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<SEC-DOCUMENT>0000944075-10-000018.txt : 20100505
<SEC-HEADER>0000944075-10-000018.hdr.sgml : 20100505
<ACCEPTANCE-DATETIME>20100505153451
ACCESSION NUMBER:		0000944075-10-000018
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20100429
ITEM INFORMATION:		Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20100505
DATE AS OF CHANGE:		20100505

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SOCKET MOBILE, INC.
		CENTRAL INDEX KEY:			0000944075
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRONIC COMPUTERS [3571]
		IRS NUMBER:				943155066
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-25904
		FILM NUMBER:		10801627

	BUSINESS ADDRESS:	
		STREET 1:		39700 EUREKA DRIVE
		CITY:			NEWARK
		STATE:			CA
		ZIP:			94560-4808
		BUSINESS PHONE:		5109333000

	MAIL ADDRESS:	
		STREET 1:		39700 EUREKA DRIVE
		CITY:			NEWARK
		STATE:			CA
		ZIP:			94560-4808

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	SOCKET COMMUNICATIONS INC
		DATE OF NAME CHANGE:	19950418
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>form-8k0429.htm
<DESCRIPTION>8-K
<TEXT>
<html>
<head>

</head>

<body bgcolor="#FFFFFF">
<div align=left>
  <hr width="100%">
  <div align=center>
    <hr width="100%">
    <p><font face="Times New Roman, Times, serif" size="3"><b><font size="5">UNITED
      STATES<br>
      </font></b><font size="5"><strong>SECURITIES AND EXCHANGE COMMISSION</strong></font></font></p>
  </div>
</div>
<p align=center><font face="Times New Roman, Times, serif" size="3">Washington,
  DC 20549</font></p>
<p align=center><font face="Times New Roman, Times, serif" size="3">__________________________</font></p>
<p align=center><font face="Times New Roman, Times, serif" size="3"> <b><font size="5">FORM
  8-K</font></b><br>
  <br>
  <b>CURRENT REPORT</b><br>
  <b><br>
  Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934</b><br>
  <b><br>
  </b></font></p>
<p align=center><font face="Times New Roman, Times, serif" size="3"><b>April 29</b></font><font face="Times New Roman, Times, serif"><b><font size=3>,
  2010<br>
  </font></b><font size=3> <font size="2">Date of Report<br>
  (Date of earliest event reported)</font></font><font size=3><br>
  </font></font><font face="Times New Roman, Times, serif" size="3"> </font></p>
<p align=center><font face="Times New Roman, Times, serif" size="5"><strong><font size="6">SOCKET
  MOBILE, INC.</font></strong></font><font face="Times New Roman, Times, serif"><br>
  <font size=2>(Exact name of registrant as specified in its charter) </font></font></p>
<p>&nbsp;
<table cols=3 width="100%">
  <tr>
    <td height=28 width="34%">
      <center>
        <font face="Times New Roman, Times, serif" size=3><b>Delaware<br>
        </b></font><font face="Times New Roman, Times, serif" size=2>(State or
        other jurisdiction of incorporation)</font><font face="Times New Roman, Times, serif" size=3><b>
        </b> </font>
      </center>
    </td>
    <td height=28 width="32%">
      <center>
        <font face="Times New Roman, Times, serif" size=3><b>001-13810<br>
        </b></font><font face="Times New Roman, Times, serif" size=2>(Commission
        File Number)</font><font face="Times New Roman, Times, serif" size=3><b>
        </b></font>
      </center>
    </td>
    <td height=28 width="34%">
      <center>
        <font face="Times New Roman, Times, serif" size=3><b>94-3155066</b><br>
        </font><font face="Times New Roman, Times, serif" size=2>(IRS Employer
        Identification No.)</font><font face="Times New Roman, Times, serif" size=3>
        </font>
      </center>
    </td>
  </tr>
</table>
<font face="Times New Roman, Times, serif"><br>
</font>
<p align=center><font face="Times New Roman, Times, serif" size="3"><b>39700 Eureka
  Drive <br>
  Newark, CA 94560</b></font><font face="Times New Roman, Times, serif"><br>
  <font size=2>(Address of principal executive offices, including zip code) </font></font></p>
<p align=center><font face="Times New Roman, Times, serif" size="3"><b>(510) 933-3000<br>
  </b></font> <font face="Times New Roman, Times, serif"><font size="2">(Registrant's
  telephone number, including area code)</font></font>
<div align="center">
  <p>&nbsp;</p>
  <p align="left">Check the appropriate box below if the Form 8-K filing is intended
    to simultaneously satisfy the filing obligation of the registrant under any
    of the following provisions (see General Instruction A.2. below):</p>
  <p align="left"><font face="Times New Roman, Times, serif"><font size="3">[
    ] Written communications pursuant to Rule 425 under the Securities Act (17
    CFR 230.425)</font></font></p>
  <p align="left"><font face="Times New Roman, Times, serif"><font size="3">[
    ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
    240.14a-12)</font></font></p>
  <p align="left"><font face="Times New Roman, Times, serif"><font size="3">[
    ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
    Act (17 CFR 240.14d-2(b))</font></font></p>
  <p align="left"><font face="Times New Roman, Times, serif"><font size="3">[
    ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
    Act (17 CFR 240.13e-4(c))<br>
    <br>
    </font></font></p>
</div>
<p style="PAGE-BREAK-BEFORE: always"> </p>
<div align=left></div>
<div align=left>
  <hr width="100%">
  <div align=center>
    <hr width="100%">
  </div>
</div>
<p><font face="Times New Roman, Times, serif"><br>
  <b><br>
  Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
  Appointment of Certain Officers; Compensatory Arrangements of Certain Officers</b><br>
  </font></p>
<p>On April 29, 2010, the stockholders of Socket Mobile, Inc. (the &quot;Company&quot;)
  approved an amendment to its 2004 Equity Incentive Plan (the &quot;Plan&quot;)
  to allow for a one-time stock option exchange program (the &quot;Exchange Program&quot;)
  for its employees, executive officers, directors and consultants (&quot;Service
  Providers&quot;). The Exchange Program permits the Service Providers to surrender
  certain outstanding stock options that are &quot;underwater&quot; (i.e. the
  exercise prices of such options are greater than the Company's current stock
  price) in exchange for new options to purchase the same number of shares of
  the Company's Common Stock granted under the 2004 Incentive Plan, but with an
  adjusted vesting schedule and a per share exercise price equal to the fair market
  value of the Company's Common Stock on the new date of grant. Eligible options
  include all outstanding options granted prior to January 1, 2009. The Company's
  Board of Directors may commence the exchange program on or prior to August 27,
  2010 (within 120 days of the stockholder approval). The actual start date will
  be determined at the discretion of the Board.</p>
<p>The foregoing summary description of the Plan is qualified in its entirety
  by reference to the actual terms of the Plan, as amended, which is attached
  as Exhibit 10.1. For additional information regarding the Plan, refer to Proposal
  2 of the Company's 2010 Proxy Statement, as filed with the Securities and Exchange
  Commission on April 1, 2010.</p>
<p><font face="Times New Roman, Times, serif"><b>Item 9.01 Financial Statements
  and Exhibits</b><br>
  </font></p>
<p><font face="Times New Roman, Times, serif"><b>(d) Exhibits.</b></font></p>
<table cellspacing=0 cellpadding=0 width="100%" align=left border=0>
  <tr valign=bottom>
    <td align="left" height="54" width="215" style="border-bottom: 1px solid #000000" class="border">
      <div style="margin-left: 10px; text-indent: -10px">
        <div align="center" class="border"><font face="Times New Roman, Times, serif">Exhibit
          Number</font></div>
      </div>
    </td>
    <td width=29 height=54><font face="Times New Roman, Times, serif"></font></td>
    <td align="left" height="54" width="680" style="border-bottom: 1px solid #000000" class="border">

        <div class="border">

        <div align="left"><font face="Times New Roman, Times, serif">Description</font>
        </div>
      </div>
      </td>
  </tr>
  <tr valign=top>
    <td width=215 height="22">
      <div align=center><font face="Times New Roman, Times, serif">10.1</font></div>
    </td>
    <td width=29 height="22"><font face="Times New Roman, Times, serif"></font></td>
    <td width=680 height="22">Socket Mobile, Inc. 2004 Equity Incentive Plan,
      as amended</td>
  </tr>
