OMNICELL INC /CA/
EX-10.16
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<BR></FONT><FONT SIZE=2><B>EXHIBIT&nbsp;10.16    <BR>  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>OMNICELL,&nbsp;INC.<BR>
<BR>
1999 EQUITY INCENTIVE PLAN<BR>
<BR>
Adopted September&nbsp;1, 1999<BR>
Amended and Restated November&nbsp;5, 2002<BR>
Termination Date: August&nbsp;30, 2009  </B></FONT></P>

<P><FONT SIZE=2><B>1.&nbsp;&nbsp;&nbsp;&nbsp;PURPOSES.  </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;Eligible Stock Award Recipients.</B></FONT><FONT SIZE=2> The persons eligible to receive Stock Awards are the Employees, Directors and
Consultants of the Company and its Affiliates. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;Available Stock Awards.</B></FONT><FONT SIZE=2> The purpose of the Plan is to provide a means by which eligible recipients of Stock Awards may be
given an opportunity to benefit from increases in value of the Common Stock through the granting of the following Stock Awards: (i)&nbsp;Incentive Stock Options, (ii)&nbsp;Nonstatutory Stock
Options, (iii)&nbsp;stock bonuses and (iv)&nbsp;rights to acquire restricted stock. The Plan also provides for non-discretionary grants of Nonstatutory Stock Options to
Non-Employee Directors of the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)&nbsp;&nbsp;General Purpose.</B></FONT><FONT SIZE=2> The Company, by means of the Plan, seeks to retain the services of the group of persons eligible to
receive Stock Awards, to secure and retain the services of new members of this group and to provide incentives for such persons to exert maximum efforts for the success of the Company and its
Affiliates. </FONT></P>

<P><FONT SIZE=2><B>2.&nbsp;&nbsp;&nbsp;&nbsp;DEFINITIONS.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Affiliate"</I></B></FONT><FONT SIZE=2> means any parent corporation or subsidiary corporation of the Company, whether now or
hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of the Code. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Board"</I></B></FONT><FONT SIZE=2> means the Board of Directors of the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Code"</I></B></FONT><FONT SIZE=2> means the Internal Revenue Code of 1986, as amended. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(d)&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Committee"</I></B></FONT><FONT SIZE=2> means a committee of one or more members of the Board appointed by the Board in
accordance with subsection 3(c). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(e)&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Common Stock"</I></B></FONT><FONT SIZE=2> means the common stock of the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(f)&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Company"</I></B></FONT><FONT SIZE=2> means Omnicell,&nbsp;Inc., a Delaware corporation. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(g)&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Consultant"</I></B></FONT><FONT SIZE=2> means any person, including an advisor, (i)&nbsp;engaged by the Company or an
Affiliate to render consulting or advisory services and who is compensated for such services or (ii)&nbsp;who is a member of the Board of Directors of an Affiliate. However, the term "Consultant"
shall not include either Directors who are not compensated by the Company for their services as Directors or Directors who are merely paid a director's fee by the Company for their services as
Directors. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(h)&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Continuous Service"</I></B></FONT><FONT SIZE=2> means that the Participant's service with the Company or an Affiliate,
whether as an Employee, Director or Consultant, is not interrupted or terminated. The Participant's Continuous Service shall not be deemed to have terminated merely because of a change in the capacity
in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service, provided that
there is no interruption or termination of the Participant's Continuous Service. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or a Director will not
constitute an </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>1</FONT></P>

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interruption of Continuous Service. The Board or the chief executive officer of the Company, in that party's sole discretion, may determine whether Continuous Service shall be considered interrupted
in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal leave. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(i)&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Covered Employee"</I></B></FONT><FONT SIZE=2> means the chief executive officer and the four (4)&nbsp;other highest
compensated officers of the Company for whom total compensation is required to be reported to shareholders under the Exchange Act, as determined for purposes of Section&nbsp;162(m) of the Code. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(j)&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Director"</I></B></FONT><FONT SIZE=2> means a member of the Board of Directors of the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(k)&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Disability"</I></B></FONT><FONT SIZE=2> means (i)&nbsp;before the Listing Date, the inability of a person, in the opinion
of a qualified physician acceptable to the Company, to perform the major duties of that person's position with the Company or an Affiliate of the Company because of the sickness or injury of the
person and (ii)&nbsp;after the Listing Date, the permanent and total disability of a person within the meaning of Section&nbsp;22(e)(3) of the Code. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(l)&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Employee"</I></B></FONT><FONT SIZE=2> means any person employed by the Company or an Affiliate. Mere service as a Director
or payment of a director's fee by the Company or an Affiliate shall not be sufficient to constitute "employment" by the Company or an Affiliate. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(m)&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Exchange Act"</I></B></FONT><FONT SIZE=2> means the Securities Exchange Act of 1934, as amended. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(n)&nbsp;&nbsp;"</B></FONT><FONT SIZE=2><B><I>Fair Market Value"</I></B></FONT><FONT SIZE=2> means, as of any date, the value of the Common Stock determined as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(i)&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>If the Common Stock is listed on any established stock exchange or traded on the Nasdaq National Market or the Nasdaq
SmallCap Market, the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or market
(or the exchange or market with the greatest volume of trading in the Common Stock) on the last market trading day prior to the day of determination, as reported in </FONT><FONT SIZE=2><I>The Wall
Street Journal</I></FONT><FONT SIZE=2> or such other source as the Board deems reliable. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(ii)&nbsp;&nbsp;</B></FONT><FONT SIZE=2>In the absence of such markets for the Common Stock, the Fair Market Value shall be determined in good faith by the
Board. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(iii)&nbsp;</B></FONT><FONT SIZE=2>Prior to the Listing Date, the value of the Common Stock shall be determined in a manner consistent with
Section&nbsp;260.140.50 of Title 10 of the California Code of Regulations. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(o)&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Incentive Stock Option"</I></B></FONT><FONT SIZE=2> means an Option intended to qualify as an incentive stock option within
the meaning of Section&nbsp;422 of the Code and the regulations promulgated thereunder. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(p)&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"IPO Date"</I></B></FONT><FONT SIZE=2> means the effective date of the initial public offering of the Company's Common Stock. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(q)&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Listing Date"</I></B></FONT><FONT SIZE=2> means the first date upon which any security of the Company is listed (or approved
for listing) upon notice of issuance on any securities exchange or designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system if
such securities exchange or interdealer quotation system has been certified in accordance with the provisions of Section&nbsp;25100(o) of the California Corporate Securities Law of 1968. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(r)&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Non-Employee Director"</I></B></FONT><FONT SIZE=2> means a Director who either (i)&nbsp;is not a current
Employee or Officer of the Company or its parent or a subsidiary, does not receive compensation (directly or indirectly) from the Company or its parent or a subsidiary for services rendered as a
consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation&nbsp;S-K promulgated pursuant to
the Securities Act ("Regulation&nbsp;S-K")), does not possess an interest in any other transaction as to which disclosure would be required under Item </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

