CARDICA INC
EX-10.2
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<TYPE>EX-10.2
<SEQUENCE>2
<FILENAME>f50689exv10w2.htm
<DESCRIPTION>EX-10.2
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    <B><FONT style="font-family: 'Times New Roman', Times">Exhibit 10.2</FONT></b>
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    <B><FONT style="font-family: 'Times New Roman', Times"><BR>
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    <B><FONT style="font-family: 'Times New Roman', Times; font-variant: SMALL-CAPS">Cardica,
    Inc.<BR>
    </FONT></B>
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<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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    <B><FONT style="font-family: 'Times New Roman', Times; font-variant: SMALL-CAPS">2005
    Equity Incentive Plan</FONT></B>
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<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times; font-variant: SMALL-CAPS">Adopted
    by the Board of Directors: October&#160;13, 2005<BR>
    Approved by the Stockholders: December&#160;27, 2005<BR>
    As Amended by the Board of Directors: September&#160;29, 2006<BR>
    Approved by the Stockholders: November&#160;8, 2006<BR>
    As Amended by the Board of Directors: October&#160;10, 2007<BR>
    Approved by the Stockholders: November&#160;14, 2007<BR>
    As Amended by the Board of Directors: August&#160;13, 2008<BR>
    Approved by the
    Stockholders: November&#160;19, 2008<BR>
    Termination Date: October&#160;12, 2015</FONT></B>
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    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">1.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times; font-variant: SMALL-CAPS">General.</FONT></B>
</TD>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)<I>&#160;Eligible Stock Award Recipients.</I>&#160;&#160;The
    persons eligible to receive Stock Awards are Employees,
    Directors and Consultants.
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    (b)&#160;<I>Available Stock Awards.</I>&#160;&#160;The Plan
    provides for the grant of the following Stock Awards:
    (i)&#160;Incentive Stock Options, (ii)&#160;Nonstatutory Stock
    Options, (iii)&#160;Stock Purchase Awards, (iv)&#160;Stock Bonus
    Awards, (v)&#160;Stock Appreciation Rights, (vi)&#160;Stock Unit
    Awards, and (vii)&#160;Other Stock Awards.
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    (c)&#160;<I>Purpose.</I>&#160;&#160;The Company, by means of the
    Plan, seeks to secure and retain the services of the group of
    persons eligible to receive Stock Awards as set forth in
    Section&#160;1(a), to provide incentives for such persons to
    exert maximum efforts for the success of the Company and any
    Affiliate and to provide a means by which such eligible
    recipients may be given an opportunity to benefit from increases
    in value of the Common Stock through the granting of Stock
    Awards.
</DIV>

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    <B><FONT style="font-family: 'Times New Roman', Times">2.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times; font-variant: SMALL-CAPS">Definitions.</FONT></B>
</TD>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As used in the Plan, the following definitions shall apply to
    the capitalized terms indicated below:
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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;<I>&#147;Affiliate&#148; </I>means (i)&#160;any
    corporation (other than the Company) in an unbroken chain of
    corporations ending with the Company, provided each corporation
    in the unbroken chain (other than the Company) owns, at the time
    of the determination, stock possessing fifty percent (50%) or
    more of the total combined voting power of all classes of stock
    in one of the other corporations in such chain, and
    (ii)&#160;any corporation (other than the Company) in an
    unbroken chain of corporations beginning with the Company,
    provided each corporation (other than the last corporation) in
    the unbroken chain owns, at the time of the determination, stock
    possessing fifty percent (50%) or more of the total combined
    voting power of all classes of stock in one of the other
    corporations in such chain. The Board shall have the authority
    to determine (i)&#160;the time or times at which the ownership
    tests are applied, and (ii)&#160;whether &#147;Affiliate&#148;
    includes entities other than corporations within the foregoing
    definition.
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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;<I>&#147;Board&#148; </I>means the Board of Directors
    of the Company.
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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;<I>&#147;Capitalization Adjustment&#148; </I>has the
    meaning ascribed to that term in Section&#160;10(a).
</DIV>

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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;<I>&#147;Cause&#148; </I>means, with respect to a
    Participant, the occurrence of any of the following:
    (i)&#160;such Participant&#146;s commission of any felony or any
    crime involving fraud, dishonesty or moral turpitude under the
    laws of the United States or any state thereof; (ii)&#160;such
    Participant&#146;s attempted commission of, or participation in,
    a fraud or act of dishonesty against the Company;
    (iii)&#160;such Participant&#146;s intentional, material
    violation of any material contract or agreement between the
    Participant and the Company or any statutory duty owed to the
    Company; (iv)&#160;such Participant&#146;s unauthorized use or
    disclosure of the Company&#146;s confidential information or
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    1
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    trade secrets; or (v)&#160;such Participant&#146;s gross
    misconduct. The determination that a termination is for Cause
    shall be made by the Company in its sole discretion. Any
    determination by the Company that the Continuous Service of a
    Participant was terminated with or without Cause for the
    purposes of outstanding Stock Awards held by such Participant
    shall have no effect upon any determination of the rights or
    obligations of the Company or such Participant for any other
    purpose.
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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;<I>&#147;Change in Control&#148; </I>means the
    occurrence, in a single transaction or in a series of related
    transactions, of any one or more of the following events:
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<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;any Exchange Act Person becomes the Owner, directly or
    indirectly, of securities of the Company representing more than
    fifty percent (50%) of the combined voting power of the
    Company&#146;s then outstanding securities other than by virtue
    of a merger, consolidation or similar transaction.
    Notwithstanding the foregoing, a Change in Control shall not be
    deemed to occur (A)&#160;on account of the acquisition of
    securities of the Company by an investor, any affiliate thereof
    or any other Exchange Act Person from the Company in a
    transaction or series of related transactions the primary
    purpose of which is to obtain financing for the Company through
    the issuance of equity securities or (B)&#160;solely because the
    level of Ownership held by any Exchange Act Person (the
    <B><I>&#147;Subject Person&#148;</I></B>) exceeds the designated
    percentage threshold of the outstanding voting securities as a
    result of a repurchase or other acquisition of voting securities
    by the Company reducing the number of shares outstanding,
    provided that if a Change in Control would occur (but for the
    operation of this sentence) as a result of the acquisition of
    voting securities by the Company, and after such share
    acquisition, the Subject Person becomes the Owner of any
    additional voting securities that, assuming the repurchase or
    other acquisition had not occurred, increases the percentage of
    the then outstanding voting securities Owned by the Subject
    Person over the designated percentage threshold, then a Change
    in Control shall be deemed to occur;
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    (ii)&#160;there is consummated a merger, consolidation or
    similar transaction involving (directly or indirectly) the
    Company and, immediately after the consummation of such merger,
    consolidation or similar transaction, the stockholders of the
    Company immediately prior thereto do not Own, directly or
    indirectly, either (A)&#160;outstanding voting securities
    representing more than fifty percent (50%) of the combined
    outstanding voting power of the surviving Entity in such merger,
    consolidation or similar transaction or (B)&#160;more than fifty
    percent (50%) of the combined outstanding voting power of the
    parent of the surviving Entity in such merger, consolidation or
    similar transaction, in each case in substantially the same
    proportions as their Ownership of the outstanding voting
    securities of the Company immediately prior to such transaction;
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<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;the stockholders of the Company approve or the Board
    approves a plan of complete dissolution or liquidation of the
    Company, or a complete dissolution or liquidation of the Company
    shall otherwise occur;
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<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iv)&#160;there is consummated a sale, lease, exclusive license
    or other disposition of all or substantially all of the
    consolidated assets of the Company and its Subsidiaries, other
    than a sale, lease, license or other disposition of all or
    substantially all of the consolidated assets of the Company and
    its Subsidiaries to an Entity, more than fifty percent (50%) of
    the combined voting power of the voting securities of which are
    Owned by stockholders of the Company in substantially the same
    proportions as their Ownership of the outstanding voting
    securities of the Company immediately prior to such sale, lease,
    license or other disposition;&#160;or
</DIV>

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<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (v)&#160;individuals who, on the date this Plan is adopted by
    the Board, are members of the Board (the <B><I>&#147;Incumbent
    Board&#148;</I></B>) cease for any reason to constitute at least
    a majority of the members of the Board; <I>provided, however,
    </I>that if the appointment or election (or nomination for
    election) of any new Board member was approved or recommended by
    a majority vote of the members of the Incumbent Board then still
    in office, such new member shall, for purposes of this Plan, be
    considered as a member of the Incumbent Board.
</DIV>

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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The term Change in Control shall not include a sale of assets,
    merger or other transaction effected exclusively for the purpose
    of changing the domicile of the Company.
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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Notwithstanding the foregoing or any other provision of this
    Plan, the definition of Change in Control (or any analogous
    term) in an individual written agreement between the Company or
    any Affiliate and the Participant shall supersede the foregoing
    definition with respect to Stock Awards subject to such
    agreement; <I>provided, however, </I>that if no definition of
    Change in Control or any analogous term is set forth in such an
    individual written agreement, the foregoing definition shall
    apply.
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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;<I>&#147;Code&#148; </I>means the Internal Revenue Code
    of 1986, as amended.
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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (g)&#160;<I>&#147;Committee&#148; </I>means a committee of one
    (1)&#160;or more members of the Board to whom authority has been
    delegated by the Board in accordance with Section&#160;3(c).
</DIV>