</table>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p><font face="Times New Roman, Times, serif"><br>
  <br>
  <br>
  </font></p>
<p align="center"><font face="Times New Roman, Times, serif"><br>
  1</font></p>
<hr width="100%">
<p align="center">&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif"><b>SIGNATURES</b><br>
  </font></p>
<p>Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant
  has duly caused this report to be signed on its behalf by the undersigned hereunto
  duly authorized.<br>
  <br>
</p>
<dir>
  <dir>
    <dir>
      <dir>
        <dir>
          <blockquote>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <p align=left> </p>
            <tr valign="bottom"
align="left"></tr>
          </blockquote>
        </dir>
      </dir>
    </dir>
  </dir>
</dir>
<div align=left>
  <table height=135 cellspacing=0 cellpadding=0 width=96% align=left border=0>
    <tr>
      <td width=300><font face="Times New Roman, Times, serif"></font></td>
      <td width=21><font face="Times New Roman, Times, serif"></font></td>
      <td colspan="2"><font face="Times New Roman, Times, serif"><b>SOCKET MOBILE,
        INC.</b></font></td>
    </tr>
    <tr>
      <td width=300><font face="Times New Roman, Times, serif"></font></td>
      <td width=21><font face="Times New Roman, Times, serif"></font></td>
      <td colspan="2"><font face="Times New Roman, Times, serif"></font></td>
    </tr>
    <tr>
      <td width=300>
        <div align=left><font face="Times New Roman, Times, serif"></font></div>
      </td>
      <td width=21><font face="Times New Roman, Times, serif"></font></td>
      <td colspan="2"><font face="Times New Roman, Times, serif"></font></td>
    </tr>
    <tr>
      <td width=300 height=19>
        <div align=left><font face="Times New Roman, Times, serif">Date: May 5,
          2010</font></div>
      </td>
      <td width=21 height=19><font face="Times New Roman, Times, serif"></font></td>
      <td width=30 height=19><font face="Times New Roman, Times, serif">By: <u>/s/
        </u></font></td>
      <td width=379 height=19><font face="Times New Roman, Times, serif"><u>David
        W. Dunlap</u></font></td>
    </tr>
    <tr>
      <td width=300 height=40>
        <div align=left><font face="Times New Roman, Times, serif"></font></div>
      </td>
      <td width=21 height=40><font face="Times New Roman, Times, serif"></font></td>
      <td width=30 height=40>
        <blockquote>
          <div align="left"><font face="Times New Roman, Times, serif"></font></div>
        </blockquote>
      </td>
      <td width=379 height=40><font face="Times New Roman, Times, serif">Name:
        David W. Dunlap<br>
        Vice President, Finance and Administration <br>
        and Chief Financial Officer</font></td>
    </tr>
  </table>
</div>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p><font face="Times New Roman, Times, serif"><br>
  <br>
  <br>
  <br>
  </font></p>
<p align="center"><font face="Times New Roman, Times, serif">2</font></p>
<hr>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif"><b>EXHIBIT INDEX</b></font></p>
<p>&nbsp;</p>
<table cellspacing=0 cellpadding=0 width="100%" align=left border=0>
  <tr valign=bottom>
    <td align="left" height="54" width="215" style="border-bottom: 1px solid #000000" class="border">
      <div style="margin-left: 10px; text-indent: -10px">
        <div align="center" class="border"><font face="Times New Roman, Times, serif">Exhibit
          Number</font></div>
      </div>
    </td>
    <td width=29 height=54><font face="Times New Roman, Times, serif"></font></td>
    <td align="left" height="54" width="680" style="border-bottom: 1px solid #000000" class="border">
      <div class="border">
        <div align="left"><font face="Times New Roman, Times, serif">Description</font>
        </div>
      </div>
    </td>
  </tr>
  <tr valign=top>
    <td width=215 height="22">
      <div align=center><font face="Times New Roman, Times, serif">10.1</font></div>
    </td>
    <td width=29 height="22"><font face="Times New Roman, Times, serif"></font></td>
    <td width=680 height="22">Socket Mobile, Inc. 2004 Equity Incentive Plan,
      as amended</td>
  </tr>
</table>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">3</font></p>
<hr>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>ex101.htm
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
<html>
<head>
<title>Untitled Document</title>
</head>

<body bgcolor="#FFFFFF">
<p align="right"><font face="Times New Roman, Times, serif"><b>Exhibit 10.1</b><br>
  </font></p>
<p>&nbsp;</p>
<p align="center"> <font face="Times New Roman, Times, serif"><b>SOCKET MOBILE,
  INC.<br>
  <br>
  2004 EQUITY INCENTIVE PLAN<br>
  <br>
  (As Amended April 29, 2010) </b></font></p>
<p>&nbsp;</p>
<p>1. <u>Purposes of the Plan</u>. The purposes of this Plan are:</p>
<ul>
  <li>to attract and retain the best available personnel for positions of substantial
    responsibility,<br>
    <br>
  </li>
  <li>to provide additional incentive to Employees, Directors and Consultants,
    and<br>
    <br>
  </li>
  <li>to promote the success of the Company's business.
    <p>The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock
      Options, Restricted Stock, Stock Appreciation Rights, Performance Units
      and Performance Shares.</p>
  </li>
</ul>
<p>2. <u>Definitions</u>. As used herein, the following definitions will apply:</p>
<blockquote>
  <p> (a) &quot;<u>Administrator</u>&quot; means the Board or any of its Committees
    as will be administering the Plan, in accordance with Section 4 of the Plan.
  </p>
  <p>(b) &quot;<u>Applicable Laws</u>&quot; means the requirements relating to
    the administration of equity-based awards under U.S. state corporate laws,
    U.S. federal and state securities laws, the Code, any stock exchange or quotation
    system on which the Common Stock is listed or quoted and the applicable laws
    of any foreign country or jurisdiction where Awards are, or will be, granted
    under the Plan.</p>
  <p>(c) &quot;<u>Award</u>&quot; means, individually or collectively, a grant
    under the Plan of Options, SARs, Restricted Stock, Performance Units or Performance
    Shares.</p>
  <p>(d) &quot;<u>Award Agreement</u>&quot; means the written or electronic agreement
    setting forth the terms and provisions applicable to each Award granted under
    the Plan. The Award Agreement is subject to the terms and conditions of the
    Plan.</p>
  <p>(e) &quot;<u>Board</u>&quot; means the Board of Directors of the Company.</p>
  <p>(f) &quot;<u>Cash Position</u>&quot; means as to any Performance Period,
    the Company' s level of cash and cash equivalents, including, without limitation,
    amounts classified for financial reporting purposes as short-term investments
    and restricted investments.</p>
  <p>(g) &quot;<u>Change in Control</u>&quot; means the occurrence of any of the
    following events:</p>
</blockquote>
<ul>
  <blockquote>
    <p>(i) Any &quot;person&quot; (as such term is used in Sections 13(d) and
      14(d) of the Exchange Act) becomes the &quot;beneficial owner&quot; (as
      defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities
      of the Company representing fifty percent (50%) or more of the total voting
      power represented by the Company's then outstanding voting securities; or</p>
    <p>&nbsp;</p>
  </blockquote>
</ul>
<p align="center"><font face="Times New Roman, Times, serif">1</font></p>
<hr>
<p><font face="Times New Roman, Times, serif"><br>
  <font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>(ii)
  The consummation of the sale or disposition by the Company of all or substantially
  all of the Company's assets; or</font></p>
<p><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>(iii)
  The consummation of a merger or consolidation of the Company with any other
  corporation, other than a merger or consolidation which would result in the
  voting securities of the Company outstanding immediately prior thereto continuing
  to represent (either by remaining outstanding or by being converted into voting
  securities of the surviving entity or its parent) at least fifty percent (50%)
  of the total voting power represented by the voting securities of the Company
  or such surviving entity or its parent outstanding immediately after such merger
  or consolidation.</p>
<blockquote>
  <p>(h) &quot;<u>Code</u>&quot; means the Internal Revenue Code of 1986, as amended.
