp;&#147;</I><B><I>Subsidiary Corporation</I></B><I>&#148;</I> means any present
or future &#147;subsidiary corporation&#148; of the Company, as defined in Section 424(f) of the Code. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">3 </FONT></P>


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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">2.2<B>&nbsp;&nbsp;&nbsp;&nbsp;Construction</B>.&nbsp;&nbsp;Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated
by the context, the singular shall include the plural and the plural shall include the singular. Use of the term &#147;or&#148; is not intended to be exclusive, unless the context clearly requires otherwise. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">3.</FONT></TD>
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<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B><U>A<SMALL>DMINISTRATION</SMALL></U><SMALL></SMALL></B><SMALL></SMALL>. </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">3.1<B>&nbsp;&nbsp;&nbsp;&nbsp;Administration by the Board</B><I>.</I>&nbsp;&nbsp;The Plan shall be
administered by the Board. All questions of interpretation of the Plan or of any Option shall be determined by the Board, and such determinations shall be final and binding upon all persons having an interest in the Plan or such Option. Any officer
of a Participating Company shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, determination or election which is the responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation, determination or election. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">3.2<B><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></B><B>Powers of the Board</B><B><I>.</I></B>&nbsp;&nbsp;In addition to any other powers set forth in
the Plan and subject to the provisions of the Plan, the Board shall have the full and final power and authority, in its sole discretion: </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(a)&nbsp;&nbsp;&nbsp;&nbsp;to determine the persons to whom, and the time or times at which, Options shall be granted and the number of
shares of Stock to be subject to each Option; </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">(b)&nbsp;&nbsp;&nbsp;&nbsp;to determine the Fair Market Value of shares of Stock or other property; </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(c)&nbsp;&nbsp;&nbsp;&nbsp;to determine the terms, conditions and restrictions applicable to each Option (which need not be identical)
and any shares acquired upon the exercise thereof, including, without limitation, (i) the exercise price of the Option, (ii) the method of payment for shares purchased upon the exercise of the Option, (iii) the method for satisfaction of any tax
withholding obligation arising in connection with the Option or such shares, including by the withholding or delivery of shares of stock, (iv) the timing, terms and conditions of the exercisability of the Option or the vesting of any shares acquired
upon the exercise thereof, (v) the time of the expiration of the Option, (vi) the effect of the Optionee&#146;s termination of Service with the Participating Company Group on any of the foregoing, and (vii) all other terms, conditions and
restrictions applicable to the Option or such shares not inconsistent with the terms of the Plan; </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(d)&nbsp;&nbsp;&nbsp;&nbsp;to approve one or more forms of Option Agreement; </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(e)&nbsp;&nbsp;&nbsp;&nbsp;to amend, modify, extend, cancel, renew, or grant a new Option in substitution
for, any Option or to waive any restrictions or conditions applicable to any Option or any shares acquired upon the exercise thereof; </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">4 </FONT></P>


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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">(f)&nbsp;&nbsp;&nbsp;&nbsp;to accelerate, continue, extend or defer the exercisability of any Option or the vesting of any shares acquired upon the exercise thereof, including with respect to the period following an Optionee&#146;s
termination of Service with the Participating Company Group; </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">(g)&nbsp;&nbsp;&nbsp;&nbsp;to delegate to any proper officer of the Company the authority to grant one or more Options, without further approval of the Board, to any person eligible pursuant to Section 5, other than a person who, at
the time of such grant, is an Insider; provided, however, that (i) such Options shall not be granted to any one person within any fiscal year of the Company for more than 250,000 shares in the aggregate, (ii) the exercise price per share of each
such Option shall be equal to the Fair Market Value per share of the Stock on the effective date of grant (or, if the Stock has not traded on such date, on the last day preceding the effective date of grant on which the Stock was traded), and (iii)
each such Option shall be subject to the terms and conditions of the appropriate standard form of Option Agreement approved by the Board and shall conform to the provisions of the Plan and such other guidelines as shall be established from time to
time by the Board; </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">(h)&nbsp;&nbsp;&nbsp;&nbsp;to prescribe, amend or rescind rules, guidelines and policies relating to the Plan, or to adopt supplements to, or alternative versions of, the Plan, including, without limitation, as the Board deems