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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (h)&#160;<I>&#147;Common Stock&#148; </I>means the common stock
    of the Company.
</DIV>

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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;<I>&#147;Company&#148; </I>means Cardica, Inc., a
    Delaware corporation.
</DIV>

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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (j)&#160;<I>&#147;Consultant&#148; </I>means any person,
    including an advisor, who is (i)&#160;engaged by the Company or
    an Affiliate to render consulting or advisory services and is
    compensated for such services, or (ii)&#160;serving as a member
    of the Board of Directors of an Affiliate and is compensated for
    such services. However, service solely as a Director, or payment
    of a fee for such service, shall not cause a Director to be
    considered a &#147;Consultant&#148; for purposes of the Plan.
</DIV>

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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (k)&#160;<I>&#147;Continuous Service&#148; </I>means that the
    Participant&#146;s service with the Company or an Affiliate,
    whether as an Employee, Director or Consultant, is not
    interrupted or terminated. 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&#146;s
    service with the Company or an Affiliate, shall not terminate a
    Participant&#146;s Continuous Service; <I>provided, however</I>,
    if the corporation for which a Participant is rendering service
    ceases to qualify as an Affiliate, as determined by the Board in
    its sole discretion, such Participant&#146;s Continuous Service
    shall be considered to have terminated on the date such
    corporation ceases to qualify as an Affiliate. For example, a
    change in status from an employee of the Company to a consultant
    of an Affiliate or to a Director shall not constitute an
    interruption of Continuous Service. To the extent permitted by
    law, the Board or the chief executive officer of the Company, in
    that party&#146;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.
    Notwithstanding the foregoing, a leave of absence shall be
    treated as Continuous Service for purposes of vesting in a Stock
    Award only to such extent as may be provided in the
    Company&#146;s leave of absence policy or in the written terms
    of the Participant&#146;s leave of absence.
</DIV>

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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (l)&#160;<I>&#147;Corporate Transaction&#148; </I>means the
    occurrence, in a single transaction or in a series of related
    transactions, of any one or more of the following events:
</DIV>

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<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;a sale or other disposition of all or substantially
    all, as determined by the Board in its sole discretion, of the
    consolidated assets of the Company and its Subsidiaries;
</DIV>

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<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;a sale or other disposition of at least ninety percent
    (90%<B>) </B>of the outstanding securities of the Company;
</DIV>

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<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;the consummation of a merger, consolidation or
    similar transaction following which the Company is not the
    surviving corporation;&#160;or
</DIV>

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<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iv)&#160;the consummation of a merger, consolidation or similar
    transaction following which the Company is the surviving
    corporation but the shares of Common Stock outstanding
    immediately preceding the merger, consolidation or similar
    transaction are converted or exchanged by virtue of the merger,
    consolidation or similar transaction into other property,
    whether in the form of securities, cash or otherwise.
</DIV>

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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (m)&#160;<I>&#147;Covered Employee&#148; </I>means the chief
    executive officer and the four (4)&#160;other highest
    compensated officers of the Company for whom total compensation
    is required to be reported to stockholders under the Exchange
    Act, as determined for purposes of Section&#160;162(m) of the
    Code.
</DIV>

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    (n)&#160;<I>&#147;Director&#148; </I>means a member of the Board.
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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (o)&#160;<I>&#147;Disability&#148; </I>means the permanent and
    total disability of a person within the meaning of
    Section&#160;22(e)(3) of the Code.
</DIV>

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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (p)&#160;<I>&#147;Employee&#148; </I>means any person employed
    by the Company or an Affiliate. However, service solely as a
    Director, or payment of a fee for such services, shall not cause
    a Director to be considered an &#147;Employee&#148; for purposes
    of the Plan.
</DIV>

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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (q)&#160;<I>&#147;Entity&#148; </I>means a corporation,
    partnership or other entity.
</DIV>

