S-8

As filed with the Securities and Exchange Commission on April 24, 2003

Registration No. 333-                              

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-8

REGISTRATION STATEMENT
Under
The Securities Act of 1933

CADENCE DESIGN SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Delaware	77-0148231
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

2655 Seely Avenue, Building 5
San Jose, California 95134
(Address of Principal Executive Offices) (Zip Code)

Options Assumed by Cadence Design Systems, Inc.
originally granted under the
Get2Chip.Com 1997 Stock Option Plan
Get2Chip.Com 2001 Stock Plan
(Full title of the Plans)

R.L. Smith McKeithen
Senior Vice President, General Counsel and Secretary
Cadence Design Systems, Inc.
2655 Seely Avenue, Building 5, San Jose, California 95134
(Name and Address of Agent for Service)
(408) 943-1234
(Telephone number, including area code, of agent for service)

Copies to:
Gregory J. Conklin, Esq.
Gibson, Dunn & Crutcher LLP
One Montgomery Street, 31st Floor
San Francisco, California 94104
(415) 393-8200

CALCULATION OF REGISTRATION FEE

		Proposed Maximum
Title of Securities		Offering Price per		Proposed Maximum		Amount of
to be Registered(1)	Amount to be Registered (2)	Share (3)		Aggregate Offering Price (3)		Registration Fee(3)
Common Stock, par value $0.01 per share	1,127,748 shares	$	1.11	$	1,252,270	$	101.31

(1)	Includes, with respect to each share of Common Stock, Rights, pursuant to the registrant’s Amended and Restated Rights Agreement, dated as of February 1, 2000, between the Registrant and ChaseMellon Shareholder Services, L.L.C., as Rights Agent. Until a triggering event thereunder, the Rights trade with, and cannot be separated from, the Common Stock.
(2)	In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this registration statement also covers an indeterminate amount of interests to be offered or sold pursuant to the employee benefit plans described herein, the Get2Chip.Com 1997 Stock Option Plan and the Get2Chip.Com 2001 Stock Plan (the “Plans”).
(3)	Calculated on a weighted average basis solely for purposes of this offering under Rule 457(h) of the Securities Act of 1933, as amended, on the basis of the maximum offering price per share that such options may be exercised.

TABLE OF CONTENTS

PART I
PART II
	Item 3. Incorporation of Documents by Reference
INFORMATION REGARDING FINANCIAL STATEMENTS
	Item 4. Description of Securities
	Item 5. Interests of Named Experts and Counsel
	Item 6. Indemnification of Directors and Officers
	Item 7. Exemption from Registration Claimed
	Item 8. Exhibits
	Item 9. Undertakings
SIGNATURES
POWER OF ATTORNEY
EXHIBIT INDEX
EXHIBIT 5.1
EXHIBIT 23.1
EXHIBIT 23.2
EXHIBIT 99.1
EXHIBIT 99.2

PART I

Information Required in the Section 10(A) Prospectus

     Pursuant to the instructions to Form S-8, Part I (Information Required in the Section 10(a) Prospectus) is not filed as part of this Registration Statement.

     The shares of common stock subject to options registered hereunder have been assumed by the Registrant pursuant to an Agreement and Plan of Merger, dated as of April 8, 2003, among the Registrant, Get2Chip.Com, Inc., a California corporation, Project Don, Inc., a California corporation and wholly-owned subsidiary of the Registrant, and Bernd Braune, as shareholder agent. These options were originally granted to directors, employees and consultants of Get2Chip.Com, Inc. under the Plans.

PART II

Information Required in the Registration Statement

Item 3. Incorporation of Documents by Reference

     The Registrant hereby incorporates by reference into this Registration Statement the following documents previously filed with the Securities and Exchange Commission (the “Commission”):

(a)	The Registrant’s Annual Report on Form 10-K for the fiscal year ended December 28, 2002, including all material incorporated by reference therein;
(b)	The Registrant’s Current Report on Form 8-K filed with the Commission on March 14, 2003 and April 15, 2003;
(c)	The description of the Registrant’s Common Stock to be offered hereby contained in the Registrant’s Registration Statement on Form 8-A filed with the Commission on August 29, 1990; and
(d)	The description of the Registrant’s Preferred Share Purchase Rights set forth in Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on February 16, 1996.

     All documents filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, after the date of this Registration Statement and prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold shall be deemed to be incorporated by reference into this Registration Statement and to be a part hereof from the date of filing of such documents.

     Any document, and any statement contained in a document, incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein, or in any other subsequently filed document that also is incorporated or deemed to be incorporated by reference herein, modifies or supersedes such document or statement. Any such document or statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. Subject to the foregoing, all information appearing in this Registration Statement is qualified in its entirety by the information appearing in the documents incorporated by reference.

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INFORMATION REGARDING FINANCIAL STATEMENTS
INCORPORATED BY REFERENCE INTO THIS
REGISTRATION STATEMENT

     On March 22, 2002, we announced that we had appointed KPMG LLP to replace Arthur Andersen LLP (“Andersen”) as our independent auditors. Our consolidated balance sheet as of December 29, 2001, and the related consolidated statements of operations, stockholders’ equity and cash flows for the fiscal years ended December 29, 2001 and December 30, 2000, included in our Annual Report on Form 10-K for the fiscal year ended December 28, 2002 incorporated by reference in this registration statement have been audited by Andersen, as stated in their report dated March 11, 2002, which is incorporated by reference herein. After reasonable efforts, we have been unable to obtain Andersen’s consent to the incorporation by reference into this registration statement of its report with respect to these financial statements. Under these circumstances, Rule 437a under the Securities Act of 1933 permits us to file this registration statement without a written consent from Andersen. The absence of such consent may limit recovery by investors on certain claims. In particular, and without limitation, investors will not be able to assert claims against Andersen under Section 11 of the Securities Act. In addition, the ability of Andersen to satisfy any claims (including claims arising from Andersen’s provision of auditing and other services to us) may be limited as a practical matter due to recent events regarding Andersen.

Item 4. Description of Securities

Not Applicable.

Item 5. Interests of Named Experts and Counsel

Not Applicable.

Item 6. Indemnification of Directors and Officers

     Section 145 of the Delaware General Corporation Law permits a corporation to indemnify any of its directors or officers who was or is a party or is threatened to be made a party to any third party proceeding by reason of the fact that such person is or was a director or officer of the corporation against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe that such person’s conduct was unlawful. In a derivative action, i.e., one by or in the right of a corporation, the corporation is permitted to indemnify any of its directors or officers against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made if such person shall have been adjudged liable to the corporation, unless and only to the extent that the court in which such action or suit was brought shall determine upon application that such person is fairly and reasonably entitled to indemnity for such expenses despite such adjudication of liability.

     Article VII of the Registrant’s currently effective Certificate of Incorporation eliminates the personal liability of its directors for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law or (iv) for any transaction from which the director derived an improper personal benefit. In addition, as permitted by Section 145 of the Delaware General Corporation Law, the Bylaws of the Registrant provide that: (a) the Registrant is required to indemnify its directors and officers and persons serving in such capacities in other business entities (including, for example, subsidiaries of the Registrant) at the Registrant’s request (such directors, officers and other persons are hereinafter referred to collectively as, “Covered Persons”), to the fullest extent permitted by Delaware law, including those circumstances in which indemnification would

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otherwise be discretionary; (b) the Registrant is required to advance expenses, as incurred to such Covered Persons in connection with defending a proceeding; (c) the indemnitee(s) of the Registrant have the right to bring suit, and to be paid the expenses of prosecuting such suit if successful, to enforce the rights to indemnification under the Bylaws or to advancement of expenses under the Bylaws; (d) the rights conferred in the Bylaws are not exclusive and the Registrant is authorized to enter into indemnification agreements with such directors, officers and employees; (e) the Registrant is required to maintain director and officer liability insurance to the extent reasonably available; and (f) the Registrant may not retroactively amend the Bylaws indemnification provision in a way that is adverse to such Covered Persons.

     The Registrant has entered into indemnity agreements with each of its executive officers and directors that provide the maximum indemnity allowed to officers and directors by Section 145 of the Delaware General Corporation Law and the Bylaws, as well as certain additional procedural protections. The Registrant also maintains a limited amount of director and officer insurance. The indemnification provision in the Bylaws, and the indemnity agreements entered into between the Registrant and its officers or directors, may be sufficiently broad to permit indemnification of the Registrant’s officers and directors for liability arising under the Securities Act of 1933, as amended (the “1933 Act”).

Item 7. Exemption from Registration Claimed

Not Applicable.

Item 8. Exhibits

Exhibit Number	Exhibit
4.1	Instruments Defining Rights of Stockholders. Reference is made to the Registrant’s Registration Statement on Form 8-A filed with the Commission on August 29, 1990 incorporated by reference pursuant to Items 3(c) and (d).
5.1	Opinion and consent of Gibson, Dunn & Crutcher LLP.
23.1	Independent Auditors’ Consent.
23.2	Consent of Arthur Andersen LLP, Independent Public Accountants.
23.3	Consent of Gibson, Dunn & Crutcher LLP (contained in Exhibit 5.1).
24.1	Power of Attorney (included on the signature pages to this Registration Statement on Form S-8).
99.1	Get2Chip.Com 1997 Stock Option Plan.
99.2	Get2Chip.Com 2001 Stock Plan.

Item 9. Undertakings

     A.           The undersigned Registrant hereby undertakes: (1) to file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement (i) to include any prospectus required by Section 10(a)(3) of 1933 Act; (ii) to reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; provided however, that clauses (1)(i) and (l)(ii) shall not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to

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Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, that are incorporated by reference into this Registration Statement; (2) that for the purpose of determining any liability under the 1933 Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof, and (3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold upon the termination of the offering under the Plans.

     B.           The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the 1933 Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is incorporated by reference into this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

     C.           Insofar as indemnification for liabilities arising under the 1933 Act may be permitted to directors, officers or controlling persons of the Registrant pursuant to the indemnity provisions incorporated by reference in Item 6, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue.

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SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8, and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Jose, State of California, on this day of April 24, 2003.

CADENCE DESIGN SYSTEMS, INC.

By: /S/ H. RAYMOND BINGHAM

            H. Raymond Bingham

President, Chief Executive Officer and Director

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POWER OF ATTORNEY

     KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints H. Raymond Bingham, William Porter and R.L. Smith McKeithen, and each of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof.

     Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/S/ H. RAYMOND BINGHAM       H. Raymond Bingham	President, Chief Executive Officer and Director (Principal Executive Officer)	April 24, 2003
/S/ WILLIAM PORTER       William Porter	Senior Vice President, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	April 24, 2003
/S/ DONALD L. LUCAS       Donald L. Lucas	Chairman of the Board of Directors	April 24, 2003
/S/ SUSAN L. BOSTROM       Susan L. Bostrom	Director	April 24, 2003
/S/ DR. LEONARD Y.W. LIU       Dr. Leonard Y.W. Liu	Director	April 24, 2003
/S/ SEAN M. MALONEY       Sean M. Maloney	Director	April 24, 2003
/S/ DR. ALBERTO SANGIOVANI- VINCENTELLI       Dr. Alberto Sangiovanni-       Vincentelli	Director	April 24, 2003
/S/ GEORGE M. SCALISE       George M. Scalise	Director	April 24, 2003
/S/ DR. JOHN B. SHOVEN       Dr. John B. Shoven	Director	April 24, 2003
/S/ ROGER S. SIBONI       Roger S. Siboni	Director	April 24, 2003

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EXHIBIT INDEX

Exhibit Number	Exhibit
4.1	Instruments Defining Rights of Stockholders. Reference is made to the Registrant’s Registration Statement on Form 8-A filed with the Commission on August 29, 1990 incorporated by reference pursuant to Items 3(c) and (d).
5.1	Opinion and consent of Gibson, Dunn & Crutcher LLP.
23.1	Independent Auditors’ Consent.
23.2	Consent of Arthur Andersen LLP, Independent Public Accountants.
23.3	Consent of Gibson, Dunn & Crutcher LLP (contained in Exhibit 5.1).
24.1	Power of Attorney (included on the signature pages to this Registration Statement on Form S-8).
99.1	Get2Chip.Com 1997 Stock Option Plan.
99.2	Get2Chip.Com 2001 Stock Plan.