necessary or desirable to comply with the laws of, or to accommodate the tax policy or custom of, foreign jurisdictions whose citizens may be granted Options; and </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(i)&nbsp;&nbsp;&nbsp;&nbsp;to correct any defect, supply any omission or reconcile any inconsistency in the
Plan or any Option Agreement and to make all other determinations and take such other actions with respect to the Plan or any Option as the Board may deem advisable to the extent consistent with the Plan and applicable law. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">4.</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B><U>S<SMALL>HARES</SMALL> S<SMALL>UBJECT</SMALL> <SMALL>TO</SMALL> P<SMALL>LAN</SMALL></U><SMALL></SMALL></B><SMALL></SMALL>. </FONT></TD></TR></TABLE><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">4.1&nbsp;&nbsp;&nbsp;&nbsp;<B>Maximum Number of Shares
Issuable</B>.&nbsp;&nbsp;Subject to adjustment as provided in Section 4.2, the maximum aggregate number of shares of Stock that may be issued under the Plan shall be two hundred thousand (200,000) and shall consist of authorized but unissued or
reacquired shares of Stock or any combination thereof. If an outstanding Option for any reason expires or is terminated or canceled, or if shares of Stock acquired, subject to repurchase, upon the exercise of an Option are repurchased by the
Company, the shares of Stock allocable to the unexercised portion of such Option or such repurchased shares of Stock shall again be available for issuance under the Plan. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">4.2&nbsp;&nbsp;&nbsp;&nbsp;<B>Adjustments for Changes in Capital Structure</B>.&nbsp;&nbsp;In the event of
any stock dividend, stock split, reverse stock split, recapitalization, combination, reclassification or similar change in the capital structure of the Company, appropriate adjustments shall be made in the number and class of shares subject to the
Plan and to any outstanding Options and in the exercise price per share of any outstanding Options. If a majority of the shares which are of the same class as the shares that are subject to outstanding Options are exchanged for, converted </FONT>
</P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">into, or otherwise become (whether or not pursuant to an Ownership Change Event, as defined in Section 8.1) shares of another corporation
(the <I>&#147;</I><B><I>New Shares</I></B><I>&#148;</I>), the Board may unilaterally amend the outstanding Options to provide that such Options are exercisable for New Shares. In the event of any such amendment, the number of shares subject to, and
the exercise price per share of, the outstanding Options shall be adjusted in a fair and equitable manner as determined by the Board, in its sole discretion. Notwithstanding the foregoing, any fractional share resulting from an adjustment pursuant
to this Section 4.2 shall be rounded up or down to the nearest whole number, as determined by the Board, and in no event may the exercise price of any Option be decreased to an amount less than the par value, if any, of the stock subject to the
Option. The adjustments determined by the Board pursuant to this Section 4.2 shall be final, binding and conclusive. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">5.</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><U><B>E<SMALL>LIGIBILITY</SMALL> <SMALL>AND</SMALL> O<SMALL>PTION</SMALL> L<SMALL>IMITATIONS</SMALL></B><SMALL></SMALL></U><SMALL></SMALL>.
</FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">5.1&nbsp;&nbsp;&nbsp;&nbsp;<B>Persons Eligible for Options</B>.&nbsp;&nbsp;Options may be granted only to Employees and Consultants. For purposes of the foregoing sentence, &#147;Employees&#148; and &#147;Consultants&#148; shall
include prospective Employees and prospective Consultants to whom Options are granted in connection with written offers of employment or other service relationship with the Participating Company Group. However, notwithstanding any other provision
herein to the contrary, no person shall be eligible to be granted an Option under the Plan whose eligibility would require approval of the Plan by the stockholders of the Company under any law or regulation or the rules of any stock exchange or
market system upon which the Stock may then be listed. If not inconsistent with any such law, regulation or rule, an Option may be granted to a person, not previously employed by the Company, as an inducement essential to entering into an employment
contract with the Company. Eligible persons may be granted more than one (1) Option. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2" COLOR="#000000">5.2&nbsp;&nbsp;&nbsp;&nbsp;<B>Options Authorized</B>.&nbsp;&nbsp;Options granted under the Plan may only be Nonstatutory Stock Options. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">6.</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B><U>T<SMALL>ERMS</SMALL> <SMALL>AND</SMALL> C<SMALL>ONDITIONS</SMALL> <SMALL>OF</SMALL> O<SMALL>PTIONS</SMALL></U><SMALL></SMALL>.</B> </FONT></TD></TR></TABLE><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Options shall be evidenced by Option Agreements specifying the
number of shares of Stock covered thereby, in such form as the Board shall from time to time establish. No Option or purported Option shall be a valid and binding obligation of the Company unless evidenced by a fully executed Option Agreement.