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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (r)&#160;<I>&#147;Exchange Act&#148; </I>means the Securities
    Exchange Act of 1934, as amended.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (s)&#160;<I>&#147;Exchange Act Person&#148; </I>means any
    natural person, Entity or &#147;group&#148; (within the meaning
    of Section&#160;13(d) or 14(d) of the Exchange Act), except that
    &#147;Exchange Act Person&#148; shall not include (i)&#160;the
    Company or any Subsidiary of the Company, (ii)&#160;any employee
    benefit plan of the Company or any Subsidiary of the Company or
    any trustee or other fiduciary holding securities under an
    employee benefit plan of the Company or any Subsidiary of the
    Company, (iii)&#160;an underwriter temporarily holding
    securities pursuant to an offering of such securities,
    (iv)&#160;an Entity Owned, directly or indirectly, by the
    stockholders of the Company in substantially the same
    proportions as their Ownership of stock of the Company; or
    (v)&#160;any natural person, Entity or &#147;group&#148; (within
    the meaning of Section&#160;13(d) or 14(d) of the Exchange Act)
    that, as of the effective date of the Plan as set forth in
    Section&#160;13, is the Owner, directly or indirectly, of
    securities of the Company representing more than fifty percent
    (50%) of the combined voting power of the Company&#146;s then
    outstanding securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (t)&#160;<I>&#147;Fair Market Value&#148; </I>means, as of any
    date, the value of the Common Stock determined as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;If the Common Stock is listed on any established stock
    exchange or traded on the Nasdaq Global Market (formerly the
    Nasdaq National Market) or the Nasdaq Capital Market (formerly
    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 date in question,
    as reported in <I>The Wall Street Journal </I>or such other
    source as the Board deems reliable. Unless otherwise provided by
    the Board, if there is no closing sales price (or closing bid if
    no sales were reported) for the Common Stock on the date in
    question, then the Fair Market Value shall be the closing sales
    price (or closing bid if no sales were reported) on the last
    preceding date for which such quotation exists.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;In the absence of such markets for the Common Stock,
    the Fair Market Value shall be determined by the Board in good
    faith.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (u)&#160;<I>&#147;Incentive Stock Option&#148; </I>means an
    Option intended to qualify as an incentive stock option within
    the meaning of Section&#160;422 of the Code and the regulations
    promulgated thereunder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (v)&#160;<I>&#147;IPO Date&#148; </I>means the date of the
    underwriting agreement between the Company and the
    underwriter(s) managing the initial public offering of the
    Common Stock, pursuant to which the Common Stock is priced for
    the initial public offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (w)&#160;<I>&#147;Non-Employee Director&#148; </I>means a
    Director who either (i)&#160;is not a current employee or
    officer of the Company or an Affiliate, does not receive
    compensation, either directly or indirectly, from the Company or
    an Affiliate 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&#160;404(a) of
    <FONT style="white-space: nowrap">Regulation&#160;S-K</FONT>
    promulgated pursuant to the Securities Act
    <B><I><FONT style="white-space: nowrap">(&#147;Regulation&#160;S-K&#148;)</FONT></I></B>),
    does not possess an interest in any other transaction for which
    disclosure would be required under Item&#160;404(a) of
    <FONT style="white-space: nowrap">Regulation&#160;S-K,</FONT>
    and is not engaged in a business relationship for which
    disclosure would be required pursuant to Item&#160;404(b) of
    <FONT style="white-space: nowrap">Regulation&#160;S-K;</FONT>
    or (ii)&#160;is otherwise considered a &#147;non-employee
    director&#148; for purposes of
    <FONT style="white-space: nowrap">Rule&#160;16b-3.</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (x)&#160;<I>&#147;Nonstatutory Stock Option&#148; </I>means an
    Option not intended to qualify as an Incentive Stock Option.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    4
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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (y)&#160;<I>&#147;Officer&#148; </I>means a person who is an
    officer of the Company within the meaning of Section&#160;16 of
    the Exchange Act and the rules and regulations promulgated
    thereunder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (z)&#160;<I>&#147;Option&#148; </I>means an Incentive Stock
    Option or a Nonstatutory Stock Option to purchase shares of
    Common Stock granted pursuant to the Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (aa)&#160;<I>&#147;Option Agreement&#148; </I>means a written
    agreement between the Company and an Optionholder evidencing the
    terms and conditions of an Option grant. Each Option Agreement
    shall be subject to the terms and conditions of the Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (bb)&#160;<I>&#147;Optionholder&#148; </I>means a person to whom
    an Option is granted pursuant to the Plan or, if applicable,
    such other person who holds an outstanding Option.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (cc)&#160;<I>&#147;Other Stock Award&#148; </I>means an award
    based in whole or in part by reference to the Common Stock which
    is granted pursuant to the terms and conditions of
    Section&#160;7(f).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (dd)&#160;<I>&#147;Other Stock Award Agreement&#148; </I>means a
    written agreement between the Company and a holder of an Other
    Stock Award evidencing the terms and conditions of an Other
    Stock Award grant. Each Other Stock Award Agreement shall be
    subject to the terms and conditions of the Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ee)&#160;<I>&#147;Outside Director&#148; </I>means a Director
    who either (i)&#160;is not a current employee of the Company or
    an &#147;affiliated corporation&#148; (within the meaning of
    Treasury Regulations promulgated under Section&#160;162(m) of
    the Code), is not a former employee of the Company or an
    &#147;affiliated corporation&#148; who receives compensation for
    prior services (other than benefits under a tax-qualified
    retirement plan) during the taxable year, has not been an
    officer of the Company or an &#147;affiliated corporation,&#148;
    and does not receive remuneration from the Company or an
    &#147;affiliated corporation,&#148; either directly or
    indirectly, in any capacity other than as a Director, or
    (ii)&#160;is otherwise considered an &#147;outside
    director&#148; for purposes of Section&#160;162(m) of the Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ff)&#160;<I>&#147;Own,&#148; &#147;Owned,&#148;
    &#147;Owner,&#148; &#147;Ownership&#148; </I>A person or Entity
    shall be deemed to &#147;Own,&#148; to have &#147;Owned,&#148;
    to be the &#147;Owner&#148; of, or to have acquired
    &#147;Ownership&#148; of securities if such person or Entity,
    directly or indirectly, through any contract, arrangement,
    understanding, relationship or otherwise, has or shares voting
    power, which includes the power to vote or to direct the voting,
    with respect to such securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (gg)&#160;<I>&#147;Participant&#148; </I>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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (hh)&#160;<I>&#147;Performance Criteria&#148; </I>means the one
    or more criteria that the Board shall select for purposes of
    establishing the Performance Goals for a Performance Period. The
    Performance Criteria that shall be used to establish such
    Performance Goals may be based on any one of, or combination of,
    the following: (i)&#160;earnings per share; (ii)&#160;earnings
    before interest, taxes and depreciation; (iii)&#160;earnings
    before interest, taxes, depreciation and amortization (EBITDA);
    (iv)&#160;net earnings; (v)&#160;return on equity;
    (vi)&#160;return on assets, investment, or capital employed;
    (vii)&#160;operating margin; (viii)&#160;gross margin;
    (ix)&#160;operating income; (x)&#160;net income (before or after
    taxes); (xi)&#160;net operating income; (xii)&#160;net operating
    income after tax; (xiii)&#160;pre- and after-tax income;
    (xiv)&#160;pre-tax profit; (xv)&#160;operating cash flow;
    (xvi)&#160;sales or revenue targets; (xvii)&#160;increases in
    revenue or product revenue; (xviii)&#160;expenses and cost
    reduction goals; (xix)&#160;improvement in or attainment of
    expense levels; (xx)&#160;improvement in or attainment of
    working capital levels; (xxi)&#160;economic value added;
    (xxii)&#160;market share; (xxiii)&#160;cash flow;
    (xxiv)&#160;cash flow per share; (xxv)&#160;share price
    performance; (xxvi)&#160;debt reduction;
    (xxvii)&#160;implementation or completion of projects or
    processes; (xxviii)&#160;customer satisfaction;
    (xxix)&#160;total stockholder return;
    (xxx)&#160;stockholders&#146; equity; and (xxxi)&#160;other
    measures of performance selected by the Board. Partial
    achievement of the specified criteria may result in the payment
    or vesting corresponding to the degree of achievement as
    specified in the Stock Award Agreement. The Board shall, in its
    sole discretion, define the manner of calculating the
    Performance Criteria it selects to use for such Performance
    Period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;<I>&#147;Performance Goals&#148; </I>means, for a
    Performance Period, the one or more goals established by the
    Board for the Performance Period based upon the Performance
    Criteria. Performance Goals may be based on a Company-wide
    basis, with respect to one or more business units, divisions,
    Affiliates, or business segments, and in either absolute terms
    or relative to the performance of one or more comparable
    companies or a relevant index. The Board is authorized to make
    adjustments in the method of calculating the attainment of
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    5
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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Performance Goals for a Performance Period as follows:
    (i)&#160;to exclude restructuring
    <FONT style="white-space: nowrap">and/or</FONT> other
    nonrecurring charges; (ii)&#160;to exclude exchange rate
    effects, as applicable, for
    <FONT style="white-space: nowrap">non-U.S.&#160;dollar</FONT>
    denominated net sales and operating earnings; (iii)&#160;to
    exclude the effects of changes to generally accepted accounting
    standards required by the Financial Accounting Standards Board;
    (iv)&#160;to exclude the effects of any statutory adjustments to
    corporate tax rates; and (v)&#160;to exclude the effects of any
    &#147;extraordinary items&#148; as determined under generally
    accepted accounting principles. The Board also retains the
    discretion to reduce or eliminate the compensation or economic
    benefit due upon attainment of Performance Goals.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (jj)&#160;<I>&#147;Performance Period&#148; </I>means the one or
    more periods of time, which may be of varying and overlapping
    durations, as the Committee may select, over which the
    attainment of one or more Performance Goals will be measured for
    the purpose of determining a Participant&#146;s right to and the
    payment of a Stock Award.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (kk)&#160;<I>&#147;Performance Stock Award&#148; </I>means an
    award of shares of Common Stock which is granted pursuant to the
    terms and conditions of Section&#160;7(e).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ll)&#160;<I>&#147;Plan&#148; </I>means this Cardica, Inc. 2005
    Equity Incentive Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (mm)&#160;<I>&#147;Prior Plan&#148; </I>means the Company&#146;s
    1997 Equity Incentive Plan in effect immediately prior to the
    effective date of the Plan as set forth in Section&#160;13.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (nn)&#160;<I><FONT style="white-space: nowrap">&#147;Rule&#160;16b-3&#148;</FONT>
    </I>means
    <FONT style="white-space: nowrap">Rule&#160;16b-3</FONT>
    promulgated under the Exchange Act or any successor to
    <FONT style="white-space: nowrap">Rule&#160;16b-3,</FONT>
    as in effect from time to time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (oo)&#160;<I>&#147;Securities Act&#148; </I>means the Securities
    Act of 1933, as amended.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (pp)&#160;<I>&#147;Stock Appreciation Right&#148; </I>means a
    right to receive the appreciation on Common Stock that is
    granted pursuant to the terms and conditions of
    Section&#160;7(d).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (qq)&#160;<I>&#147;Stock Appreciation Right Agreement&#148;
    </I>means a written agreement between the Company and a holder
    of a Stock Appreciation Right evidencing the terms and
    conditions of a Stock Appreciation Right grant. Each Stock
    Appreciation Right Agreement shall be subject to the terms and
    conditions of the Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (rr)&#160;<I>&#147;Stock Award&#148; </I>means any right granted
    under the Plan, including an Option, a Stock Purchase Award,
    Stock Bonus Award, a Stock Appreciation Right, a Stock Unit
    Award, Performance Stock Award, or any Other Stock Award.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ss)&#160;<I>&#147;Stock Award Agreement&#148; </I>means a
    written agreement between the Company and a Participant
    evidencing the terms and conditions of a Stock Award grant. Each
    Stock Award Agreement shall be subject to the terms and
    conditions of the Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (tt)&#160;<I>&#147;Stock Bonus Award&#148; </I>means an award of
    shares of Common Stock which is granted pursuant to the terms
    and conditions of Section&#160;7(b).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (uu)&#160;<I>&#147;Stock Bonus Award Agreement&#148; </I>means a
    written agreement between the Company and a holder of a Stock
    Bonus Award evidencing the terms and conditions of a Stock Bonus
    Award grant. Each Stock Bonus Award Agreement shall be subject
    to the terms and conditions of the Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (vv)&#160;<I>&#147;Stock Purchase Award&#148; </I>means an award
    of shares of Common Stock which is granted pursuant to the terms
    and conditions of Section&#160;7(a).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ww)&#160;<I>&#147;Stock Purchase Award Agreement&#148;
    </I>means a written agreement between the Company and a holder
    of a Stock Purchase Award evidencing the terms and conditions of
    a Stock Purchase Award grant. Each Stock Purchase Award
    Agreement shall be subject to the terms and conditions of the
    Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (xx)&#160;<I>&#147;Stock Unit Award&#148; </I>means a right to
    receive shares of Common Stock which is granted pursuant to the
    terms and conditions of Section&#160;7(c).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (yy)&#160;<I>&#147;Stock Unit Award Agreement&#148; </I>means a
    written agreement between the Company and a holder of a Stock
    Unit Award evidencing the terms and conditions of a Stock Unit
    Award grant. Each Stock Unit Award Agreement shall be subject to
    the terms and conditions of the Plan.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    6
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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (zz) <I>&#147;Subsidiary&#148; </I>means, with respect to the
    Company, (i)&#160;any corporation of which more than fifty
    percent (50%) of the outstanding capital stock having ordinary
    voting power to elect a majority of the board of directors of
    such corporation (irrespective of whether, at the time, stock of
    any other class or classes of such corporation shall have or
    might have voting power by reason of the happening of any
    contingency) is at the time, directly or indirectly, Owned by
    the Company, and (ii)&#160;any partnership in which the Company
    has a direct or indirect interest (whether in the form of voting
    or participation in profits or capital contribution) of more
    than fifty percent (50%).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (aaa) <I>&#147;Ten Percent&#160;Stockholder&#148; </I>means a
    person who Owns (or is deemed to Own pursuant to
    Section&#160;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 any Affiliate.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">3.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times; font-variant: SMALL-CAPS">Administration.</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;<I>Administration by Board.</I>&#160;&#160;The Board
    shall administer the Plan unless and until the Board delegates
    administration of the Plan to a Committee, as provided in
    Section&#160;3(c).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;<I>Powers of Board.</I>&#160;&#160;The Board shall have
    the power, subject to, and within the limitations of, the
    express provisions of the Plan:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;To determine from time to time (1)&#160;which of the
    persons eligible under the Plan shall be granted Stock Awards;
    (2)&#160;when and how each Stock Award shall be granted;
    (3)&#160;what type or combination of types of Stock Award shall
    be granted; (4)&#160;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 cash or Common Stock
    pursuant to a Stock Award; and (5)&#160;the number of shares of
    Common Stock with respect to which a Stock Award shall be
    granted to each such person.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iv)&#160;To amend the Plan or a Stock Award as provided in
    Section&#160;11.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (v)&#160;To terminate or suspend the Plan as provided in
    Section&#160;12.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (vi)&#160;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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (vii)&#160;To adopt such procedures and sub-plans as are
    necessary or appropriate to permit participation in the Plan by
    Employees who are foreign nationals or employed outside the
    United States.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;<I>Delegation to Committee.</I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;<I>General.</I>&#160;&#160;The Board may delegate some
    or all of the administration of the Plan to a Committee or
    Committees. 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 that
    have been delegated to the Committee, 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 retain the
    authority to concurrently administer the Plan with the Committee
    and may, at any time, revest in the Board some or all of the
    powers previously delegated.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    7
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;<I>Section&#160;162(m) and
    <FONT style="white-space: nowrap">Rule&#160;16b-3</FONT>
    Compliance.</I>&#160;&#160;In the sole discretion of the Board,
    the Committee may consist solely of two (2)&#160;or more Outside
    Directors, in accordance with Section&#160;162(m) of the Code,
    <FONT style="white-space: nowrap">and/or</FONT>
    solely of two or more Non-Employee Directors, in accordance with
    <FONT style="white-space: nowrap">Rule&#160;16b-3.</FONT>
    In addition, the Board or the Committee, in its sole discretion,
    may (1)&#160;delegate to a committee of one or more members of
    the Board who need not be Outside Directors the authority to
    grant Stock Awards to eligible persons who are either
    (a)&#160;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)&#160;not persons with respect to
    whom the Company wishes to comply with Section&#160;162(m) of
    the Code,
    <FONT style="white-space: nowrap">and/or</FONT>
    (2)&#160;delegate to a committee of one or more members of the
    Board who need not be Non-Employee Directors the authority to
    grant Stock Awards to eligible persons who are not then subject
    to Section&#160;16 of the Exchange Act.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;<I>Delegation to an Officer.</I>&#160;&#160;The Board
    may delegate to one or more Officers of the Company the
    authority to do one or both of the following (i)&#160;designate
    Officers and Employees of the Company or any of its Subsidiaries
    to be recipients of Stock Awards and the terms thereof, and
    (ii)&#160;determine the number of shares of Common Stock to be
    subject to such Stock Awards granted to such Officers and
    Employees; <I>provided, however, </I>that the Board resolutions
    regarding such delegation shall specify the total number of
    shares of Common Stock that may be subject to the Stock Awards
    granted by such Officer and that such Officer may not grant a
    Stock Award to himself or herself. Notwithstanding anything to
    the contrary in this Section&#160;3(d), the Board may not
    delegate to an Officer authority to determine the Fair Market
    Value of the Common Stock pursuant to Section&#160;2(t)(ii)
    above.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;<I>Effect of Board&#146;s Decision.</I>&#160;&#160;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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;<I>Cancellation and Re-Grant of Stock
    Awards.</I>&#160;&#160;Neither the Board nor any Committee shall
    have the authority to: (i)&#160;reprice any outstanding Stock
    Awards under the Plan, or (ii)&#160;cancel and re-grant any
    outstanding Stock Awards under the Plan, unless the stockholders
    of the Company have approved such an action within a twelve
    (12)&#160;month period preceding or following such an event.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">4.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times; font-variant: SMALL-CAPS">Shares
    Subject to the Plan.</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;<I>Share Reserve.</I>&#160;&#160;Subject to the
    provisions of Section&#160;10(a) relating to Capitalization
    Adjustments, the number of shares of Common Stock that may be
    issued pursuant to Stock Awards shall not exceed, in the
    aggregate, 1,658,377&#160;shares of Common Stock. Such share
    reserve consists of the number of shares remaining available for
    future issuance under the Prior Plan as of immediately prior to
    the termination of the Prior Plan, plus an additional
    1,650,000&#160;shares of Common Stock. In addition, the share
    reserve shall be increased from time to time by the number of
    shares of Common Stock that (i)&#160;are issuable pursuant to
    stock awards outstanding under the Company&#146;s Prior Plan as
    of the effective date of the Plan (as set forth in
    Section&#160;13), and (ii)&#160;but for the termination of the
    Prior Plan as of the effective date of the Plan, would otherwise
    have reverted to the share reserve of the Prior Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;<I>Reversion of Shares to the Share
    Reserve.</I>&#160;&#160;If any Stock Award shall for any reason
    expire or otherwise terminate, in whole or in part, without
    having been exercised in full, if any shares of Common Stock
    issued to a Participant pursuant to a Stock Award are forfeited
    to or repurchased by the Company, including, but not limited to,
    any repurchase or forfeiture caused by the failure to meet a
    contingency or condition required for the vesting of such
    shares, or if any shares of Common Stock are cancelled in
    accordance with the cancellation and regrant provisions of
    Section&#160;3(f), then the shares of Common Stock not issued
    under such Stock Award, or forfeited to or repurchased by the
    Company, shall revert to and again become available for issuance
    under the Plan. If any shares subject to a Stock Award are not
    delivered to a Participant because such shares are withheld for
    the payment of taxes or the Stock Award is exercised through a
    reduction of shares subject to the Stock Award (<I>i.e.</I>,
    &#147;net exercised&#148;), the number of shares that are not
    delivered to the Participant shall remain available for issuance
    under the Plan. If the exercise price of any Stock Award is
    satisfied by tendering shares of Common Stock held by the
    Participant (either by actual delivery or attestation), then the
    number of shares so tendered shall remain available for issuance
    under the Plan. Notwithstanding anything to the contrary in this
    Section&#160;4(b), subject to the provisions of
    Section&#160;10(a) relating to Capitalization Adjustments the
    aggregate maximum number of shares of Common Stock that may be
    issued pursuant to the exercise of Incentive Stock Options shall
    be 1,658,377&#160;shares of Common Stock plus the amount of any
    increase in the number of shares that may be available for
    issuance pursuant to Stock Awards pursuant to Section&#160;4(a).
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    8
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;<I>Source of Shares.</I>&#160;&#160;The stock issuable
    under the Plan shall be shares of authorized but unissued or
    reacquired Common Stock, including shares repurchased by the
    Company on the open market.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">5.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times; font-variant: SMALL-CAPS">Eligibility.</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;<I>Eligibility for Specific Stock
    Awards.</I>&#160;&#160;Incentive Stock Options may be granted
    only to Employees. Stock Awards other than Incentive Stock
    Options may be granted to Employees, Directors and Consultants.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;<I>Ten Percent&#160;Stockholders.</I>&#160;&#160;A Ten
    Percent&#160;Stockholder shall not be granted an Incentive Stock
    Option unless the exercise price of such Option is at least one
    hundred ten percent (110%) of the Fair Market Value of the
    Common Stock on the date of grant and the Option is not
    exercisable after the expiration of five (5)&#160;years from the
    date of grant.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;<I>Section&#160;162(m) Limitation on Annual
    Grants.</I>&#160;&#160;Subject to the provisions of
    Section&#160;10(a) relating to Capitalization Adjustments, at
    such time as the Company may be subject to the applicable
    provisions of Section&#160;162(m) of the Code, no Employee shall
    be eligible to be granted Stock Awards whose value is determined
    by reference to an increase over an exercise or strike price of
    at least one hundred percent (100%) of the Fair Market Value of
    the Common Stock on the date the Stock Award is granted covering
    more than two hundred thousand (200,000) shares of Common Stock
    during any calendar year.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;<I>Consultants.</I>&#160;&#160;A Consultant shall not
    be eligible for the grant of a Stock Award if, at the time of
    grant, a
    <FONT style="white-space: nowrap">Form&#160;S-8</FONT>
    Registration Statement under the Securities Act
    <B><I><FONT style="white-space: nowrap">(&#147;Form&#160;S-8&#148;</FONT></I></B>)
    is not available to register either the offer or the sale of the
    Company&#146;s securities to such Consultant because of the
    nature of the services that the Consultant is providing to the
    Company, because the Consultant is not a natural person, or
    because of any other rule governing the use of
    <FONT style="white-space: nowrap">Form&#160;S-8.</FONT>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">6.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times; font-variant: SMALL-CAPS">Option
    Provisions.</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    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
    shall be issued for shares of Common Stock purchased on exercise
    of each type of Option. The provisions of separate Options need
    not be identical; <I>provided, however</I>, that each Option
    Agreement shall include (through incorporation of provisions
    hereof by reference in the Option or otherwise) the substance of
    each of the following provisions:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;<I>Term.</I>&#160;&#160;The Board shall determine the
    term of an Option; <I>provided, however</I>, that subject to the
    provisions of Section&#160;5(b) regarding Ten
    Percent&#160;Stockholders, no Incentive Stock Option shall be
    exercisable after the expiration of ten (10)&#160;years from the
    date of grant.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;<I>Exercise Price of an Incentive Stock
    Option.</I>&#160;&#160;Subject to the provisions of
    Section&#160;5(b) regarding Ten Percent&#160;Stockholders, the
    exercise price of each Incentive Stock Option shall be not less
    than one hundred percent (100%) of the Fair Market Value of the
    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 consistent with the provisions of Section&#160;424(a)
    of the Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;<I>Exercise Price of a Nonstatutory Stock
    Option.</I>&#160;&#160;The exercise price of each Nonstatutory
    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, 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 consistent with the
    provisions of Section&#160;424(a) of the Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;<I>Consideration.</I>&#160;&#160;The purchase price of
    Common Stock acquired pursuant to the exercise of an Option
    shall be paid, to the extent permitted by applicable law and as
    determined by the Board in its sole discretion, by any
    combination of the methods of payment set forth below. The Board
    shall have the authority to grant Options that do not permit all
    of the following methods of payment (or otherwise restrict the
    ability to
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    9
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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    use certain methods) and to grant Options that require the
    consent of the Company to utilize a particular method of
    payment. The methods of payment permitted by this
    Section&#160;6(d) are:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;by cash or check;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;pursuant to a program developed under
    Regulation&#160;T as promulgated by the Federal Reserve Board
    that, prior to the issuance of Common Stock, results in either
    the receipt of cash (or check) by the Company or the receipt of
    irrevocable instructions to pay the aggregate exercise price to
    the Company from the sales proceeds; <I>provided, however,
    </I>that such program is not in violation of the prohibition on
    the extension of credit to the Company&#146;s executive officers
    and Directors under Section&#160;402 of the Sarbanes-Oxley Act
    of 2002, in the opinion of counsel acceptable to the Company;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;by delivery to the Company (either by actual delivery
    or attestation) of shares of Common Stock;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iv)&#160;by a &#147;net exercise&#148; arrangement pursuant to
    which the Company will reduce the number of shares of Common
    Stock issued upon exercise by the largest whole number of shares
    with a Fair Market Value that does not exceed the aggregate
    exercise price; <I>provided, however, </I>the Company shall
    accept a cash or other payment from the Participant to the
    extent of any remaining balance of the aggregate exercise price
    not satisfied by such reduction in the number of whole shares to
    be issued; <I>provided, however, </I>shares of Common Stock will
    no longer be outstanding under an Option and will not be
    exercisable thereafter to the extent that (i)&#160;shares are
    used to pay the exercise price pursuant to the &#147;net
    exercise,&#148; (ii)&#160;shares are delivered to the
    Participant as a result of such exercise, and (iii)&#160;shares
    are withheld to satisfy tax withholding obligations;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (v)&#160;according to a deferred payment or similar arrangement
    with the Optionholder; <I>provided, however, </I>that interest
    shall compound at least annually and shall be charged at the
    minimum rate of interest necessary to avoid (i)&#160;the
    imputation of interest income to the Company and compensation
    income to the Optionholder under any applicable provisions of
    the Code, and (ii)&#160;the classification of the Option as a
    liability for financial accounting purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;<I>Transferability of Options.</I>&#160;&#160;The Board
    may, in its sole discretion, impose such limitations on the
    transferability of Options as the Board shall determine. In the
    absence of such a determination by the Board to the contrary,
    the following restrictions on the transferability of Options
    shall apply:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;<I>Restrictions on Transfer.</I>&#160;&#160;An 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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;<I>Domestic Relations
    Orders.</I>&#160;&#160;Notwithstanding the foregoing, an Option
    may be transferred pursuant to a domestic relations order.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;<I>Beneficiary
    Designation.</I>&#160;&#160;Notwithstanding the foregoing, the
    Optionholder may, by delivering written notice to the Company,
    in a form provided by or otherwise satisfactory to the Company,
    designate a third party who, in the event of the death of the
    Optionholder, shall thereafter be the beneficiary of an Option
    with the right to exercise the Option and receive the Common
    Stock or other consideration resulting from an Option exercise.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;<I>Vesting Generally.</I>&#160;&#160;The total number
    of shares of Common Stock subject to an Option may vest and
    therefore become exercisable in periodic installments that may
    or may not be equal. The Option may be subject to such other
    terms and conditions on the time or times when it may or may not
    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 Section&#160;6(f) are subject to any Option provisions
    governing the minimum number of shares of Common Stock as to
    which an Option may be exercised.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (g)&#160;<I>Termination of Continuous Service.</I>&#160;&#160;In
    the event that an Optionholder&#146;s Continuous Service
    terminates (other than for Cause or upon the Optionholder&#146;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
</DIV>