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404(a) of Regulation&nbsp;S-K and is not engaged in a business relationship as to which disclosure would be required under Item 404(b) of Regulation&nbsp;S-K; or
(ii)&nbsp;is otherwise considered a "non-employee director" for purposes of Rule&nbsp;16b-3. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(s)&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Non-Employee Director Option"</I></B></FONT><FONT SIZE=2> means a Non-Statutory Stock Option granted
pursuant to Section&nbsp;7 hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(t)&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Non-Employee Director Option Agreement"</I></B></FONT><FONT SIZE=2> means a written agreement between the
Company and a Non-Employee Director evidencing the terms and conditions of a Non-Employee Director Option grant. Each Non-Employee Director Option Agreement shall
be subject to the terms and conditions of the Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(u)&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Nonstatutory Stock Option"</I></B></FONT><FONT SIZE=2> means an Option not intended to qualify as an Incentive Stock Option. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(v)&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Officer"</I></B></FONT><FONT SIZE=2> means (i)&nbsp;before the Listing Date, any person designated by the Company as an
officer and (ii)&nbsp;on and after the Listing Date, a person who is an officer of the Company within the meaning of Section&nbsp;16 of the Exchange Act and the rules and regulations promulgated
thereunder. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(w)&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Option"</I></B></FONT><FONT SIZE=2> means an Incentive Stock Option or a Nonstatutory Stock Option granted pursuant to the
Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(x)&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Option Agreement"</I></B></FONT><FONT SIZE=2> means a written agreement between the Company and an Optionholder evidencing
the terms and conditions of an individual Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(y)&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Optionholder"</I></B></FONT><FONT SIZE=2> means a person to whom an Option is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Option. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(z)&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Outside Director"</I></B></FONT><FONT SIZE=2> means a Director who either (i)&nbsp;is not a current employee of the
Company or an "affiliated corporation" (within the meaning of Treasury Regulations promulgated under Section&nbsp;162(m) of the Code), is not a former employee of the Company or an "affiliated
corporation" receiving compensation for prior services (other than benefits under a tax qualified pension plan), was not an officer of the Company or an "affiliated corporation" at any time and is not
currently receiving direct or indirect remuneration from the Company or an "affiliated corporation" for services in any capacity other than as a Director or (ii)&nbsp;is otherwise considered an
"outside director" for purposes of Section&nbsp;162(m) of the Code. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(aa)&nbsp;</B></FONT><FONT SIZE=2><B><I>"Participant"</I></B></FONT><FONT SIZE=2> means a person to whom a Stock Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Stock Award. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(bb)&nbsp;</B></FONT><FONT SIZE=2><B><I>"Plan"</I></B></FONT><FONT SIZE=2> means this Omnicell,&nbsp;Inc. 1999 Equity Incentive Plan. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(cc)&nbsp;</B></FONT><FONT SIZE=2><B><I>"Rule&nbsp;16b-3"</I></B></FONT><FONT SIZE=2> means Rule&nbsp;16b-3 promulgated under the
Exchange Act or any successor to Rule&nbsp;16b-3, as in effect from time to time. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(dd)&nbsp;</B></FONT><FONT SIZE=2><B><I>"Securities Act"</I></B></FONT><FONT SIZE=2> means the Securities Act of 1933, as amended. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(ee)&nbsp;</B></FONT><FONT SIZE=2><B><I>"Stock Award"</I></B></FONT><FONT SIZE=2> means any right granted under the Plan, including an Option, a stock bonus and a
right to acquire restricted stock. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(ff)&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>"Stock Award Agreement"</I></B></FONT><FONT SIZE=2> means a written agreement between the Company and a holder of a Stock
Award evidencing the terms and conditions of an individual Stock Award grant. Each Stock Award Agreement shall be subject to the terms and conditions of the Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(gg)&nbsp;</B></FONT><FONT SIZE=2><B><I>"Ten Percent Shareholder"</I></B></FONT><FONT SIZE=2> means a person who owns (or is deemed to own pursuant to
Section&nbsp;424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any of its Affiliates. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

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<P><FONT SIZE=2><B>3.&nbsp;&nbsp;&nbsp;&nbsp;ADMINISTRATION.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;Administration by Board.</B></FONT><FONT SIZE=2> The Board shall administer the Plan unless and until the Board delegates administration to a
Committee, as provided in subsection 3(c). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;Powers of Board.</B></FONT><FONT SIZE=2> The Board shall have the power, subject to, and within the limitations of, the express provisions of the
Plan: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(i)&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>To determine from time to time which of the persons eligible under the Plan shall be granted Stock Awards; when and how
each Stock Award shall be granted; what type or combination of types of Stock Award shall be granted; the provisions of each Stock Award granted (which need not be identical), including the time or
times when a person shall be permitted to receive Common Stock pursuant to a Stock Award; and the number of shares of Common Stock with respect to which a Stock Award shall be granted to each such
person. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(ii)&nbsp;&nbsp;</B></FONT><FONT SIZE=2>To construe and interpret the Plan and Stock Awards granted under it, and to establish, amend and revoke rules and
regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement, in a manner and to the
extent it shall deem necessary or expedient to make the Plan fully effective. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(iii)&nbsp;</B></FONT><FONT SIZE=2>To amend the Plan or a Stock Award as provided in Section&nbsp;13. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(iv)&nbsp;&nbsp;</B></FONT><FONT SIZE=2>To effect, at any time and from time to time, with the consent of any adversely affected Optionholder, (1)&nbsp;the
reduction of the exercise price of any outstanding Option under the Plan to the then Fair Market Value and/or (2)&nbsp;the cancellation of any outstanding Option under the Plan and the grant in
substitution therefor of (A)&nbsp;a new Option under the Plan covering the same or a different number of shares of Common Stock, (B)&nbsp;a stock bonus, (C)&nbsp;the right to acquire restricted
stock, (D)&nbsp;cash and/or (E)&nbsp;other valuable consideration (as determined by the Board, in its sole discretion). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(v)&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best
interests of the Company which are not in conflict with the provisions of the Plan. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)&nbsp;&nbsp;Delegation to Committee.  </B></FONT></P>

<UL>

<P><FONT SIZE=2><B> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;General.</B></FONT><FONT SIZE=2> The Board may delegate administration of the Plan to a Committee or Committees of one (1)&nbsp;or more members of the
Board, and the
term "Committee" shall apply to any person or persons to whom such authority has been delegated. If administration is delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise
(and references in this Plan to the Board shall thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be
adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan. </FONT></P>

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

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

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persons with respect to whom the Company wishes to comply with Section&nbsp;162(m) of the Code and/or (2)&nbsp;delegate to a committee of one or more members of the Board who are not
Non-Employee Directors the authority to grant Stock Awards to eligible persons who are not then subject to Section&nbsp;16 of the Exchange Act. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(d)&nbsp;&nbsp;Effect of Board's Decision.</B></FONT><FONT SIZE=2> All determinations, interpretations and constructions made by the Board in good faith shall
not be subject to review by any person and shall be final, binding and conclusive on all persons. </FONT></P>

