8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) January 10, 2005

The Gymboree Corporation

(Exact name of registrant as specified in its charter)

Delaware	000-21250		942615258
(State or other jurisdiction	(Commission File	(IRS Employer
of incorporation)	Number)	Identification No.)

500 Howard Street, San Francisco, CA		94105
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (415) 278-7000

(Former name or former address if changed since last report)

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):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

     Blair W. Lambert commenced employment as the Company’s Chief Financial Officer and Chief Operating Officer on January 10, 2005 and was awarded a restricted stock award for 50,000 shares of the Company’s common stock under the Company’s 2004 Equity Incentive Plan. A copy of Mr. Lambert’s Restricted Stock Award Notice and Agreement is attached hereto as Exhibit 10.62 and incorporated herein by reference. Mr. Lambert was also awarded an option to purchase 100,000 shares of the Company’s common stock at an exercise price equal to the fair market value of a share of the Company’s common stock on that date under the Company’s 2004 Equity Incentive Plan. A copy of Mr. Lambert’s Stock Option Grant Notice and Agreement is attached hereto as Exhibit 10.63 and incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

(c)	Exhibits
10.62	Blair W. Lambert Restricted Stock Award Notice and Agreement dated January 10, 2005
10.63	Blair W. Lambert Stock Option Grant Notice and Agreement dated January 10, 2005

          SIGNATURES

     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.

	THE GYMBOREE CORPORATION
Date: January 13, 2005	By:	/s/ Blair W. Lambert
		Blair W. Lambert
		Chief Financial Officer and Chief Operating Officer

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EXHIBIT INDEX

Exhibit No.	Description
10.62	Blair W. Lambert Restricted Stock Award Notice and Agreement dated January 10, 2005
10.63	Blair W. Lambert Stock Option Grant Notice and Agreement dated January 10, 2005

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EX-10.62

EXHIBIT 10.62

THE GYMBOREE CORPORATION
RESTRICTED STOCK AWARD NOTICE
2004 EQUITY INCENTIVE PLAN

     The Gymboree Corporation (the “Company”) hereby grants to Participant a Restricted Stock Award (the “Award”) for shares of the Company’s Common Stock. The Award is subject to all the terms and conditions set forth in this Restricted Stock Award Notice (the “Award Notice”) and in the Restricted Stock Award Agreement and the Company’s 2004 Equity Incentive Plan (the “Plan”), which are attached to and incorporated into the Award Notice in their entirety.

Participant:	Blair W. Lambert
Grant Date:	January 10, 2005
Vesting Commencement Date:	January 10, 2005
Number of Shares:	50,000
Fair Market Value Per Share on Grant Date:	$12.60
Vesting Schedule:	1/2 of the shares subject to the Award will vest and the restrictions thereon shall lapse on the second anniversary of the Vesting Commencement Date.
	1/48th of the shares subject to the Award will vest and the restrictions thereon shall lapse monthly thereafter over the next two years.

Additional Terms/Acknowledgement: The undersigned Participant acknowledges receipt of, and understands and agrees to, the Award Notice, the Restricted Stock Award Agreement and the Plan. Participant further acknowledges that as of the Grant Date, the Award Notice, the Restricted Stock Award Agreement and the Plan set forth the entire understanding between Participant and the Company regarding the Award and supersede all prior oral and written agreements on the subject.

THE GYMBOREE CORPORATION	PARTICIPANT
By: Lisa Harper	Blair W. Lambert
Its: Chief Executive Officer / Chairman	Taxpayer ID:
	Address: 3128 Vichy Avenue
	Napa, CA 94558
	o Check Box if Not Legally Married
Attachments:	PARTICIPANT’S SPOUSE
1. Restricted Stock Award Agreement
2. 2004 Equity Incentive Plan
3. Plan Summary	Signature
	Print Name:

THE GYMBOREE CORPORATION
2004 EQUITY INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

     Pursuant to your Restricted Stock Award Notice (the “Award Notice”) and this Restricted Stock Award Agreement (this “Agreement”), The Gymboree Corporation (the “Company”) has granted you a Restricted Stock Award (the “Award”) under its 2004 EquityIncentive Plan (the "Plan”) for the number of shares of the Company’s Common Stock indicated in your Award Notice. Capitalized terms not explicitly defined in this Agreement but defined in the Plan shall have the same definitions as in the Plan.