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    <BR>
    10
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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    date of termination of Continuous Service) but only within such
    period of time ending on the earlier of (i)&#160;the date three
    (3)&#160;months following the termination of the
    Optionholder&#146;s Continuous Service (or such longer or
    shorter period specified in the Option Agreement), or
    (ii)&#160;the expiration of the term of the Option as set forth
    in the Option Agreement. If, after termination of Continuous
    Service, the Optionholder does not exercise his or her Option
    within the time specified herein or in the Option Agreement (as
    applicable), the Option shall terminate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (h)&#160;<I>Extension of Termination Date.</I>&#160;&#160;An
    Optionholder&#146;s Option Agreement may provide that if the
    exercise of the Option following the termination of the
    Optionholder&#146;s Continuous Service (other than upon the
    Optionholder&#146;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)&#160;the expiration of a period of three (3)&#160;months
    after the termination of the Optionholder&#146;s Continuous
    Service during which the exercise of the Option would not be in
    violation of such registration requirements, or (ii)&#160;the
    expiration of the term of the Option as set forth in the Option
    Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;<I>Disability of Optionholder.</I>&#160;&#160;In the
    event that an Optionholder&#146;s Continuous Service terminates
    as a result of the Optionholder&#146;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 of Continuous Service), but only within such
    period of time ending on the earlier of (i)&#160;the date twelve
    (12)&#160;months following such termination of Continuous
    Service (or such longer or shorter period specified in the
    Option Agreement), or (ii)&#160;the expiration of the term of
    the Option as set forth in the Option Agreement. If, after
    termination of Continuous Service, the Optionholder does not
    exercise his or her Option within the time specified herein or
    in the Option Agreement (as applicable), the Option shall
    terminate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (j)&#160;<I>Death of Optionholder.</I>&#160;&#160;In the event
    that (i)&#160;an Optionholder&#146;s Continuous Service
    terminates as a result of the Optionholder&#146;s death, or
    (ii)&#160;the Optionholder dies within the period (if any)
    specified in the Option Agreement after the termination of the
    Optionholder&#146;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&#146;s estate, by a person who
    acquired the right to exercise the Option by bequest or
    inheritance or by a person designated as the beneficiary of the
    Option upon the Optionholder&#146;s death, but only within the
    period ending on the earlier of (i)&#160;the date eighteen
    (18)&#160;months following the date of death (or such longer or
    shorter period specified in the Option Agreement), or
    (ii)&#160;the expiration of the term of such Option as set forth
    in the Option Agreement. If, after the Optionholder&#146;s
    death, the Option is not exercised within the time specified
    herein or in the Option Agreement (as applicable), the Option
    shall terminate. If the Optionholder designates a third party
    beneficiary of the Option in accordance with
    Section&#160;6(e)(iii), then upon the death of the Optionholder
    such designated beneficiary shall have the sole right to
    exercise the Option and receive the Common Stock or other
    consideration resulting from the Option exercise.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (k)&#160;<I>Termination for Cause.</I>&#160;&#160;In the event
    that an Optionholder&#146;s Continuous Service is terminated for
    Cause, the Option shall terminate immediately and cease to
    remain outstanding.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">7.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times; font-variant: SMALL-CAPS">Provisions
    of Stock Awards other than Options.</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;<I>Stock Purchase Awards.</I>&#160;&#160;Each Stock
    Purchase Award Agreement shall be in such form and shall contain
    such terms and conditions as the Board shall deem appropriate.
    At the Board&#146;s election, shares of Common Stock may be
    (i)&#160;held in book entry form subject to the Company&#146;s
    instructions until any restrictions relating to the Stock
    Purchase Award lapse; or (ii)&#160;evidenced by a certificate,
    which certificate shall be held in such form and manner as
    determined by the Board. The terms and conditions of Stock
    Purchase Award Agreements may change from time to time, and the
    terms and conditions of separate Stock Purchase Award Agreements
    need not be identical; <I>provided, however, </I>that each Stock
    Purchase Award Agreement shall include (through incorporation of
    the provisions hereof by reference in the agreement or
    otherwise) the substance of each of the following provisions:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;<I>Purchase Price.</I>&#160;&#160;At the time of the
    grant of a Stock Purchase Award, the Board will determine the
    price to be paid by the Participant for each share subject to
    the Stock Purchase Award. To the extent required by applicable
    law, the price to be paid by the Participant for each share of
    the Stock Purchase Award will not be less than the par value of
    a share of Common Stock.
</DIV>