<P><FONT SIZE=2><B>4.&nbsp;&nbsp;&nbsp;&nbsp;SHARES SUBJECT TO THE PLAN.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;Share Reserve.</B></FONT><FONT SIZE=2> Subject to the provisions of Section&nbsp;12 relating to adjustments upon changes in Common Stock, the
Common Stock that may be issued pursuant to Stock Awards shall not exceed in the aggregate five million (5,000,000) shares of Common Stock, plus an annual increase to be added each January&nbsp;1,
beginning January&nbsp;1, 2001, equal to the lesser of (i)&nbsp;five and one-half percent (5.5%) of the total number of shares of Common Stock outstanding on such January&nbsp;1 or
(ii)&nbsp;three million (3,000,000) shares of Common Stock. Notwithstanding the foregoing, the Board may designate a smaller number of shares of Common Stock to be added to the share reserve as of a
particular January&nbsp;1. The shares that may be issuable under incentive stock options shall be limited to the above maximum number of shares reserved under the Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;Reversion of Shares to the Share Reserve</B></FONT><FONT SIZE=2>. If any Stock Award shall for any reason expire or otherwise terminate, in whole
or in part, without having been exercised in full, the shares of Common Stock not acquired under such Stock Award shall revert to and again become available for issuance under the Plan. In addition,
if any stock award issued under the Company's 1992 Incentive Stock Option Plan and 1995 Management Stock Option Plan shall for any reason expire or otherwise terminate, in whole or in part, without
having been exercised in full, the shares of Common Stock not acquired under such stock award shall revert to and again become available for issuance under this Plan provided such shares shall not be
issuable under an incentive stock option. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)&nbsp;&nbsp;Source of Shares.</B></FONT><FONT SIZE=2> The shares of Common Stock subject to the Plan may be unissued shares or reacquired shares, bought on
the market or otherwise. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(d)&nbsp;&nbsp;Share Reserve Limitation.</B></FONT><FONT SIZE=2> Prior to the Listing Date and to the extent then required by Section&nbsp;260.140.45 of Title
10 of the California Code of Regulations, the total number of shares of Common Stock issuable upon exercise of all outstanding Options and the total number of shares of Common Stock provided for under
any stock bonus or similar plan of the Company shall not exceed the applicable percentage as calculated in accordance with the conditions and exclusions of Section&nbsp;260.140.45 of Title 10 of the
California Code of Regulations, based on the shares of Common Stock of the Company that are outstanding at the time the calculation is made. </FONT></P>


<P><FONT SIZE=2><B>5.&nbsp;&nbsp;&nbsp;&nbsp;ELIGIBILITY.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;Eligibility for Specific Stock Awards</B></FONT><FONT SIZE=2>. Incentive Stock Options may be granted only to Employees. Stock Awards other than
Incentive Stock Options may be granted to Employees, Directors and Consultants. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;Ten Percent Shareholders.</B></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(i)&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>A Ten Percent Shareholder shall not be granted an Incentive Stock Option unless the exercise price of such Option is at
least one hundred ten percent (110%) of the Fair Market Value of the Common Stock at the date of grant and the Option is not exercisable after the expiration of five (5)&nbsp;years from the date of
grant. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(ii)&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Prior to the Listing Date, a Ten Percent Shareholder shall not be granted a Nonstatutory Stock Option unless the
exercise price of such Option is at least (i)&nbsp;one hundred ten percent </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

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<P><FONT SIZE=2>
(110%) of the Fair Market Value of the Common Stock at the date of grant or (ii)&nbsp;such lower percentage of the Fair Market Value of the Common Stock at the date of grant as is permitted by
Section&nbsp;260.140.41 of Title 10 of the California Code of Regulations at the time of the grant of the Option. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(iii)&nbsp;</B></FONT><FONT SIZE=2>Prior to the Listing Date, a Ten Percent Shareholder shall not be granted a restricted stock award unless the purchase
price of the restricted stock is at least (i)&nbsp;one hundred percent (100%) of the Fair Market Value of the Common Stock at the date of grant or (ii)&nbsp;such lower percentage of the Fair
Market Value of the Common Stock at the date of grant as is permitted by Section&nbsp;260.140.41 of Title 10 of the California Code of Regulations at the time of the grant of the Option. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)&nbsp;&nbsp;Section&nbsp;162(m) Limitation.</B></FONT><FONT SIZE=2> Subject to the provisions of Section&nbsp;12 relating to adjustments upon changes in
the shares of Common Stock, no Employee shall be eligible to be granted Options covering more than one million two hundred thousand (1,200,000) shares of Common Stock during any calendar year. This
subsection 5(c) shall not apply prior to the Listing Date and, following the Listing Date, this subsection 5(c) shall not apply until (i)&nbsp;the earliest of: (1)&nbsp;the first material
modification of the Plan (including any increase in the number of shares of Common Stock reserved for issuance under the Plan in accordance with Section&nbsp;4); (2)&nbsp;the issuance of all of
the shares of Common Stock reserved for issuance under the Plan; (3)&nbsp;the expiration of the Plan; or (4)&nbsp;the first meeting of shareholders at which Directors are to be elected that occurs
after the close of the third calendar year following the calendar year in which occurred the first registration of an equity security under Section&nbsp;12 of the Exchange Act; or (ii)&nbsp;such
other date required by Section&nbsp;162(m) of the Code and the rules and regulations promulgated thereunder. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(d)&nbsp;&nbsp;Consultants.</B></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(i)&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Prior to the Listing Date, a Consultant shall not be eligible for the grant of a Stock Award if, at the time of grant,
either the offer or the sale of the Company's securities to such Consultant is not exempt under Rule&nbsp;701 of the Securities Act ("Rule&nbsp;701") because of the nature of the services that the
Consultant is providing to the Company, or because the Consultant is not a natural person, or as otherwise provided by Rule&nbsp;701, unless the Company determines that such grant need not comply
with the requirements of Rule&nbsp;701 and will satisfy another exemption under the Securities Act as well as comply with the securities laws of all other relevant jurisdictions. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(ii)&nbsp;&nbsp;</B></FONT><FONT SIZE=2>From and after the Listing Date, a Consultant shall not be eligible for the grant of a Stock Award if, at the time of
grant, a Form&nbsp;S-8 Registration Statement under the Securities Act ("Form&nbsp;S-8") is not available to register either the offer or the sale of the Company's
securities to such Consultant because of the nature of the services that the Consultant is providing to the Company, or because the Consultant is not a natural person, or as otherwise provided by the
rules governing the use of Form&nbsp;S-8, unless the Company determines both (i)&nbsp;that such grant (A)&nbsp;shall be registered in another manner under the Securities Act
(</FONT><FONT SIZE=2><I>e.g.,</I></FONT><FONT SIZE=2> on a Form&nbsp;S-3 Registration Statement) or (B)&nbsp;does not require registration under the Securities Act in order to comply
with the requirements of the Securities Act, if applicable, and (ii)&nbsp;that such grant complies with the securities laws of all other relevant jurisdictions. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(iii)&nbsp;</B></FONT><FONT SIZE=2>Rule&nbsp;701 and Form&nbsp;S-8 generally are available to consultants and advisors only if
(i)&nbsp;they are natural persons; (ii)&nbsp;they provide bona fide services to the issuer, its parents, its majority-owned subsidiaries or majority-owned subsidiaries of the issuer's parent; and
(iii)&nbsp;the services are not in connection with the offer or sale of securities in a capital-raising transaction, and do not directly or indirectly promote or maintain a market for the issuer's
securities. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