EX-5.1 3 f89398orexv5w1.txt EXHIBIT 5.1 EXHIBIT 5.1 April 24, 2003 (415) 393-8200 C 18861-00088 Cadence Design Systems, Inc. 2655 Seely Avenue, Building 5 San Jose, CA 95134 Re: Registration Statement on Form S-8 of Cadence Design Systems, Inc. Ladies and Gentlemen: We refer to the registration statement on Form S-8 (the "Registration Statement"), under the Securities Act of 1933, as amended (the "Securities Act"), filed by Cadence Design Systems, Inc., a Delaware corporation (the "Company"), with the Securities and Exchange Commission on April 24, 2003, with respect to the proposed offering by the Company of up to 1,127,748 shares (the "Shares") of its common stock, $0.01 par value per share (the "Common Stock"), subject to issuance by the Company upon exercise of options granted under Get2Chip.Com 1997 Stock Option Plan and the Get2Chip.Com 2001 Stock Plan (collectively, the "Plans"). The options issuable under the Plans were assumed by the Company pursuant to the terms of that certain Agreement and Plan of Merger, dated as of April 8, 2003, by and among the Company, Project Don, Inc., a California corporation and wholly-owned subsidiary of the Company, Get2Chip.Com, Inc., a California corporation, and Bernd Braune, as shareholder agent. We have examined the originals or certified copies of such corporate records, certificates of officers of the Company and/or public officials and such other documents, and have made such other factual and legal investigations, as we deemed relevant and necessary as the basis for the opinions set forth below. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as conformed or photostatic copies and the authenticity of the originals of such copies. Based on our examination described above, subject to the assumptions stated above and relying on the statements of fact contained in the documents that we have examined, we are of the opinion that (i) the issuance by the Company of the Shares has been duly authorized and (ii) when issued in accordance with the terms of the Plans, the Shares will be duly and validly issued, fully paid and non-assessable shares of Common Stock. We are admitted to practice in the State of California, and are not admitted to practice in the State of Delaware. However, for the limited purpose of our opinions set forth above, we are generally familiar with the General Corporation Law of the State of Delaware (the "DGCL") as presently in effect and have made such inquiries as we consider necessary to render this opinion with respect to a Delaware corporation. This opinion letter is limited to the DGCL, as it presently exists and to the facts as they presently exist. We express no opinion with respect to the effect or applicability of the laws of any other jurisdiction. We assume no obligation to revise or supplement this opinion letter should the laws of such jurisdictions be changed after the date hereof by legislative action, judicial decision or otherwise. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the General Rules and Regulations of the Securities and Exchange Commission. Very truly yours, /S/ GIBSON, DUNN & CRUTCHER LLP Gibson, Dunn & Crutcher LLP EX-23.1 4 f89398orexv23w1.txt EXHIBIT 23.1 EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT The Board of Directors and Stockholders Cadence Design Systems, Inc.: We consent to the incorporation by reference in the Registration Statement on Form S-8 of Cadence Design Systems, Inc., of our report dated January 21, 2003, except as to Note 20, which is as of February 5, 2003, relating to the consolidated balance sheet of Cadence Design Systems, Inc. and subsidiaries as of December 28, 2002, and the consolidated income statement and consolidated statements of stockholders' equity and cash flows for the year then ended, and the 2002 financial statement schedule, which report appears in the December 28, 2002 annual report on Form 10-K of Cadence Design Systems, Inc. Our report refers to our audit of the adjustments and disclosures that were applied to revise the 2001 and 2000 consolidated financial statements as more fully described in Note 2 to the consolidated financial statements. However, we were not engaged to audit, review, or apply any procedures to the 2001 and 2000 consolidated financial statements of Cadence Design Systems, Inc. other than with respect to such adjustments and disclosures. /s/ KPMG LLP Mountain View, California April 23, 2003 EX-23.2 5 f89398orexv23w2.txt EXHIBIT 23.2 EXHIBIT 23.2 CONSENT OF ARTHUR ANDERSEN LLP, INDEPENDENT PUBLIC ACCOUNTANTS The registrant was unable to obtain the written consent of Arthur Andersen LLP, to incorporate by reference its report dated March 11, 2002. See Explanatory Note in the section above captioned "INFORMATION REGARDING FINANCIAL STATEMENTS INCORPORATED BY REFERENCE INTO THIS REGISTRATION STATEMENT." EX-99.1 6 f89398orexv99w1.txt EXHIBIT 99.1 EXHIBIT 99.1 GET2CHIP.COM, INC. 1997 STOCK OPTION PLAN As Adopted Effective December 1997 1. Purpose. (a) The purpose of the Get2Chip.com, Inc. 1997 Stock Option Plan (the "Plan") is to provide a means whereby selected eligible employees and officers and directors of and consultants to Get2Chip.com, Inc., a California corporation (the "Company"), and its Affiliates, if any, as defined below, may be given a favorable opportunity to acquire common stock of the Company (the "Common Stock"), thereby encouraging such persons to accept or continue a qualifying relationship with the Company; increasing the interest of such persons in the Company's welfare through participation in the growth and value of the Common Stock; and furnishing such persons with an incentive to improve operations and increase profits of the Company. The terms "Affiliate" or "Affiliates" as used in the Plan shall mean any parent corporation or subsidiary corporation of the Company, as those terms are defined in Sections 424(e) and (f) of the Internal Revenue Code of 1986, as amended (the "Code"). (b) To accomplish the foregoing objectives, this Plan provides a means whereby employees, directors, and consultants may receive options to purchase Common Stock. 2. Stock Options. Stock options granted pursuant to the Plan may, at the discretion of the Board of Directors of the Company, be granted either as an Incentive Stock Option ("ISO") or as a Nonstatutory Stock Option ("NSO"). An ISO shall mean an option described in Section 422 of the Code. An NSO shall mean any option not meeting the requirements of Section 422 of the Code. An option designated as an NSO will not be treated as an ISO. 3. Administration. The Board of Directors (the "Board"), whose authority shall be plenary, shall administer the Plan, unless and until such time as the Board delegates administration of the Plan pursuant to subsection 3(b), below. (a) The Board, whose determinations shall be conclusive, shall have the power, subject to and within the limits of the express provisions of the Plan: (i) To grant options pursuant to the Plan. (ii) To determine from time to time which of the eligible persons described in Section 5, below, shall be granted options under the Plan, the number of shares for which each option shall be granted, the term of each granted option and the time or times during the term of each option within which all or portions of each option may be exercised (which at the Board's discretion may be accelerated, if allowed under applicable law). (iii) To construe and interpret the Plan and options granted under it and to establish, amend, and revoke rules and regulations for its administration. The Board, in the exercise of this power, shall generally determine all questions of policy and expediency that may arise and may correct any defect, omission or inconsistency in the Plan or in any option agreement with respect to the Plan in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective. (iv) To grant options in exchange for cancellation of options granted earlier at different exercise prices; provided, however, nothing contained herein shall empower the Board to grant an ISO under conditions or pursuant to terms that are inconsistent with the requirements of subsection 4(b), below, or Section 422 of the Code. (v) To prescribe the terms and provisions of each option granted (which need not be identical) and the form of written instrument that shall constitute the option agreement. (vi) To amend the Plan as provided in Section 11 below. (vii) Generally, to exercise such powers and to perform such acts as are deemed necessary or expedient to promote the best interests of the Company. (viii) To take appropriate action to cause any option granted hereunder to cease to be an ISO; provided, however, no such action may be taken by the Board without the written consent of the affected optionee. (ix) To take appropriate action to accelerate the dates for exercise of any or all options granted hereunder, or any part of any option granted hereunder. (b) The Board may, by resolution, delegate administration of the Plan (including, without limitation, the Board's powers under subsection 3(b) above) to a committee acting under the authority of the Board. In the event that the Company has registered any equity security under Section 12 of the Securities and Exchange Act of 1934, as amended (the "Act"), such committee shall consist of not less than two (2) members of the Board each of whom shall be a "disinterested person" and an "outside director." A member of the Board is a "disinterested person" if at the time he exercises discretion in administering the Plan he is not eligible and has not at any time within one year prior thereto been eligible for selection as a person to whom stock may be allocated or to whom stock options or stock appreciation rights may be granted pursuant to the Plan or any other plan of the Company (or Affiliate) entitling the participants therein to acquire stock, stock options or stock appreciation rights of the Company or (Affiliate), or if he otherwise satisfies the requirements of a "disinterested person" within the meaning of Rule 16b-3 of the Act. A member of the Board is an "outside director" if he is not a current employee of the Corporation (or Affiliate), is not a former employee of the Corporation (or Affiliate) who is receiving compensation for prior services, was not an officer of the Corporation (or Affiliate) at any time, and currently is not receiving compensation -2- for personal services to the Corporation (or Affiliate) in any capacity other than as a member of the Board, or if otherwise satisfies the requirements of an "outside director" as such term is defined for purposes of Section 162(m) of the Code. The Board shall have complete discretion to determine the composition, structure, form, term and operation of any committee established to administer the Plan. The Board at any time may revest in the Board the administration of the Plan. 4. Shares Subject to Plan and to Option. (a) Subject to the provisions of Section 10, below (relating to adjustments upon changes in stock), the stock which may be sold pursuant to options granted under the Plan shall not exceed in the aggregate three hundred fifty thousand (350,000) shares of the Company's authorized Common Stock and may be unissued shares, reacquired shares, or shares bought on the market for the purpose of issuance under the Plan. If any options granted under the Plan shall for any reason terminate or expire without having been exercised in full, the stock not purchased under such options shall be available again for the purpose of the Plan. (b) If the aggregate fair market value of stock with respect to which ISOs are exercisable for the first time by any individual during any calendar year exceeds the amount provided in Section 422(d) of the Code, such options representing stock in excess of the Section 422(d) annual limitation shall be deemed to be a grant of an NSO to the extent of such excess. 5. Eligibility. (a) All employees of the Company and its Affiliates are eligible to receive ISOs and only employees of the Company and its Affiliates may be granted ISOs. Directors of the Company who are not also employees of the Company shall not be eligible for ISOs, but are eligible for NSOs. Employees and independent contractors shall also be eligible for NSOs. (b) No option issued under the Plan may be granted to a person who, at the time such option would be granted, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of outstanding capital stock of the Company or any of its Affiliates unless the option price is at least one hundred percent (100%) in the case of an NSO, one hundred ten percent (110%) in the case of an ISO, of the fair market value of the stock subject to the option and such option by its terms is not exercisable after five (5) years from the date such option is granted. Any employee may hold more than one (1) option at any time. For purposes of this subsection 5(b), in determining stock ownership, an optionee shall be considered as owning the voting capital stock owned, directly or indirectly, by or for his brothers and sisters, spouse, ancestors and lineal descendants. Voting capital stock owned, directly or indirectly, by or for a corporation, partnership, estate or trust shall be considered as being owned proportionately by or for its stockholders, partners or beneficiaries, as applicable. Common Stock with respect to which any such optionee holds an option shall not be counted. Additionally, for purposes of this subsection 5(b), outstanding capital stock shall include all capital stock actually issued and outstanding immediately after the grant of the option to the optionee. Outstanding capital stock shall -3- not include capital stock authorized for issue under outstanding options held by the optionee or by any other person. 6. Terms of Options. Options granted pursuant to the Plan need not be identical, but each option shall be granted within ten (10) years from the date the Plan is adopted by the Board or approved by the stockholders, whichever is earlier, shall specify the number of shares to which it pertains and shall be subject to the following terms and conditions: (a) The purchase price of each option shall be determined by the administrator of the Plan at the time the option is granted, but shall in no event, except as otherwise set forth in Section 5, above, be less than eighty-five percent (85%) in the case of an NSO, or one hundred percent (100%) in the case of an ISO, of the fair market value of the stock subject to the option on the date the option is granted. For all purposes of the Plan, the fair market value of the Common Stock shall be, if the Stock is publicly traded, its closing bid price on NASDAQ or the over-the-counter market, or if is traded on another exchange, the last price at which it traded on such exchange. If the stock is not publicly traded, the fair market value shall be such value as is determined in good faith by the Board of Directors by taking into consideration the following factors: the Company's net worth, prospective earning power and dividend-paying capacity, and other relevant factors. "Other relevant factors" include the goodwill of the business; the economic outlook in the particular industry; the Company's position in the industry and its management; the degree of control of the business represented by the block of stock to be valued; and the values of securities of corporations engaged in the same or similar lines of business which are listed on a stock exchange. In addition to the relevant factors described above, consideration shall also be given to non-operating assets, including proceeds of life insurance policies payable to or for the benefit of the Company, to the extent such non-operating assets have not been taken into account in the determination of net worth, prospective earning power, and dividend-earning capacity. (b) Except as otherwise set forth in Section 5, above, the term of any option shall not be greater than ten (10) years from the date it was granted. (c) An option by its terms, shall not be transferable otherwise than by will or the laws of descent and distribution and may be exercisable, during the lifetime of the option holder, only by the individual to whom the option is granted. Notwithstanding the above, if an employee is determined to be incompetent by a court of proper jurisdiction, his legal representative may exercise the option on his behalf. (d) Each option shall become exercisable on an annual basis as to not less than twenty percent (20%) of the total number of shares subject thereto. (e) Options under the Plan may be exercised by a participant regardless of whether he is employed by the Company or an Affiliate at the time of exercise. (f) Upon the termination of a participant's employment (defined as the date the participant is no longer employed by either the Company or any of its Affiliates), his rights to exercise an option then held by him shall be only as follows: -4- (i) If a participant's employment is terminated for any reason other than death or disability of the participant, he may, within not more than three (3) months following such termination, or within such longer period as the Board may fix, exercise the option to the extent such option was exercisable by the participant on the date of termination of his employment, or to the extent otherwise specified by the Board, which may so specify at a time that is subsequent to the date of the termination of his employment, provided that the date of exercise is in no event after the expiration of the term of the option. However, if the participant's employment is terminated due to Disability (within the meaning of Section 22(e) of the Code) of the participant, then this paragraph 6(f)(i) shall apply to such participant by substituting twelve (12) months for three (3) months. (ii) If a participant's employment is terminated by death, his estate shall have the right for a period of not more than twelve (12) months following the date of death, or for such longer period as the Board may fix, to exercise the option to the extent the participant was entitled to exercise such option on the date of death, or to the extent otherwise specified by the Board, which may so specify, at a time that is subsequent to the date of death, provided the actual date of exercise is in no event after the expiration of the term of the option. A participant's estate shall mean his legal representative or any person who acquires the right to exercise an option by reason of the participant's death. (g) Options may also contain such other provisions, which shall not be inconsistent with any of the foregoing terms, as the Board shall deem appropriate. No