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    <BR>
    11
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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;<I>Consideration.</I>&#160;&#160;At the time of the
    grant of a Stock Purchase Award, the Board will determine the
    consideration permissible for the payment of the purchase price
    of the Stock Purchase Award. The purchase price of Common Stock
    acquired pursuant to the Stock Purchase Award shall be paid
    either: (i)&#160;in cash or by check at the time of purchase,
    (ii)&#160;at the discretion of the Board, according to a
    deferred payment or other similar arrangement with the
    Participant, (iii)&#160;by past or future services rendered to
    the Company or an Affiliate, or (iv)&#160;in any other form of
    legal consideration that may be acceptable to the Board in its
    sole discretion and permissible under applicable law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;<I>Vesting.</I>&#160;&#160;Shares of Common Stock
    acquired under a Stock Purchase Award may be subject to a share
    repurchase right or option in favor of the Company in accordance
    with a vesting schedule to be determined by the Board.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iv)&#160;<I>Termination of Participant&#146;s Continuous
    Service.</I>&#160;&#160;In the event that a Participant&#146;s
    Continuous Service terminates, the Company shall have the right,
    but not the obligation, to repurchase or otherwise reacquire,
    any or all of the shares of Common Stock held by the Participant
    that have not vested as of the date of termination under the
    terms of the Stock Purchase Award Agreement. At the Board&#146;s
    election, the price paid for all shares of Common Stock so
    repurchased or reacquired by the Company may be at the lesser
    of: (i)&#160;the Fair Market Value on the relevant date, or
    (ii)&#160;the Participant&#146;s original cost for such shares.
    The Company shall not be required to exercise its repurchase or
    reacquisition option until at least six (6)&#160;months (or such
    longer or shorter period of time necessary to avoid
    classification of the Option as a liability for financial
    accounting purposes) have elapsed following the
    Participant&#146;s purchase of the shares of stock acquired
    pursuant to the Stock Purchase Award unless otherwise determined
    by the Board or provided in the Stock Purchase Award Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (v)&#160;<I>Transferability.</I>&#160;&#160;Rights to purchase
    or receive shares of Common Stock granted under a Stock Purchase
    Award shall be transferable by the Participant only upon such
    terms and conditions as are set forth in the Stock Purchase
    Award Agreement, as the Board shall determine in its sole
    discretion, and so long as Common Stock awarded under the Stock
    Purchase Award remains subject to the terms of the Stock
    Purchase Award Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;<I>Stock Bonus Awards.</I>&#160;&#160;Each Stock Bonus
    Award Agreement shall be in such form and shall contain such
    terms and conditions as the Board shall deem appropriate. At the
    Board&#146;s election, shares of Common Stock may be
    (i)&#160;held in book entry form subject to the Company&#146;s
    instructions until any restrictions relating to the Stock Bonus
    Award lapse; or (ii)&#160;evidenced by a certificate, which
    certificate shall be held in such form and manner as determined
    by the Board. The terms and conditions of Stock Bonus Award
    Agreements may change from time to time, and the terms and
    conditions of separate Stock Bonus Award Agreements need not be
    identical, <I>provided, however</I>, that each Stock Bonus Award
    Agreement shall include (through incorporation of provisions
    hereof by reference in the agreement or otherwise) the substance
    of each of the following provisions:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;<I>Consideration.</I>&#160;&#160;A Stock Bonus Award
    may be awarded in consideration for (i)&#160;past or future
    services rendered to the Company or an Affiliate, or
    (ii)&#160;any other form of legal consideration that may be
    acceptable to the Board in its sole discretion and permissible
    under applicable law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;<I>Vesting.</I>&#160;&#160;Shares of Common Stock
    awarded under the Stock Bonus Award Agreement may be subject to
    forfeiture to the Company in accordance with a vesting schedule
    to be determined by the Board.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;<I>Termination of Participant&#146;s Continuous
    Service.</I>&#160;&#160;In the event a Participant&#146;s
    Continuous Service terminates, the Company may receive via a
    forfeiture condition, any or all of the shares of Common Stock
    held by the Participant which have not vested as of the date of
    termination of Continuous Service under the terms of the Stock
    Bonus Award Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iv)&#160;<I>Transferability.</I>&#160;&#160;Rights to acquire
    shares of Common Stock under the Stock Bonus Award Agreement
    shall be transferable by the Participant only upon such terms
    and conditions as are set forth in the Stock Bonus Award
    Agreement, as the Board shall determine in its sole discretion,
    so long as Common Stock awarded under the Stock Bonus Award
    Agreement remains subject to the terms of the Stock Bonus Award
    Agreement.
</DIV>

