KERYX BIOPHARMACEUTICALS INC
1999 STOCK OPTION PLAN (AS AMENDED)
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>d55674_ex10-2.txt
<DESCRIPTION>1999 STOCK OPTION PLAN (AS AMENDED)
<TEXT>
                                                                    EXHIBIT 10.2

                         KERYX BIOPHARMACEUTICALS, INC.

                             1999 SHARE OPTION PLAN
                           (As Amended - May 13, 2003)

      1. Purposes of the Plan. The purposes of this Share Option Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees, Directors and
Consultants and to promote the success of the Company's business. Options
granted under this Plan may or may not contain such terms as will qualify the
Options as Incentive Share Options ("ISOs") within the meaning of Section 422(b)
of the United State Internal Revenue Code of 1986, as amended (the "Code").
Options granted under this Plan will be designated for tax purposes as
determined by the Administrator at the time of the grant in accordance with
Applicable Laws.

      2. Definitions. As used herein, the following definitions and the
definitions set forth in Section 1 above shall apply.

            (a) "Administrator" means the Board or any of its Committees as
shall be administering the Plan, in accordance with Section 4 hereof.

            (b) "Applicable Laws" means the requirements relating to the
administration of share option plans under U.S. state corporate laws, U.S.
federal and state securities laws, U.S. tax laws, the stock exchange or
quotation system on which the shares are listed or quoted and the applicable
laws of any country or jurisdiction where the shares are registered or options
are granted under the Plan.

            (c) "Board" means the Board of Directors of the Company or of any
Parent or Subsidiary of the Company.

            (d) "Committee" means a committee of Directors appointed by the
Board in accordance with Section 4 hereof.

            (e) "Company" means Keryx Biopharmaceuticals, Inc., a corporation
under the laws of the State of Delaware.

            (f) "Consultant" means any person who is engaged by the Company or
any Parent or Subsidiary to render consulting or advisory services to such
entity.

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

            (h) "Employee" means any person, including officers of the Company
(within the meaning of the U.S. Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder), 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


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<PAGE>

between the Company, any Parent, any Subsidiary, or any successor. Neither
service as a Director nor payment of a director's fee by the Company shall be
sufficient to constitute "employment" by the Company.

            (i) "Fair Market Value" means, as of any date, the value of a Share
determined as follows:

                  (i) If the Shares are 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, the Fair Market
Value shall be the closing sales price for such Shares (or the closing bid, if
no sales were reported) as quoted on such exchange or system for the last market
trading day prior to the time of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable;

                  (ii) If the Shares are regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value
shall be the mean between the high bid and low asked prices for the Shares on
the last market trading day prior to the day of determination; or

                  (iii) In the absence of an established market for the Shares,
the Fair Market Value thereof shall be determined in good faith by the
Administrator.

            (j) "Option" means a share option granted pursuant to the Plan.

            (k) "Option Agreement" means a written or electronic agreement or
letter 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. The Option Agreement shall specify whether, and to what
extent, the Options which are the subject of the Agreement are intended to be
ISOs or Options intended to be taxed under the Code but not intended to qualify
as ISO's ("NSOs").

            (l) "Optioned Shares" means the Shares subject to an Option.

            (m) "Optionee" means the holder of an outstanding Option granted
under the Plan.

            (n) "Parent" means any company other than the Company, whether now
or hereafter existing, in an unbroken chain of companies ending with the Company
if, at the time of the granting of the Option, each of the companies other than
the Company owns shares possessing 50 percent or more of the total combined
voting power of all classes of shares in one of the other companies in such
chain.

            (o) "Plan" means this Lakaro Biopharmaceuticals, Inc. 1999 Share
Option Plan.

            (p) "Repurchaser" means (i) the Company, if permitted by Applicable
Laws; (ii) if the Company is not permitted by Applicable Laws, then any
affiliate or subsidiary of the Company designated by the Board of Directors; or
(iii) if the majority of the Board of Directors of the Company so decide, any
other third party or parties designated by the Board of Directors,


                                       2
<PAGE>

provided in no case shall the Company provide financial assistance to any other
party to purchase the Shares if doing so is prohibited by Applicable Laws.