option, however, nor anything contained in the Plan, shall confer upon any employee any right to continue in the employ of the Company (or Affiliate) nor limit in any way the right of the Company (or Affiliate) to terminate his employment at any time. (h) In the event of a dissolution or liquidation of the Company, a merger in which the Company is not the surviving corporation, a transaction in which 100% of the then outstanding voting stock is sold or otherwise transferred, or the sale of substantially all of the assets of the Company, any or all outstanding options shall, notwithstanding any contrary terms of the grant, accelerate and become exercisable in full at least ten days prior to (and shall expire on) the consummation of such dissolution, liquidation, merger, sale of stock or sale of assets on such conditions as the Board of Directors shall determine unless the successor corporation assumes the outstanding options or substitutes substantially equivalent options. The aggregate fair market value (determined at the time an option is granted) of stock with respect to ISOs, which first become exercisable in the year of such dissolution, liquidation, merger, sale of stock or sale of assets cannot exceed $100,000. Any remaining accelerated ISOs shall be NSOs. 7. Payments and Loans Upon Exercise. (a) The purchase price of stock sold pursuant to an option shall be paid either in full in cash or by certified check at the time the option is exercised or to the extent permitted under the applicable provisions of the General Corporation Law of California, pursuant to any deferred payment arrangement that the Board in its discretion may approve; provided, however, that any interest to be paid by an optionee in connection with any such deferred payment arrangement shall be charged interest at the applicable federal rate as defined in Section 1274(d) of the Code. -5- (b) The Company may make loans or guarantee loans made by an appropriate financial institution to individual optionees, including officers, on such terms as may be approved by the Board for the purpose of financing the exercise of options granted under the Plan and the payment of any taxes that may be due by reason of such exercise. (c) In addition, if and to the extent authorized by the Board, optionees may make all or any portion of any payment due to the Company upon exercise of an option by delivery of any property (including securities of the Company) other than cash, so long as such property constitutes valid consideration for the stock under applicable law. (d) Where the Company has or will have a legal obligation to withhold taxes relating to the exercise of any stock option, such option may not be exercised, in whole or in part, unless such tax obligation is first satisfied in a manner satisfactory to the Company. 8. Use of Proceeds from Stock. Proceeds from the sale of stock pursuant to options granted under the Plan shall be used for general corporate purposes. 9. Stock Transfer Restrictions; Repurchase Provisions. Stock issued pursuant to the exercise of options granted under the Plan shall be subject to those stock transfer restrictions and repurchase provisions which shall be set forth in a Stock Restriction Agreement (the "Agreement"), substantially in the form attached hereto as Exhibit A. Each individual shall be required to execute the Agreement prior to receiving his shares. 10. Adjustments of and Changes in the Stock. Subject to the provisions set forth in subsection 6(h), above, in the event the shares of Common Stock of the Company, as presently constituted, shall be changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation (whether by reason of merger, consolidation, recapitalization, reclassification, split-up, combination of shares, or otherwise), or if the number of shares of Common Stock of the Company shall be increased through the payment of a stock dividend, then there shall be substituted for or added to each share of Common Stock of the Company theretofore appropriated or thereafter subject or which may become subject to an option under the Plan, the number and kind of shares of stock or other securities into which each outstanding share of Common Stock of the Company shall be so changed, or for which each such share shall be exchanged or to which each such share shall be entitled, as the case may be. Outstanding options shall also be amended as to price and other terms if necessary to reflect the foregoing events. In the event there shall be any other change in the number or kind of the outstanding shares of Common Stock of the Company, or of any stock or other securities into which such Common Stock shall have been changed, or for which it shall have been exchanged, then if the Board of Directors shall, in its sole discretion, determine that such change equitably requires an adjustment in any option theretofore granted or which may be granted under the Plan, such adjustment shall be made in accordance with such determination. No right to purchase fractional shares shall result from any adjustment in options pursuant to this Section 10. In case of any such adjustment, the shares subject to the option shall be rounded down to the nearest whole share. Notice of any adjustment shall be given by the Company to each holder of an option which shall -6- have been so adjusted and such adjustment (whether or not such notice is given) shall be effective and binding for all purposes of the Plan. 11. Amendment of the Plan. The Board at any time and from time to time, may amend the Plan, subject to the limitation, however, that, except as provided in Section 10 (relating to adjustments upon changes in stock), no amendment shall be effective, unless approved, within twelve (12) months before or after the date of such amendment's adoption, by the vote or written consent of a majority of the outstanding shares of the Company entitled to vote, where such amendment will: (a) increase the number of shares reserved for options under the Plan; (b) materially modify the requirements of Section 5 as to eligibility for participation in the Plan; or (c) materially increase the benefits accruing to participants under the Plan. It is expressly contemplated that the Board may amend the Plan in any respect necessary to provide the Company's employees with the maximum benefits provided or to be provided under Section 422 of the Code and the regulations promulgated thereunder relating to employee incentive stock options and/or to bring the plan or options granted under it into compliance therewith. Rights and obligations under any option granted before any amendment of the Plan shall not be altered or impaired by amendment of the Plan, except with the consent, which may be obtained in any manner deemed by the Board to be appropriate, of the person to whom the option was granted. 12. Termination or Suspension of the Plan. The Board at any time may suspend or terminate the Plan. The Plan, unless sooner terminated, shall terminate at the end of ten (10) years from the date the Plan is adopted by the Board or approved by the stockholders of the Company, whichever is earlier. An option may not be granted under the Plan while the Plan is suspended or after it is terminated. Rights and obligations under any option granted while the Plan is in effect shall not be altered or impaired by suspension or termination of the Plan, except with the consent of the person to whom the option was granted, which may be obtained in any manner that the Board deems appropriate. 13. Time of Granting Options. The date of grant of an option hereunder shall, for all purposes, be the date on which the Board (or committee under authority of the Board) makes the determination granting such option. 14. Listing, Qualification or Approval of Stock; Approval of Options. All options granted under the Plan are subject to the requirement that if at any time the Board shall determine in its discretion that the listing or qualification of the shares of stock subject thereto on any securities exchange or under any applicable law, or the consent or approval by any governmental regulatory -7- body or the stockholders of the Company, is necessary or desirable as a condition of or in connection with the issuance of shares under the option, the option may not be exercised in whole or in part, unless such listing, qualification, consent or approval shall have been effected or obtained free of any condition not acceptable to the Board. 15. Binding Effect of Conditions. The conditions and stipulations hereinabove contained or in any option granted pursuant to the Plan shall be and constitute a covenant running with all of the shares of the Company owned by the participant at any time, directly or indirectly whether the same have been issued or not, and those shares of the Company owned by the participant shall not be sold, assigned or transferred by any person save and except in accordance with the terms and conditions herein provided, and the participant shall agree to use his best efforts to cause the officers of the Company to refuse to record on the books of the Company any assignment or transfer made or attempted to be made, except as provided in the Plan and to cause said officers to refuse to cancel old certificates or to issue or deliver new certificates therefor where the purchaser or assignee has acquired certificates for the stock represented thereby, except strictly in accordance with the provisions of this Plan. 16. Effective Date of Plan. The Plan shall become effective as determined by the Board but no options granted under it shall be exercisable until the Plan has been approved by the vote or written consent of the holders of a majority of the outstanding shares of the Company entitled to vote. If such stockholder approval is not obtained within twelve (12) months before or after the date of the Board's adoption of the Plan, then all options previously granted under the Plan shall terminate, and no further options shall be granted and no shares shall be issued. Subject to such limitation, the Board may grant options under the Plan at any time after the effective date and before the date fixed herein for termination of the Plan. 17. Gender. The use of any gender specific pronoun or similar term is intended to be without legal significance as to gender. 18. Financial Reports. The Company shall provide financial and other information regarding the Company, on an annual or more frequent basis, to each individual holding an outstanding option under the Plan as required under applicable law. -8- EXHIBIT A Form of Stock Restriction Agreement GET2CHIP.COM, INC. INCENTIVE STOCK OPTION ACCEPTANCE LETTER TO: GRANT DATE: VESTING COMMENCEMENT DATE: We are pleased to notify you that Get2Chip.com, Inc., a California corporation (the "Company") hereby grants to you an option to purchase all or any part of _______________ shares (although no fractional shares may be purchased) of the Common Stock of the Company at the price of $ ______________ per share (the "Optioned Shares") as an Incentive Stock Option, as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), under the Get2Chip.com, Inc. (formerly known as Meropa, Inc.) 1997 Stock Option Plan (the "Plan"). This option cannot be exercised unless you first sign this Incentive Stock Option Acceptance Letter (the "Acceptance Letter") in the place provided and return it to the Secretary of the Company. However, your signing and delivering this letter will not bind you to purchase any of the shares subject to the option. Your obligation to purchase shares can arise only when you exercise this option in the manner set forth in Section 1 below. THIS OPTION IS SUBJECT TO AND MAY BE EXERCISED ONLY IN ACCORDANCE WITH THE PLAN. ONLY CERTAIN PROVISIONS OF THE PLAN ARE SUMMARRIZED IN THIS ACCEPTANCE LETTER. A COPY OF THE PLAN IS ATTACHED TO THIS ACCEPTANCE LETTER AND SHOULD BE READ CAREFULLY. 1. Term of Option and Exercise of Option. Subject to the provisions of the Plan and the terms and conditions of this Acceptance Letter, the term of this option shall be for a period of ten (10) years from the Grant Date. This option may be exercised immediately, in whole or in part, conditioned upon your entering into a Stock Restriction Agreement with respect to any Optioned Shares. The Optioned Shares shall vest in accordance with the following schedule: Twenty-five percent (25%) of the Optioned Shares shall vest one (1) year from the Vesting Commencement Date, and the remaining seventy-five percent (75%) of the Optioned Shares shall vest in successive equal monthly installments of 2.083% thereafter until the Optioned Shares become fully vested four (4) years from the Vesting Commencement Date. The number of Optioned Shares that may vest at any time pursuant to the foregoing schedule shall be rounded down to the nearest whole Optioned Share. 2. Termination of Employment. If your employment with the Company is terminated for any reason other than death or disability, this option may be exercised only within three (3) months of such termination and only to the extent that it was vested on the date of termination, but in no event may this option be exercised after ten (10) years from the Grant Date. 3. Death or Disability. If your employment with the Company terminates as a result of your death or disability, this option may be exercised in whole or in part by the duly authorized executor of your last Will or by the duly authorized administrator or special administrator of your estate, as the case may be, within twelve (12) months, to the extent that the option was vested on the date of your death or disability, but in no event after ten (10) years from the Grant Date. Your estate shall mean yourself or your legal representative or any person who acquires the right to exercise an option, as the case may be, by reason of your death or disability. 4. Nontransferability of Option. This option shall not be transferable except by Will or the laws of descent and distribution, and this option may be exercised during your lifetime only by you. Any purported transfer or assignment of this option shall be void and of no effect, and shall give the Company the right to terminate this option as of the date of such purported transfer or assignment. 5. Method of Exercise. This option may be exercised with respect to all or any part of the Optioned Shares as follows: (a) By giving the Company written notice of such exercise, specifying the number of shares as to which this option is so exercised and accompanied by cash, check, bank draft, or money order payable to the order of the Company for an amount in lawful money of the United States or other consideration approved by the Board of Directors, including Company's Common Stock shares equal to the Exercise Price multiplied by the number of said shares; and (b) By executing a Stock Restriction Agreement (Exhibit "A" to the Plan), a form of which is attached hereto and all the terms of which are incorporated by this reference. As soon as practical after receipt of such notice, payment of consideration and executed Stock Restriction Agreement, the Company shall, without transfer or issue tax or the other incidental expense to your or your successor, transfer and deliver thereto at the office of the Company or other such place as may be mutually agreeable a certificate or certificates for such shares of its Common Stock; provided, however, that the time of such delivery may be postponed by the Company for such period as may be required for it with reasonable diligence to comply with applicable registration requirements under the Securities Act of 1933, as amended, any applicable listing requirements of any national securities exchange, and requirements under any other laws or regulations applicable to the issuance or transfer of such shares. If you fail to accept delivery of any payment for all or any part of the number of shares specified in such notice upon tender of delivery of these shares, your right to purchase said shares may be terminated by the Company at its election and within its sole discretion. 6. Adjustments Upon Changes in Capitalization. In the event of any change in the outstanding Common Stock of the Company by reason of stock dividends, recapitalization, mergers, -2- consolidations, split-up, combinations or exchanges of shares and the like, the aggregate number or class of shares subject to this option immediately prior to such event shall be appropriately adjusted by the Board of Directors in accordance with the terms of the Plan, and such adjustment shall be conclusive. 7. Tax Status. Incentive stock options granted pursuant to the Plan are intended to result in favorable tax treatment under Section 422 of the Code. Your treatment of shares purchased pursuant to the exercise of the option thereafter may have significant tax consequences. You may wish to consult your tax advisor with respect to the tax consequences to you upon exercise of the option or sale of the stock that you acquire pursuant to this option. 8. Financial Reports. The Company shall provide financial and other information regarding the Company, on an annual or more frequent basis, to each individual holding an outstanding option under the Plan, as required by applicable law. 9. Entire Agreement; Governing Law. The Plan is incorporated herein by reference. The Plan and this Acceptance Letter constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of you and the Company with respect to the subject matter hereof, and may not be modified adversely to your interest except by means of a writing signed by you and the Company. This Acceptance Letter is governed by the internal substantive laws but not the choice of law rules of California. COMPANY By:___________________________________ EMPLOYEE: _______________________________ (Name) Address:_______________________ _______________________________ _______________________________ Social Security No.: _________________ -3- EX-99.2 7 f89398orexv99w2.txt EXHIBIT 99.2 EXHIBIT 99.2 GET2CHIP.COM, INC. 2001 STOCK PLAN (AS AMENDED NOVEMBER 12,2002) 1. Purposes of the Plan. The purposes of this Stock Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees, Directors and Consultants and to promote the success of the Company's business. Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the time of grant. 