     The details of the Award are as follows:

1. Vesting

     The Award will vest and no longer be subject to forfeiture according to the vesting schedule set forth in the Award Notice (the “Vesting Schedule”). Shares subject to the portion of the Award that has vested and is no longer subject to forfeiture according to the Vesting Schedule are referred to herein as “Vested Shares.” Shares subject to the portion of the Award that has not vested and remains subject to forfeiture under the Vesting Schedule are referred to herein as "Unvested Shares.” The Unvested Shares will vest (and to the extent so vested cease to be Unvested Shares remaining subject to forfeiture) in accordance with the Vesting Schedule (the Unvested and Vested Shares are collectively referred to herein as the “Shares”). The Award will terminate and the Shares will be subject to forfeiture upon your Termination of Service as set forth in Section 2.

2. Termination of Award upon Termination of Service

     Upon your Termination of Service, any portion of the Award which has not vested as provided in Section 1 will immediately terminate. Unless the Plan Administrator determines otherwise prior to your Termination of Service, all Unvested Shares shall immediately be forfeited upon your Termination of Service without payment of any further consideration to you. Notwithstanding Section 7.6 of the Plan, for purposes of the Award and this Agreement, a termination of your employment as the Company’s Chief Operating Officer will be deemed a Termination of Service.

3. Consideration for Award

     Consideration has been paid by you to the Company for the Award in the form of services rendered.

4. Securities Law Compliance

     4.1 You represent and warrant that you (a) have been furnished with a copy of the Plan and all information which you deem necessary to evaluate the merits and risks of receipt of the Shares, (b) have had the opportunity to ask questions and receive answers concerning

the information received about the Shares and the Company, and (c) have been given the opportunity to obtain any additional information you deem necessary to verify the accuracy of any information obtained concerning the Shares and the Company.

     4.2 You hereby agree that you will in no event sell or distribute all or any part of the Shares unless (a) there is an effective registration statement under the Securities Act and applicable state securities laws covering any such transaction involving the Shares or (b) the Company receives an opinion of your legal counsel (concurred in by legal counsel for the Company) stating that such transaction is exempt from registration or the Company otherwise satisfies itself that such transaction is exempt from registration. You understand that the Company has no obligation to you to register the Shares with the SEC and has not represented to you that it will so register the Shares.

     4.3 You confirm that you have been advised, prior to your receipt of the Shares, that neither the offering of the Shares nor any offering materials have been reviewed by any administrator under the Securities Act or any other applicable securities act (the “Acts”) and that the Shares have not been registered under any of the Acts and therefore cannot be resold unless they are registered under the Acts or unless an exemption from such registration is available.

     4.4 You hereby agree to indemnify the Company and hold it harmless from and against any loss, claim or liability, including attorneys’ fees or legal expenses, incurred by the Company as a result of any breach by you of, or any inaccuracy in, any representation, warranty or statement made by you in this Agreement or the breach by you of any terms or conditions of this Agreement.

5. Transfer Restrictions

     5.1 Restrictions on Transfer. Shares will not be sold, transferred, assigned, encumbered or otherwise disposed of in contravention of the provisions of this Agreement. Except as otherwise provided in this Agreement, such restrictions on transfer, however, will not apply to (a) a gratuitous transfer of the Shares, provided, and only if, you obtain the Company’s prior written consent to such transfer, (b) a transfer of title to the Shares effected pursuant to your will or laws of intestate succession, or (c) a transfer to the Company in pledge as a security for any purchase-money indebtedness incurred by you in connection with the acquisition of the Shares.

     5.2 Transferee Obligations. Each person (other than the Company) to whom the Shares are transferred by means of one of the permitted transfers specified in Section 5.1 must, as a condition precedent to the validity of such transfer, acknowledge in writing to the Company that such person is bound by the provisions of this Agreement, to the same extent the Shares would be so subject if retained by you.