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

            (r) "Share" means a share of the Company's common shares having a
par value of $0.001, as adjusted in accordance with Section 11 below.

            (s) "Subsidiary" means any company other than the Company, whether
now or hereafter existing, in an unbroken chain of companies beginning with the
Company if, at the time of the granting of the Option, each of the companies
other than the last company in an unbroken chain owns shares possessing 50
percent or more of the total combined voting power of all classes of shares in
one of the other companies in such chain.

      3. Shares Subject to the Plan. Subject to the provisions of Section 11 of
the Plan, the maximum aggregate number of Shares which may be subject to option
and sold under the Plan is two million eight hundred twenty thousand (2,820,000)
Shares. The Shares may be authorized, but unissued, or acquired by the
Repurchaser.

      If an Option expires or becomes unexercisable without having been
exercised in full, 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 shall not be returned to the Plan and shall not become available for
future distribution under the Plan, other than Shares which have been acquired
by the Repurchaser pursuant to the terms of the Plan.

      4. Administration of the Plan.

            (a) Procedure. The Plan shall be administered by the Board or a
Committee appointed by the Board, which Committee shall be constituted to comply
with Applicable Laws.

            (b) Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, the specific duties delegated by the Board
to such Committee, and subject to the approval of any relevant authorities, 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 may from
time to time be granted hereunder;

                  (iii) to determine the number of Shares to be covered by each
such award granted hereunder;

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


                                       3
<PAGE>

                  (v) to determine the terms and conditions of any Option
granted hereunder, including, without limitation, the vesting schedule, and
whether and to what extent an Option shall be ISO's;

                  (vi) to determine whether and under what circumstances an
Option may be settled in cash as set forth under subsection 9(e) instead of
Shares;

                  (vii) to reduce the exercise price of any Option to the then
current Fair Market Value, if the Fair Market Value of the Shares covered by
such Option has declined since the date the Option was granted;

                  (viii) to prescribe, amend and rescind rules and regulations
relating to the Plan;

                  (ix) subject to Applicable Laws, to allow Optionees to satisfy
withholding tax obligations by electing to have the Company, if permitted under
Applicable Laws, withhold from the Shares to be issued upon exercise of an
Option that number of Shares having a Fair Market Value equal to the 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 Optionees 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; and

                  (x) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan.

            (c) Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees.

            (d) Grants to Committee Members. If the Administrator is a Committee
appointed by the Board, the grant of Options under the Plan to members of such
Committee, if any, shall be made by the Board and not by such Committee.

      5. Eligibility.

            (a) Options may be granted to Service Providers.

            (b) The Plan shall not confer upon any Optionee any right with
respect to continuing the Optionee's relationship as a Service Provider with the
Company or a Parent or Subsidiary, nor shall it interfere in any way with his or
her right or the Company's right, or the right of the Company's Parent or
Subsidiary, subject to any employment agreements, to terminate such relationship
at any time, with or without cause.

      6. Term of Plan. The Plan shall become effective upon its adoption by the
Board. It shall continue in effect for a term of ten (10) years after the
earlier of its adoption by the Board or its approval by the Company's
Shareholders, unless sooner terminated under Section 13 of the Plan.


                                       4
<PAGE>

      7. Term of Option. Unless stated otherwise in the Option Agreement, the
term of each Option shall be no more than ten (10) years from the date of grant
thereof.

      8. Option Exercise Price and Consideration.

            (a) The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the
Administrator in accordance with Applicable Laws and subject to guidelines as
shall be suggested by the Board from time to time, if any.

            (b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator and may consist entirely of (1) cash, (2) check, (3)
promissory note, (4) consideration received by the Company under a formal
cashless exercise program, if such program is adopted by the Company in
connection with the Plan, or (5) any combination of the foregoing methods of
payment. In making its determination as to the type of consideration to accept,
the Administrator shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company.

            (c) The proceeds received by the Company from the issuance of Shares
subject to the Options will be added to the general funds of the Company and
used for its corporate purposes.