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<P><FONT SIZE=2><B>6.&nbsp;&nbsp;&nbsp;&nbsp;OPTION PROVISIONS.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Option shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. All Options shall be separately designated
Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased
on exercise of each type of Option. The provisions of separate Options need not be identical, but each Option shall include (through incorporation of provisions hereof by reference in the Option or
otherwise) the substance of each of the following provisions: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;Term.</B></FONT><FONT SIZE=2> Subject to the provisions of subsection 5(b) regarding Ten Percent Shareholders, no Option granted prior to the
Listing Date shall be exercisable after the expiration of ten (10)&nbsp;years from the date it was granted, and no Incentive Stock Option granted on or after the Listing Date shall be exercisable
after the expiration of ten (10)&nbsp;years from the date it was granted. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;Exercise Price of an Incentive Stock Option.</B></FONT><FONT SIZE=2> Subject to the provisions of subsection 5(b) regarding Ten Percent
Shareholders, the exercise price of each Incentive Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the date the
Option is granted. Notwithstanding the foregoing, an Incentive Stock Option may be granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant
to an assumption or substitution for another option in a manner satisfying the provisions of Section&nbsp;424(a) of the Code. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)&nbsp;&nbsp;Exercise Price of a Nonstatutory Stock Option.</B></FONT><FONT SIZE=2> Subject to the provisions of subsection 5(b) regarding Ten Percent
Shareholders, the exercise price of each Nonstatutory Stock Option granted prior to the Listing Date shall be not less than eighty-five percent (85%) of the Fair Market Value of the Common
Stock subject to the Option on the date the Option is granted. The exercise price of each Nonstatutory Stock Option granted on or after the Listing Date shall be not less than eighty-five
percent (85%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, a Nonstatutory Stock Option may be granted with an
exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of
Section&nbsp;424(a) of the Code. </FONT></P>

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


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the case of any deferred payment arrangement, interest shall be compounded at least annually and shall be charged at the minimum rate of interest necessary to avoid the treatment as
interest, under any applicable provisions of the Code, of any amounts other than amounts stated to be interest under the deferred payment arrangement. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>7</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(e)&nbsp;&nbsp;Transferability of an Incentive Stock Option.</B></FONT><FONT SIZE=2> An Incentive Stock Option shall not be transferable except by will or by
the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by
delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise
the Option. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(f)&nbsp;&nbsp;&nbsp;&nbsp;Transferability of a Nonstatutory Stock Option.</B></FONT><FONT SIZE=2> A Nonstatutory Stock Option granted prior to the Listing Date shall not
be transferable except by will or by the laws of descent and distribution and, to the extent provided in the Option Agreement, to such further extent as permitted by Section&nbsp;260.140.41(d) of
Title 10 of the California Code of Regulations at the time of the grant of the Option, and shall be exercisable during the lifetime of the Optionholder only by the Optionholder. A Nonstatutory Stock
Option granted on or after the Listing Date shall be transferable to the extent provided in the Option Agreement. If the Nonstatutory Stock Option does not provide for transferability, then the
Nonstatutory Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder.
Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the
Optionholder, shall thereafter be entitled to exercise the Option. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(g)&nbsp;&nbsp;Vesting Generally.</B></FONT><FONT SIZE=2> The total number of shares of Common Stock subject to an Option may, but need not, vest and therefore
become exercisable in periodic installments that may, but need not, be equal. The Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be
based on performance or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options may vary. The provisions of this subsection 6(g) are subject to any Option
provisions governing the minimum number of shares of Common Stock as to which an Option may be exercised. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(h)&nbsp;&nbsp;Minimum Vesting Prior to the Listing Date.</B></FONT><FONT SIZE=2> Notwithstanding the foregoing subsection 6(g), to the extent that the
following restrictions on vesting are required by Section&nbsp;260.140.41(f) of Title 10 of the California Code of Regulations at the time of the grant of the Option, then: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(i)&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Options granted prior to the Listing Date to an Employee who is not an Officer, Director or Consultant shall provide for
vesting of the total number of shares of Common Stock at a rate of at least twenty percent (20%) per year over five (5)&nbsp;years from the date the Option was granted, subject to reasonable
conditions such as continued employment; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(ii)&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Options granted prior to the Listing Date to Officers, Directors or Consultants may be made fully exercisable, subject
to reasonable conditions such as continued employment, at any time or during any period established by the Company. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(i)&nbsp;&nbsp;&nbsp;&nbsp;Termination of Continuous Service.</B></FONT><FONT SIZE=2> In the event an Optionholder's Continuous Service terminates (other than upon the
Optionholder's death or Disability), the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination) but only
within such period of time ending on the earlier of (i)&nbsp;the date three (3)&nbsp;months
following the termination of the Optionholder's Continuous Service (or such longer or shorter period specified in the Option Agreement, which period shall not be less than thirty (30)&nbsp;days for
Options granted prior to the Listing Date unless such termination is for cause), or (ii)&nbsp;the expiration of the term of the Option as set forth in the Option Agreement. If, after termination,
the Optionholder does not exercise his or her Option within the time specified in the Option Agreement, the Option shall terminate. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(j)&nbsp;&nbsp;&nbsp;&nbsp;Extension of Termination Date.</B></FONT><FONT SIZE=2> An Optionholder's Option Agreement may also provide that if the exercise of the Option
following the termination of the Optionholder's Continuous Service (other </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>8</FONT></P>

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than upon the Optionholder's death or Disability) would be prohibited at any time solely because the issuance of shares of Common Stock would violate the registration requirements under the
Securities Act, then the Option shall terminate on the earlier of (i)&nbsp;the expiration of the term of the Option set forth in subsection 6(a) or (ii)&nbsp;the expiration of a period of three
(3)&nbsp;months after the termination of the Optionholder's Continuous Service during which the exercise of the Option would not be in violation of such registration requirements. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(k)&nbsp;&nbsp;Disability of Optionholder.</B></FONT><FONT SIZE=2> In the event that an Optionholder's Continuous Service terminates as a result of the
Optionholder's Disability, the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination), but only within
such period of time ending on the earlier of (i)&nbsp;the date twelve (12)&nbsp;months following such termination (or such longer or shorter period specified in the Option Agreement, which period
shall not be less than six (6)&nbsp;months for Options granted prior to the Listing Date) or (ii)&nbsp;the expiration of the term of the Option as set forth in the Option Agreement. If, after
termination, the Optionholder does not exercise his or her Option within the time specified herein, the Option shall terminate. </FONT></P>