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    <BR>
    12
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;<I>Stock Unit Awards.</I>&#160;&#160;Each Stock Unit
    Award 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 Unit Award Agreements may change
    from time to time, and the terms and conditions of separate
    Stock Unit Award Agreements need not be identical, <I>provided,
    however, </I>that each Stock Unit Award Agreement shall include
    (through incorporation of the provisions hereof by reference in
    the agreement or otherwise) the substance of each of the
    following provisions:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;<I>Consideration.</I>&#160;&#160;At the time of grant
    of a Stock Unit Award, the Board will determine the
    consideration, if any, to be paid by the Participant upon
    delivery of each share of Common Stock subject to the Stock Unit
    Award. The consideration to be paid (if any) by the Participant
    for each share of Common Stock subject to a Stock Unit Award may
    be paid in any form of legal consideration that may be
    acceptable to the Board in its sole discretion and permissible
    under applicable law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;<I>Vesting.</I>&#160;&#160;At the time of the grant of
    a Stock Unit Award, the Board may impose such restrictions or
    conditions to the vesting of the Stock Unit Award as it, in its
    sole discretion, deems appropriate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;<I>Payment.</I>&#160;&#160;A Stock Unit Award may be
    settled by the delivery of shares of Common Stock, their cash
    equivalent, any combination thereof or in any other form of
    consideration, as determined by the Board and contained in the
    Stock Unit Award Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iv)&#160;<I>Additional Restrictions.</I>&#160;&#160;At the time
    of the grant of a Stock Unit Award, the Board, as it deems
    appropriate, may impose such restrictions or conditions that
    delay the delivery of the shares of Common Stock (or their cash
    equivalent) subject to a Stock Unit Award after the vesting of
    such Stock Unit Award.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (v)&#160;<I>Dividend Equivalents.</I>&#160;&#160;Dividend
    equivalents may be credited in respect of shares of Common Stock
    covered by a Stock Unit Award, as determined by the Board and
    contained in the Stock Unit Award Agreement. At the sole
    discretion of the Board, such dividend equivalents may be
    converted into additional shares of Common Stock covered by the
    Stock Unit Award in such manner as determined by the Board. Any
    additional shares covered by the Stock Unit Award credited by
    reason of such dividend equivalents will be subject to all the
    terms and conditions of the underlying Stock Unit Award
    Agreement to which they relate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (vi)&#160;<I>Termination of Participant&#146;s Continuous
    Service.</I>&#160;&#160;Except as otherwise provided in the
    applicable Stock Unit Award Agreement, such portion of the Stock
    Unit Award that has not vested will be forfeited upon the
    Participant&#146;s termination of Continuous Service.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;<I>Stock Appreciation Rights.</I>&#160;&#160;Each Stock
    Appreciation Right 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 Appreciation
    Right Agreements may change from time to time, and the terms and
    conditions of separate Stock Appreciation Right Agreements need
    not be identical; <I>provided, however</I>, that each Stock
    Appreciation Right Agreement shall include (through
    incorporation of the provisions hereof by reference in the
    agreement or otherwise) the substance of each of the following
    provisions:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;<I>Strike Price and Calculation of
    Appreciation.</I>&#160;&#160;Each Stock Appreciation Right will
    be denominated in shares of Common Stock equivalents. The
    appreciation distribution payable on the exercise of a Stock
    Appreciation Right will be not greater than an amount equal to
    the excess of (i)&#160;the aggregate Fair Market Value (on the
    date of the exercise of the Stock Appreciation Right) of a
    number of shares of Common Stock equal to the number of share of
    Common Stock equivalents in which the Participant is vested
    under such Stock Appreciation Right, and with respect to which
    the Participant is exercising the Stock Appreciation Right on
    such date, over (ii)&#160;an amount (the strike price) that will
    be determined by the Board at the time of grant of the Stock
    Appreciation Right.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;<I>Vesting.</I>&#160;&#160;At the time of the grant of
    a Stock Appreciation Right, the Board may impose such
    restrictions or conditions to the vesting of such Stock
    Appreciation Right as it, in its sole discretion, deems
    appropriate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;<I>Exercise.</I>&#160;&#160;To exercise any
    outstanding Stock Appreciation Right, the Participant must
    provide written notice of exercise to the Company in compliance
    with the provisions of the Stock Appreciation Right Agreement
    evidencing such Stock Appreciation Right.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    13
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iv)&#160;<I>Payment.</I>&#160;&#160;The appreciation
    distribution in respect to a Stock Appreciation Right may be
    paid in Common Stock, in cash, in any combination of the two or
    in any other form of consideration, as determined by the Board
    and contained in the Stock Appreciation Right Agreement
    evidencing such Stock Appreciation Right.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (v)&#160;<I>Termination of Continuous Service.</I>&#160;&#160;In
    the event that a Participant&#146;s Continuous Service
    terminates, the Participant may exercise his or her Stock
    Appreciation Right (to the extent that the Participant was
    entitled to exercise such Stock Appreciation Right as of the
    date of termination) but only within such period of time ending
    on the earlier of (i)&#160;the date three (3)&#160;months
    following the termination of the Participant&#146;s Continuous
    Service (or such longer or shorter period specified in the Stock
    Appreciation Right Agreement), or (ii)&#160;the expiration of
    the term of the Stock Appreciation Right as set forth in the
    Stock Appreciation Right Agreement. If, after termination, the
    Participant does not exercise his or her Stock Appreciation
    Right within the time specified herein or in the Stock
    Appreciation Right Agreement (as applicable), the Stock
    Appreciation Right shall terminate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;<I>Performance Stock Awards.</I>&#160;&#160;A
    Performance Stock Award is any Stock Award that may be granted,
    may vest, or may be exercised based upon service conditions,
    upon the attainment during a Performance Period of certain
    Performance Goals, or both. The length of any Performance
    Period, the Performance Goals to be achieved during the
    Performance Period, and the measure of whether and to what
    degree such Performance Goals have been attained shall be
    conclusively determined by the Board in its sole discretion. The
    maximum benefit to be received by any individual in any calendar
    year attributable to Performance Stock Awards shall not exceed
    the value of two hundred thousand (200,000) shares of Common
    Stock.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;<I>Other Stock Awards.</I>&#160;&#160;Other forms of
    Stock Awards valued in whole or in part by reference to, or
    otherwise based on, Common Stock may be granted either alone or
    in addition to Stock Awards provided for under Section&#160;6
    and the preceding provisions of this Section&#160;7. Subject to
    the provisions of the Plan, the Board shall have sole and
    complete authority to determine the persons to whom and the time
    or times at which such Other Stock Awards will be granted, the
    number of shares of Common Stock (or the cash equivalent
    thereof) to be granted pursuant to such Other Stock Awards and
    all other terms and conditions of such Other Stock Awards.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">8.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times; font-variant: SMALL-CAPS">Covenants
    of the Company.</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;<I>Availability of Shares.</I>&#160;&#160;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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;<I>Securities Law Compliance.</I>&#160;&#160;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; <I>provided,
    however, </I>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 that 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.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">9.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times; font-variant: SMALL-CAPS">Miscellaneous.</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;<I>Use of Proceeds.</I>&#160;&#160;Proceeds from the
    sale of shares of Common Stock pursuant to Stock Awards shall
    constitute general funds of the Company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;<I>Stockholder Rights.</I>&#160;&#160;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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;<I>No Employment or Other Service
    Rights.&#160;&#160;</I>Nothing in the Plan, any Stock Award
    Agreement or other instrument executed thereunder or any 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)&#160;the employment of an Employee with
</DIV>