2. Definitions. As used herein, the following definitions shall apply: (a) "Administrator" means the Board or any of its Committees as shall be administering the Plan in accordance with Section 4 hereof. (b) "Applicable Laws" means the requirements relating to the administration of stock option plans 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 other country or jurisdiction where Options are granted under the Plan. (c) "Board" means the Board of Directors of the Company. (d) "Change in Control" means the occurrence of any of the following events: (i) Any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (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 (ii) The consummation of the sale or disposition by the Company of all or substantially all of the Company's assets; or (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. (e) "Code" means the Internal Revenue Code of 1986, as amended. (f) "Committee" means a committee of Directors appointed by the Board in accordance with Section 4 hereof. (g) "Common Stock" means the Common Stock of the Company. (h) "Company" means Get2Chip.com, Inc., a California corporation. (i) "Consultant" means any person who is engaged by the Company or any Parent or Subsidiary to render consulting or advisory services to such entity. (j) "Director" means a member of the Board. (k) "Disability" means total and permanent disability as defined in Section 22(e)(3) of the Code. (1) "Employee" means any person, including officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. A Service Provider shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor. 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 Optionee shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option. Neither service as a Director nor payment of a director's fee by the Company shall be sufficient to constitute "employment" by the Company. (m) "Exchange Act" means the Securities Exchange Act of 1934, as amended. (n) "Fair Market Value" means, as of any date, the value of Common Stock determined as follows: (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 shall 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; (ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean between the high bid and low asked prices for the Common Stock on the day of determination; or (iii) In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Administrator. (o) "Incentive Stock Option" means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code. (p) "Nonstatutory Stock Option" means an Option not intended to qualify as an Incentive Stock Option. (q) "Option" means a stock option granted pursuant to the Plan. -2- (r) "Option Agreement" means a written or electronic agreement between the Company and an Optionee evidencing the terms and conditions of an individual Option grant. The Option Agreement is subject to the terms and conditions of the Plan. (s) "Optioned Stock" means the Common Stock subject to an Option. (t) "Optionee" means the holder of an outstanding Option granted under the Plan. (u) "Parent" means a "parent corporation," whether now or hereafter existing, as defined in Section 424(e) of the Code. (v) "Plan" means this 2001 Stock Plan. (w) "Service Provider" means an Employee, Director or Consultant. (x) "Share" means a share of the Common Stock, as adjusted in accordance with Section 12 below. (y) "Subsidiary" means a "subsidiary corporation," whether now or hereafter existing, as defined in Section 424(f) of the Code. 3. Stock Subject to the Plan. Subject to the provisions of Section 12 of the Plan, the maximum aggregate number of Shares that may be subject to option and sold under the Plan is 6,015,751 Shares. The Shares may be authorized but unissued, or reacquired Common Stock. If an Option expires or becomes unexercisable without having been exercised in full, the unpurchased Shares which were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated). However, Shares that have actually been issued under the Plan, upon exercise of an Option, shall not be returned to the Plan and shall not become available for future distribution under the Plan, except that if Shares of restricted stock issued pursuant to an Option are repurchased by the Company at their original purchase price, such Shares shall become available for future grant under the Plan. 4. Administration of the Plan. (a) Administrator. The Plan shall be administered by the Board or a Committee appointed by the Board, which Committee shall be constituted to comply with Applicable Laws. (b) Powers of the Administrator. Subject to the provisions of the Plan and, in the case of a Committee, the specific duties delegated by the Board to such Committee, and subject to the approval of any relevant authorities, the Administrator shall have the authority in its discretion: (i) to determine the Fair Market Value; (ii) to select the Service Providers to whom Options may from time to time be granted hereunder; (iii) to determine the number of Shares to be covered by each such Option granted hereunder; -3- (iv) to approve forms of agreement for use under the Plan; (v) to determine the terms and conditions of any Option granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Options 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 Option or the Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine; (vi) 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; (vii) to allow Optionees to satisfy withholding tax obligations by electing to have the Company withhold from the Shares to be issued upon exercise of an Option that number of Shares having a Fair Market Value equal to the minimum amount required to be withheld. The Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined. All elections by Optionees to have Shares withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable; and (viii) to construe and interpret the terms of the Plan and Options granted pursuant to the Plan. (c) Effect of Administrator's Decision. All decisions, determinations and interpretations of the Administrator shall be final and binding on all Optionees. 5. Eligibility. Nonstatutory Stock Options may be granted to Service Providers. Incentive Stock Options may be granted only to Employees. 6. Limitations. (a) Incentive Stock Option Limit. Each Option shall be designated in the Option 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 Optionee during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock Options shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted. (b) At-Will Employment. Neither the Plan nor any Option shall confer upon any Optionee any right with respect to continuing the Optionee's relationship as a Service Provider with the Company, nor shall it interfere in any way with his or her right or the Company's right to terminate such relationship at any time, with or without cause, and with or without notice. -4- 7. Term of Plan. Subject to shareholder approval in accordance with Section 18, the Plan shall become effective upon its adoption by the Board. Unless sooner terminated under Section 14, it shall continue in effect for a term of ten (10) years from the later of (i) the effective date of the Plan, or (ii) the date of the most recent Board approval of an increase in the number of shares reserved for issuance under the Plan. 8. Term of Option. The term of each Option shall be stated in the Option Agreement; provided, however, that the term shall be no more than ten (10) years from the date of grant thereof. In the case of an Incentive Stock Option granted to an Optionee who, at the time the 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 term of the Option shall be five (5) years from the date of grant or such shorter term as may be provided in the Option Agreement. 9. Option Exercise Price and Consideration. (a) Exercise Price. The per share exercise price for the Shares to be issued upon exercise of an Option shall be such price as is determined by the Administrator, but shall be subject to the following: (i) In the case of an Incentive Stock Option (A) granted to an Employee who, at the time of grant of such Option, 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 exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant. (B) granted to any other Employee, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant. (ii) In the case of a Nonstatutory Stock Option (A) granted to a Service Provider who, at the time of grant of such Option, 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 exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant. (B) granted to any other Service Provider, the per Share exercise price shall be no less than 85% of the Fair Market Value per Share on the date of grant. (iii) Notwithstanding the foregoing, Options may be granted with a per Share exercise price other than as required above pursuant to a merger or other corporate transaction. (b) Forms of Consideration. The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant). Such consideration may consist of, without limitation, (1) cash, (2) check, (3) promissory note, (4) other Shares, provided Shares acquired directly from the Company (x) have been owned by the Optionee for more than six (6) months on the date of surrender, and (y) have a Fair Market Value -5- on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option shall be exercised, (5) consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan, or (6) any combination of the foregoing methods of payment. In making its determination as to the type of consideration to accept, the Administrator shall consider if acceptance of such consideration may be reasonably expected to benefit the Company. Notwithstanding the foregoing, the Administrator may permit an Optionee to exercise his or her Option by delivery of a full-recourse promissory note secured by the purchased Shares. The terms of such promissory note shall be determined by the Administrator in its sole discretion. 10. Exercise of Option. (a) Procedure for Exercise; Rights as a Shareholder. Any Option granted hereunder shall be exercisable according to the terms hereof at such times and under such conditions as determined by the Administrator and set forth in the Option Agreement. Except in the case of Options granted to officers, Directors and Consultants, Options shall become exercisable at a rate of no less than 20% per year over five (5) years from the date the Options are granted. Unless the Administrator provides otherwise, vesting of Options granted hereunder to officers and Directors shall be suspended during any unpaid leave of absence. An Option may not be exercised for a fraction of a Share. An Option shall be deemed exercised when the Company receives (i) written or electronic notice of exercise (in accordance with the Option Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised. Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Option Agreement and the Plan. Shares issued upon exercise of an Option shall be issued in the name of the Optionee or, if requested by the Optionee, in the name of the Optionee and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Shares, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 12 of the Plan. Exercise of an Option in any manner shall result in a decrease in the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised. (b) Termination of Relationship as a Service Provider. If an Optionee ceases to be a Service Provider, such Optionee may exercise his or her Option within thirty (30) days of termination, or such longer period of time as specified in the Option Agreement, to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of the Option as set forth in the Option Agreement). If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. -6- (c) Disability of Optionee. If an Optionee ceases to be a Service Provider as a result of the Optionee's Disability, the Optionee may exercise his or her Option within six (6) months of termination, or such longer period of time as specified in the Option 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 Option Agreement). If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. (d) Death of Optionee. If an Optionee dies while a Service Provider, the Option may be exercised within six (6) months following Optionee's death, or such longer period of time as specified in the Option Agreement, to the extent that the Option is vested on the date of death (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement) by the Optionee's designated beneficiary, provided such beneficiary has been designated prior to Optionee's death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Optionee, then such Option may be exercised by the personal representative of the Optionee's estate or by the person(s) to whom the Option is transferred pursuant to the Optionee's will or in accordance with the laws of descent and distribution. If, at the time of death, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 11. Limited Transferability of Options. Unless determined otherwise by the Administrator, Options may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or the laws of descent and distribution, and may be exercised during the lifetime of the Optionee, only by the Optionee. If the Administrator in its sole discretion makes an Option transferable, such Option may only be transferred by (i) will, (ii) the laws of descent and distribution, (iii) instrument to an inter vivos or testamentary trust in which the Option is to be passed to beneficiaries upon the death of the Optionee, or (iv) gift to a member of Optionee's immediate family (as such term is defined in Rule 16a-l(e) of the Exchange Act). In addition, any transferable Option shall contain additional terms and conditions as the Administrator deems appropriate. 12. Adjustments Upon Changes in Capitalization, Merger or Change in Control. (a) Changes in Capitalization. Subject to any required action by the shareholders of the Company, the number and type of Shares which have been authorized for issuance under the Plan but as to which no Options have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Option, and the number and type of Shares covered by each outstanding Option, as well as the price per Share covered by each such outstanding Option, shall be proportionately adjusted for any increase or decrease in the number or type of issued Shares resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company. The conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration." Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the -7- Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number, type or price of Shares subject to an Option. (b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each Optionee as soon as practicable prior to the effective date of such proposed transaction. The Administrator in its discretion may provide for an Optionee to have the right to exercise his or her Option until fifteen (15) days prior to such transaction as to all of the Optioned Stock covered thereby, including Shares as to which the Option would not otherwise be exercisable. In addition, the Administrator may provide that any Company repurchase option applicable to any Shares purchased upon exercise of an Option shall lapse as to all such Shares, provided the proposed dissolution or liquidation takes place at the time and in the manner contemplated. To the extent it has not been previously exercised, an Option will terminate immediately prior to the consummation of such proposed action. (c) Merger or Change in Control. In the event of a merger of the Company with or into another corporation, or a Change in Control, each outstanding Option shall be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. If, in such event, the Option is not assumed or substituted, the Option shall terminate as of the date of the closing of the merger or Change in Control. For the purposes of this paragraph, the Option shall be considered assumed if, following the merger or Change in Control, the Option confers the right to purchase or receive, for each Share of Optioned Stock subject to the Option immediately prior to the merger or Change in Control, the consideration (whether stock, cash, or other securities or property) 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 merger or 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 the Option, for each Share of Optioned Stock subject to the Option, 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 Stock in the merger or Change in Control. 13. Time of Granting Options. The date of grant of an Option shall, for all purposes, be the date on which the Administrator makes the determination granting such Option, or such later date as is determined by the Administrator. Notice of the determination shall be given to each Service Provider to whom an Option is so granted within a reasonable time after the date of such grant. 14. Amendment and Termination of the Plan. (a) Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the Plan. (b) Shareholder Approval. The Board shall obtain shareholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws. -8- (c) Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Optionee, unless mutually agreed otherwise between the Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and the Company. Termination of the Plan shall not affect the Administrator's ability to exercise the powers granted to it hereunder with respect to Options granted under the Plan prior to the date of such termination. 15. Conditions Upon Issuance of Shares. (a) Legal Compliance. Shares shall not be issued pursuant to the exercise of an Option unless the exercise of such Option and the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance. (b) Investment Representations. As a condition to the exercise of an Option, the Administrator may require the person exercising such Option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required. 16. Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained. 17. Reservation of Shares. The Company, during the term of this Plan, shall at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. 18. Shareholder Approval. The Plan shall be subject to approval by the shareholders of the Company within twelve (12) months after the date the Plan is adopted. Such shareholder approval shall be obtained in the degree and manner required under Applicable Laws. 19. Information to Optionees. The Company shall provide to each Optionee and to each individual who acquires Shares pursuant to the Plan, not less frequently than annually during the period such Optionee has one or more Options outstanding, and, in the case of an individual who acquires Shares pursuant to the Plan, during the period such individual owns such Shares, copies of annual financial statements. The Company shall not be required to provide such statements to key employees whose duties in connection with the Company assure their access to equivalent information. -9- -----END PRIVACY-ENHANCED MESSAGE-----