    Any reference to a section of the Code herein will be a reference to any successor
    or amended section of the Code.</p>
  <p>(i) &quot;<u>Committee</u>&quot; means a committee of Directors or of other
    individuals satisfying Applicable Laws appointed by the Board in accordance
    with Section 4 hereof.</p>
  <p>(j) &quot;<u>Common Stock</u>&quot; means the common stock of the Company.</p>
  <p>(k) &quot;<u>Company</u>&quot; means Socket Mobile, Inc., a Delaware corporation,
    or any successor thereto.</p>
  <p>(l) &quot;<u>Consultant</u>&quot; means any person, including an advisor,
    engaged by the Company or a Parent or Subsidiary to render services to such
    entity.</p>
  <p>(m) &quot;<u>Determination Date</u>&quot; means the latest possible date
    that will not jeopardize the qualification of an Award granted under the Plan
    as &quot;performance-based compensation&quot; under Section 162(m) of the
    Code.</p>
  <p>(n) &quot;<u>Director</u>&quot; means a member of the Board.</p>
  <p>(o) &quot;<u>Disability</u>&quot; means total and permanent disability as
    defined in Section 22(e)(3) of the Code, provided that in the case of Awards
    other than Incentive Stock Options, the Administrator in its discretion may
    determine whether a permanent and total disability exists in accordance with
    uniform and non-discriminatory standards adopted by the Administrator from
    time to time. </p>
  <p>(p) &quot;<u>Earnings Per Share</u>&quot; means as to any Performance Period,
    the Company's or a business unit's Net Income, divided by a weighted average
    number of common shares outstanding and dilutive common equivalent shares
    deemed outstanding, determined in accordance with U.S. GAAP; provided, however,
    that if Net Income as to any such Performance Period is a negative amount,
    then Earnings Per Share means the Company's or business unit's Net Income,
    divided by a weighted average number of common shares outstanding, determined
    in accordance with U.S. GAAP.</p>
</blockquote>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">2</font></p>
<hr>
<blockquote>
  <p><font size="3" face="Times New Roman, Times, serif"><br>
    (q) &quot;<u>Employee</u>&quot; means any person, including Officers and Directors,
    employed by the Company or any Parent or Subsidiary of the Company. Neither
    service as a Director nor payment of a director's fee by the Company will
    be sufficient to constitute &quot;employment&quot; by the Company.</font></p>
  <p><font size="3" face="Times New Roman, Times, serif">(r) &quot;<u>Exchange
    Act</u>&quot; means the Securities Exchange Act of 1934, as amended.</font></p>
  <p><font size="3" face="Times New Roman, Times, serif">(s) &quot;<u>Excluded
    Items</u>&quot; includes, without limitation, (i) incentive compensation,
    (ii) in-process research and development expenses, (iii) acquisition costs,
    (iv) compensation expense from equity compensation, (v) operating expenses
    from acquired businesses, (vi) amortization of acquired intangible assets,
    and (vii) such other unusual or one-time items as may be identified by the
    Administrator.</font></p>
  <p><font size="3" face="Times New Roman, Times, serif">(t) &quot;<u>Fair Market
    Value</u>&quot; means, as of any date, the value of Common Stock determined
    as follows:</font></p>
  <blockquote>
    <p><font size="3" face="Times New Roman, Times, serif">(i) If the Common Stock
      is listed on any established stock exchange or a national market system,
      including without limitation the Nasdaq National Market or The Nasdaq SmallCap
      Market of The Nasdaq Stock Market, its Fair Market Value will be the closing
      sales price for such stock (or the closing bid, if no sales were reported)
      as quoted on such exchange or system on the day of determination, as reported
      in The Wall Street Journal or such other source as the Administrator deems
      reliable;</font></p>
    <p><font size="3" face="Times New Roman, Times, serif">(ii) If the Common
      Stock is regularly quoted by a recognized securities dealer but selling
      prices are not reported, the Fair Market Value of a Share will be the mean
      between the high bid and low asked prices for the Common Stock on the day
      of determination, as reported in <i>The Wall Street Journal</i> or such
      other source as the Administrator deems reliable; or</font></p>
    <p><font size="3" face="Times New Roman, Times, serif">(iii) In the absence
      of an established market for the Common Stock, the Fair Market Value will
      be determined in good faith by the Administrator.</font></p>
  </blockquote>
  <p><font size="3" face="Times New Roman, Times, serif">(u) &quot;<u>Fiscal Year</u>&quot;
    means the fiscal year of the Company.</font></p>
  <p><font size="3" face="Times New Roman, Times, serif">(v) &quot;<u>Incentive
    Stock Option</u>&quot; means an Option that by its terms qualifies and is
    otherwise intended to qualify as an incentive stock option within the meaning
    of Section 422 of the Code and the regulations promulgated thereunder.</font></p>
  <p><font size="3" face="Times New Roman, Times, serif">(w) &quot;<u>Inside Director</u>&quot;
    means a Director who is an Employee.</font></p>
  <p><font size="3" face="Times New Roman, Times, serif">(x) &quot;<u>Net Income</u>&quot;
    means as to any Performance Period, the Company's or a business unit's income
    after taxes determined in accordance with U.S. GAAP, adjusted for any Excluded
    Items approved for exclusion by the Administrator.</font></p>
  <p><font size="3" face="Times New Roman, Times, serif">(y) &quot;<u>Nonstatutory
    Stock Option</u>&quot; means an Option that by its terms does not qualify
    or is not intended to qualify as an Incentive Stock Option.</font></p>
  <p><font size="3" face="Times New Roman, Times, serif">(z) &quot;<u>Officer</u>&quot;
    means a person who is an officer of the Company within the meaning of Section
    16 of the Exchange Act and the rules and regulations promulgated thereunder.<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</blockquote>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">3</font></p>
<hr>
<blockquote>
  <p><font size="3" face="Times New Roman, Times, serif"><br>
    (aa) &quot;<u>Operating Cash Flow</u>&quot; means as to any Performance Period,
    the Company's or a business unit's cash flow generated from operating activities,
    as reported in the Company's cash flow statements and calculated in accordance
    with U.S. GAAP, adjusted for any Excluded Items approved for exclusion by
    the Administrator.</font></p>
  <p><font size="3" face="Times New Roman, Times, serif">(bb) &quot;<u>Operating
    Income</u>&quot; means as to any Performance Period, the Company's or a business
    unit's income from operations determined in accordance with U.S. GAAP, adjusted
    for any Excluded Items approved for exclusion by the Administrator.</font></p>
  <p><font size="3" face="Times New Roman, Times, serif">(cc) &quot;<u>Option</u>&quot;
    means a stock option granted pursuant to the Plan.</font></p>
  <p><font size="3" face="Times New Roman, Times, serif">(dd) &quot;<u>Parent</u>&quot;
    means a &quot;parent corporation,&quot; whether now or hereafter existing,
    as defined in Section 424(e) of the Code.</font></p>
  <p><font size="3" face="Times New Roman, Times, serif">(ee) &quot;<u>Participant</u>&quot;
    means the holder of an outstanding Award.</font></p>
  <p><font size="3" face="Times New Roman, Times, serif">(ff) &quot;<u>Performance
    Goals</u>&quot; means the goal(s) (or combined goal(s)) determined by the
    Administrator (in its discretion) to be applicable to a Participant with respect
    to an Award granted under the Plan. As determined by the Administrator, the
    Performance Goals applicable to an Award may provide for a targeted level
    or levels of achievement using one or more of the following measures: (a)
    Cash Position, (b) Earnings Per Share, (c) Net Income, (d) Operating Cash
    Flow, (e) Operating Income, (f) Return on Assets, (g) Return on Equity, (h)
    Return on Sales, (i) Revenue and (j) Total Shareholder Return. The Performance
    Goals may differ from Participant to Participant and from Award to Award.