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    <BR>
    14
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    or without notice and with or without cause, (ii)&#160;the
    service of a Consultant pursuant to the terms of such
    Consultant&#146;s agreement with the Company or an Affiliate, or
    (iii)&#160;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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;<I>Incentive Stock Option $100,000
    Limitation.</I>&#160;&#160;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 any Affiliates) exceeds one
    hundred thousand dollars ($100,000), the Options or portions
    thereof that exceed such limit (according to the order in which
    they were granted) shall be treated as Nonstatutory Stock
    Options, notwithstanding any contrary provision of the
    applicable Option Agreement(s).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;<I>Investment Assurances.</I>&#160;&#160;The Company
    may require a Participant, as a condition of exercising or
    acquiring Common Stock under any Stock Award, (i)&#160;to give
    written assurances satisfactory to the Company as to the
    Participant&#146;s knowledge and experience in financial and
    business matters
    <FONT style="white-space: nowrap">and/or</FONT> 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)&#160;to give
    written assurances satisfactory to the Company stating that the
    Participant is acquiring Common Stock subject to the Stock Award
    for the Participant&#146;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 (i)&#160;the issuance
    of the shares 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
    (ii)&#160;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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;<I>Withholding Obligations.</I>&#160;&#160;To the
    extent provided by the terms of a Stock Award Agreement, the
    Company may, in its sole discretion, satisfy any federal, state
    or local tax withholding obligation relating to a Stock Award by
    any of the following means (in addition to the Company&#146;s
    right to withhold from any compensation paid to the Participant
    by the Company) or by a combination of such means:
    (i)&#160;causing the Participant to tender a cash payment;
    (ii)&#160;withholding shares of Common Stock from the shares of
    Common Stock issued or otherwise issuable to the Participant in
    connection with the Stock Award; <I>provided, however, </I>that
    no shares of Common Stock are withheld with a value exceeding
    the minimum amount of tax required to be withheld by law (or
    such lower amount as may be necessary to avoid classification of
    the Stock Award as a liability for financial accounting
    purposes); or (iii)&#160;by such other method as may be set
    forth in the Stock Award Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (g)&#160;<I>Electronic Delivery.</I>&#160;&#160;Any reference
    herein to a &#147;written&#148; agreement or document shall
    include any agreement or document delivered electronically or
    posted on the Company&#146;s intranet.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">10.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times; font-variant: SMALL-CAPS">Adjustments
    upon Changes in Common Stock; Corporate Transactions.</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;<I>Capitalization Adjustments.</I>&#160;&#160;If any
    change is made in, or other events occur with respect to, the
    Common Stock subject to the Plan or subject to any Stock Award
    after the effective date of the Plan set forth in
    Section&#160;13 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 (each a <B><I>&#147;Capitalization
    Adjustment&#148;</I></B>)), the Board shall appropriately
    adjust: (i)&#160;the class(es) and maximum number of securities
    subject to the Plan pursuant to Section&#160;4(a), (ii)&#160;the
    class(es) and number of securities subject to each outstanding
    stock award under the Prior Plan that are added from time to
    time to the share reserve under the Plan pursuant to
    Section&#160;4(a), (iii)&#160;the class(es) and maximum number
    of securities that may be issued pursuant to the exercise of
    Incentive Stock Options pursuant to Section&#160;4(b),
    (iv)&#160;the class(es) and maximum number of securities that
    may be awarded to any person pursuant to Sections&#160;5(c) and
    7(e), and (v)&#160;the class(es) and number of securities and
    price per share of stock subject to outstanding Stock Awards.
    The
</DIV>