Option Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions: </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">6.1&nbsp;&nbsp;&nbsp;&nbsp;<B>Exercise Price</B>.&nbsp;&nbsp;The exercise price for each Option shall be established in the sole
discretion of the Board; provided, however, that the exercise price per share shall be not less than eighty-five percent (85%) of the Fair Market Value of a share of Stock on the effective date of grant of the Option. Notwithstanding the foregoing,
an Option may be granted with an exercise price lower than the minimum exercise price set forth above if such Option is granted </FONT>
</P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">pursuant to an assumption or substitution for another option in the manner described in Section 424(a) of the Code. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">6.2<B>&nbsp;&nbsp;&nbsp;&nbsp;Exercise
Period.</B>&nbsp;&nbsp;Options shall be exercisable at such time or times, or upon such event or events, and subject to such terms, conditions, performance criteria, and restrictions as shall be determined by the Board and set forth in the Option
Agreement evidencing such Option; provided, however, that no Option granted to a prospective Employee or prospective Consultant may become exercisable prior to the date on which such person commences Service with a Participating Company. Subject to
the foregoing, unless otherwise specified by the Board in the grant of an Option, any Option granted hereunder shall have a term of ten (10) years from the effective date of the grant of the Option. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">6.3&nbsp;&nbsp;&nbsp;&nbsp;<B>Payment of Exercise Price</B>.
</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(a)<B><I>&nbsp;&nbsp;&nbsp;&nbsp;Forms of
Consideration Authorized.</I></B>&nbsp;&nbsp;Except as otherwise provided below, payment of the exercise price for the number of shares of Stock being purchased pursuant to any Option shall be made (i) in cash, by check, or cash equivalent, (ii) by
tender to the Company of shares of Stock owned by the Optionee having a Fair Market Value (as determined by the Company without regard to any restrictions on transferability applicable to such stock by reason of federal or state securities laws or
agreements with an underwriter for the Company) not less than the exercise price, (iii) by the assignment of the proceeds of a sale or loan with respect to some or all of the shares being acquired upon the exercise of the Option (including, without
limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System) (a&nbsp;&#147;<B><I>Cashless Exercise</I></B>&#148;), (iv) provided that the
Optionee is an Employee, by cash for a portion of the aggregate exercise price not less than the par value of the shares being acquired and the Optionee&#146;s promissory note in a form approved by the Company for the balance of the aggregate
exercise price, (v) by such other consideration as may be approved by the Board from time to time to the extent permitted by applicable law, or (vi) by any combination thereof. The Board may at any time or from time to time, by adoption of or by
amendment to the standard forms of Option Agreement described in Section 7, or by other means, grant Options which do not permit all of the foregoing forms of consideration to be used in payment of the exercise price or which otherwise restrict one
or more forms of consideration. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">(b)<B><I>&nbsp;&nbsp;&nbsp;&nbsp;Tender of Stock</I></B><B>.</B>&nbsp;&nbsp;Notwithstanding the foregoing, an Option may not be exercised by tender to the Company of shares of Stock to the extent such tender of Stock would constitute
a violation of the provisions of any law, regulation or agreement restricting the redemption of the Company&#146;s stock. Unless otherwise provided by the Board, an Option may not be exercised by tender to the Company of shares of Stock unless such
shares either have been owned by the Optionee for more than six (6) months or were not acquired, directly or indirectly, from the Company. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(c)<B><I>&nbsp;&nbsp;&nbsp;&nbsp;Cashless Exercise.</I></B>&nbsp;&nbsp;The Company reserves, at any and all times, the right, in the
Company&#146;s sole and absolute discretion, to establish, decline to approve or </FONT>