    Prior to the Determination Date, the Administrator will determine whether
    any significant element(s) will be included in or excluded from the calculation
    of any Performance Goal with respect to any Participant.</font></p>
  <p><font size="3" face="Times New Roman, Times, serif">(vv) &quot;Subsidiary&quot;
    means a &quot;subsidiary corporation&quot;, whether now or hereafter existing,
    as defined in Section 424(f) of the Code.(gg) &quot;<u>Performance Period</u>&quot;
    means any Fiscal Year of the Company or such other period as determined by
    the Administrator in its sole discretion.</font></p>
  <p><font size="3" face="Times New Roman, Times, serif">(hh) &quot;<u>Performance
    Share</u>&quot; means an Award granted to a Participant pursuant to Section
    9.</font></p>
  <p><font size="3" face="Times New Roman, Times, serif">(ii) &quot;<u>Performance
    Unit</u>&quot; means an Award granted to a Participant pursuant to Section
    9.</font></p>
  <p><font size="3" face="Times New Roman, Times, serif">(jj) &quot;<u>Period
    of Restriction</u>&quot; means the period during which the transfer of Shares
    of Restricted Stock are subject to restrictions and therefore, the Shares
    are subject to a substantial risk of forfeiture. Such restrictions may be
    based on the passage of time, the achievement of target levels of performance,
    or the occurrence of other events as determined by the Administrator.</font></p>
  <p><font size="3" face="Times New Roman, Times, serif">(kk) &quot;<u>Plan</u>&quot;
    means this 2004 Equity Incentive Plan, as may be amended from time to time.</font></p>
  <p><font size="3" face="Times New Roman, Times, serif">(ll) &quot;<u>Restricted
    Stock</u>&quot; means Shares issued pursuant to a Restricted Stock award under
    Section 7 of the Plan, or issued pursuant to the early exercise of an Option.<br>
    </font></p>
</blockquote>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">4</font></p>
<hr>
<blockquote>
  <p><font face="Times New Roman, Times, serif"><br>
    (mm) &quot;<u>Return on Assets</u>&quot; means as to any Performance Period,
    the percentage equal to the Company's or a business unit's Operating Income
    divided by average net Company or business unit, as applicable, assets, determined
    in accordance with U.S. GAAP.</font></p>
  <p><font face="Times New Roman, Times, serif">(nn) &quot;<u>Return on Equity</u>&quot;
    means as to any Performance Period, the percentage equal to the Company's
    Net Income divided by average stockholder's equity, determined in accordance
    with U.S. GAAP.</font></p>
  <p><font face="Times New Roman, Times, serif">(oo) &quot;<u>Return on Sales</u>&quot;
    means as to any Performance Period, the percentage equal to the Company's
    or a business unit's Operating Income divided by the Company's or the business
    unit's, as applicable, Revenue.</font></p>
  <p><font face="Times New Roman, Times, serif">(pp) &quot;<u>Revenue</u>&quot;
    means as to any Performance Period, the Company's or business unit's net sales,
    determined in accordance with U.S. GAAP.</font></p>
  <p><font face="Times New Roman, Times, serif">(qq) &quot;<u>Rule 16b-3</u>&quot;
    means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in
    effect when discretion is being exercised with respect to the Plan.</font></p>
  <p><font face="Times New Roman, Times, serif">(rr) &quot;<u>Section 16(b)</u>&quot;
    means Section 16(b) of the Exchange Act.</font></p>
  <p><font face="Times New Roman, Times, serif">(ss) &quot;<u>Service Provider</u>&quot;
    means an Employee, Director or Consultant.</font></p>
  <p><font face="Times New Roman, Times, serif">(tt) &quot;<u>Share</u>&quot;
    means a share of the Common Stock, as adjusted in accordance with Section
    12 of the Plan.</font></p>
  <p><font face="Times New Roman, Times, serif">(uu) &quot;<u>Stock Appreciation
    Right</u>&quot; or &quot;SAR&quot; means an Award, granted alone or in connection
    with an Option, that pursuant to Section 8 is designated as a SAR.</font></p>
  <p>(vv) &quot;<u>Subsidiary</u>&quot; means a &quot;subsidiary corporation&quot;,
    whether now or hereafter existing, as defined in Section 424(f) of the Code.</p>
  <p>(ww) &quot;<u>Total Shareholder Return</u>&quot; means as to any Performance
    Period, the total return (change in share price plus reinvestment of any dividends)
    of a Share. </p>
  <p>(xx) &quot;<u>U.S. GAAP</u>&quot; means generally accepted accounting principles
    in the United States.</p>
</blockquote>
<p>3. <u>Stock Subject to the Plan</u>. </p>
<blockquote>
  <p><font face="Times New Roman, Times, serif">(a) <u>Stock Subject to the Plan</u>.
    Subject to the provisions of Section 12 of the Plan, the maximum aggregate
    number of Shares that may be awarded and sold under the Plan is (i) the number
    of Shares which have been reserved but not issued under the Company's 1995
    Stock Plan, as amended and restated (the &quot;1995 Plan&quot;) as of the
    date of stockholder approval of this Plan, (ii) any Shares returned to the
    1995 Plan as a result of termination of options or repurchase of Shares issued
    under such plan, and (iii) an annual increase to be added on the first day
    of the Company's fiscal year beginning in 2005, equal to the least of (A)
    2,000,000 Shares, (B) 4% of the outstanding Shares on such date or (C) an
    amount determined by the Board.. The Shares may be authorized, but unissued,
    or reacquired Common Stock. Shares will not be deemed to have been issued
    pursuant to the Plan with respect to any portion of an Award that is settled
    in cash. Upon payment in Shares pursuant to the exercise of an SAR, the number
    of Shares available for issuance under the Plan will be reduced only by the
    number of Shares actually issued in such payment. If the exercise price of
    an Option is paid by tender to the Company, or attestation to the ownership,
    of Shares owned by the Participant, the number of Shares available for issuance
    under the Plan will be reduced by the gross number of Shares for which the
    Option is exercised.<br>
    </font></p>
</blockquote>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">5</font></p>
<hr>
<blockquote>
  <p><font face="Times New Roman, Times, serif"><br>
    (b) <u>Lapsed Awards</u>. If an Award expires or becomes unexercisable without
    having been exercised in full, the unpurchased Shares which were subject thereto
    will become available for future grant or sale under the Plan (unless the
    Plan has terminated); <u>provided</u>, however, that Shares that have actually
    been issued under the Plan, whether upon exercise of an Award, will not be
    returned to the Plan and will not become available for future distribution
    under the Plan, except that if unvested Shares are forfeited or repurchased
    by the Company, such Shares will become available for future grant under the
    Plan. </font></p>
  <p>(c) <u>Share Reserve</u>. The Company, during the term of this Plan, will
    at all times reserve and keep available such number of Shares as will be sufficient
    to satisfy the requirements of the Plan.</p>
</blockquote>
<p>4. <u>Administration of the Plan</u>. </p>
<blockquote>
  <p>(a) <u>Procedure</u>.</p>
  <blockquote>
    <p>(i) <u>Multiple Administrative Bodies</u>. Different Committees with respect
      to different groups of Service Providers may administer the Plan.</p>
    <p>(ii) <u>Section 162(m)</u>. To the extent that the Administrator determines
      it to be desirable to qualify Awards granted hereunder as &quot;performance-based
      compensation&quot; within the meaning of Section 162(m) of the Code, the
      Plan will be administered by a Committee of two or more &quot;outside directors&quot;
      within the meaning of Section 162(m) of the Code.</p>
    <p>(iii) <u>Rule 16b-3</u>. To the extent desirable to qualify transactions
      hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder
      will be structured to satisfy the requirements for exemption under Rule
      16b-3.</p>
    <p>(iv) <u>Other Administration</u>. Other than as provided above, the Plan
      will be administered by (A) the Board or (B) a Committee, which committee
      will be constituted to satisfy Applicable Laws. </p>
  </blockquote>
  <p>(b) <u>Powers of the Administrator</u>. Subject to the provisions of the
    Plan, and in the case of a Committee, subject to the specific duties delegated
    by the Board to such Committee, the Administrator will have the authority,
    in its discretion:</p>
  <blockquote>
    <p>(i) to determine the Fair Market Value;</p>
    <p>(ii) to select the Service Providers to whom Awards may be granted hereunder;</p>
  </blockquote>
</blockquote>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">6</font></p>
<hr>
<blockquote>
  <blockquote>
    <p><font face="Times New Roman, Times, serif"><br>
      (iii) to determine the number of Shares to be covered by each Award granted
      hereunder; </font></p>
    <p>(iv) to approve forms of agreement for use under the Plan;</p>
    <p>(v) to determine the terms and conditions, not inconsistent with the terms
      of the Plan, of any Award granted hereunder. Such terms and conditions include,
      but are not limited to, the exercise price, the time or times when Awards
      may be exercised (which may be based on performance criteria), any vesting
      acceleration or waiver of forfeiture restrictions, and any restriction or
      limitation regarding any Award or the Shares relating thereto, based in
      each case on such factors as the Administrator will determine;</p>
    <p>(vi) to construe and interpret the terms of the Plan and Awards granted
      pursuant to the Plan; </p>
    <p>(vii) to prescribe, amend and rescind rules and regulations relating to
      the Plan, including rules and regulations relating to sub-plans established
      for the purpose of satisfying applicable foreign laws;</p>
    <p>(viii) to modify or amend each Award (subject to Section 17(c) of the Plan),
      including the discretionary authority to extend the post-termination exercisability
      period of Awards longer than is otherwise provided for in the Plan. Notwithstanding
      the foregoing, the Administrator may not modify or amend an Option or SAR
      to reduce the exercise price of such Option or SAR after it has been granted
      (except for adjustments made pursuant to Section 12), unless approved by
      the Company's stockholders and neither may the Committee, without the approval
      of the Company's stockholders, cancel any outstanding Option or SAR and
      immediately replace it with a new Option or SAR with a lower exercise price;</p>
    <p>(ix) to allow Participants to satisfy withholding tax obligations in such
      manner as prescribed in Section 13;</p>
    <p>(x) to authorize any person to execute on behalf of the Company any instrument
      required to effect the grant of an Award previously granted by the Administrator;</p>
    <p>(xi) to allow a Participant to defer the receipt of the payment of cash
      or the delivery of Shares that would otherwise be due to such Participant
      under an Award</p>
    <p>(xii) to make all other determinations deemed necessary or advisable for
      administering the Plan.</p>
  </blockquote>
  <p>(c) <u>Effect of Administrator's Decision</u>. The Administrator's decisions,
    determinations and interpretations will be final and binding on all Participants
    and any other holders of Awards.</p>
</blockquote>
<p>5. <u>Eligibility</u>. Nonstatutory Stock Options, Restricted Stock, Stock
  Appreciation Rights, Performance Units and Performance Shares may be granted
  to Service Providers. Incentive Stock Options may be granted only to Employees.</p>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">7</font></p>
<hr>
<p><font face="Times New Roman, Times, serif"><br>
  6. <u>Stock Options</u>.</font></p>
<blockquote>
  <p><font face="Times New Roman, Times, serif">(a) <u>Limitations</u>.</font></p>
  <blockquote>
    <p><font face="Times New Roman, Times, serif">(i) Each Option will be designated
      in the Award Agreement as either an Incentive Stock Option or a Nonstatutory
      Stock Option. However, notwithstanding such designation, to the extent that
      the aggregate Fair Market Value of the Shares with respect to which Incentive
      Stock Options are exercisable for the first time by the Participant during
      any calendar year (under all plans of the Company and any Parent or Subsidiary)
      exceeds $100,000, such Options will be treated as Nonstatutory Stock Options.