EX-5.1

                                                                     EXHIBIT 5.1

                                 April 24, 2003

(415) 393-8200                                                     C 18861-00088

Cadence Design Systems, Inc.
2655 Seely Avenue, Building 5
San Jose, CA 95134

         Re: Registration Statement on Form S-8 of Cadence Design Systems, Inc.

Ladies and Gentlemen:

         We refer to the registration statement on Form S-8 (the "Registration
Statement"), under the Securities Act of 1933, as amended (the "Securities
Act"), filed by Cadence Design Systems, Inc., a Delaware corporation (the
"Company"), with the Securities and Exchange Commission on April 24, 2003, with
respect to the proposed offering by the Company of up to 1,127,748 shares (the
"Shares") of its common stock, $0.01 par value per share (the "Common Stock"),
subject to issuance by the Company upon exercise of options granted under
Get2Chip.Com 1997 Stock Option Plan and the Get2Chip.Com 2001 Stock Plan
(collectively, the "Plans"). The options issuable under the Plans were assumed
by the Company pursuant to the terms of that certain Agreement and Plan of
Merger, dated as of April 8, 2003, by and among the Company, Project Don, Inc.,
a California corporation and wholly-owned subsidiary of the Company,
Get2Chip.Com, Inc., a California corporation, and Bernd Braune, as shareholder
agent.

         We have examined the originals or certified copies of such corporate
records, certificates of officers of the Company and/or public officials and
such other documents, and have made such other factual and legal investigations,
as we deemed relevant and necessary as the basis for the opinions set forth
below. In such examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as conformed or
photostatic copies and the authenticity of the originals of such copies.

         Based on our examination described above, subject to the assumptions
stated above and relying on the statements of fact contained in the documents
that we have examined, we are of the opinion that (i) the issuance by the
Company of the Shares has been duly authorized and (ii) when issued in
accordance with the terms of the Plans, the Shares will be duly and validly
issued, fully paid and non-assessable shares of Common Stock.

         We are admitted to practice in the State of California, and are not
admitted to practice in the State of Delaware. However, for the limited purpose
of our opinions set forth above, we are generally familiar with the General
Corporation Law of the State of Delaware (the "DGCL") as presently in effect and
have made such inquiries as we consider necessary to render this opinion with
respect to a Delaware corporation. This opinion letter is limited to the DGCL,
as it presently exists and to the facts as they presently exist. We express no
opinion with respect to the effect or applicability of the laws of any other
jurisdiction. We assume no obligation to revise or supplement this opinion
letter should the laws of such jurisdictions be changed after the date hereof by
legislative action, judicial decision or otherwise.

         We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not admit that we are
within the category of persons whose consent is required under Section 7 of the
Securities Act or the General Rules and Regulations of the Securities and
Exchange Commission.

                                           Very truly yours,

                                           /S/ GIBSON, DUNN & CRUTCHER LLP
                                           Gibson, Dunn & Crutcher LLP

EX-23.1

                                                                    EXHIBIT 23.1

                         INDEPENDENT AUDITORS' CONSENT

The Board of Directors and Stockholders
Cadence Design Systems, Inc.:

We consent to the incorporation by reference in the Registration Statement on
Form S-8 of Cadence Design Systems, Inc., of our report dated January 21, 2003,
except as to Note 20, which is as of February 5, 2003, relating to the
consolidated balance sheet of Cadence Design Systems, Inc. and subsidiaries as
of December 28, 2002, and the consolidated income statement and consolidated
statements of stockholders' equity and cash flows for the year then ended, and
the 2002 financial statement schedule, which report appears in the December 28,
2002 annual report on Form 10-K of Cadence Design Systems, Inc.

Our report refers to our audit of the adjustments and disclosures that were
applied to revise the 2001 and 2000 consolidated financial statements as more
fully described in Note 2 to the consolidated financial statements. However, we
were not engaged to audit, review, or apply any procedures to the 2001 and 2000
consolidated financial statements of Cadence Design Systems, Inc. other than
with respect to such adjustments and disclosures.

/s/ KPMG LLP

Mountain View, California
April 23, 2003

EX-23.2

                                                                    EXHIBIT 23.2

         CONSENT OF ARTHUR ANDERSEN LLP, INDEPENDENT PUBLIC ACCOUNTANTS

The registrant was unable to obtain the written consent of Arthur Andersen LLP,
to incorporate by reference its report dated March 11, 2002. See Explanatory
Note in the section above captioned "INFORMATION REGARDING FINANCIAL STATEMENTS
INCORPORATED  BY REFERENCE INTO THIS REGISTRATION STATEMENT."

EX-99.1

                                                                    EXHIBIT 99.1

                               GET2CHIP.COM, INC.

                             1997 STOCK OPTION PLAN

                       As Adopted Effective December 1997

         1.       Purpose.

                  (a)      The purpose of the Get2Chip.com, Inc. 1997 Stock
Option Plan (the "Plan") is to provide a means whereby selected eligible
employees and officers and directors of and consultants to Get2Chip.com, Inc., a
California corporation (the "Company"), and its Affiliates, if any, as defined
below, may be given a favorable opportunity to acquire common stock of the
Company (the "Common Stock"), thereby encouraging such persons to accept or
continue a qualifying relationship with the Company; increasing the interest of
such persons in the Company's welfare through participation in the growth and
value of the Common Stock; and furnishing such persons with an incentive to
improve operations and increase profits of the Company. The terms "Affiliate" or
"Affiliates" as used in the Plan shall mean any parent corporation or subsidiary
corporation of the Company, as those terms are defined in Sections 424(e) and
(f) of the Internal Revenue Code of 1986, as amended (the "Code").

                  (b)      To accomplish the foregoing objectives, this Plan
provides a means whereby employees, directors, and consultants may receive
options to purchase Common Stock.

         2.       Stock Options. Stock options granted pursuant to the Plan may,
at the discretion of the Board of Directors of the Company, be granted either as
an Incentive Stock Option ("ISO") or as a Nonstatutory Stock Option ("NSO"). An
ISO shall mean an option described in Section 422 of the Code. An NSO shall mean
any option not meeting the requirements of Section 422 of the Code. An option
designated as an NSO will not be treated as an ISO.

         3.       Administration. The Board of Directors (the "Board"), whose
authority shall be plenary, shall administer the Plan, unless and until such
time as the Board delegates administration of the Plan pursuant to subsection
3(b), below.

                  (a)      The Board, whose determinations shall be conclusive,
shall have the power, subject to and within the limits of the express provisions
of the Plan:

                           (i)      To grant options pursuant to the Plan.

                           (ii)     To determine from time to time which of the
eligible persons described in Section 5, below, shall be granted options under
the Plan, the number of shares for which each option shall be granted, the term
of each granted option and the time or times during the



term of each option within which all or portions of each option may be exercised
(which at the Board's discretion may be accelerated, if allowed under applicable
law).

                           (iii)    To construe and interpret the Plan and
options granted under it and to establish, amend, and revoke rules and
regulations for its administration. The Board, in the exercise of this power,
shall generally determine all questions of policy and expediency that may arise
and may correct any defect, omission or inconsistency in the Plan or in any
option agreement with respect to the Plan in a manner and to the extent it shall
deem necessary or expedient to make the Plan fully effective.

                           (iv)     To grant options in exchange for
cancellation of options granted earlier at different exercise prices; provided,
however, nothing contained herein shall empower the Board to grant an ISO under
conditions or pursuant to terms that are inconsistent with the requirements of
subsection 4(b), below, or Section 422 of the Code.

                           (v)      To prescribe the terms and provisions of
each option granted (which need not be identical) and the form of written
instrument that shall constitute the option agreement.

                           (vi)     To amend the Plan as provided in Section 11
below.

                           (vii)    Generally, to exercise such powers and to
perform such acts as are deemed necessary or expedient to promote the best
interests of the Company.