</P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">terminate any program or procedures for the exercise of Options by means of a Cashless Exercise. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(d)<B><I>&nbsp;&nbsp;&nbsp;&nbsp;Payment by Promissory
Note.</I></B>&nbsp;&nbsp;No promissory note shall be permitted if the exercise of an Option using a promissory note would be a violation of any law. Any permitted promissory note shall be on such terms as the Board shall determine at the time the
Option is granted. The Board shall have the authority to permit or require the Optionee to secure any promissory note used to exercise an Option with the shares of Stock acquired upon the exercise of the Option or with other collateral acceptable to
the Company. Unless otherwise provided by the Board, if the Company at any time is subject to the regulations promulgated by the Board of Governors of the Federal Reserve System or any other governmental entity affecting the extension of credit in
connection with the Company&#146;s securities, any promissory note shall comply with such applicable regulations, and the Optionee shall pay the unpaid principal and accrued interest, if any, to the extent necessary to comply with such applicable
regulations. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">6.4&nbsp;&nbsp;&nbsp;&nbsp;<B>Tax
Withholding.</B>&nbsp;&nbsp;The Company shall have the right, but not the obligation, to deduct from the shares of Stock issuable upon the exercise of an Option, or to accept from the Optionee the tender of, a number of whole shares of Stock having
a Fair Market Value, as determined by the Company, equal to all or any part of the federal, state, local and foreign taxes, if any, required by law to be withheld by the Participating Company Group with respect to such Option or the shares acquired
upon the exercise thereof. Alternatively or in addition, in its sole discretion, the Company shall have the right to require the Optionee, through payroll withholding, cash payment or otherwise, including by means of a Cashless Exercise, to make
adequate provision for any such tax withholding obligations of the Participating Company Group arising in connection with the Option or the shares acquired upon the exercise thereof. The Company shall have no obligation to deliver shares of Stock
until the Participating Company Group&#146;s tax withholding obligations have been satisfied by the Optionee. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">6.5<B>&nbsp;&nbsp;&nbsp;&nbsp;Effect of Termination of Service.</B> </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(a)<B><I>&nbsp;&nbsp;&nbsp;&nbsp;Option Exercisability.</I></B>&nbsp;&nbsp;Subject to earlier termination of
the Option as otherwise provided herein, an Option shall be exercisable after an Optionee&#146;s termination of Service as follows: </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(i)<B>&nbsp;&nbsp;&nbsp;&nbsp;Disability.</B>&nbsp;&nbsp;If the Optionee&#146;s Service with the Participating Company Group is
terminated because of the Disability of the Optionee, the Option, to the extent unexercised and exercisable on the date on which the Optionee&#146;s Service terminated, may be exercised by the Optionee (or the Optionee&#146;s guardian or legal
representative) at any time prior to the expiration of twelve (12) months (or such longer or shorter period of time as determined by the Board, in its sole discretion) after the date on which the Optionee&#146;s Service terminated, but in any event
no later than the date of expiration of the Option&#146;s term as set forth in the Option Agreement evidencing such Option (the <I>&#147;</I><B></B><B><I>Option Expiration Date</I></B><B></B><I>&#148;</I>). </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(ii)<B>&nbsp;&nbsp;&nbsp;&nbsp;Death.</B>&nbsp;&nbsp;If the
Optionee&#146;s Service with the Participating Company Group is terminated because of the death of the Optionee, the Option, to the extent </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">unexercised and exercisable on the date on which the Optionee&#146;s Service terminated, may be exercised by the Optionee&#146;s legal
representative or other person who acquired the right to exercise the Option by reason of the Optionee&#146;s death at any time prior to the expiration of twelve (12) months (or such longer or shorter period of time as determined by the Board, in