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    <BR>
    15
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Board shall make such adjustments, and its determination shall
    be final, binding and conclusive. (Notwithstanding the
    foregoing, the conversion of any convertible securities of the
    Company shall not be treated as a transaction &#147;without
    receipt of consideration&#148; by the Company.)
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;<I>Dissolution or Liquidation.</I>&#160;&#160;In the
    event of a dissolution or liquidation of the Company, all
    outstanding Stock Awards (other than Stock Awards consisting of
    vested and outstanding shares of Common Stock not subject to the
    Company&#146;s right of repurchase) shall terminate immediately
    prior to the completion of such dissolution or liquidation, and
    the shares of Common Stock subject to the Company&#146;s
    repurchase option may be repurchased by the Company
    notwithstanding the fact that the holder of such Stock Award is
    providing Continuous Service, <I>provided, however, </I>that the
    Board may, in its sole discretion, cause some or all Stock
    Awards to become fully vested, exercisable
    <FONT style="white-space: nowrap">and/or</FONT> no
    longer subject to repurchase or forfeiture (to the extent such
    Stock Awards have not previously expired or terminated) before
    the dissolution or liquidation is completed but contingent on
    its completion.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;<I>Corporate Transaction.</I>&#160;&#160;The following
    provisions shall apply to Stock Awards in the event of a
    Corporate Transaction unless otherwise provided in a written
    agreement between the Company or any Affiliate and the holder of
    the Stock Award:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;<I>Stock Awards May Be Assumed.</I>&#160;&#160;In the
    event of a Corporate Transaction, any surviving corporation or
    acquiring corporation (or the surviving or acquiring
    corporation&#146;s parent company) may assume or continue any or
    all Stock Awards outstanding under the Plan or may substitute
    similar stock awards for Stock Awards outstanding under the Plan
    (including but not limited to, awards to acquire the same
    consideration paid to the stockholders of the Company pursuant
    to the Corporate Transaction), and any reacquisition or
    repurchase rights held by the Company in respect of Common Stock
    issued pursuant to Stock Awards may be assigned by the Company
    to the successor of the Company (or the successor&#146;s parent
    company, if any), in connection with such Corporate Transaction.
    A surviving corporation or acquiring corporation may choose to
    assume or continue only a portion of a Stock Award or substitute
    a similar stock award for only a portion of a Stock Award. The
    terms of any assumption, continuation or substitution shall be
    set by the Board in accordance with the provisions of
    Section&#160;3(b).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;<I>Stock Awards Held by Current
    Participants.</I>&#160;&#160;In the event of a Corporate
    Transaction in which the surviving corporation or acquiring
    corporation (or its parent company) does not assume or continue
    such outstanding Stock Awards or substitute similar stock awards
    for such outstanding Stock Awards, then with respect to Stock
    Awards that have not been assumed, continued or substituted and
    that are held by Participants whose Continuous Service has not
    terminated prior to the effective time of the Corporate
    Transaction (referred to as the <B><I>&#147;Current
    Participants&#148;</I></B>), the vesting of such Stock Awards
    (and, if applicable, the time at which such Stock Awards may be
    exercised) shall (contingent upon the effectiveness of the
    Corporate Transaction) be accelerated in full to a date prior to
    the effective time of such Corporate Transaction as the Board
    shall determine (or, if the Board shall not determine such a
    date, to the date that is five (5)&#160;days prior to the
    effective time of the Corporate Transaction), and such Stock
    Awards shall terminate if not exercised (if applicable) at or
    prior to the effective time of the Corporate Transaction, and
    any reacquisition or repurchase rights held by the Company with
    respect to such Stock Awards shall lapse (contingent upon the
    effectiveness of the Corporate Transaction). No vested Stock
    Unit Award shall terminate pursuant to this
    Section&#160;10(c)(ii) without being settled by delivery of
    shares of Common Stock, their cash equivalent, any combination
    thereof, or in any other form of consideration, as determined by
    the Board, prior to the effective time of the Corporate
    Transaction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;<I>Stock Awards Held by Former
    Participants.</I>&#160;&#160;In the event of a Corporate
    Transaction in which the surviving corporation or acquiring
    corporation (or its parent company) does not assume or continue
    such outstanding Stock Awards or substitute similar stock awards
    for such outstanding Stock Awards, then with respect to Stock
    Awards that have not been assumed, continued or substituted and
    that are held by persons other than Current Participants, the
    vesting of such Stock Awards (and, if applicable, the time at
    which such Stock Award may be exercised) shall not be
    accelerated and such Stock Awards (other than a Stock Award
    consisting of vested and outstanding shares of Common Stock not
    subject to the Company&#146;s right of repurchase) shall
    terminate if not exercised (if applicable) prior to the
    effective time of the Corporate Transaction; <I>provided,
    however, </I>that any reacquisition or repurchase rights held by
    the Company with respect to such Stock Awards shall not
    terminate and may continue to be exercised notwithstanding the
    Corporate Transaction. No vested
</DIV>

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    <BR>
    16
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Stock Unit Award shall terminate pursuant to this
    Section&#160;10(c)(iii) without being settled by delivery of
    shares of Common Stock, their cash equivalent, any combination
    thereof, or in any other form of consideration, as determined by
    the Board, prior to the effective time of the Corporate
    Transaction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iv)&#160;<I>Payment for Stock Awards in Lieu of
    Exercise.</I>&#160;&#160;Notwithstanding the foregoing, in the
    event a Stock Award will terminate if not exercised prior to the
    effective time of a Corporate Transaction, the Board may
    provide, in its sole discretion, that the holder of such Stock
    Award may not exercise such Stock Award but will receive a
    payment, in such form as may be determined by the Board, equal
    in value to the excess, if any, of (i)&#160;the value of the
    property the holder of the Stock Award would have received upon
    the exercise of the Stock Award, over (ii)&#160;any exercise
    price payable by such holder in connection with such exercise.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;<I>Change in Control.</I>&#160;&#160;A Stock Award may
    be subject to additional acceleration of vesting and
    exercisability upon or after a Change in Control as may be
    provided in the Stock Award Agreement for such Stock Award or as
    may be provided in any other written agreement between the
    Company or any Affiliate and the Participant. A Stock Award may
    vest as to all or any portion of the shares subject to the Stock
    Award (i)&#160;immediately upon the occurrence of a Change in
    Control, whether or not such Stock Award is assumed, continued,
    or substituted by a surviving or acquiring entity in the Change
    in Control, or (ii)&#160;in the event a Participant&#146;s
    Continuous Service is terminated, actually or constructively,
    within a designated period following the occurrence of a Change
    in Control. In the absence of such provisions, no such
    acceleration shall occur.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

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<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">11.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times; font-variant: SMALL-CAPS">Amendment
    of the Plan and Stock Awards.</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;<I>Amendment of Plan.</I>&#160;&#160;Subject to the
    limitations, if any, of applicable law, the Board at any time,
    and from time to time, may amend the Plan. However, except as
    provided in Section&#160;10(a) relating to Capitalization
    Adjustments, no amendment shall be effective unless approved by
    the stockholders of the Company to the extent stockholder
    approval is necessary to satisfy applicable law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;<I>Stockholder Approval.</I>&#160;&#160;The Board, in
    its sole discretion, may submit any other amendment to the Plan
    for stockholder approval, including, but not limited to,
    amendments to the Plan intended to satisfy the requirements of
    Section&#160;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
    Covered Employees.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;<I>Contemplated Amendments.</I>&#160;&#160;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
    <FONT style="white-space: nowrap">and/or</FONT> to
    bring the Plan
    <FONT style="white-space: nowrap">and/or</FONT>
    Incentive Stock Options granted under it into compliance
    therewith.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;<I>No Impairment of Rights.</I>&#160;&#160;Rights under
    any Stock Award granted before amendment of the Plan shall not
    be impaired by any amendment of the Plan unless (i)&#160;the
    Company requests the consent of the affected Participant, and
    (ii)&#160;such Participant consents in writing.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;<I>Amendment of Stock Awards.</I>&#160;&#160;The Board,
    at any time and from time to time, may amend the terms of any
    one or more Stock Awards, including, but not limited to,
    amendments to provide terms more favorable than previously
    provided in the Stock Award Agreement, subject to any specified
    limits in the Plan that are not subject to Board discretion;
    <I>provided, however, </I>that the rights under any Stock Award
    shall not be impaired by any such amendment unless (i)&#160;the
    Company requests the consent of the affected Participant, and
    (ii)&#160;such Participant consents in writing.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

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    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">12.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times; font-variant: SMALL-CAPS">Termination
    or Suspension of the Plan.</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;<I>Plan Term.</I>&#160;&#160;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 earlier of (i)&#160;the date the Plan is
    adopted by the Board, or (ii)&#160;the date the Plan is approved
    by the stockholders of the Company. No Stock Awards may be
    granted under the Plan while the Plan is suspended or after it
    is terminated.
</DIV>

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    <BR>
    17
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;<I>No Impairment of Rights.</I>&#160;&#160;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 affected
    Participant.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

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    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">13.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times; font-variant: SMALL-CAPS">Effective
    Date of Plan.</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Plan shall become effective on the IPO Date, but no Stock
    Award shall be exercised (or, in the case of a Stock Purchase
    Award, Stock Bonus Award, Stock Unit Award, or Other Stock Award
    shall be granted) unless and until the Plan has been approved by
    the stockholders of the Company, which approval shall be within
    twelve (12)&#160;months before or after the date the Plan is
    adopted by the Board.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

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    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">14.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times; font-variant: SMALL-CAPS">Choice
    of Law.</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The law of the State of Delaware shall govern all questions
    concerning the construction, validity and interpretation of this
    Plan, without regard to that state&#146;s conflict of laws rules.
</DIV>

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    <BR>
    18
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