      9. Exercise of Option.

            (a) Procedure for Exercise; Rights as a Shareholder. 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 tolled during any unpaid leave of
absence other than leave pursuant to law. 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 Applicable Laws, 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 valid trust established by the Optionee. 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 shareholder shall exist with respect to the
Shares, notwithstanding the exercise of the Option. To avoid doubt, until the
Shares are issued, such Optionee shall not have the right to vote at any meeting
of the shareholders of the Company, nor shall the Optionees be deemed to be a
class of shareholders or creditors of the Company. Upon their issuance, unless
otherwise determined by the Board, the Shares shall carry equal voting rights as
the common stock of the company on all matters where such vote is permitted by


                                       5
<PAGE>

Applicable Law. The Company shall issue (or cause to be issued) such Shares
promptly after the Option is exercised. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
Shares are issued, except as provided in Section 11 of the Plan.

      If any law or regulation requires the Company to take any action with
respect to the Shares specified in such notice before the issuance thereof, then
the date of their issuance shall be delayed for the period necessary to take
such action.

      Exercise of an Option in any manner shall result in a decrease in 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 (as defined below), the Optionee may exercise his or her Option
within such period of time (of at least thirty (30) days) 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). Unless otherwise determined by the
Administrator and in the absence of a specified time in the Option Agreement,
the Option shall remain exercisable for ninety (90) days following the
Optionee's termination, except that the Option shall remain exercisable for only
thirty (30) days following the Optionee's termination if such termination is
with cause (as determined by the Company). Unless otherwise determined by the
Administrator, 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 within the time specified by the Option Agreement, the Plan or the
Administrator the portion of his or her Option that had vested, the vested
portion of the Option shall terminate, and the Shares covered by such portion
shall revert to the Plan.

            (c) Disability of Optionee. If an Optionee ceases to be a Service
Provider as a result of a physical or mental impairment, which has lasted or is
expected to last for a continuous period of not less than 12 months and which
causes the Optionee's total and permanent disability to engage in any
substantial gainful activity, or for such other period and/or such other
conditions as are specifically provided in the Option Agreement or any other
agreement between a Grantee and the Company ("Disability"), the Optionee may
exercise his or her Option within such period of time as is specified in the
Option Agreement (of at least six (6) months) to the extent the Option is vested
on the date of termination, but in no event later than the expiration date 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 the entire Option, the Shares
covered by the unvested portion of the Option shall revert to the Plan. If,
after termination, the Option is not exercised 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 within such period of time as is specified in the
Option Agreement (of at least six (6) months) to the extent that the Option is
vested on the date of death (but in no event later


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<PAGE>

than the expiration of the term of such Option as set forth in the Option
Agreement) by the Optionee's estate or by a person who acquires the right to
exercise the Option by bequest or inheritance. 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, unless otherwise extended by the
Administrator. If, at the time of death, the Optionee is not vested as to the
entire Option, the Shares covered by the unvested portion of the Option shall
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.

            (e) Buyout Provisions. The Administrator may at any time, if
permitted under Applicable Laws, offer to buy out for a payment in cash or
Shares, an Option previously granted, based on such terms and conditions as the
Administrator shall establish and communicate to the Optionee at the time that
such offer is made. No such offer shall obligate the Optionee to relinquish his
or her Option.

      10. Transferability of Options. Unless otherwise specifically provided in
an Option Agreement, Options may be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner, only to an Optionee's spouse or
descendants, or to a trust (or other entity owned by such a trust) for the
primary benefit of the Optionee, his spouse and/or descendants ("Permitted
Transferees"), and may be exercised, during the lifetime of the Optionee, only
by the Optionee or a Permitted Transferee.