its sole discretion) after the date on which the Optionee&#146;s Service terminated, but in any event no later than the Option Expiration Date. The Optionee&#146;s Service shall be deemed to have terminated on account of death if the Optionee dies
within three (3) months after the Optionee&#146;s termination of Service. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:17%"><FONT
FACE="Times New Roman" SIZE="2" COLOR="#000000">(iii)<B>&nbsp;&nbsp;&nbsp;&nbsp;Other Termination of Service.</B>&nbsp;&nbsp;If the Optionee&#146;s Service with the Participating Company Group terminates for any reason, except Disability, death or
Cause, as provided in Section 6.5(d) below, the Option, to the extent unexercised and exercisable by the Optionee on the date on which the Optionee&#146;s Service terminated, may be exercised by the Optionee within three (3) months (or such longer
or shorter period of time as determined by the Board, in its sole discretion) after the date on which the Optionee&#146;s Service terminated, but in any event no later than the Option Expiration Date. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(b)&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Extension if Exercise
Prevented by Law.</I></B>&nbsp;&nbsp;Notwithstanding the foregoing, if the exercise of an Option within the applicable time periods set forth in Section 6.5(a) is prevented by the provisions of Section 11 below, the Option shall remain exercisable
until three (3) months after the date the Optionee is notified by the Company that the Option is exercisable, but in any event no later than the Option Expiration Date. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(c)<B><I>&nbsp;&nbsp;&nbsp;&nbsp;Extension if Optionee Subject to
Section16(b).</I></B>&nbsp;&nbsp;Notwithstanding the foregoing, if a sale within the applicable time periods set forth in Section 6.5(a) of shares acquired upon the exercise of the Option would subject the Optionee to suit under Section 16(b) of the
Exchange Act, the Option shall remain exercisable until the earliest to occur of (i) the tenth (10th) day following the date on which a sale of such shares by the Optionee would no longer be subject to such suit, (ii) the one hundred and ninetieth
(190th) day after the Optionee&#146;s termination of Service, or (iii) the Option Expiration Date. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(d)<B><I>&nbsp;&nbsp;&nbsp;&nbsp;Termination for Cause.</I></B>&nbsp;&nbsp;Except as otherwise provided in a contract of employment or
service between a Participating Company and an Optionee, and notwithstanding any other provision of the Plan to the contrary, if the Optionee&#146;s Service with the Participating Company Group is terminated for Cause as defined below, the Option
shall terminate and cease to be exercisable immediately upon such termination of Service. For purposes of this Section 6.5(d), <B><I>&#147;Cause&#148;</I></B> shall mean any of the following: (1) the Optionee&#146;s theft, dishonesty, or
falsification of any Participating Company documents or records; (2) the Optionee&#146;s improper use or disclosure of a Participating Company&#146;s confidential or proprietary information; (3) any action by the Optionee which has a detrimental
effect on a Participating Company&#146;s reputation or business; (4) the Optionee&#146;s failure or inability to perform any reasonable assigned duties after written notice from the Participating Company Group of, and a reasonable opportunity to
cure, such failure or inability; (5) any material breach by the Optionee of any agreement of employment or service between the Optionee and the Participating Company Group, which breach is not cured pursuant to the terms of such agreement; or (6)
the Optionee&#146;s </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">conviction (including any plea of guilty or nolo contendere) of any criminal act which impairs the Optionee&#146;s ability to perform his or
her duties with the Participating Company Group. A determination by the Board that the Optionee was terminated for Cause shall be final and binding upon the Optionee for all purposes and shall not be subject to review by any governmental agency or
court of law. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">7.<B><U></U></B></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B><U>S<SMALL>TANDARD</SMALL> F<SMALL>ORMS</SMALL> <SMALL>OF</SMALL> O<SMALL>PTION</SMALL> A<SMALL>GREEMENT</SMALL></U><SMALL></SMALL></B><SMALL></SMALL>.
</FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">7.1<B>&nbsp;&nbsp;&nbsp;&nbsp;Nonstatutory Stock Option Agreement.</B>&nbsp;&nbsp;Unless otherwise provided by the Board at the time the Option is granted, each Option shall comply with and be subject to the terms and conditions set
forth in the appropriate form of Nonstatutory Stock Option Agreement adopted by the Board concurrently with its adoption of the Plan and as amended from time to time. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">7.2&nbsp;&nbsp;&nbsp;&nbsp;<B>Authority to Vary Terms.</B>&nbsp;&nbsp;The Board shall have the authority from
time to time to vary the terms of any of the standard forms of Option Agreement described in this Section 7 either in connection with the grant or amendment of an individual Option or in connection with the authorization of a new standard form or
forms; provided, however, that the terms and conditions of any such new, revised or amended standard form or forms of Option Agreement are not inconsistent with the terms of the Plan. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">8.</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B><U>C<SMALL>HANGE</SMALL> <SMALL>IN</SMALL> C<SMALL>ONTROL</SMALL></U><SMALL></SMALL>.</B> </FONT></TD></TR></TABLE><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">8.1<B>&nbsp;&nbsp;&nbsp;&nbsp;Definitions.</B>&nbsp;&nbsp;Except as otherwise determined by the Board and set forth in an Option Agreement, the following terms shall have their respective meanings set forth below: </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(a)&nbsp;&nbsp;&nbsp;&nbsp;An
<B><I></I></B>&#147;<B><I>Ownership Change Event</I></B>&#148;<B><I></I></B> shall be deemed to have occurred if any of the following occurs with respect to the Company: </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(i)&nbsp;&nbsp;&nbsp;&nbsp;the direct or indirect sale or exchange in a single or series of related
transactions by the stockholders of the Company of more than fifty percent (50%) of the voting stock of the Company; </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(ii)&nbsp;&nbsp;&nbsp;&nbsp;a merger or consolidation in which the Company is a party; </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(iii)&nbsp;&nbsp;&nbsp;&nbsp;the sale, exchange, or transfer
of all or substantially all of the assets of the Company;&nbsp;or </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:17%"><FONT FACE="Times New Roman"
SIZE="2" COLOR="#000000">(iv)&nbsp;&nbsp;&nbsp;&nbsp;a liquidation or dissolution of the Company. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(b)&nbsp;&nbsp;&nbsp;&nbsp;A &#147;<B><I>Change in Control</I></B>&#148; shall mean an Ownership Change Event or a series of related
Ownership Change Events (collectively, the &#147;<B><I>Transaction</I></B>&#148;) wherein the stockholders of the Company immediately before the Transaction do not retain immediately after the Transaction, in substantially the same proportions as
their ownership of shares of the Company&#146;s voting stock immediately before the Transaction, direct or indirect beneficial </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">ownership of more than fifty percent (50%) of the total combined voting power of the outstanding voting stock of the Company or the
corporation or corporations to which the assets of the Company were transferred (the <B><I></I></B>&#147;<B><I>Transferee Corporation(s)</I></B>&#148;<B><I></I></B>), as the case may be. For purposes of the preceding sentence, indirect beneficial
ownership shall include, without limitation, an interest resulting from ownership of the voting stock of one or more corporations which, as a result of the Transaction, own the Company or the Transferee Corporation(s), as the case may be, either
directly or through one or more subsidiary corporations. The Board shall have the right to determine whether multiple sales or exchanges of the voting stock of the Company or multiple Ownership Change Events are related, and its determination shall
be final, binding and conclusive. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">8.2<B>&nbsp;&nbsp;&nbsp;&nbsp;Effect of Change in Control on Options.</B>&nbsp;&nbsp;In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or parent corporation thereof, as the case may
be (the <B><I></I></B>&#147;<B><I>Acquiring Corporation</I></B>&#148;<B><I></I></B>), may either assume the Company&#146;s rights and obligations under outstanding Options or substitute for outstanding Options substantially equivalent options for
the Acquiring Corporation&#146;s stock. For purposes of this Section 8.2, an Option shall be deemed assumed if, following the Change in Control, the Option confers the right to purchase in accordance with its terms and conditions, for each share of
Stock subject to the Option immediately prior to the Change in Control, the consideration (whether stock, cash or other securities or property) to which a holder of a share of Stock on the effective date of the Change in Control was entitled. The
Board may, in its sole discretion, provide in any Option Agreement that, in the event of a Change in Control, the exercisability and vesting of the outstanding Option shall accelerate upon such circumstances and to such extent as specified in such
Option Agreement. The exercise or vesting of any Option that was permissible solely by reason of such provision shall be conditioned upon the consummation of the Change in Control. Any Options which are neither assumed or substituted for by the
Acquiring Corporation in connection with the Change in Control nor exercised as of the date of the Change in Control shall terminate and cease to be outstanding effective as of the date of the Change in Control. Notwithstanding the foregoing, if the