6. Section 83(b) Election for Award

     You understand that under Section 83(a) of the Code, the excess of the Fair Market Value of the Unvested Shares on the date the forfeiture restrictions lapse over the purchase

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price, if any, paid for such Shares will be taxed, on the date such forfeiture restrictions lapse, as ordinary income subject to payroll and withholding tax and tax reporting, as applicable. For this purpose, the term “forfeiture restrictions” means the right of the Company to receive back any Unvested Shares upon termination of your employment or services with the Company or a Related Company. You understand that you may elect under Section 83(b) of the Code to be taxed at the time the Unvested Shares are acquired, rather than when and as the Unvested Shares cease to be subject to the forfeiture restrictions. Such election (an “83(b) Election”) must be filed with the Internal Revenue Service within 30 days from the Grant Date of the Award. Even if the Fair Market Value of the Unvested Shares on the Grant Date equals the purchase price, if any, (and thus no tax is payable), you must file the election within the 30-day period to avoid the risk of adverse tax consequences in the future.

     You understand that there is a risk the Internal Revenue Service might challenge the Company’s determination of the Fair Market Value of the Shares, in which case you will be deemed to have received more ordinary income than originally estimated. You also understand that (a) you will not be entitled to a deduction for any ordinary income previously recognized as a result of the 83(b) Election if the Unvested Shares are subsequently forfeited to the Company, and (b) the 83(b) Election may cause you to recognize more ordinary income than you would have otherwise recognized if the Internal Revenue Service determines that the value of the Unvested Shares on the date the Shares are transferred is higher than the Fair Market Value of the Shares on that date as determined by the Company and/or the value of the Unvested Shares subsequently declines.

     THE FORM FOR MAKING AN 83(b) ELECTION IS ATTACHED TO THIS AGREEMENT AS EXHIBIT B. YOU UNDERSTAND THAT FAILURE TO FILE SUCH AN ELECTION WITHIN THE 30-DAY PERIOD MAY RESULT IN THE RECOGNITION OF ORDINARY INCOME BY YOU AS THE FORFEITURE RESTRICTIONS LAPSE. You further understand that an additional copy of such election form should be filed with your federal income tax return for the calendar year in which the date of this Agreement falls. You acknowledge that the foregoing is only a summary of the federal income tax laws that apply to the receipt of the Unvested Shares under this Agreement and does not purport to be complete. YOU FURTHER ACKNOWLEDGE THAT THE COMPANY HAS DIRECTED YOU TO SEEK INDEPENDENT ADVICE REGARDING THE APPLICABLE PROVISIONS OF THE CODE, THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH YOU MAY RESIDE, AND THE TAX CONSEQUENCES OF YOUR DEATH.

     You agree to execute and deliver to the Company with this Agreement a copy of the Acknowledgment and Statement of Decision Regarding Section 83(b) Election attached hereto as Exhibit A. You further agree that you will execute and deliver to the Company with this Agreement a copy of the 83(b) Election attached hereto as Exhibit B if you chooses to make such an election.

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7. Book Entry Registration of the Shares

     The Company will issue the Shares by registering the Shares in book entry form with the Company’s transfer agent in your name and the applicable restrictions will be noted in the records of the Company’s transfer agent in the book entry system. No certificate(s) representing all or a part of the Shares may be issued until the Shares become Vested Shares.

8. Stop-Transfer Notices

     You understand and agree that, in order to ensure compliance with the restrictions referred to in this Agreement, the Company may issue appropriate “stop-transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records. The Company will not be required to (a) transfer on its books any Shares that have been sold or transferred in violation of the provisions of this Agreement or (b) treat as the owner of the Shares, or otherwise accord voting, dividend or liquidation rights to, any transferee to whom the Shares have been transferred in contravention of this Agreement.