                           (viii)   To take appropriate action to cause any
option granted hereunder to cease to be an ISO; provided, however, no such
action may be taken by the Board without the written consent of the affected
optionee.

                           (ix)     To take appropriate action to accelerate the
dates for exercise of any or all options granted hereunder, or any part of any
option granted hereunder.

                  (b)      The Board may, by resolution, delegate administration
of the Plan (including, without limitation, the Board's powers under subsection
3(b) above) to a committee acting under the authority of the Board. In the event
that the Company has registered any equity security under Section 12 of the
Securities and Exchange Act of 1934, as amended (the "Act"), such committee
shall consist of not less than two (2) members of the Board each of whom shall
be a "disinterested person" and an "outside director." A member of the Board is
a "disinterested person" if at the time he exercises discretion in administering
the Plan he is not eligible and has not at any time within one year prior
thereto been eligible for selection as a person to whom stock may be allocated
or to whom stock options or stock appreciation rights may be granted pursuant to
the Plan or any other plan of the Company (or Affiliate) entitling the
participants therein to acquire stock, stock options or stock appreciation
rights of the Company or (Affiliate), or if he otherwise satisfies the
requirements of a "disinterested person" within the meaning of Rule 16b-3 of the
Act. A member of the Board is an "outside director" if he is not a current
employee of the Corporation (or Affiliate), is not a former employee of the
Corporation (or Affiliate) who is receiving compensation for prior services, was
not an officer of the Corporation (or Affiliate) at any time, and currently is
not receiving compensation

                                      -2-



for personal services to the Corporation (or Affiliate) in any capacity other
than as a member of the Board, or if otherwise satisfies the requirements of an
"outside director" as such term is defined for purposes of Section 162(m) of the
Code. The Board shall have complete discretion to determine the composition,
structure, form, term and operation of any committee established to administer
the Plan. The Board at any time may revest in the Board the administration of
the Plan.

         4.       Shares Subject to Plan and to Option.

                  (a)      Subject to the provisions of Section 10, below
(relating to adjustments upon changes in stock), the stock which may be sold
pursuant to options granted under the Plan shall not exceed in the aggregate
three hundred fifty thousand (350,000) shares of the Company's authorized Common
Stock and may be unissued shares, reacquired shares, or shares bought on the
market for the purpose of issuance under the Plan. If any options granted under
the Plan shall for any reason terminate or expire without having been exercised
in full, the stock not purchased under such options shall be available again for
the purpose of the Plan.

                  (b)      If the aggregate fair market value of stock with
respect to which ISOs are exercisable for the first time by any individual
during any calendar year exceeds the amount provided in Section 422(d) of the
Code, such options representing stock in excess of the Section 422(d) annual
limitation shall be deemed to be a grant of an NSO to the extent of such excess.

         5.       Eligibility.

                  (a)      All employees of the Company and its Affiliates are
eligible to receive ISOs and only employees of the Company and its Affiliates
may be granted ISOs. Directors of the Company who are not also employees of the
Company shall not be eligible for ISOs, but are eligible for NSOs. Employees and
independent contractors shall also be eligible for NSOs.

                  (b)      No option issued under the Plan may be granted to a
person who, at the time such option would be granted, owns stock possessing more
than ten percent (10%) of the total combined voting power of all classes of
outstanding capital stock of the Company or any of its Affiliates unless the
option price is at least one hundred percent (100%) in the case of an NSO, one
hundred ten percent (110%) in the case of an ISO, of the fair market value of
the stock subject to the option and such option by its terms is not exercisable
after five (5) years from the date such option is granted. Any employee may hold
more than one (1) option at any time. For purposes of this subsection 5(b), in
determining stock ownership, an optionee shall be considered as owning the
voting capital stock owned, directly or indirectly, by or for his brothers and
sisters, spouse, ancestors and lineal descendants. Voting capital stock owned,
directly or indirectly, by or for a corporation, partnership, estate or trust
shall be considered as being owned proportionately by or for its stockholders,
partners or beneficiaries, as applicable. Common Stock with respect to which any
such optionee holds an option shall not be counted. Additionally, for purposes
of this subsection 5(b), outstanding capital stock shall include all capital
stock actually issued and outstanding immediately after the grant of the option
to the optionee. Outstanding capital stock shall

                                      -3-



not include capital stock authorized for issue under outstanding options held by
the optionee or by any other person.

         6.       Terms of Options. Options granted pursuant to the Plan need
not be identical, but each option shall be granted within ten (10) years from
the date the Plan is adopted by the Board or approved by the stockholders,
whichever is earlier, shall specify the number of shares to which it pertains
and shall be subject to the following terms and conditions:

                  (a)      The purchase price of each option shall be determined
by the administrator of the Plan at the time the option is granted, but shall in
no event, except as otherwise set forth in Section 5, above, be less than
eighty-five percent (85%) in the case of an NSO, or one hundred percent (100%)
in the case of an ISO, of the fair market value of the stock subject to the
option on the date the option is granted. For all purposes of the Plan, the fair
market value of the Common Stock shall be, if the Stock is publicly traded, its
closing bid price on NASDAQ or the over-the-counter market, or if is traded on
another exchange, the last price at which it traded on such exchange. If the
stock is not publicly traded, the fair market value shall be such value as is
determined in good faith by the Board of Directors by taking into consideration
the following factors: the Company's net worth, prospective earning power and
dividend-paying capacity, and other relevant factors. "Other relevant factors"
include the goodwill of the business; the economic outlook in the particular
industry; the Company's position in the industry and its management; the degree
of control of the business represented by the block of stock to be valued; and
the values of securities of corporations engaged in the same or similar lines of
business which are listed on a stock exchange. In addition to the relevant
factors described above, consideration shall also be given to non-operating
assets, including proceeds of life insurance policies payable to or for the
benefit of the Company, to the extent such non-operating assets have not been
taken into account in the determination of net worth, prospective earning power,
and dividend-earning capacity.

                  (b)      Except as otherwise set forth in Section 5, above,
the term of any option shall not be greater than ten (10) years from the date it
was granted.

                  (c)      An option by its terms, shall not be transferable
otherwise than by will or the laws of descent and distribution and may be
exercisable, during the lifetime of the option holder, only by the individual to
whom the option is granted. Notwithstanding the above, if an employee is
determined to be incompetent by a court of proper jurisdiction, his legal
representative may exercise the option on his behalf.

                  (d)      Each option shall become exercisable on an annual
basis as to not less than twenty percent (20%) of the total number of shares
subject thereto.

                  (e)      Options under the Plan may be exercised by a
participant regardless of whether he is employed by the Company or an Affiliate
at the time of exercise.

                  (f)      Upon the termination of a participant's employment
(defined as the date the participant is no longer employed by either the Company
or any of its Affiliates), his rights to exercise an option then held by him
shall be only as follows:

                                       -4-



                           (i)      If a participant's employment is terminated
for any reason other than death or disability of the participant, he may, within
not more than three (3) months following such termination, or within such longer
period as the Board may fix, exercise the option to the extent such option was
exercisable by the participant on the date of termination of his employment, or
to the extent otherwise specified by the Board, which may so specify at a time
that is subsequent to the date of the termination of his employment, provided
that the date of exercise is in no event after the expiration of the term of the
option. However, if the participant's employment is terminated due to Disability
(within the meaning of Section 22(e) of the Code) of the participant, then this
paragraph 6(f)(i) shall apply to such participant by substituting twelve (12)
months for three (3) months.

                           (ii)     If a participant's employment is terminated
by death, his estate shall have the right for a period of not more than twelve
(12) months following the date of death, or for such longer period as the Board
may fix, to exercise the option to the extent the participant was entitled to
exercise such option on the date of death, or to the extent otherwise specified
by the Board, which may so specify, at a time that is subsequent to the date of
death, provided the actual date of exercise is in no event after the expiration
of the term of the option. A participant's estate shall mean his legal
representative or any person who acquires the right to exercise an option by
reason of the participant's death.

                  (g)      Options may also contain such other provisions, which
shall not be inconsistent with any of the foregoing terms, as the Board shall
deem appropriate. No option, however, nor anything contained in the Plan, shall
confer upon any employee any right to continue in the employ of the Company (or
Affiliate) nor limit in any way the right of the Company (or Affiliate) to
terminate his employment at any time.

                  (h)      In the event of a dissolution or liquidation of the
Company, a merger in which the Company is not the surviving corporation, a
transaction in which 100% of the then outstanding voting stock is sold or
otherwise transferred, or the sale of substantially all of the assets of the
Company, any or all outstanding options shall, notwithstanding any contrary
terms of the grant, accelerate and become exercisable in full at least ten days
prior to (and shall expire on) the consummation of such dissolution,
liquidation, merger, sale of stock or sale of assets on such conditions as the
Board of Directors shall determine unless the successor corporation assumes the
outstanding options or substitutes substantially equivalent options. The
aggregate fair market value (determined at the time an option is granted) of
stock with respect to ISOs, which first become exercisable in the year of such
dissolution, liquidation, merger, sale of stock or sale of assets cannot exceed
$100,000. Any remaining accelerated ISOs shall be NSOs.

         7.       Payments and Loans Upon Exercise.

                  (a)      The purchase price of stock sold pursuant to an
option shall be paid either in full in cash or by certified check at the time
the option is exercised or to the extent permitted under the applicable
provisions of the General Corporation Law of California, pursuant to any
deferred payment arrangement that the Board in its discretion may approve;
provided, however, that any interest to be paid by an optionee in connection
with any such deferred payment arrangement shall be charged interest at the
applicable federal rate as defined in Section 1274(d) of the Code.

                                      -5-



                  (b)      The Company may make loans or guarantee loans made by
an appropriate financial institution to individual optionees, including
officers, on such terms as may be approved by the Board for the purpose of
financing the exercise of options granted under the Plan and the payment of any
taxes that may be due by reason of such exercise.

                  (c)      In addition, if and to the extent authorized by the
Board, optionees may make all or any portion of any payment due to the Company
upon exercise of an option by delivery of any property (including securities of
the Company) other than cash, so long as such property constitutes valid
consideration for the stock under applicable law.

                  (d)      Where the Company has or will have a legal obligation
to withhold taxes relating to the exercise of any stock option, such option may
not be exercised, in whole or in part, unless such tax obligation is first
satisfied in a manner satisfactory to the Company.

         8.       Use of Proceeds from Stock. Proceeds from the sale of stock
pursuant to options granted under the Plan shall be used for general corporate
purposes.

         9.       Stock Transfer Restrictions; Repurchase Provisions. Stock
issued pursuant to the exercise of options granted under the Plan shall be
subject to those stock transfer restrictions and repurchase provisions which
shall be set forth in a Stock Restriction Agreement (the "Agreement"),
substantially in the form attached hereto as Exhibit A. Each individual shall be
required to execute the Agreement prior to receiving his shares.

         10.      Adjustments of and Changes in the Stock. Subject to the
provisions set forth in subsection 6(h), above, in the event the shares of
Common Stock of the Company, as presently constituted, shall be changed into or
exchanged for a different number or kind of shares of stock or other securities
of the Company or of another corporation (whether by reason of merger,
consolidation, recapitalization, reclassification, split-up, combination of
shares, or otherwise), or if the number of shares of Common Stock of the Company
shall be increased through the payment of a stock dividend, then there shall be
substituted for or added to each share of Common Stock of the Company
theretofore appropriated or thereafter subject or which may become subject to an
option under the Plan, the number and kind of shares of stock or other
securities into which each outstanding share of Common Stock of the Company
shall be so changed, or for which each such share shall be exchanged or to which
each such share shall be entitled, as the case may be. Outstanding options shall
also be amended as to price and other terms if necessary to reflect the
foregoing events. In the event there shall be any other change in the number or
kind of the outstanding shares of Common Stock of the Company, or of any stock
or other securities into which such Common Stock shall have been changed, or for
which it shall have been exchanged, then if the Board of Directors shall, in its
sole discretion, determine that such change equitably requires an adjustment in
any option theretofore granted or which may be granted under the Plan, such
adjustment shall be made in accordance with such determination. No right to
purchase fractional shares shall result from any adjustment in options pursuant
to this Section 10. In case of any such adjustment, the shares subject to the
option shall be rounded down to the nearest whole share. Notice of any
adjustment shall be given by the Company to each holder of an option which shall

                                       -6-



have been so adjusted and such adjustment (whether or not such notice is given)
shall be effective and binding for all purposes of the Plan.