      For purposes of this Section 6(a), Incentive Stock Options will be taken
      into account in the order in which they were granted. The Fair Market Value
      of the Shares will be determined as of the time the Option with respect
      to such Shares is granted.</font></p>
    <p><font face="Times New Roman, Times, serif">(ii) The following limitations
      will apply to grants of Options:</font></p>
    <blockquote>
      <p><font face="Times New Roman, Times, serif">(1) No Service Provider will
        be granted, in any Fiscal Year, Options and/or Stock Appreciation Rights
        to purchase more than 750,000 Shares.</font></p>
      <p><font face="Times New Roman, Times, serif">(2) In connection with his
        or her initial service, a Service Provider may be granted Options and/or
        Stock Appreciation Rights to purchase up to an additional 1,250,000 Shares,
        which will not count against the limit set forth in Section 6(a)(2)(ii)(1)
        above.</font></p>
      <p><font face="Times New Roman, Times, serif">(3) The foregoing limitations
        will be adjusted proportionately in connection with any change in the
        Company's capitalization as described in Section 12.</font></p>
      <p><font face="Times New Roman, Times, serif">(4) If an Option and/or Stock
        Appreciation Right is cancelled in the same Fiscal Year in which it was
        granted (other than in connection with a transaction described in Section
        12), the cancelled Option and/or Stock Appreciation Right, as applicable,
        will be counted against the limits set forth in subsections (1) and (2)
        above. For this purpose, if the exercise price of an Option and/or Stock
        Appreciation Right is reduced, the transaction will be treated as a cancellation
        of the Option and/or Stock Appreciation Right and the grant of a new Option
        and/or Stock Appreciation Right, as applicable.</font></p>
    </blockquote>
  </blockquote>
  <p><font face="Times New Roman, Times, serif">(b) <u>Term of Option</u>. The
    Administrator will determine the term of each Option in its sole discretion.
    In the case of an Incentive Stock Option, the term will be ten (10) years
    from the date of grant or such shorter term as may be provided in the Award
    Agreement. Moreover, in the case of an Incentive Stock Option granted to a
    Participant who, at the time the Incentive Stock Option is granted, owns stock
    representing more than ten percent (10%) of the total combined voting power
    of all classes of stock of the Company or any Parent or Subsidiary, the term
    of the Incentive Stock Option will be five (5) years from the date of grant
    or such shorter term as may be provided in the Award Agreement.</font></p>
  <p>(c) <u>Option Exercise Price and Consideration</u>.</p>
  <blockquote>
    <p><font face="Times New Roman, Times, serif">(i) <u>Exercise Price</u>. The
      per share exercise price for the Shares to be issued pursuant to exercise
      of an Option will be determined by the Administrator, subject to the following:</font></p>
    <blockquote>
      <p><font face="Times New Roman, Times, serif">(1) In the case of an Incentive
        Stock Option<br>
        </font></p>
    </blockquote>
  </blockquote>
</blockquote>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">8</font></p>
<hr>
<blockquote>
  <blockquote>
    <blockquote>
      <blockquote>
        <p><font face="Times New Roman, Times, serif"><br>
          a) granted to an Employee who, at the time the Incentive Stock Option
          is granted, owns stock representing more than ten percent (10%) of the
          voting power of all classes of stock of the Company or any Parent or
          Subsidiary, the per Share exercise price will be no less than 110% of
          the Fair Market Value per Share on the date of grant. </font></p>
        <p>b) granted to any Employee other than an Employee described in paragraph
          (A) immediately above, the per Share exercise price will be no less
          than 100% of the Fair Market Value per Share on the date of grant.</p>
      </blockquote>
      <p>(2) In the case of a Nonstatutory Stock Option, the per Share exercise
        price shall be determined by the Administrator, but shall be no less than
        100% of the Fair Market Value per Share on the date of grant. </p>
      <p>(3) Notwithstanding the foregoing, Options may be granted with a per
        Share exercise price of less than 100% of the Fair Market Value per Share
        on the date of grant pursuant to a transaction described in, and in a
        manner consistent with, Section 424(a) of the Code.</p>
    </blockquote>
    <p>(ii) <u>Waiting Period and Exercise Dates</u>. At the time an Option is
      granted, the Administrator will fix the period within which the Option may
      be exercised and will determine any conditions that must be satisfied before
      the Option may be exercised.</p>
    <p>(iii) <u>Form of Consideration</u>. The Administrator will determine the
      acceptable form of consideration for exercising an Option, including the
      method of payment. In the case of an Incentive Stock Option, the Administrator
      will determine the acceptable form of consideration at the time of grant.
      Such consideration may consist entirely of: (1) cash; (2) check; (3) promissory
      note; (4) other Shares, provided Shares acquired directly or indirectly
      from the Company, (A) have been owned by the Participant and not subject
      to substantial risk of forfeiture for more than six months on the date of
      surrender, and (B) have a Fair Market Value on the date of surrender equal
      to the aggregate exercise price of the Shares as to which said Option will
      be exercised; (5) consideration received by the Company under a cashless
      exercise program implemented by the Company in connection with the Plan;
      (6) a reduction in the amount of any Company liability to the Participant,
      including any liability attributable to the Participant's participation
      in any Company-sponsored deferred compensation program or arrangement; (7)
      any combination of the foregoing methods of payment; or (8) such other consideration
      and method of payment for the issuance of Shares to the extent permitted
      by Applicable Laws.</p>
  </blockquote>
  <p>(d) <u>Exercise of Option</u>.</p>
  <blockquote>
    <p>(i) <u>Procedure for Exercise; Rights as a Stockholder</u>. Any Option
      granted hereunder will be exercisable according to the terms of the Plan
      and at such times and under such conditions as determined by the Administrator
      and set forth in the Award Agreement. An Option may not be exercised for
      a fraction of a Share.</p>
    </blockquote>
</blockquote>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">9</font></p>
<hr>
<blockquote>
  <blockquote>
    <p><font face="Times New Roman, Times, serif"><br>
      An Option will be deemed exercised when the Company receives: (i) notice
      of exercise (in such form as the Administrator specify from time to time)
      from the person entitled to exercise the Option, and (ii) full payment for
      the Shares with respect to which the Option is exercised (together with
      an applicable withholding taxes). Full payment may consist of any consideration
      and method of payment authorized by the Administrator and permitted by the
      Award Agreement and the Plan. Shares issued upon exercise of an Option will
      be issued in the name of the Participant or, if requested by the Participant,
      in the name of the Participant and his or her spouse. Until the Shares are
      issued (as evidenced by the appropriate entry on the books of the Company
      or of a duly authorized transfer agent of the Company), no right to vote
      or receive dividends or any other rights as a stockholder will exist with
      respect to the Shares subject to an Award, notwithstanding the exercise
      of the Option. The Company will issue (or cause to be issued) such Shares
      promptly after the Option is exercised. No adjustment will be made for a
      dividend or other right for which the record date is prior to the date the
      Shares are issued, except as provided in Section 12 of the Plan.</font></p>
    <p>Exercising an Option in any manner will decrease the number of Shares thereafter
      available, both for purposes of the Plan and for sale under the Option,
      by the number of Shares as to which the Option is exercised.</p>
    <p>(ii) <u>Termination of Relationship as a Service Provider</u>. If a Participant
      ceases to be a Service Provider, other than upon the Participant's death
      or Disability, the Participant may exercise his or her Option within such
      period of time as is specified in the Award Agreement to the extent that
      the Option is vested on the date of termination (but in no event later than
      the expiration of the term of such Option as set forth in the Award Agreement).