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

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(m)&nbsp;&nbsp;Early Exercise.</B></FONT><FONT SIZE=2> The Option may, but need not, include a provision whereby the Optionholder may elect at any time before
the Optionholder's Continuous Service terminates to exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior to the full vesting of the Option. Subject to
the "Repurchase Limitation" in subsection 11(h), any unvested shares of Common Stock so purchased may be subject to a repurchase option in favor of the Company or to any other
restriction the Board determines to be appropriate. Provided that the "Repurchase Limitation" in subsection 11(h) is not violated, the Company will not exercise its repurchase option until at least
six (6)&nbsp;months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes) have elapsed following exercise of the Option unless the Board
otherwise specifically provides in the Option. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(n)&nbsp;&nbsp;Right of Repurchase.</B></FONT><FONT SIZE=2> Subject to the "Repurchase Limitation" in subsection 11(h), the Option may, but need not, include a
provision whereby the Company may elect, prior to the Listing Date, to repurchase all or any part of the vested shares of Common Stock acquired by the Optionholder pursuant to the exercise of the
Option. Provided that the "Repurchase Limitation" in subsection 11(h) is not violated, the Company will not exercise its repurchase option until at least six (6)&nbsp;months (or such longer or
shorter period of time required to avoid a charge to earnings for financial accounting purposes) have elapsed following exercise of the Option unless the Board otherwise specifically provides in the
Option. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(o)&nbsp;&nbsp;Right of First Refusal.</B></FONT><FONT SIZE=2> The Option may, but need not, include a provision whereby the Company may elect, prior to the
Listing Date, to exercise a right of first refusal following receipt of notice from the Optionholder of the intent to transfer all or any part of the shares of Common Stock received upon the exercise
of the Option. Except as expressly provided in this subsection 6(o), such </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>9</FONT></P>

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right of first refusal shall otherwise comply with any applicable provisions of the Bylaws of the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(p)&nbsp;&nbsp;Re-Load Options.</B></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(i)&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Without in any way limiting the authority of the Board to make or not to make grants of Options hereunder, the Board
shall have the authority (but not an obligation) to include as part of any Option Agreement a provision entitling the Optionholder to a further Option (a "Re-Load Option") in the event the
Optionholder exercises the Option evidenced by the Option Agreement, in whole or in part, by surrendering other shares of Common Stock in accordance with this Plan and the terms and conditions of the
Option Agreement. Unless otherwise specifically provided in the Option, the Optionholder shall not surrender shares of Common Stock acquired, directly or indirectly from the Company, unless such
shares have been held for more than six (6)&nbsp;months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes). </FONT></P>

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

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(iii)&nbsp;</B></FONT><FONT SIZE=2>Any such Re-Load Option may be an Incentive Stock Option or a Nonstatutory Stock Option, as the Board may
designate at the time of the grant of the original Option; provided, however, that the designation of any Re-Load Option as an Incentive Stock Option shall be subject to the one hundred
thousand dollar ($100,000) annual limitation on the exercisability of Incentive Stock Options described in subsection 11(d) and in Section&nbsp;422(d) of the Code. There shall be no
Re-Load Options on a Re-Load Option. Any such Re-Load Option shall be subject to the availability of sufficient shares of Common Stock under subsection 4(a) and the
"Section&nbsp;162(m) Limitation" on the grants of Options under subsection 5(c) and shall be subject to such other terms and conditions as the Board may determine which are not inconsistent with the
express provisions of the Plan regarding the terms of Options. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>10</FONT></P>

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<P><FONT SIZE=2><A
NAME="page_kk2321_1_11"> </A> </FONT> <FONT SIZE=2><B>7.&nbsp;&nbsp;&nbsp;&nbsp;NON-EMPLOYEE DIRECTOR STOCK OPTIONS.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Without any further action of the Board, each Non-Employee Director shall be granted Nonstatutory Stock Options as described in subsections 7(a) and
7(b) (collectively, "Non-Employee Director Options"). Each Non-Employee Director Option shall include the substance of the terms set forth in subsections 7(c) through 7(k). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;Stock Option Grants.</B></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(i)&nbsp;&nbsp;&nbsp;&nbsp;Initial Grants.</B></FONT><FONT SIZE=2> After the IPO Date, each person who is elected or appointed for the first time to be a
Non-Employee Director automatically shall, upon the date of his or her initial election or appointment to be a Non-Employee Director by the Board or shareholders of the
Company, be granted an Initial Grant to purchase forty thousand (40,000) shares of Common Stock on the terms and conditions set forth herein; provided, that a Non-Employee Director who is
on the Board on the IPO Date shall be granted his or her Initial Grant on that date. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(ii)&nbsp;&nbsp;Annual Grants</B></FONT><FONT SIZE=2>. After the IPO Date, each person who is a Non-Employee Director on the Board shall
automatically as of the day following the date of the annual shareholders' meeting be granted an Annual Grant to purchase ten thousand (10,000) shares of Common Stock on the terms and conditions set
forth herein. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;Term. </B></FONT><FONT SIZE=2>Each Non-Employee Director Option shall have a term of ten (10)&nbsp;years from the date it is
granted. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)&nbsp;&nbsp;Exercise Price. </B></FONT><FONT SIZE=2>The exercise price of each Non-Employee Director Option shall be one hundred percent (100%)
of the Fair Market Value of the stock subject to the Non-Employee Director Option on the date of grant. Notwithstanding the foregoing, a Non-Employee Director Option may be
granted with an exercise price lower than that set forth in the preceding sentence if such Non-Employee Director Option is granted pursuant to an assumption or substitution for another
option in a manner satisfying the provisions of Section&nbsp;424(a) of the Code. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(d)&nbsp;&nbsp;Vesting.</B></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(i)&nbsp;&nbsp;&nbsp;&nbsp;Initial Grants.</B></FONT><FONT SIZE=2> Initial Grants shall vest one-thirty-sixth (1/36<SUP>th</SUP>) for each month of
Continuous Service of the Non-Employee Director from the date of the stock option grant. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(ii)&nbsp;&nbsp;Annual Grants. </B></FONT><FONT SIZE=2>Annual Grants shall vest one-twelfth (1/12<SUP>th</SUP>) for each month of Continuous
Service of the Non-Employee Director from the date of the stock option grant. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(e)&nbsp;&nbsp;Consideration. </B></FONT><FONT SIZE=2>The purchase price of stock acquired pursuant to a Non-Employee Director Option may be paid,
to the extent permitted by applicable statutes and regulations, in any combination of (i)&nbsp;cash or check, (ii)&nbsp;delivery to the Company of other Common Stock, (ii)&nbsp;deferred payment
or (iv)&nbsp;any other form of legal consideration that may be acceptable to the Board and provided in the Non-Employee Director Option Agreement; provided, however, that at any time
that the Company is incorporated in Delaware, payment of the Common Stock's "par value," as defined in the Delaware General Corporation Law, shall not be made by deferred payment. In the case of any
deferred payment arrangement, interest shall be compounded at least annually and shall be charged at the minimum rate of interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest under the deferred payment arrangement. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(f)&nbsp;&nbsp;&nbsp;&nbsp;Transferability. </B></FONT><FONT SIZE=2>A Non-Employee Director Option shall not be transferable except by will or by the laws of
descent and distribution and shall be exercisable during the lifetime of the Non-Employee Director only by the Non-Employee Director. Notwithstanding the foregoing, the
Non-Employee Director may, by delivering written notice to the Company, in a form satisfactory to the </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>11</FONT></P>