9. Independent Tax Advice

     You acknowledge that determining the actual tax consequences to you of receiving or disposing of the Shares may be complicated. These tax consequences will depend, in part, on your specific situation and may also depend on the resolution of currently uncertain tax law and other variables not within the control of the Company. You are aware that you should consult a competent and independent tax advisor for a full understanding of the specific tax consequences to you of receiving or disposing of the Shares. Prior to executing this Agreement, you either have consulted with a competent tax advisor independent of the Company to obtain tax advice concerning the receipt or disposition of the Shares in light of your specific situation or you have had the opportunity to consult with such a tax advisor but chose not to do so.

10. Withholding and Disposition of Shares

     As a condition to the removal of restrictions from your Vested Shares registered in book entry form with the Company’s transfer agent, you agree to make arrangements satisfactory to the Company for the payment of any federal, state, local or foreign withholding tax obligations that arise either upon receipt of the Shares or as the forfeiture restrictions on any Shares lapse. Notwithstanding the previous sentence, you acknowledge and agree that the Company and any Related Company has the right to deduct from payments of any kind otherwise due to you any federal, state or local taxes of any kind required by law to be withheld with respect the Award.

11. General Provisions

     11.1 Assignment. The Company may assign its forfeiture rights at any time, whether or not such rights are then exercisable, to any person or entity selected by the Company’s Board of Directors.

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     11.2 No Waiver. No waiver of any provision of this Agreement will be valid unless in writing and signed by the person against whom such waiver is sought to be enforced, nor will failure to enforce any right hereunder constitute a continuing waiver of the same or a waiver of any other right hereunder.

     11.3 Cancellation of Shares. If the Company or its assignees exercises the Company’s forfeiture rights in accordance with the provisions of this Agreement, then, from and after such time, the person from whom such Shares are to be forfeited will no longer have any rights as a recipient of such Shares, such Shares will be deemed forfeited in accordance with the applicable provisions of this Agreement, and the Company or its assignees will be deemed the owner and recipient of such Shares, whether or not the certificates therefor have been delivered as required by this Agreement.

     11.4 Undertaking. You hereby agree to take whatever additional action and execute whatever additional documents the Company may deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on either you or the Shares pursuant to the express provisions of this Agreement.

     11.5 Agreement Is Entire Contract. This Agreement constitutes the entire contract between the parties hereto with regard to the subject matter hereof. This Agreement is made pursuant to the provisions of the Plan and will in all respects be construed in conformity with the express terms and provisions of the Plan.

     11.6 Successors and Assigns. The provisions of this Agreement will inure to the benefit of, and be binding on, the Company and its successors and assigns and you and your legal representatives, heirs, legatees, distributees, assigns and transferees by operation of law, whether or not any such person will have become a party to this Agreement and agreed in writing to join herein and be bound by the terms and conditions hereof.

     11.7 No Employment or Service Contract. Nothing in this Agreement will affect in any manner whatsoever the right or power of the Company, or a Related Company, to terminate your employment or services on behalf of the Company, for any reason, with or without Cause.

     11.8 Shareholder of Record. You will be recorded as a shareholder of the Company and will have, subject to the provisions of this Agreement and the Plan, all the rights of a shareholder with respect to the Shares.

     11.9 Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but which, upon execution, will constitute one and the same instrument.

     11.10 Governing Law. This Agreement will be construed and administered in accordance with and governed by the laws of the State of California.

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EX-10.63

EXHIBIT 10.63

THE GYMBOREE CORPORATION
STOCK OPTION GRANT NOTICE
2004 EQUITY INCENTIVE PLAN

     The Gymboree Corporation (the “Company”) hereby grants to Participant an Option (the “Option”) to purchase shares of the Company’s Common Stock. The Option is subject to all the terms and conditions set forth in this Stock Option Grant Notice (this “Grant Notice”) and in the Stock Option Agreement and the Company’s 2004 Equity Incentive Plan (the “Plan”), which are attached to and incorporated into this Grant Notice in their entirety.