      In the absence of a specified time in the Award Agreement, the Option will
      remain exercisable for three (3) months following the Participant's termination.
      Unless otherwise provided by the Administrator, if on the date of termination
      the Participant is not vested as to his or her entire Option, the Shares
      covered by the unvested portion of the Option will revert to the Plan. If
      after termination the Participant does not exercise his or her Option within
      the time specified by the Administrator, the Option will terminate, and
      the Shares covered by such Option will revert to the Plan.</p>
    <p>(iii) <u>Disability of Participant</u>. If a Participant ceases to be a
      Service Provider as a result of the Participant's Disability, the Participant
      may exercise his or her Option within such period of time as is specified
      in the Award Agreement to the extent the Option is vested on the date of
      termination (but in no event later than the expiration of the term of such
      Option as set forth in the Award Agreement). In the absence of a specified
      time in the Award Agreement, the Option will remain exercisable for twelve
      (12) months following the Participant's termination. Unless otherwise provided
      by the Administrator, if on the date of termination the Participant is not
      vested as to his or her entire Option, the Shares covered by the unvested
      portion of the Option will revert to the Plan. If after termination the
      Participant does not exercise his or her Option within the time specified
      herein, the Option will terminate, and the Shares covered by such Option
      will revert to the Plan.</p>
    <p>(iv) <u>Death of Participant</u>. If a Participant dies while a Service
      Provider, the Option may be exercised following the Participant's death
      within such period of time as is specified in the Award Agreement to the
      extent that the Option is vested on the date of death (but in no event may
      the option be exercised later than the expiration of the term of such Option
      as set forth in the Award Agreement), by the Participant's designated beneficiary,
      provided such beneficiary has been designated prior to Participant's death
      in a form acceptable to the Administrator. If no such beneficiary has been
      designated by the Participant, then such Option may be exercised by the
      personal representative of the Participant's estate or by the person(s)
      to whom the Option is transferred pursuant to the Participant's will or
      in accordance with the laws of descent and distribution. In the absence
      of a specified time in the Award Agreement, the Option will remain exercisable
      for twelve (12) months following Participant's death. Unless otherwise provided
      by the Administrator, if at the time of death Participant is not vested
      as to his or her entire Option, the Shares covered by the unvested portion
      of the Option will immediately revert to the Plan. If the Option is not
      so exercised within the time specified herein, the Option will terminate,
      and the Shares covered by such Option will revert to the Plan. </p>
  </blockquote>
</blockquote>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">10</font></p>
<hr>
<p><font face="Times New Roman, Times, serif"><br>
  7. <u>Restricted Stock</u>.</font></p>
<blockquote>
  <p><font face="Times New Roman, Times, serif">(a) <u>Grant of Restricted Stock</u>.
    Subject to the terms and provisions of the Plan, the Administrator, at any
    time and from time to time, may grant Shares of Restricted Stock to Service
    Providers in such amounts as the Administrator, in its sole discretion, will
    determine.</font></p>
  <p><font face="Times New Roman, Times, serif">(b) <u>Restricted Stock Agreement</u>.
    Each Award of Restricted Stock will be evidenced by an Award Agreement that
    will specify the Period of Restriction, the number of Shares granted, and
    such other terms and conditions as the Administrator, in its sole discretion,
    will determine. Notwithstanding the foregoing, during any Fiscal Year no Participant
    will receive more than an aggregate of 250,000 Shares of Restricted Stock;
    provided, however, that in connection with a Participant's initial service
    as an Employee, an Employee may be granted an aggregate of up to an additional
    500,000 Shares of Restricted Stock. Unless the Administrator determines otherwise,
    Shares of Restricted Stock will be held by the Company as escrow agent until
    the restrictions on such Shares have lapsed.</font></p>
  <p><font face="Times New Roman, Times, serif">(c) <u>Transferability</u>. Except
    as provided in this Section 7, Shares of Restricted Stock may not be sold,
    transferred, pledged, assigned, or otherwise alienated or hypothecated until
    the end of the applicable Period of Restriction.</font></p>
  <p><font face="Times New Roman, Times, serif">(d) <u>Other Restrictions</u>.
    The Administrator, in its sole discretion, may impose such other restrictions
    on Shares of Restricted Stock as it may deem advisable or appropriate.</font></p>
  <p><font face="Times New Roman, Times, serif">(e) <u>Removal of Restrictions</u>.
    Except as otherwise provided in this Section 7, Shares of Restricted Stock
    covered by each Restricted Stock grant made under the Plan will be released
    from escrow as soon as practicable after the last day of the Period of Restriction.
    The Administrator, in its discretion, may accelerate the time at which any
    restrictions will lapse or be removed. </font></p>
  <p><font face="Times New Roman, Times, serif">(f) <u>Voting Rights</u>. During
    the Period of Restriction, Service Providers holding Shares of Restricted
    Stock granted hereunder may exercise full voting rights with respect to those
    Shares, unless the Administrator determines otherwise.</font></p>
  <p><font face="Times New Roman, Times, serif">(g) <u>Dividends and Other Distributions</u>.
    During the Period of Restriction, Service Providers holding Shares of Restricted
    Stock will be entitled to receive all dividends and other distributions paid
    with respect to such Shares unless otherwise provided in the Award Agreement.