         11.      Amendment of the Plan. The Board at any time and from time to
time, may amend the Plan, subject to the limitation, however, that, except as
provided in Section 10 (relating to adjustments upon changes in stock), no
amendment shall be effective, unless approved, within twelve (12) months before
or after the date of such amendment's adoption, by the vote or written consent
of a majority of the outstanding shares of the Company entitled to vote, where
such amendment will:

                  (a)      increase the number of shares reserved for options
under the Plan;

                  (b)      materially modify the requirements of Section 5 as to
eligibility for participation in the Plan; or

                  (c)      materially increase the benefits accruing to
participants under the Plan.

         It is expressly contemplated that the Board may amend the Plan in any
respect necessary to provide the Company's employees with the maximum benefits
provided or to be provided under Section 422 of the Code and the regulations
promulgated thereunder relating to employee incentive stock options and/or to
bring the plan or options granted under it into compliance therewith.

         Rights and obligations under any option granted before any amendment of
the Plan shall not be altered or impaired by amendment of the Plan, except with
the consent, which may be obtained in any manner deemed by the Board to be
appropriate, of the person to whom the option was granted.

         12.      Termination or Suspension of the Plan. The Board at any time
may suspend or terminate the Plan. The Plan, unless sooner terminated, shall
terminate at the end of ten (10) years from the date the Plan is adopted by the
Board or approved by the stockholders of the Company, whichever is earlier. An
option may not be granted under the Plan while the Plan is suspended or after it
is terminated.

         Rights and obligations under any option granted while the Plan is in
effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom the option was granted,
which may be obtained in any manner that the Board deems appropriate.

         13.      Time of Granting Options. The date of grant of an option
hereunder shall, for all purposes, be the date on which the Board (or committee
under authority of the Board) makes the determination granting such option.

         14.      Listing, Qualification or Approval of Stock; Approval of
Options. All options granted under the Plan are subject to the requirement that
if at any time the Board shall determine in its discretion that the listing or
qualification of the shares of stock subject thereto on any securities exchange
or under any applicable law, or the consent or approval by any governmental
regulatory

                                      -7-



body or the stockholders of the Company, is necessary or desirable as a
condition of or in connection with the issuance of shares under the option, the
option may not be exercised in whole or in part, unless such listing,
qualification, consent or approval shall have been effected or obtained free of
any condition not acceptable to the Board.

         15.      Binding Effect of Conditions. The conditions and stipulations
hereinabove contained or in any option granted pursuant to the Plan shall be and
constitute a covenant running with all of the shares of the Company owned by the
participant at any time, directly or indirectly whether the same have been
issued or not, and those shares of the Company owned by the participant shall
not be sold, assigned or transferred by any person save and except in accordance
with the terms and conditions herein provided, and the participant shall agree
to use his best efforts to cause the officers of the Company to refuse to record
on the books of the Company any assignment or transfer made or attempted to be
made, except as provided in the Plan and to cause said officers to refuse to
cancel old certificates or to issue or deliver new certificates therefor where
the purchaser or assignee has acquired certificates for the stock represented
thereby, except strictly in accordance with the provisions of this Plan.

         16.      Effective Date of Plan. The Plan shall become effective as
determined by the Board but no options granted under it shall be exercisable
until the Plan has been approved by the vote or written consent of the holders
of a majority of the outstanding shares of the Company entitled to vote. If such
stockholder approval is not obtained within twelve (12) months before or after
the date of the Board's adoption of the Plan, then all options previously
granted under the Plan shall terminate, and no further options shall be granted
and no shares shall be issued. Subject to such limitation, the Board may grant
options under the Plan at any time after the effective date and before the date
fixed herein for termination of the Plan.

         17.      Gender. The use of any gender specific pronoun or similar term
is intended to be without legal significance as to gender.

         18.      Financial Reports. The Company shall provide financial and
other information regarding the Company, on an annual or more frequent basis, to
each individual holding an outstanding option under the Plan as required under
applicable law.

                                      -8-



                                    EXHIBIT A

                       Form of Stock Restriction Agreement



                               GET2CHIP.COM, INC.

                             INCENTIVE STOCK OPTION
                                ACCEPTANCE LETTER

TO:

                                   GRANT DATE:

                                   VESTING COMMENCEMENT DATE:

         We are pleased to notify you that Get2Chip.com, Inc., a California
corporation (the "Company") hereby grants to you an option to purchase all or
any part of _______________ shares (although no fractional shares may be
purchased) of the Common Stock of the Company at the price of $ ______________
per share (the "Optioned Shares") as an Incentive Stock Option, as defined in
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), under
the Get2Chip.com, Inc. (formerly known as Meropa, Inc.) 1997 Stock Option Plan
(the "Plan").

         This option cannot be exercised unless you first sign this Incentive
Stock Option Acceptance Letter (the "Acceptance Letter") in the place provided
and return it to the Secretary of the Company. However, your signing and
delivering this letter will not bind you to purchase any of the shares subject
to the option. Your obligation to purchase shares can arise only when you
exercise this option in the manner set forth in Section 1 below.

THIS OPTION IS SUBJECT TO AND MAY BE EXERCISED ONLY IN ACCORDANCE WITH THE PLAN.
ONLY CERTAIN PROVISIONS OF THE PLAN ARE SUMMARRIZED IN THIS ACCEPTANCE LETTER. A
COPY OF THE PLAN IS ATTACHED TO THIS ACCEPTANCE LETTER AND SHOULD BE READ
CAREFULLY.

         1.       Term of Option and Exercise of Option. Subject to the
provisions of the Plan and the terms and conditions of this Acceptance Letter,
the term of this option shall be for a period of ten (10) years from the Grant
Date. This option may be exercised immediately, in whole or in part, conditioned
upon your entering into a Stock Restriction Agreement with respect to any
Optioned Shares. The Optioned Shares shall vest in accordance with the following
schedule: Twenty-five percent (25%) of the Optioned Shares shall vest one (1)
year from the Vesting Commencement Date, and the remaining seventy-five percent
(75%) of the Optioned Shares shall vest in successive equal monthly installments
of 2.083% thereafter until the Optioned Shares become fully vested four (4)
years from the Vesting Commencement Date. The number of Optioned Shares that may
vest at any time pursuant to the foregoing schedule shall be rounded down to the
nearest whole Optioned Share.



         2.       Termination of Employment. If your employment with the Company
is terminated for any reason other than death or disability, this option may be
exercised only within three (3) months of such termination and only to the
extent that it was vested on the date of termination, but in no event may this
option be exercised after ten (10) years from the Grant Date.

         3.       Death or Disability. If your employment with the Company
terminates as a result of your death or disability, this option may be exercised
in whole or in part by the duly authorized executor of your last Will or by the
duly authorized administrator or special administrator of your estate, as the
case may be, within twelve (12) months, to the extent that the option was vested
on the date of your death or disability, but in no event after ten (10) years
from the Grant Date. Your estate shall mean yourself or your legal
representative or any person who acquires the right to exercise an option, as
the case may be, by reason of your death or disability.

         4.       Nontransferability of Option. This option shall not be
transferable except by Will or the laws of descent and distribution, and this
option may be exercised during your lifetime only by you. Any purported transfer
or assignment of this option shall be void and of no effect, and shall give the
Company the right to terminate this option as of the date of such purported
transfer or assignment.

         5.       Method of Exercise. This option may be exercised with
respect to all or any part of the Optioned Shares as follows:

                  (a)      By giving the Company written notice of such
exercise, specifying the number of shares as to which this option is so
exercised and accompanied by cash, check, bank draft, or money order payable to
the order of the Company for an amount in lawful money of the United States or
other consideration approved by the Board of Directors, including Company's
Common Stock shares equal to the Exercise Price multiplied by the number of said
shares; and

                  (b)      By executing a Stock Restriction Agreement (Exhibit
"A" to the Plan), a form of which is attached hereto and all the terms of which
are incorporated by this reference.

         As soon as practical after receipt of such notice, payment of
consideration and executed Stock Restriction Agreement, the Company shall,
without transfer or issue tax or the other incidental expense to your or your
successor, transfer and deliver thereto at the office of the Company or other
such place as may be mutually agreeable a certificate or certificates for such
shares of its Common Stock; provided, however, that the time of such delivery
may be postponed by the Company for such period as may be required for it with
reasonable diligence to comply with applicable registration requirements under
the Securities Act of 1933, as amended, any applicable listing requirements of
any national securities exchange, and requirements under any other laws or
regulations applicable to the issuance or transfer of such shares. If you fail
to accept delivery of any payment for all or any part of the number of shares
specified in such notice upon tender of delivery of these shares, your right to
purchase said shares may be terminated by the Company at its election and within
its sole discretion.

         6.       Adjustments Upon Changes in Capitalization. In the event of
any change in the outstanding Common Stock of the Company by reason of stock
dividends, recapitalization, mergers,

                                      -2-



consolidations, split-up, combinations or exchanges of shares and the like, the
aggregate number or class of shares subject to this option immediately prior to
such event shall be appropriately adjusted by the Board of Directors in
accordance with the terms of the Plan, and such adjustment shall be conclusive.

         7.       Tax Status. Incentive stock options granted pursuant to the
Plan are intended to result in favorable tax treatment under Section 422 of the
Code. Your treatment of shares purchased pursuant to the exercise of the option
thereafter may have significant tax consequences. You may wish to consult your
tax advisor with respect to the tax consequences to you upon exercise of the
option or sale of the stock that you acquire pursuant to this option.

         8.       Financial Reports. The Company shall provide financial and
other information regarding the Company, on an annual or more frequent basis, to
each individual holding an outstanding option under the Plan, as required by
applicable law.

         9.       Entire Agreement; Governing Law. The Plan is incorporated
herein by reference. The Plan and this Acceptance Letter constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede
in their entirety all prior undertakings and agreements of you and the Company
with respect to the subject matter hereof, and may not be modified adversely to
your interest except by means of a writing signed by you and the Company. This
Acceptance Letter is governed by the internal substantive laws but not the
choice of law rules of California.

                              COMPANY

                              By:___________________________________

                              EMPLOYEE:

                                     _______________________________
                                     (Name)

                                     Address:_______________________
                                     _______________________________
                                     _______________________________

                              Social Security No.: _________________

                                       -3-

EX-99.2

                                                                    EXHIBIT 99.2

                               GET2CHIP.COM, INC.

                                 2001 STOCK PLAN
                          (AS AMENDED NOVEMBER 12,2002)

         1.       Purposes of the Plan. The purposes of this Stock Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees, Directors and
Consultants and to promote the success of the Company's business. Options
granted under the Plan may be Incentive Stock Options or Nonstatutory Stock
Options, as determined by the Administrator at the time of grant.

         2.       Definitions. As used herein, the following definitions shall
apply:

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

                  (b)      "Applicable Laws" means the requirements relating to
the administration of stock option plans 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 other country or jurisdiction where Options are granted under the Plan.

                  (c)      "Board" means the Board of Directors of the Company.

                  (d)      "Change in Control" means the occurrence of any of
the following events:

                           (i)      Any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (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

                           (ii)     The consummation of the sale or disposition
by the Company of all or substantially all of the Company's assets; or

                           (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.

                  (e)      "Code" means the Internal Revenue Code of 1986, as
amended.

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

                  (g)      "Common Stock" means the Common Stock of the Company.



                  (h)      "Company" means Get2Chip.com, Inc., a California
corporation.

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

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

                  (k)      "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code.

                  (1)      "Employee" means any person, including officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company. A
Service Provider shall not cease to be an Employee in the case of (i) any leave
of absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
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 Optionee shall cease to be
treated as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option. Neither service as a Director nor payment of a
director's fee by the Company shall be sufficient to constitute "employment" by
the Company.

                  (m)      "Exchange Act" means the Securities Exchange Act of
1934, as amended.

                  (n)      "Fair Market Value" means, as of any date, the value
of Common Stock determined as follows:

                           (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 shall 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;

                           (ii)     If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high bid and low asked prices for the
Common Stock on the day of determination; or

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

                  (o)      "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.

                  (p)      "Nonstatutory Stock Option" means an Option not
intended to qualify as an Incentive Stock Option.

                  (q)      "Option" means a stock option granted pursuant to the
Plan.