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<P><FONT SIZE=2>
Company, designate a third party who, in the event of the death of the Non-Employee Director, shall thereafter be entitled to exercise the Non-Employee Director Option. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(g)&nbsp;&nbsp;Termination of Continuous Service. </B></FONT><FONT SIZE=2>In the event a Non-Employee Director's Continuous Service terminates
(other than upon the Non-Employee Director's death or Disability), the Non-Employee Director may exercise his or her Non-Employee Director Option (to the extent
that the Non-Employee Director was entitled to exercise it as of the date of termination) but only within such period of time ending on the earlier of (i)&nbsp;the date three
(3)&nbsp;months following the termination of the Non-Employee Director's Continuous Service, or (ii)&nbsp;the expiration of the term of the Non-Employee Director Option as
set forth in the Non-Employee Director Option Agreement. If, after termination, the Non-Employee Director does not exercise his or her Non-Employee Director Option
within the time specified in the Non-Employee Director Option Agreement, the Non-Employee Director Option shall terminate. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(h)&nbsp;&nbsp;Extension of Termination Date. </B></FONT><FONT SIZE=2>If the exercise of the Non-Employee Director Option following the termination
of the Non-Employee Director's Continuous Service (other than upon the Non-Employee Director's death or Disability) would be prohibited at any time solely because the issuance
of shares would violate the registration requirements under the Securities Act, then the Non-Employee Director Option shall terminate on the earlier of (i)&nbsp;the expiration of the
term of the Non-Employee Director Option set forth in subsection 7(c) or (ii)&nbsp;the expiration of a period of three (3)&nbsp;months after the termination of the
Non-Employee Director's Continuous Service during which the exercise of the Non-Employee Director Option would not violate such registration requirements. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(i)&nbsp;&nbsp;&nbsp;&nbsp;Disability of Non-Employee Director. </B></FONT><FONT SIZE=2>In the event a Non-Employee Director's Continuous Service
terminates as a result of the Non-Employee Director's Disability, the Non-Employee Director may exercise his or her Non-Employee Director Option (to the extent that
the Non-Employee Director was entitled to exercise it as of the date of termination), but only within such period of time ending on the earlier of (i)&nbsp;the date twelve
(12)&nbsp;months following such termination or (ii)&nbsp;the expiration of the term of the Non-Employee Director Option as set forth in the Non-Employee Director Option
Agreement. If, after termination, the Non-Employee Director does not exercise his or her Non-Employee Director Option within the time specified herein, the
Non-Employee Director Option shall terminate. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(j)&nbsp;&nbsp;&nbsp;&nbsp;Death of Non-Employee Director. </B></FONT><FONT SIZE=2>In the event (i)&nbsp;a Non-Employee Director's Continuous
Service terminates as a result of the Non-Employee Director's death or (ii)&nbsp;the Non-Employee Director dies within the three-month period after the termination of the
Non-Employee Director's Continuous Service for a reason other than death, then the Non-Employee Director Option may be exercised (to the extent the Non-Employee
Director was entitled to exercise the Non-Employee Director Option as of the date of death) by the Non-Employee Director's estate, by a person who acquired the right to
exercise the Non-Employee Director Option by bequest or inheritance or by a person designated to exercise the Non-Employee Director Option upon the Non-Employee
Director's death, but only within the period ending on the earlier of (1)&nbsp;the date eighteen (18)&nbsp;months following the date of death or (2)&nbsp;the expiration of the term of such
Non-Employee Director Option as set forth in the Non-Employee Director Option Agreement. If, after death, the Non-Employee Director Option is not exercised within
the time specified herein, the Non-Employee Director Option shall terminate. </FONT></P>

<P><FONT SIZE=2><B>8.&nbsp;&nbsp;&nbsp;&nbsp;PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;Stock Bonus Awards.</B></FONT><FONT SIZE=2> Each stock bonus agreement shall be in such form and shall contain such terms and conditions as the
Board shall deem appropriate. The terms and conditions of stock bonus agreements may change from time to time, and the terms and conditions of separate stock bonus agreements need not be identical,
but each stock bonus agreement shall include (through incorporation </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>12</FONT></P>