    If any such dividends or distributions are paid in Shares, the Shares will
    be subject to the same restrictions on transferability and forfeitability
    as the Shares of Restricted Stock with respect to which they were paid.<br>
    </font></p>
</blockquote>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">11</font></p>
<hr>
<blockquote>
  <p><font face="Times New Roman, Times, serif"><br>
    (h) <u>Return of Restricted Stock to Company</u>. On the date set forth in
    the Award Agreement, the Restricted Stock for which restrictions have not
    lapsed will revert to the Company and again will become available for grant
    under the Plan.</font></p>
  <p>(i) <u>Section 162(m) Performance Restrictions</u>. For purposes of qualifying
    a Restricted Stock as &quot;performance-based compensation&quot; under Section
    162(m) of the Code, the Administrator, in its discretion, may set restrictions
    based upon the achievement of Performance Goals, which will be set by the
    Administrator on or before the Determination Date. In this connection, the
    Administrator will follow any procedures determined by it from time to time
    to be necessary or appropriate to ensure qualification of the Restricted Stock
    under Section 162(m) of the Code (e.g., in determining the Performance Goals).</p>
</blockquote>
<p>8. <u>Stock Appreciation Rights</u>. </p>
<blockquote>
  <p>(a) <u>Grant of SARs</u>. Subject to the terms and conditions of the Plan,
    a SAR may be granted to Service Providers at any time and from time to time
    as will be determined by the Administrator, in its sole discretion. </p>
  <p>(b) <u>Number of Shares</u>. The Administrator will have complete discretion
    to determine the number of SARs granted to any Participant, provided that
    during any Fiscal Year, no Participant will be granted Options and/or SARs
    covering more than 750,000 Shares. Notwithstanding the foregoing limitation,
    in connection with a Participant's initial service as an Employee, an Employee
    may be granted Options and/or SARs covering up to an additional 1,250,000
    Shares.</p>
  <p>(c) <u>Exercise Price and Other Terms</u>. The Administrator, subject to
    the provisions of the Plan, will have complete discretion to determine the
    terms and conditions of SARs granted under the Plan. In the case of a freestanding
    SAR, the exercise price will be not less than one hundred percent (100%) of
    the Fair Market Value of a Share on the date of grant. The exercise price
    of a tandem or affiliated SARs will equal the exercise price of the related
    Option.</p>
  <p>(d) <u>SAR Agreement</u>. Each SAR grant will be evidenced by an Award Agreement
    that will specify the exercise price, the term of the SAR, the conditions
    of exercise, and such other terms and conditions as the Administrator, in
    its sole discretion, will determine.</p>
  <p>(e) <u>Expiration of SARs</u>. An SAR granted under the Plan will expire
    upon the date determined by the Administrator, in its sole discretion, and
    set forth in the Award Agreement. Notwithstanding the foregoing, the rules
    of Section 6(d) also will apply to SARs.</p>
  <p>(f) <u>Payment of SAR Amount</u>. Upon exercise of an SAR, a Participant
    will be entitled to receive payment from the Company in an amount determined
    by multiplying:</p>
  <blockquote>
    <p>(i) The difference between the Fair Market Value of a Share on the date
      of exercise over the exercise price; times</p>
    <p>(ii) The number of Shares with respect to which the SAR is exercised.</p>
  </blockquote>
</blockquote>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">12</font></p>
<hr>
<p><font face="Times New Roman, Times, serif"><br>
  At the discretion of the Administrator, the payment upon SAR exercise may be
  in cash, in Shares of equivalent value, or in some combination thereof.</font></p>
<p>9. <u>Performance Units and Performance Shares</u>.</p>
<blockquote>
  <p>(a) <u>Grant of Performance Units/Shares</u>. Performance Units and Performance
    Shares may be granted to Service Providers at any time and from time to time,
    as will be determined by the Administrator, in its sole discretion. The Administrator
    will have complete discretion in determining the number of Performance Units
    and Performance Shares granted to each Participant provided that during any
    Fiscal Year, (a) no Participant will receive Performance Units having an initial
    value greater than $1,000,000, and (b) no Participant will receive more than
    250,000 Performance Shares. Notwithstanding the foregoing limitation, in connection
    with a Participant's initial service as an Employee, an Employee may be granted
    up to an additional 500,000 Performance Shares.</p>
  <p>(b) <u>Value of Performance Units/Shares</u>. Each Performance Unit will
    have an initial value that is established by the Administrator on or before
    the date of grant. Each Performance Share will have an initial value equal
    to the Fair Market Value of a Share on the date of grant.</p>
  <p>(c) <u>Performance Objectives and Other Terms</u>. The Administrator will
    set performance objectives or other vesting provisions (including, without
    limitation, continued status as a Service Provider) in its discretion which,
    depending on the extent to which they are met, will determine the number or
    value of Performance Units/Shares that will be paid out to the Service Provider.
    The time period during which the performance objectives or other vesting provisions
    must be met will be called the &quot;Performance Period.&quot; Each Award
    of Performance Units/Shares will be evidenced by an Award Agreement that will
    specify the Performance Period, and such other terms and conditions as the
    Administrator, in its sole discretion, will determine. </p>
  <blockquote>
    <p>(i) <u>General Performance Objectives</u>. The Administrator may set performance
      objectives based upon the achievement of Company-wide, divisional, or individual
      goals, or any other basis determined by the Administrator in its discretion.
    </p>
    <p>(ii) <u>Section 162(m) Performance Objectives</u>. For purposes of qualifying
      grants of Performance Units/Shares as &quot;performance-based compensation&quot;
      under Section 162(m) of the Code, the Administrator, in its discretion,
      may determine that the performance objectives applicable to Performance
      Units/Shares will be based on the achievement of Performance Goals. The
      Administrator will set the Performance Goals on or before the Determination
      Date. In granting Performance Units/Shares which are intended to qualify
      under Section 162(m) of the Code, the Administrator will follow any procedures
      determined by it from time to time to be necessary or appropriate to ensure
      qualification of the Performance Units/Shares under Section 162(m) of the
      Code (e.g., in determining the Performance Goals).</p>
  </blockquote>
  <p>(d) <u>Earning of Performance Units/Shares</u>. After the applicable Performance
    Period has ended, the holder of Performance Units/Shares will be entitled
    to receive a payout of the number of Performance Units/Shares earned by the
    Participant over the Performance Period, to be determined as a function of
    the extent to which the corresponding performance objectives or other vesting
    provisions have been achieved. After the grant of a Performance Unit/Share,
    the Administrator, in its sole discretion, may reduce or waive any performance
    objectives or other vesting provisions for such Performance Unit/Share. </p>
</blockquote>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">13</font></p>
<hr>
<blockquote>
  <p><font face="Times New Roman, Times, serif"><br>
    (e) <u>Form and Timing of Payment of Performance Units/Shares</u>. Payment
    of earned Performance Units/Shares will be made as soon as practicable after
    the expiration of the applicable Performance Period. The Administrator, in
    its sole discretion, may pay earned Performance Units/Shares in the form of
    cash, in Shares (which have an aggregate Fair Market Value equal to the value
    of the earned Performance Units/Shares at the close of the applicable Performance
    Period) or in a combination thereof.</font></p>
  <p>(f) <u>Cancellation of Performance Units/Shares</u>. On the date set forth
    in the Award Agreement, all unearned or unvested Performance Units/Shares
    will be forfeited to the Company, and again will be available for grant under
    the Plan.</p>
</blockquote>
<p>10. <u>Leaves of Absence</u>. Unless the Administrator provides otherwise,
  vesting of Awards granted hereunder will be suspended during any unpaid leave
  of absence. A Service Provider will not cease to be an Employee in the case
  of (i) any leave of absence approved by the Company or (ii) transfers between
  locations of the Company or between the Company, its Parent, or any Subsidiary.
  For purposes of Incentive Stock Options, no such leave may exceed ninety (90)
  days, unless reemployment upon expiration of such leave is guaranteed by statute
  or contract. If reemployment upon expiration of a leave of absence approved
  by the Company is not so guaranteed, then three (3) months following the 91st
  day of such leave any Incentive Stock Option held by the Participant will cease
  to be treated as an Incentive Stock Option and will be treated for tax purposes
  as a Nonstatutory Stock Option.</p>
<p>11. <u>Transferability of Awards</u>. Unless determined otherwise by the Administrator,
  an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed
  of in any manner other than by will or by the laws of descent or distribution
  and may be exercised, during the lifetime of the Participant, only by the Participant.
  If the Administrator makes an Award transferable, such Award will contain such
  additional terms and conditions as the Administrator deems appropriate.</p>
<p>12. <u>Adjustments; Dissolution or Liquidation; Merger or Change in Control</u>.</p>
<blockquote>
  <p>(a) <u>Adjustments</u>. In the event that any dividend or other distribution
    (whether in the form of cash, Shares, other securities, or other property),
    recapitalization, stock split, reverse stock split, reorganization, merger,
    consolidation, split-up, spin-off, combination, repurchase, or exchange of
    Shares or other securities of the Company, or other change in the corporate
    structure of the Company affecting the Shares occurs, the Administrator, in
    order to prevent diminution or enlargement of the benefits or potential benefits
    intended to be made available under the Plan, may (in its sole discretion)
    adjust the number and class of Shares that may be delivered under the Plan
    and/or the number, class, and price of Shares covered by each outstanding
    Award, and the numerical Share limits set forth in Sections 3, 6, 7, 8 and
    9.<br>
  </p>
</blockquote>
<p align="center"><font face="Times New Roman, Times, serif"><br>
  14</font></p>
<hr>
<blockquote>
  <p><br>
    (b) <u>Dissolution or Liquidation</u>. In the event of the proposed dissolution
    or liquidation of the Company, the Administrator will notify each Participant
    as soon as practicable prior to the effective date of such proposed transaction.
    To the extent it has not been previously exercised, an Award will terminate
    immediately prior to the consummation of such proposed action. </p>
  <p>(c) <u>Change in Control</u>. In the event of a Change in Control, each outstanding
    Award will be assumed or an equivalent option or right substituted by the
    successor corporation or a Parent or Subsidiary of the successor corporation.