corporation the stock of which is subject to the outstanding Options immediately prior to an Ownership Change Event described in Section 8.1(a)(i) constituting a Change in Control is the surviving or continuing corporation and immediately after such
Ownership Change Event less than fifty percent (50%) of the total combined voting power of its voting stock is held by another corporation or by other corporations that are members of an affiliated group within the meaning of Section 1504(a) of the
Code without regard to the provisions of Section 1504(b) of the Code, the outstanding Options shall not terminate unless the Board otherwise provides in its sole discretion. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">9.</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B><U>P<SMALL>ROVISION</SMALL> <SMALL>OF</SMALL> I<SMALL>NFORMATION</SMALL></U><SMALL></SMALL>.</B> </FONT></TD></TR></TABLE><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Each Optionee shall be given access to information concerning
the Company equivalent to that information generally made available to the Company&#146;s common stockholders. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">10.</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B><U>T<SMALL>RANSFERABILITY</SMALL> <SMALL>OF</SMALL> O<SMALL>PTIONS</SMALL></U><SMALL></SMALL>.</B> </FONT></TD></TR></TABLE><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">11 </FONT></P>


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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">During the
lifetime of the Optionee, an Option shall be exercisable only by the Optionee or the Optionee&#146;s guardian or legal representative. No Option shall be assignable or transferable by the Optionee, except by will or by the laws of descent and
distribution. Notwithstanding the foregoing, an Option shall be assignable or transferable to the extent permitted by the Board and set forth in the Option Agreement evidencing such Option. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">11.</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B><U>C<SMALL>OMPLIANCE</SMALL> <SMALL>WITH</SMALL> S<SMALL>ECURITIES</SMALL> L<SMALL>AW</SMALL></U><SMALL></SMALL>.</B> </FONT></TD></TR></TABLE><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">The grant of Options and the issuance of shares of Stock upon
exercise of Options shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to such securities. Options may not be exercised if the issuance of shares of Stock upon exercise would constitute a
violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, no Option may be exercised unless (a)
a registration statement under the Securities Act shall at the time of exercise of the Option be in effect with respect to the shares issuable upon exercise of the Option or (b) in the opinion of legal counsel to the Company, the shares issuable
upon exercise of the Option may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. The inability of the Company to obtain from any regulatory body having jurisdiction the
authority, if any, deemed by the Company&#146;s legal 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. As a condition to the exercise of any Option, the Company may require the Optionee to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law
or regulation and to make any representation or warranty with respect thereto as may be requested by the Company. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">12.</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B><U>I<SMALL>NDEMNIFICATION</SMALL></U><SMALL></SMALL>.</B> </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">In addition to such other rights of indemnification as they may have as members of the Board or officers or employees of the Participating
Company Group, members of the Board and any officers or employees of the Participating Company Group to whom authority to act for the Board or the Company is delegated shall be indemnified by the Company against all reasonable expenses, including
attorneys&#146; fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure
to act under or in connection with the Plan, or any right granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct
in duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">13.</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B><U>T<SMALL>ERMINATION</SMALL> <SMALL>OR</SMALL> A<SMALL>MENDMENT</SMALL> <SMALL>OF</SMALL> P<SMALL>LAN</SMALL></U><SMALL></SMALL>.</B> </FONT></TD></TR></TABLE><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">The Board may terminate or amend the Plan at any time.
However, no termination or amendment of the Plan may adversely affect any then outstanding Option or any unexercised portion thereof, without the consent of the Optionee, unless such termination or amendment is necessary to comply with any
applicable law, regulation or rule. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B><U>PLAN
HISTORY</U> </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD VALIGN="top" WIDTH="14%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">January 28, 1998</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Board adopts Plan, with an initial share reserve of 200,000 shares.</FONT></P></TD></TR>
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<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="14%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">April 21, 1998</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Board ratifies the approval of the final form of the Plan.</FONT></P></TD></TR>
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