      11. Adjustments Upon Changes in Capitalization or Merger.

      (a)   Changes in Capitalization. Subject to any required action by the
            shareholders of the Company, the number of Shares covered by each
            outstanding Option, and the number of Shares which have been
            authorized for issuance under the Plan but as to which no Options
            have yet been granted or which have been returned to the Plan upon
            cancellation or expiration of an Option, as well as the exercise
            price per Share of each such outstanding Option shall be
            proportionately adjusted for any increase or decrease in the number
            of issued Shares resulting from a share split, reverse share split,
            share dividend, recapitalization, combination or reclassification of
            the Shares, rights issues or any other increase or decrease in the
            number of issued Shares effected without receipt of consideration by
            the Company; provided, however that conversion of any convertible
            securities (including the Series A Convertible Preferred Stock) of
            the Company shall not be deemed to have been "effected without
            receipt of consideration." Such adjustment shall be made by the
            Administrator, whose determination in that respect shall be final,
            binding and conclusive. Except as expressly provided herein, no
            issuance by the Company of shares of any class, or securities
            convertible into shares of any class, shall affect, and no
            adjustment by reason thereof shall be made with respect to, the
            number or price of Shares subject to an Option.

      (b)   Dissolution or Liquidation. In the event of the proposed dissolution
            or liquidation of the Company, the administrator shall notify each
            Optionee a soon as practicable


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<PAGE>

            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 fifteen (15) days
            prior to such transaction as to all of the Optioned Shares,
            including Shares as to which the Option would not otherwise be
            exercisable. To the extent it has not been previously exercised, an
            Option will terminate immediately prior to the consummation of such
            proposed action.

      (c)   Reorganization and Change in Control Events

            (1)   Definitions

                  (a)   A "Reorganization Event" shall mean:

                        (i)   any merger or consolidation of the Company with or
                              into another entity as a result of which all of
                              the Common Stock of the Company is converted into
                              or exchanged for the right to receive cash,
                              securities or other property; or

                        (ii)  any exchange of all of the Common Stock of the
                              Company for cash, securities or other property
                              pursuant to a share exchange transaction.

                  (b)   A "Change in Control Event" shall mean:

                        (i)   the acquisition by an individual, entity or group
                              (within the meaning of Section 13(d)(3) or
                              14(d)(2) of the Exchange Act) (a "Person") of
                              beneficial ownership of any capital stock of the
                              Company if, after such acquisition, such Person
                              beneficially owns (within the meaning of Rule
                              13d-3 promulgated under the Exchange Act) 30% or
                              more of either (x) the then-outstanding shares of
                              common stock of the Company (the "Outstanding
                              Company Common Stock") or (y) the combined voting
                              power of the then-outstanding securities of the
                              Company entitled to vote generally in the election
                              of directors (the "Outstanding Company Voting
                              Securities"); provided, however, that for purposes
                              of this subsection (i), the following acquisitions
                              shall not constitute a Change in Control Event:
                              (A) any acquisition directly from the Company
                              (excluding an acquisition pursuant to the
                              exercise, conversion or exchange of any security
                              exercisable for, convertible into or exchangeable
                              for common stock or voting securities of the
                              Company, unless the Person exercising, converting
                              or exchanging such security acquired such security
                              directly from the Company or an underwriter or
                              agent of the Company), (B) any acquisition by any
                              employee benefit


                                       8
<PAGE>

                              plan (or related trust) sponsored or maintained by
                              the Company or any corporation controlled by the
                              Company, (C) any acquisition by any corporation
                              pursuant to a Business Combination (as defined
                              below) which complies with clauses (x) and (y) of
                              subsection (iii) of this definition, or (D) any
                              acquisition by Lindsay A. Rosenwald, Paramount
                              Capital Inc., or any entity controlled by,
                              controlling or under common control with Paramount
                              Capital, Inc. (each such party is referred to
                              herein as an "Exempt Person") of any shares of
                              capital stock of the Company; provided that, after
                              such acquisition, such Exempt Person does not
                              beneficially own more than 49% of either (i) the
                              Outstanding Company Common Stock or (ii) the
                              Outstanding Company Voting Securities; or

                        (ii)  such time as the Continuing Directors (as defined
                              below) do not constitute a majority of the Board
                              (or, if applicable, the Board of Directors of a
                              successor corporation to the Company), where the
                              term "Continuing Director" means at any date a
                              member of the Board (x) who was a member of the
                              Board on the date of the initial adoption of this
                              Plan by the Board or (y) who was nominated or
                              elected subsequent to such date by at least a
                              majority of the directors who were Continuing
                              Directors at the time of such nomination or
                              election or whose election to the Board was
                              recommended or endorsed by at least a majority of
                              the directors who were Continuing Directors at the
                              time of such nomination or election; provided,
                              however, that there shall be excluded from this
                              clause (y) any individual whose initial assumption
                              of office occurred as a result of an actual or
                              threatened election contest with respect to the
                              election or removal of directors or other actual
                              or threatened solicitation of proxies or consents,
                              by or on behalf of a person other than the Board;
                              or