    In the event that the successor corporation refuses to assume or substitute
    for the Award, the Participant will fully vest in and have the right to exercise
    all of his or her outstanding Options and Stock Appreciation Rights, including
    Shares as to which such Awards would not otherwise be vested or exercisable,
    all restrictions on Restricted Stock will lapse, and, with respect to Performance
    Shares and Performance Units, all performance goals or other vesting criteria
    will be deemed achieved at target levels and all other terms and conditions
    met. In addition, if an Option or Stock Appreciation Right becomes fully vested
    and exercisable in lieu of assumption or substitution in the event of a Change
    in Control, the Administrator will notify the Participant in writing or electronically
    that the Option or Stock Appreciation Right will be fully vested and exercisable
    for a period of time determined by the Administrator in its sole discretion,
    and the Option or Stock Appreciation Right will terminate upon the expiration
    of such period.</p>
  <p>With respect to Awards granted to a non-employee Directors that are assumed
    or substituted for, if on the date of or following such assumption or substitution
    the Participant's status as a Director or a director of the successor corporation,
    as applicable, is terminated other than upon a voluntary resignation by the
    Participant, then the Participant will fully vest in and have the right to
    exercise Options and/or Stock Appreciation Rights as to all of the Shares
    subject thereto, including Shares as to which such Awards would not otherwise
    be vested or exercisable, all restrictions on Restricted Stock will lapse,
    and, with respect to Performance Shares and Performance Units, all performance
    goals or other vesting criteria will be deemed achieved at target levels and
    all other terms and conditions met.</p>
  <p>For the purposes of this subsection (c), an Award will be considered assumed
    if, following the Change in Control, the Award confers the right to purchase
    or receive, for each Share subject to the Award immediately prior to the Change
    in Control, the consideration (whether stock, cash, or other securities or
    property) or, in the case of a Stock Appreciation Right upon the exercise
    of which the Administrator determines to pay cash or a Performance Share or
    Performance Unit which the Administrator can determine to pay in cash, the
    fair market value of the consideration received in the merger or Change in
    Control by holders of Common Stock for each Share held on the effective date
    of the transaction (and if holders were offered a choice of consideration,
    the type of consideration chosen by the holders of a majority of the outstanding
    Shares); provided, however, that if such consideration received in the Change
    in Control is not solely common stock of the successor corporation or its
    Parent, the Administrator may, with the consent of the successor corporation,
    provide for the consideration to be received upon the exercise of an Option
    or Stock Appreciation Right or upon the payout of a Performance Share or Performance
    Unit, for each Share subject to such Award (or in the case of Performance
    Units, the number of implied shares determined by dividing the value of the
    Performance Units by the per share consideration received by holders of Common
    Stock in the Change in Control), to be solely common stock of the successor
    corporation or its Parent equal in fair market value to the per share consideration
    received by holders of Common Stock in the Change in Control.</p>
</blockquote>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif"><br>
  15</font></p>
<hr>
<p><br>
  Notwithstanding anything in this Section 12(c) to the contrary, an Award that
  vests, is earned or paid-out upon the satisfaction of one or more performance
  goals will not be considered assumed if the Company or its successor modifies
  any of such performance goals without the Participant's consent; provided, however,
  a modification to such performance goals only to reflect the successor corporation's
  post-Change in Control corporate structure will not be deemed to invalidate
  an otherwise valid Award assumption.</p>
<p>13. <u>Tax Withholding</u></p>
<blockquote>
  <p>(a) <u>Withholding Requirements</u>. Prior to the delivery of any Shares
    or cash pursuant to an Award (or exercise thereof), the Company will have
    the power and the right to deduct or withhold, or require a Participant to
    remit to the Company, an amount sufficient to satisfy federal, state, local,
    foreign or other taxes (including the Participant's FICA obligation) required
    to be withheld with respect to such Award (or exercise thereof). </p>
  <p>(b) <u>Withholding Arrangements</u>. The Administrator, in its sole discretion
    and pursuant to such procedures as it may specify from time to time, may permit
    a Participant to satisfy such tax withholding obligation, in whole or in part
    by (a) paying cash, (b) electing to have the Company withhold otherwise deliverable
    cash or Shares having a Fair Market Value equal to the amount required to
    be withheld, or (c) delivering to the Company already-owned Shares having
    a Fair Market Value equal to the amount required to be withheld. The amount
    of the withholding requirement will be deemed to include any amount which
    the Administrator agrees may be withheld at the time the election is made,
    not to exceed the amount determined by using the maximum federal, state or
    local marginal income tax rates applicable to the Participant with respect
    to the Award on the date that the amount of tax to be withheld is to be determined.
    The Fair Market Value of the Shares to be withheld or delivered will be determined
    as of the date that the taxes are required to be withheld.</p>
</blockquote>
<p>14. <u>No Effect on Employment or Service</u>. Neither the Plan nor any Award
  will confer upon a Participant any right with respect to continuing the Participant's
  relationship as a Service Provider with the Company, nor will they interfere
  in any way with the Participant's right or the Company's right to terminate
  such relationship at any time, with or without cause, to the extent permitted
  by Applicable Laws.</p>
<p>15. <u>Date of Grant</u>. The date of grant of an Award will be, for all purposes,
  the date on which the Administrator makes the determination granting such Award,
  or such other later date as is determined by the Administrator. Notice of the
  determination will be provided to each Participant within a reasonable time
  after the date of such grant.</p>
<p>16. <u>Term of Plan</u>. Subject to Section 20 of the Plan, the Plan will become
  effective upon its adoption by the Board. It will continue in effect for a term
  of ten (10) years unless terminated earlier under Section 17 of the Plan.</p>
<p>17. <u>Amendment and Termination of the Plan</u>.</p>
<blockquote>
  <p>(a) <u>Amendment and Termination</u>. The Board may at any time amend, alter,
    suspend or terminate the Plan. </p>
</blockquote>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif"><br>
  16</font></p>
<hr>
<blockquote>
  <p><br>
    (b) <u>Stockholder Approval</u>. The Company will obtain stockholder approval
    of any Plan amendment to the extent necessary and desirable to comply with
    Applicable Laws. </p>
  <p>(c) <u>Effect of Amendment or Termination</u>. No amendment, alteration,
    suspension or termination of the Plan will impair the rights of any Participant,
    unless mutually agreed otherwise between the Participant and the Administrator,
    which agreement must be in writing and signed by the Participant and the Company.
    Termination of the Plan will not affect the Administrator's ability to exercise
    the powers granted to it hereunder with respect to Awards granted under the
    Plan prior to the date of such termination.</p>
</blockquote>
<p>18. <u>Conditions Upon Issuance of Shares</u>.</p>
<blockquote>
  <p>(a) <u>Legal Compliance</u>. Shares will not be issued pursuant to the exercise
    of an Award unless the exercise of such Award and the issuance and delivery
    of such Shares will comply with Applicable Laws and will be further subject
    to the approval of counsel for the Company with respect to such compliance.</p>
  <p>(b) <u>Investment Representations</u>. As a condition to the exercise of
    an Award, the Company may require the person exercising such Award to represent
    and warrant at the time of any such exercise that the Shares are being purchased
    only for investment and without any present intention to sell or distribute
    such Shares if, in the opinion of counsel for the Company, such a representation
    is required.</p>
</blockquote>
<p>19. <u>Inability to Obtain Authority</u>. The inability of the Company to obtain
  authority from any regulatory body having jurisdiction, which authority is deemed
  by the Company's counsel to be necessary to the lawful issuance and sale of
  any Shares hereunder, will relieve the Company of any liability in respect of
  the failure to issue or sell such Shares as to which such requisite authority
  will not have been obtained.</p>
<p>20. <u>Stockholder Approval</u>. The Plan will be subject to approval by the
  stockholders of the Company within twelve (12) months after the date the Plan
  is adopted. Such stockholder approval will be obtained in the manner and to
  the degree required under Applicable Laws.</p>
<p>21. <u>Underwater Stock Option Exchange Program</u>. Notwithstanding any contrary
  provision of the Plan, the Company's stockholders on April 29, 2010 approved
  a one-time-only option exchange program described in the proxy statement with
  respect to the Company's 2010 Annual Meeting of Stockholders under which certain
  outstanding Options may be surrendered or cancelled at the election of the person
  holding such Option (and therefore made available for future grant under Section
  3(c) to the extent such Option was granted under the Plan or the 1995 Plan)
  in exchange for new Options with a lower exercise price (the &quot;Exchange
  Program&quot;). The Administrator may provide for, and the Company may implement,
  the Exchange Program within one hundred and twenty (120) days after the date
  of such Annual Meeting.</p>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">17</font></p>
<hr>
<p align="center">&nbsp; </p>
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