Participant:	Blair W. Lambert
Grant Date:	January 10, 2005
Vesting Commencement Date:	January 10, 2005
Number of Shares Subject to Option:	100,000
Exercise Price (per Share):	$12.60
Option Expiration Date:	January 10, 2015 (subject to earlier termination in accordance with the terms of the Plan and the Stock Option Agreement)
Type of Option:	x Incentive Stock Option*       o Nonqualified Stock Option
Vesting and Exercisability Schedule:	1/48th of the shares subject to the Option will vest and become exercisable monthly following each one-month period of continuous service.

Additional Terms/Acknowledgement: The undersigned Participant acknowledges receipt of, and understands and agrees to, this Grant Notice, the Stock Option Agreement, the Plan Summary and the Plan. Participant further acknowledges that as of the Grant Date, this Grant Notice, the Stock Option Agreement and the Plan set forth the entire understanding between Participant and the Company regarding the Option and supersede all prior oral and written agreements on the subject.

THE GYMBOREE CORPORATION	PARTICIPANT
By:
	Blair W. Lambert
	Taxpayer ID:
Title: Chief Executive Officer / Chairman
	Date:
Taxpayer ID: 94-2615258
Attachments:	Address: 3128 Vichy Avenue
1. Stock Option Agreement	Napa, CA 94558
2. 2004 Equity Incentive Plan
3. Plan Summary

* See Sections 3 and 4 of the Stock Option Agreement.

THE GYMBOREE CORPORATION
2004 EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT

     Pursuant to your Stock Option Grant Notice (the “Grant Notice”) and this Stock Option Agreement, The Gymboree Corporation has granted you an Option under its 2004 Equity Incentive Plan (the “Plan”) to purchase the number of shares of the Company’s Common Stock indicated in your Grant Notice (the “Shares”) at the exercise price indicated in your Grant Notice. Capitalized terms not explicitly defined in this Stock Option Agreement but defined in the Plan shall have the same definitions as in the Plan.

     The details of the Option are as follows:

     1. Vesting and Exercisability. Subject to the limitations contained herein, the Option will vest and become exercisable as provided in your Grant Notice, provided that vesting will cease upon a termination of your employment or service relationship with the Company or a Related Company for any reason, whether voluntary or involuntary, including by reason of death or Disability (“Termination of Service”) and the unvested portion of the Option will terminate. Notwithstanding Section 7.6 of the Plan, for purposes of the Award and this Agreement, a termination of your employment as the Company’s Chief Operating Officer will be deemed a Termination of Service.

     2. Securities Law Compliance. At the present time, the Company has an effective registration statement with respect to the Shares. The Company intends to maintain this registration but has no obligation to do so. Notwithstanding any other provision of this Agreement, in the event that such registration ceases to be effective, you will not be able to exercise the Option unless the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act. The exercise of the Option must also comply with other applicable laws and regulations governing the Option, and you may not exercise the Option if the Company determines that such exercise would not be in material compliance with such laws and regulations.

     3. Incentive Stock Option Qualification. If so designated in your Grant Notice, all or a portion of the Option is intended to qualify as an Incentive Stock Option under federal income tax law, but the Company does not represent or guarantee that the Option qualifies as such.

     If the Option has been designated as an Incentive Stock Option and the aggregate Fair Market Value (determined as of the grant date) of the shares of Common Stock subject to the portions of the Option and all other Incentive Stock Options you hold that first become exercisable during any calendar year exceeds $100,000, any excess portion will be treated as a Nonqualified Stock Option, unless the Internal Revenue Service changes the rules and regulations governing the $100,000 limit for Incentive Stock Options. A portion of the

Option may be treated as a Nonqualified Stock Option if certain events cause exercisability of the Option to accelerate.

     4. Notice of Disqualifying Disposition. To the extent the Option has been designated as an Incentive Stock Option, to obtain certain tax benefits afforded to Incentive Stock Options, you must hold the Shares issued upon the exercise of the Option for two years after the Grant Date and one year after the date of exercise. You may be subject to the alternative minimum tax at the time of exercise. You should obtain tax advice when exercising the Option and prior to the disposition of the Shares. By accepting the Option, you agree to promptly notify the Company if you dispose of any of the Shares within one year from the date you exercise all or part of the Option or within two years from the Grant Date.