                        (iii) the consummation of a merger, consolidation,
                              reorganization, recapitalization or share exchange
                              involving the Company or a sale or other
                              disposition of all or substantially all of the
                              assets of the Company (a "Business Combination"),
                              unless, immediately following such Business
                              Combination, each of the following two conditions
                              is satisfied: (x) all or substantially all of the
                              individuals and entities who were the beneficial
                              owners of the Outstanding Company Common Stock and
                              Outstanding Company Voting Securities immediately
                              prior to such Business Combination beneficially
                              own, directly or


                                       9
<PAGE>

                              indirectly, more than 50% of the then-outstanding
                              shares of common stock and the combined voting
                              power of the then-outstanding securities entitled
                              to vote generally in the election of directors,
                              respectively, of the resulting or acquiring
                              corporation in such Business Combination (which
                              shall include, without limitation, a corporation
                              which as a result of such transaction owns the
                              Company or substantially all of the Company's
                              assets either directly or through one or more
                              subsidiaries) (such resulting or acquiring
                              corporation is referred to herein as the
                              "Acquiring Corporation") in substantially the same
                              proportions as their ownership of the Outstanding
                              Company Common Stock and Outstanding Company
                              Voting Securities, respectively, immediately prior
                              to such Business Combination and (y) no Person
                              (excluding Exempt Persons, the Acquiring
                              Corporation or any employee benefit plan (or
                              related trust) maintained or sponsored by the
                              Company or by the Acquiring Corporation)
                              beneficially owns, directly or indirectly, 30% or
                              more of the then-outstanding shares of common
                              stock of the Acquiring Corporation, or of the
                              combined voting power of the then-outstanding
                              securities of such corporation entitled to vote
                              generally in the election of directors (except to
                              the extent that such ownership existed prior to
                              the Business Combination).

                  (c)   "Good Reason" shall mean any significant diminution in
                        the Optionee's title, authority, or responsibilities
                        from and after such Reorganization Event or Change in
                        Control Event, as the case may be, or any reduction in
                        the annual cash compensation payable to the Optionee
                        from and after such Reorganization Event or Change in
                        Control Event, as the case may be, or the relocation of
                        the place of business at which the Optionee is
                        principally located to a location that is greater than
                        50 miles from the current site.

                  (d)   "Cause" shall mean any (i) willful failure by the
                        Optionee, which failure is not cured within 30 days of
                        written notice to the Optionee from the Company, to
                        perform his or her material responsibilities to the
                        Company or (ii) willful misconduct by the Optionee which
                        affects the business reputation of the Company.

            (2)   Effect on Options

                  (a)   Reorganization Event. Upon the occurrence of a
                        Reorganization Event (regardless of whether such event
                        also constitutes a Change in Control Event), or the
                        execution by the Company of any agreement with respect
                        to a Reorganization Event (regardless of