                                       -2-



                  (r)      "Option Agreement" means a written or electronic
agreement between the Company and an Optionee evidencing the terms and
conditions of an individual Option grant. The Option Agreement is subject to the
terms and conditions of the Plan.

                  (s)      "Optioned Stock" means the Common Stock subject to an
Option.

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

                  (u)      "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.

                  (v)      "Plan" means this 2001 Stock Plan.

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

                  (x)      "Share" means a share of the Common Stock, as
adjusted in accordance with Section 12 below.

                  (y)      "Subsidiary" means a "subsidiary corporation,"
whether now or hereafter existing, as defined in Section 424(f) of the Code.

         3.       Stock Subject to the Plan. Subject to the provisions of
Section 12 of the Plan, the maximum aggregate number of Shares that may be
subject to option and sold under the Plan is 6,015,751 Shares. The Shares may
be authorized but unissued, or reacquired Common Stock.

                  If an Option expires or becomes unexercisable without having
been exercised in full, the unpurchased Shares which were subject thereto shall
become available for future grant or sale under the Plan (unless the Plan has
terminated). However, Shares that have actually been issued under the Plan, upon
exercise of an Option, shall not be returned to the Plan and shall not become
available for future distribution under the Plan, except that if Shares of
restricted stock issued pursuant to an Option are repurchased by the Company at
their original purchase price, such Shares shall become available for future
grant under the Plan.

         4.       Administration of the Plan.

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

                  (b)      Powers of the Administrator. Subject to the
provisions of the Plan and, in the case of a Committee, the specific duties
delegated by the Board to such Committee, and subject to the approval of any
relevant authorities, the Administrator shall have the authority in its
discretion:

                           (i)      to determine the Fair Market Value;

                           (ii)     to select the Service Providers to whom
Options may from time to time be granted hereunder;

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

                                      -3-



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

                           (v)      to determine the terms and conditions of any
Option granted hereunder. Such terms and conditions include, but are not limited
to, the exercise price, the time or times when Options 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 Option
or the Common Stock relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;

                           (vi)     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;

                           (vii)    to allow Optionees to satisfy withholding
tax obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option that number of Shares having a Fair Market
Value equal to the minimum amount required to be withheld. The Fair Market Value
of the Shares to be withheld shall be determined on the date that the amount of
tax to be withheld is to be determined. All elections by Optionees to have
Shares withheld for this purpose shall be made in such form and under such
conditions as the Administrator may deem necessary or advisable; and

                           (viii)   to construe and interpret the terms of the
Plan and Options granted pursuant to the Plan.

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

         5.       Eligibility. Nonstatutory Stock Options may be granted to
Service Providers. Incentive Stock Options may be granted only to Employees.

         6.       Limitations.

                  (a)      Incentive Stock Option Limit. Each Option shall be
designated in the Option 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 Optionee
during any calendar year (under all plans of the Company and any Parent or
Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory
Stock Options. For purposes of this Section 6(a), Incentive Stock Options shall
be taken into account in the order in which they were granted. The Fair Market
Value of the Shares shall be determined as of the time the Option with respect
to such Shares is granted.

                  (b)      At-Will Employment. Neither the Plan nor any Option
shall confer upon any Optionee any right with respect to continuing the
Optionee's relationship as a Service Provider with the Company, nor shall it
interfere in any way with his or her right or the Company's right to terminate
such relationship at any time, with or without cause, and with or without
notice.

                                      -4-



         7.       Term of Plan. Subject to shareholder approval in accordance
with Section 18, the Plan shall become effective upon its adoption by the Board.
Unless sooner terminated under Section 14, it shall continue in effect for a
term of ten (10) years from the later of (i) the effective date of the Plan, or
(ii) the date of the most recent Board approval of an increase in the number of
shares reserved for issuance under the Plan.

         8.       Term of Option. The term of each Option shall be stated in the
Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof. In the case of an Incentive Stock
Option granted to an Optionee who, at the time the 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 term of the Option shall
be five (5) years from the date of grant or such shorter term as may be provided
in the Option Agreement.

         9.       Option Exercise Price and Consideration.

                  (a)      Exercise Price. The per share exercise price for the
Shares to be issued upon exercise of an Option shall be such price as is
determined by the Administrator, but shall be subject to the following:

                           (i)      In the case of an Incentive Stock Option

                                    (A)      granted to an Employee who, at the
time of grant of such Option, 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 exercise price shall be no less than 110% of the Fair Market
Value per Share on the date of grant.

                                    (B)      granted to any other Employee, the
per Share exercise price shall be no less than 100% of the Fair Market Value per
Share on the date of grant.

                           (ii)     In the case of a Nonstatutory Stock Option

                                    (A)      granted to a Service Provider who,
at the time of grant of such Option, 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 exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.

                                    (B)      granted to any other Service
Provider, the per Share exercise price shall be no less than 85% of the Fair
Market Value per Share on the date of grant.

                           (iii)    Notwithstanding the foregoing, Options may
be granted with a per Share exercise price other than as required above pursuant
to a merger or other corporate transaction.

                  (b)      Forms of Consideration. The consideration to be paid
for the Shares to be issued upon exercise of an Option, including the method of
payment, shall be determined by the Administrator (and, in the case of an
Incentive Stock Option, shall be determined at the time of grant). Such
consideration may consist of, without limitation, (1) cash, (2) check, (3)
promissory note, (4) other Shares, provided Shares acquired directly from the
Company (x) have been owned by the Optionee for more than six (6) months on the
date of surrender, and (y) have a Fair Market Value

                                      -5-



on the date of surrender equal to the aggregate exercise price of the Shares as
to which such Option shall be exercised, (5) consideration received by the
Company under a cashless exercise program implemented by the Company in
connection with the Plan, or (6) any combination of the foregoing methods of
payment. In making its determination as to the type of consideration to accept,
the Administrator shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company. Notwithstanding the foregoing, the
Administrator may permit an Optionee to exercise his or her Option by delivery
of a full-recourse promissory note secured by the purchased Shares. The terms of
such promissory note shall be determined by the Administrator in its sole
discretion.

         10.      Exercise of Option.

                  (a)      Procedure for Exercise; Rights as a Shareholder. Any
Option granted hereunder shall be exercisable according to the terms hereof at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. Except in the case of Options granted to
officers, Directors and Consultants, Options shall become exercisable at a rate
of no less than 20% per year over five (5) years from the date the Options are
granted. Unless the Administrator provides otherwise, vesting of Options granted
hereunder to officers and Directors shall be suspended during any unpaid leave
of absence. An Option may not be exercised for a fraction of a Share.

                           An Option shall be deemed exercised when the Company
receives (i) written or electronic notice of exercise (in accordance with the
Option Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Shares, notwithstanding the exercise of the Option. The
Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 12 of the Plan.

                           Exercise of an Option in any manner shall result in a
decrease in the number of Shares thereafter available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.

                  (b)      Termination of Relationship as a Service Provider. If
an Optionee ceases to be a Service Provider, such Optionee may exercise his or
her Option within thirty (30) days of termination, or such longer period of time
as specified in the Option Agreement, to the extent that the Option is vested on
the date of termination (but in no event later than the expiration of the term
of the Option as set forth in the Option Agreement). If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified by the Administrator, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

                                       -6-



                  (c)      Disability of Optionee. If an Optionee ceases to be a
Service Provider as a result of the Optionee's Disability, the Optionee may
exercise his or her Option within six (6) months of termination, or such longer
period of time as specified in the Option 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 Option Agreement). If, on the date
of termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.

                  (d)      Death of Optionee. If an Optionee dies while a
Service Provider, the Option may be exercised within six (6) months following
Optionee's death, or such longer period of time as specified in the Option
Agreement, to the extent that the Option is vested on the date of death (but in
no event later than the expiration of the term of such Option as set forth in
the Option Agreement) by the Optionee's designated beneficiary, provided such
beneficiary has been designated prior to Optionee's death in a form acceptable
to the Administrator. If no such beneficiary has been designated by the
Optionee, then such Option may be exercised by the personal representative of
the Optionee's estate or by the person(s) to whom the Option is transferred
pursuant to the Optionee's will or in accordance with the laws of descent and
distribution. If, at the time of death, the Optionee is not vested as to his or
her entire Option, the Shares covered by the unvested portion of the Option
shall immediately revert to the Plan. If the Option is not so exercised within
the time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.

         11.      Limited Transferability of Options. Unless determined
otherwise by the Administrator, Options may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or
the laws of descent and distribution, and may be exercised during the lifetime
of the Optionee, only by the Optionee. If the Administrator in its sole
discretion makes an Option transferable, such Option may only be transferred by
(i) will, (ii) the laws of descent and distribution, (iii) instrument to an
inter vivos or testamentary trust in which the Option is to be passed to
beneficiaries upon the death of the Optionee, or (iv) gift to a member of
Optionee's immediate family (as such term is defined in Rule 16a-l(e) of the
Exchange Act). In addition, any transferable Option shall contain additional
terms and conditions as the Administrator deems appropriate.

         12.      Adjustments Upon Changes in Capitalization, Merger or Change
in Control.

                  (a)      Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the number and type of Shares which
have been authorized for issuance under the Plan but as to which no Options have
yet been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, and the number and type of Shares covered by each
outstanding Option, as well as the price per Share covered by each such
outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number or type of issued Shares resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the
Common Stock, or any other increase or decrease in the number of issued shares
of Common Stock effected without receipt of consideration by the Company. The
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the

                                      -7-



Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number, type or price of Shares subject to an
Option.

                  (b)      Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the Administrator shall
notify each Optionee as soon as practicable prior to the effective date of such
proposed transaction. The Administrator in its discretion may provide for an
Optionee to have the right to exercise his or her Option until fifteen (15) days
prior to such transaction as to all of the Optioned Stock covered thereby,
including Shares as to which the Option would not otherwise be exercisable. In
addition, the Administrator may provide that any Company repurchase option
applicable to any Shares purchased upon exercise of an Option shall lapse as to
all such Shares, provided the proposed dissolution or liquidation takes place at
the time and in the manner contemplated. To the extent it has not been
previously exercised, an Option will terminate immediately prior to the
consummation of such proposed action.

                  (c)      Merger or Change in Control. In the event of a merger
of the Company with or into another corporation, or a Change in Control, each
outstanding Option shall be assumed or an equivalent option substituted by the
successor corporation or a Parent or Subsidiary of the successor corporation.
If, in such event, the Option is not assumed or substituted, the Option shall
terminate as of the date of the closing of the merger or Change in Control. For
the purposes of this paragraph, the Option shall be considered assumed if,
following the merger or Change in Control, the Option confers the right to
purchase or receive, for each Share of Optioned Stock subject to the Option
immediately prior to the merger or Change in Control, the consideration (whether
stock, cash, or other securities or property) 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 merger or
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 the Option,
for each Share of Optioned Stock subject to the Option, 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 Stock in the merger or Change
in Control.

         13.      Time of Granting Options. The date of grant of an Option
shall, for all purposes, be the date on which the Administrator makes the
determination granting such Option, or such later date as is determined by the
Administrator. Notice of the determination shall be given to each Service
Provider to whom an Option is so granted within a reasonable time after the date
of such grant.

         14.      Amendment and Termination of the Plan.

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

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

                                      -8-



                  (c)      Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company. Termination of the Plan shall not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to Options
granted under the Plan prior to the date of such termination.

         15.      Conditions Upon Issuance of Shares.

                  (a)      Legal Compliance. Shares shall not be issued pursuant
to the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares shall comply with Applicable Laws and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.

                  (b)      Investment Representations. As a condition to the
exercise of an Option, the Administrator may require the person exercising such
Option to represent and warrant at the time of any such exercise that the Shares
are being purchased only for investment and without any present intention to
sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required.

         16.      Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

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

         18.      Shareholder Approval. The Plan shall be subject to approval by
the shareholders of the Company within twelve (12) months after the date the
Plan is adopted. Such shareholder approval shall be obtained in the degree and
manner required under Applicable Laws.

         19.      Information to Optionees. The Company shall provide to each
Optionee and to each individual who acquires Shares pursuant to the Plan, not
less frequently than annually during the period such Optionee has one or more
Options outstanding, and, in the case of an individual who acquires Shares
pursuant to the Plan, during the period such individual owns such Shares, copies
of annual financial statements. The Company shall not be required to provide
such statements to key employees whose duties in connection with the Company
assure their access to equivalent information.

                                      -9-