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<P><FONT SIZE=2>
of provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(i)&nbsp;&nbsp;&nbsp;&nbsp;Consideration.</B></FONT><FONT SIZE=2> A stock bonus may be awarded in consideration for past services actually rendered to the Company or an
Affiliate for its benefit. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(ii)&nbsp;&nbsp;Vesting.</B></FONT><FONT SIZE=2> Subject to the "Repurchase Limitation" in subsection 11(h), shares of Common Stock awarded under the stock
bonus agreement may, but need not, be subject to a share repurchase option in favor of the Company in accordance with a vesting schedule to be determined by the Board. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(iii)&nbsp;Termination of Participant's Continuous Service.</B></FONT><FONT SIZE=2> Subject to the "Repurchase Limitation" in subsection 11(h), in the
event a Participant's Continuous Service terminates, the Company may reacquire any or all of the shares of Common Stock held by the Participant which have not vested as of the date of termination
under the terms of the stock bonus agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(iv)&nbsp;&nbsp;Transferability.</B></FONT><FONT SIZE=2> For a stock bonus award made before the Listing Date, rights to acquire shares of Common Stock under
the stock bonus agreement shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Participant only by the Participant.
For a stock bonus award made on or after the Listing Date, rights to acquire shares of Common Stock under the stock bonus agreement shall be transferable by the Participant only upon such terms and
conditions as are set forth in the stock bonus agreement, as the Board shall determine in its discretion, so long as Common Stock awarded under the stock bonus agreement remains subject to the terms
of the stock bonus agreement. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;Restricted Stock Awards.</B></FONT><FONT SIZE=2> Each restricted stock purchase agreement shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The terms and conditions of the restricted stock purchase agreements may change from time to time, and the terms and conditions of separate restricted
stock purchase agreements need not be identical, but each restricted stock purchase agreement shall include (through incorporation of provisions hereof by reference in the agreement or otherwise) the
substance of each of the following provisions: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(i)&nbsp;&nbsp;&nbsp;&nbsp;Purchase Price.</B></FONT><FONT SIZE=2> Subject to the provisions of subsection 5(b) regarding Ten Percent Shareholders, the purchase price under
each restricted stock purchase agreement shall be such amount as the Board shall determine and designate in such restricted stock purchase agreement. For restricted stock awards made prior to the
Listing Date, the purchase price shall not be less than eighty-five percent (85%) of the Common Stock's Fair Market Value on the date such award is made or at the time the purchase is
consummated. For restricted stock awards made on or after the Listing Date, the purchase price shall not be less than eighty-five percent (85%) of the Common Stock's Fair Market Value on
the date such award is made or at the time the purchase is consummated. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(ii)&nbsp;&nbsp;Consideration.</B></FONT><FONT SIZE=2> The purchase price of Common Stock acquired pursuant to the restricted stock purchase agreement shall be
paid either: (i)&nbsp;in cash at the time of purchase; (ii)&nbsp;at the discretion of the Board, according to a deferred payment or other similar arrangement with the Participant; or
(iii)&nbsp;in any other form of legal consideration that may be acceptable to the Board in its discretion; provided, however, that at any time that the Company is incorporated in Delaware, then
payment of the Common Stock's "par value," as defined in the Delaware General Corporation Law, shall not be made by deferred payment. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(iii)&nbsp;Vesting.</B></FONT><FONT SIZE=2> Subject to the "Repurchase Limitation" in subsection 11(h), shares of Common Stock acquired under the
restricted stock purchase agreement may, but need not, be subject to a share repurchase option in favor of the Company in accordance with a vesting schedule to be determined by the Board. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>13</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(iv)&nbsp;&nbsp;Termination of Participant's Continuous Service.</B></FONT><FONT SIZE=2> Subject to the "Repurchase Limitation" in subsection 11(h), in the
event a Participant's Continuous Service terminates, the Company may repurchase or otherwise reacquire any or all of the shares of Common Stock held by the Participant which have not vested as of the
date of termination under the terms of the restricted stock purchase agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(v)&nbsp;&nbsp;Transferability.</B></FONT><FONT SIZE=2> For a restricted stock award made before the Listing Date, rights to acquire shares of Common Stock
under the restricted stock purchase agreement shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Participant only
by the Participant. For a restricted stock award made on or after the Listing Date, rights to acquire shares of Common Stock under the restricted stock purchase agreement shall be transferable by the
Participant only upon such terms and conditions as are set forth in the restricted stock purchase agreement, as the Board shall determine in its discretion, so long as Common Stock awarded under the
restricted stock purchase agreement remains subject to the terms of the restricted stock purchase agreement. </FONT></P>

</UL>

<P><FONT SIZE=2><B>9.&nbsp;&nbsp;&nbsp;&nbsp;COVENANTS OF THE COMPANY.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;Availability of Shares.</B></FONT><FONT SIZE=2> During the terms of the Stock Awards, the Company shall keep available at all times the number of
shares of Common Stock required to satisfy such Stock Awards. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;Securities Law Compliance.</B></FONT><FONT SIZE=2> The Company shall seek to obtain from each regulatory commission or agency having jurisdiction
over the Plan such authority as may be required to grant Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards; provided, however, that this undertaking shall not
require the Company to register under the Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts, the Company is
unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company
shall be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and until such authority is obtained. </FONT></P>

<P><FONT SIZE=2><B>10.&nbsp;&nbsp;USE OF PROCEEDS FROM STOCK.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from the sale of Common Stock pursuant to Stock Awards shall constitute general funds of the Company. </FONT></P>

<P><FONT SIZE=2><B>11.&nbsp;&nbsp;MISCELLANEOUS.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;Acceleration of Exercisability and Vesting.</B></FONT><FONT SIZE=2> The Board shall have the power to accelerate the time at which a Stock Award
may first be exercised or the time during which a Stock Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Stock Award stating the time at which it
may first be exercised or the time during which it will vest. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;Shareholder Rights.</B></FONT><FONT SIZE=2> No Participant shall be deemed to be the holder of, or to have any of the rights of a holder with
respect to, any shares of Common Stock subject to such Stock Award unless and until such Participant has satisfied all requirements for exercise of the Stock Award pursuant to its terms. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)&nbsp;&nbsp;No Employment or other Service Rights.</B></FONT><FONT SIZE=2> Nothing in the Plan or any instrument executed or Stock Award granted pursuant
thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Stock Award was granted or shall affect the right of the
Company or an Affiliate to terminate (i)&nbsp;the employment of an Employee with or without notice and with or without cause, (ii)&nbsp;the service of a Consultant pursuant to the terms of </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>14</FONT></P>

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<P><FONT SIZE=2>
such Consultant's agreement with the Company or an Affiliate or (iii)&nbsp;the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of the
corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(d)&nbsp;&nbsp;Incentive Stock Option $100,000 Limitation.</B></FONT><FONT SIZE=2> To the extent that the aggregate Fair Market Value (determined at the time of
grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and its Affiliates)
exceeds one hundred thousand dollars ($100,000), the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as Nonstatutory Stock
Options. </FONT></P>

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

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(f)&nbsp;&nbsp;&nbsp;&nbsp;Withholding Obligations.</B></FONT><FONT SIZE=2> To the extent provided by the terms of a Stock Award Agreement, the Participant may satisfy any
federal, state or local tax withholding obligation relating to the exercise or acquisition of Common Stock under a Stock Award by any of the following means (in addition to the Company's right to
withhold from any compensation paid to the Participant by the Company) or by a combination of such means: (i)&nbsp;tendering a cash payment; (ii)&nbsp;authorizing the Company to withhold shares of
Common Stock from the shares of Common Stock otherwise issuable to the Participant as a result of the exercise or acquisition of Common Stock under the Stock Award, provided, however, that no shares
of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (iii)&nbsp;delivering to the Company owned and unencumbered shares of Common Stock. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(g)&nbsp;&nbsp;Information Obligation.</B></FONT><FONT SIZE=2> Prior to the Listing Date, to the extent required by Section&nbsp;260.140.46 of Title 10 of the
California Code of Regulations, the Company shall deliver financial statements to Participants at least annually. This subsection 11(g) shall not apply to key Employees whose duties in connection with
the Company assure them access to equivalent information. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(h)&nbsp;&nbsp;Repurchase Limitation.</B></FONT><FONT SIZE=2> The terms of any repurchase option shall be specified in the Stock Award and may be either at Fair
Market Value at the time of repurchase or at not less than the original purchase price. To the extent required by Section&nbsp;260.140.41 and Section&nbsp;260.140.42 of Title 10 of the California
Code of Regulations at the time a Stock Award is made, any repurchase option contained in
a Stock Award granted prior to the Listing Date to a person who is not an Officer, Director or Consultant shall be upon the terms described below: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(i)&nbsp;&nbsp;&nbsp;&nbsp;Fair Market Value.</B></FONT><FONT SIZE=2> If the repurchase option gives the Company the right to repurchase the shares of Common Stock upon
termination of employment at not less than the Fair Market </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>15</FONT></P>