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<PAGE>

                        whether such event will result in a Change in Control
                        Event), except to the extent specifically provided to
                        the contrary in the instrument evidencing any Option or
                        any other agreement between an Optionee and the Company,
                        the Board shall provide that all outstanding Options
                        shall be assumed, or equivalent options shall be
                        substituted, by the acquiring or succeeding corporation
                        (or an affiliate thereof); provided that if such
                        Reorganization Event also constitutes a Change in
                        Control Event, such assumed or substituted options shall
                        become immediately exercisable in full if, on or prior
                        to the date which is eighteen (18) full months after the
                        date of the consummation of the Reorganization Event,
                        the Optionee's employment with the Company or the
                        acquiring or succeeding corporation is terminated for
                        Good Reason by the Optionee or is terminated without
                        Cause by the Company or the acquiring or succeeding
                        corporation. For purposes hereof, an Option shall be
                        considered to be assumed if, following consummation of
                        the Reorganization Event, the Option confers the right
                        to purchase, for each share of Common Stock subject to
                        the Option immediately prior to the consummation of the
                        Reorganization Event, the consideration (whether cash,
                        securities or other property) received as a result of
                        the Reorganization Event by holders of Common Stock for
                        each share of Common Stock held immediately prior to the
                        consummation of the Reorganization Event (and if holders
                        were offered a choice of consideration, the type of
                        consideration chosen by the holders of a majority of the
                        outstanding shares of Common Stock); provided, however,
                        that if the consideration received as a result of the
                        Reorganization Event is not solely common stock of the
                        acquiring or succeeding corporation (or an affiliate
                        thereof), the Company may, with the consent of the
                        acquiring or succeeding corporation, provide for the
                        consideration to be received upon the exercise of
                        Options to consist solely of common stock of the
                        acquiring or succeeding corporation (or an affiliate
                        thereof) equivalent in fair market value to the per
                        share consideration received by holders of outstanding
                        shares of Common Stock as a result of the Reorganization
                        Event.

                              Notwithstanding the foregoing, except to the
                        extent specifically provided to the contrary in the
                        instrument evidencing any Option or any other agreement
                        between a Grantee and the Company, if the acquiring or
                        succeeding corporation (or an affiliate thereof) does
                        not agree to assume, or substitute for, such Options,
                        then the Board shall, upon written notice to the
                        Optionees, provide that all then unexercised Options
                        will become exercisable in full as of a specified time
                        prior to the Reorganization Event and will terminate
                        immediately prior to the consummation of such


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<PAGE>

                        Reorganization Event, except to the extent exercised by
                        the Optionees before the consummation of such
                        Reorganization Event; provided, however, that in the
                        event of a Reorganization Event under the terms of which
                        holders of Common Stock will receive upon consummation
                        thereof a cash payment for each share of Common Stock
                        surrendered pursuant to such Reorganization Event (the
                        "Acquisition Price"), then the Board may instead provide
                        that all outstanding Options shall terminate upon
                        consummation of such Reorganization Event and that each
                        Optionee shall receive, in exchange therefor, a cash
                        payment equal to the amount (if any) by which (A) the
                        Acquisition Price multiplied by the number of shares of
                        Common Stock subject to such outstanding Options
                        (whether or not then exercisable), exceeds (B) the
                        aggregate exercise price of such Options.

                  (b)   Change in Control Event that is not a Reorganization
                        Event. Upon the occurrence of a Change in Control Event
                        that does not also constitute a Reorganization Event,
                        except to the extent specifically provided to the
                        contrary in the instrument evidencing any Option or any
                        other agreement between the Optionee and the Company,
                        the Board shall provide that all outstanding Options
                        shall be assumed, or equivalent options shall be
                        substituted, by the acquiring or succeeding corporation
                        (or an affiliate thereof); provided that such assumed or
                        substituted options shall become immediately exercisable
                        in full if, on or prior to the date which is eighteen
                        (18) full months after the date of the consummation of
                        the Change of Control Event, the Optionee's employment
                        with the Company or the acquiring or succeeding
                        corporation is terminated for Good Reason by the
                        Optionee or is terminated without Cause by the Company
                        or the acquiring or succeeding corporation. For purposes
                        hereof, an Option shall be considered to be assumed if,
                        following consummation of the Change of Control Event,
                        the Option confers the right to purchase, for each share
                        of Common Stock subject to the Option immediately prior
                        to the consummation of the Change of Control Event, the
                        consideration (whether cash, securities or other
                        property) received as a result of the Change of Control
                        Event by holders of Common Stock for each share of
                        Common Stock held immediately prior to the consummation
                        of the Change of Control Event (and if holders were
                        offered a choice of consideration, the type of
                        consideration chosen by the holders of a majority of the
                        outstanding shares of Common Stock); provided, however,
                        that if the consideration received as a result of the
                        Change of Control Event is not solely common stock of
                        the acquiring or succeeding corporation (or an affiliate
                        thereof), the Company may, with the consent of the
                        acquiring or succeeding


                                       12
<PAGE>

                        corporation, provide for the consideration to be
                        received upon the exercise of Options to consist solely
                        of common stock of the acquiring or succeeding
                        corporation (or an affiliate thereof) equivalent in fair
                        market value to the per share consideration received by
                        holders of outstanding shares of Common Stock as a
                        result of the Change of Control Event.