     5. Method of Exercise. You may exercise the Option by giving written notice to the Company (or a brokerage firm designated or approved by the Company as specified below), in form and substance satisfactory to the Company, which will state your election to exercise the Option and the number of Shares for which you are exercising the Option. The written notice must be accompanied by full payment of the exercise price for the number of Shares you are purchasing. You may make this payment in any combination of the following: (a) cash, check or wire transfer; (b) tendering shares of Common Stock that have a Fair Market Value equal to the aggregate exercise price of the Shares being purchased and that you have owned for at least six months (or any shorter period necessary to avoid a charge to the Company earnings for financial reporting purposes); (c) so long as the Common Stock is registered under the Exchange Act, and to the extent permitted by law, delivery of an executed exercise notice and irrevocable instructions to a brokerage firm designated or approved by the Company to deliver promptly to the Company the aggregate amount of proceeds to pay the Option exercise price and any withholding tax obligations that may arise in connection with the exercise, all in accordance with the regulations of the Federal Reserve Board, or (d) any other method permitted by the Committee.

     6. Treatment Upon Termination of Service. The unvested portion of the Option will terminate automatically and without further notice immediately upon your Termination of Service. You may exercise the vested portion of the Option as follows:

          (a) General Rule. You must exercise the vested portion of the Option on or before the earlier of (i) three months after your Termination of Service and (ii) the Option Expiration Date;

          (b) Disability. If your Termination of Service is due to Disability, you must exercise the vested portion of the Option on or before the earlier of (i) one year after your Termination of Service and (ii) the Option Expiration Date;

          (c) Death. If your Termination of Service is due to your death, the vested portion of the Option must be exercised on or before the earlier of (i) one year after your Termination of Service and (ii) the Option Expiration Date. If you die after your Termination

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of Service but while the Option is still exercisable, the vested portion of the Option may be exercised until the earlier of (x) one year after the date of death and (y) the Option Expiration Date; and

          (d) Cause. The vested portion of the Option will automatically expire at the time the Company first notifies you of your Termination of Service for Cause, unless the Committee determines otherwise. If your employment or service relationship is suspending pending an investigation of whether you will be terminated for Cause, all your rights under the Option likewise will be suspended during the period of investigation. If any facts that would constitute termination for Cause are discovered after your Termination of Service, any Option you then hold may be immediately terminated by the Committee in its sole discretion.

     The Option must be exercised within three months after your Termination of Service for reasons other than death or Disability and one year after your Termination of Service due to Disability to qualify for the beneficial tax treatment afforded Incentive Stock Options.

     It is your responsibility to be aware of the date the Option terminates.

     7. Limited Transferability. During your lifetime only you can exercise the Option. The Option is not transferable except by will or by the applicable laws of descent and distribution. The Plan provides for exercise of the Option by a beneficiary designated on a Company-approved form or the personal representative of your estate. Notwithstanding the foregoing and to the extent permitted by Section 422 of the Internal Revenue Code of 1986, the Committee, in its sole discretion, may permit you to assign or transfer the Option, subject to such terms and conditions as specified by the Committee.

     8. Withholding Taxes. As a condition to the exercise of any portion of the Option, you must make such arrangements as the Company may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such exercise.

     9. Option Not an Employment or Service Contract. Nothing in the Plan or any Award granted under the Plan will be deemed to constitute an employment contract or confer or be deemed to confer any right for you to continue in the employ of, or to continue any other relationship with, the Company or any Related Company or limit in any way the right of the Company or any Related Company to terminate your employment or other relationship at any time, with or without Cause.

     10. No Right to Damages. You will have no right to bring a claim or to receive damages if you are required to exercise the vested portion of the Option within three months (one year in the case of Disability or death) of your Termination of Service or if any portion of the Option is cancelled or expires unexercised. The loss of existing or potential profit in an Award will not constitute an element of damages in the event of your Termination of

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Service for any reason even if the termination is in violation of an obligation of the Company or a Related Company to you.

     11. Binding Effect. This Agreement will inure to the benefit of the successors and assigns of the Company and be binding upon you and your heirs, executors, administrators, successors and assigns.

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