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<P><FONT SIZE=2>
Value of the shares of Common Stock to be purchased on the date of termination of Continuous Service, then (i)&nbsp;the right to repurchase shall be exercised for cash or cancellation of purchase
money indebtedness for the shares of Common Stock within ninety (90)&nbsp;days of termination of Continuous Service (or in the case of shares of Common Stock issued upon exercise of Stock Awards
after such date of termination, within ninety (90)&nbsp;days after the date of the exercise) or such longer period as may be agreed to by the Company and the Participant (for example, for purposes
of satisfying the requirements of Section&nbsp;1202(c)(3) of the Code regarding "qualified small business stock") and (ii)&nbsp;the right terminates when the shares of Common Stock become publicly
traded. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(ii)&nbsp;&nbsp;Original Purchase Price.</B></FONT><FONT SIZE=2> If the repurchase option gives the Company the right to repurchase the shares of Common Stock
upon termination of Continuous Service at the original purchase price, then (i)&nbsp;the right to repurchase at the original purchase price shall lapse at the rate of at least twenty percent (20%)
of the shares of Common Stock per year over five (5)&nbsp;years from the date the Stock Award is granted (without respect to the date the Stock Award was exercised or became exercisable) and
(ii)&nbsp;the right to repurchase shall be exercised for cash or cancellation of purchase money indebtedness for the shares of Common Stock within ninety (90)&nbsp;days of termination of
Continuous Service (or in the case of shares of Common Stock issued upon exercise of Options after such date of termination, within ninety (90)&nbsp;days after the date of the exercise) or such
longer period as may be agreed to by the Company and the Participant (for example, for purposes of satisfying the requirements of Section&nbsp;1202(c)(3) of the Code regarding "qualified small
business stock"). </FONT></P>

</UL>

<P><FONT SIZE=2><B>12.&nbsp;&nbsp;ADJUSTMENTS UPON CHANGES IN STOCK.  </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;Capitalization Adjustments</B></FONT><FONT SIZE=2>. If any change is made in the Common Stock subject to the Plan, or subject to any Stock Award,
without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan will be
appropriately adjusted in the class(es) and maximum number of securities subject to the Plan pursuant to subsection 4(a) and the maximum number of securities subject to award to any person pursuant to
subsection 5(c), and the outstanding Stock Awards will be appropriately adjusted in the class(es) and number of securities and price per share of Common Stock subject to such outstanding Stock Awards.
The Board shall make such adjustments, and its determination shall be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a transaction
"without receipt of consideration" by the Company.) </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;Change in Control.</B></FONT><FONT SIZE=2> In the event of (i)&nbsp;a dissolution, liquidation or sale of substantially all of the assets of
the Company, (ii)&nbsp;a merger or consolidation in which the Company is not the surviving corporation or (iii)&nbsp;a reverse merger in which the Company is the surviving corporation but the
shares of Common Stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise, then, to the extent
permitted by applicable law: (i)&nbsp;any surviving corporation shall assume any Stock Awards outstanding under the Plan or shall substitute similar stock awards (including an award to acquire the
same consideration paid to the shareholders in the transaction described in this subsection 12(c)) for those outstanding under the Plan, or (ii)&nbsp;such Stock Awards shall continue in full force
and effect. In the event any surviving corporation refuses to assume or continue such Stock Awards, or to substitute similar stock awards for those outstanding under the Plan, then with respect to
Stock Awards held by Participants whose Continuous Service has not terminated, the time during which such Stock Awards may be exercised shall be accelerated, and the Stock Awards terminated if not
exercised prior to such event. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>16</FONT></P>

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<P><FONT SIZE=2><B>13.&nbsp;&nbsp;AMENDMENT OF THE PLAN AND STOCK AWARDS.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;Amendment of Plan.</B></FONT><FONT SIZE=2> The Board at any time, and from time to time, may amend the Plan. However, except as provided in
Section&nbsp;12 relating to adjustments upon changes in Common Stock, no amendment shall be effective unless approved by the shareholders of the Company to the extent shareholder approval is
necessary to satisfy the requirements of Section&nbsp;422 of the Code, Rule&nbsp;16b-3 or any Nasdaq or securities exchange listing requirements. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;Shareholder Approval.</B></FONT><FONT SIZE=2> The Board may, in its sole discretion, submit any other amendment to the Plan for shareholder
approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of Section&nbsp;162(m) of the Code and the regulations thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of compensation paid to certain executive officers. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)&nbsp;&nbsp;Contemplated Amendments.</B></FONT><FONT SIZE=2> It is expressly contemplated that the Board may amend the Plan in any respect the Board deems
necessary or advisable to provide eligible Employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to
Incentive Stock Options and/or to bring the Plan and/or Incentive Stock Options granted under it into compliance therewith. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(d)&nbsp;&nbsp;No Impairment of Rights.</B></FONT><FONT SIZE=2> Rights under any Stock Award granted before amendment of the Plan shall not be impaired by any
amendment of the Plan unless (i)&nbsp;the Company requests the consent of the Participant and (ii)&nbsp;the Participant consents in writing. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(e)&nbsp;&nbsp;Amendment of Stock Awards.</B></FONT><FONT SIZE=2> The Board at any time, and from time to time, may amend the terms of any one or more Stock
Awards; provided, however, that the rights under any Stock Award shall not be impaired by any such amendment unless (i)&nbsp;the Company requests the consent of the Participant and (ii)&nbsp;the
Participant consents in writing. </FONT></P>

<P><FONT SIZE=2><B>14.&nbsp;&nbsp;TERMINATION OR SUSPENSION OF THE PLAN.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;Plan Term.</B></FONT><FONT SIZE=2> The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate on
the day before the tenth (10th) anniversary of the date the Plan is adopted by the Board or approved by the shareholders of the Company, whichever is earlier. No Stock Awards may be granted under the
Plan while the Plan is suspended or after it is terminated. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;No Impairment of Rights.</B></FONT><FONT SIZE=2> Suspension or termination of the Plan shall not impair rights and obligations under any Stock
Award granted while the Plan is in effect except with the written consent of the Participant. </FONT></P>

<P><FONT SIZE=2><B>15.&nbsp;&nbsp;EFFECTIVE DATE OF PLAN.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Plan shall become effective as determined by the Board, but no Stock Award shall be exercised (or, in the case of a stock bonus, shall be granted) unless and
until the Plan has been approved by the shareholders of the Company, which approval shall be within twelve (12)&nbsp;months before or after the date the Plan is adopted by the Board. </FONT></P>

<P><FONT SIZE=2><B>16.&nbsp;&nbsp;CHOICE OF LAW.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The law of the State of California shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to such
state's conflict of laws rules. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>17</FONT></P>

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