                              Notwithstanding the foregoing, except to the
                        extent specifically provided to the contrary in the
                        instrument evidencing any Option or any other agreement
                        between a Grantee and the Company, if the acquiring or
                        succeeding corporation (or an affiliate thereof) does
                        not agree to assume, or substitute for, such Options,
                        then the Board shall, upon written notice to the
                        Grantees, provide that all then unexercised Options will
                        become exercisable in full as of a specified time prior
                        to the Change of Control Event and will terminate
                        immediately prior to the consummation of such Change of
                        Control Event, except to the extent exercised by the
                        Grantees before the consummation of such Change of
                        Control Event; provided, however, that in the event of a
                        Change of Control Event under the terms of which holders
                        of Common Stock will receive upon consummation thereof a
                        cash payment for each share of Common Stock surrendered
                        pursuant to such Change of Control Event (the
                        "Acquisition Price"), then the Board may instead provide
                        that all outstanding Options shall terminate upon
                        consummation of such Change of Control Event and that
                        each Grantee shall receive, in exchange therefor, a cash
                        payment equal to the amount (if any) by which (A) the
                        Acquisition Price multiplied by the number of shares of
                        Common Stock subject to such outstanding Options
                        (whether or not then exercisable), exceeds (B) the
                        aggregate exercise price of such Options.

      12. Date of Grant. Subject to Applicable Laws, the date of grant of an
Option shall, for all purposes, be the date on which the Administrator makes the
determination granting such Option, or such other date as is determined by the
Board. Notice of the determination shall be given to each Service Provider to
whom an Option is so granted within a reasonable time after the date of such
grant.

      13. Amendment and Termination of the Plan.

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

            (b) Shareholder Approval. The Board shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.


                                       13
<PAGE>

            (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.

      14. Conditions Upon Issuance of Shares.

            (a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option, the method of payment
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, the Administrator may require the person exercising such Option 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.

      15. 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.

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

      17. Shareholder Approval of Plan. The Plan shall be subject to approval by
the shareholders of the Company. Such shareholder approval shall be obtained in
the manner and to the degree required under Applicable Laws.

      18. Continuance of Status. Neither the Plan nor any Option Agreement shall
impose any obligation on the Company, or a Parent or Subsidiary thereof, to
continue any Optionee as a Service Provider, and nothing in the Plan or in any
Option Agreement shall confer upon any Service Provider any right to continue as
a Service Provider.

      19. Governing Law. This Plan shall be governed by and construed and
enforced in accordance with the laws of the state of Delaware applicable to
contracts made and to be performed therein, without giving effect to the
principles of conflict of laws.

      20. Tax Consequences. Any tax consequences arising from the grant or
exercise of any Option, from the payment for Shares or from any other event or
act (of the Company or the Optionee) hereunder, shall be borne solely by the
Optionee. Furthermore, the Optionee shall agree to indemnify the Company and
hold it harmless against and from any and all liability for


                                       14
<PAGE>

any such tax or interest or penalty thereon, including without limitation,
liabilities relating to the necessity to withhold, or to have withheld, any such
tax from any payment made to the Optionee.

      21. Multiple Agreements. The terms of each Option may differ from other
Options granted under the Plan at the same time. The Administrator may also
grant more than one Option to a given Optionee during the term of the Plan,
either in addition to, or in substitution for, one or more Options previously
granted to that Optionee.

      22. Provision for Foreign Participants. The Board of Directors may,
without amending the Plan, modify awards or options granted to participants who
are foreign nationals or employed outside the United States to recognize
differences in laws, rules, regulations or customs of such foreign jurisdictions
with respect to tax, securities, currency, employee benefit or other matters.

      Adopted by the Stockholders on November 15, 1999, and amended by the Board
      of Directors on December 22, 1999, November 20, 2001 and May 13, 2003


                                       15

</TEXT>
</DOCUMENT>
