S-8

Registration No. 333-           

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-8

REGISTRATION STATEMENT UNDER THE

SECURITIES ACT OF 1933

VERSANT CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

California	94-3079392
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

Versant Corporation

255 Shoreline Drive, Suite 450

Redwood City, CA  94065

(Address of Principal Executive Offices, including Zip Code)

Versant Corporation 2005 Directors Stock Option Plan

 (Full Title of the Plans)

Jerry Wong

Vice President, Finance and Chief Financial Officer

VERSANT CORPORATION

255 Shoreline Drive, Suite 450

Redwood City, California  94065

(650) 232-2400

(Name, Address and Telephone Number of Agent for Service)

Copies to:

Kenneth A. Linhares, Esq.

Fenwick & West LLP

Silicon Valley Center

801 California Street

Mountain View, California  94041

**Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer o Non-accelerated filer x Accelerated filer o Smaller reporting company o

(Do not check if a smaller reporting company)

CALCULATION OF REGISTRATION FEE

Title of Securities To Be Registered	Amount  To Be  Registered (1)		Proposed  Maximum Offering  Price  Per Share			Proposed  Maximum  Aggregate  Offering Price			Amount of  Registration Fee
Common Stock, no par value
To be issued under the 2005 Directors Stock Option Plan	50,000	(2)	$	26.51	(3)	$	1,325,500	(3)	$	52.10
Total	50,000	(2)	N/A			N/A			$	52.10

(1)Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the “Securities Act”), this Registration Statement shall also cover any additional shares of Registrant’s Common Stock in respect of the securities identified in the above table by reason of any stock dividend, stock split, recapitalization or other similar transaction effected without the Registrant’s receipt of consideration which results in an increase in the number of the outstanding shares of Registrant’s Common Stock.

(2)Represents shares subject to future issuance upon the exercise of stock options granted pursuant to the Versant Corporation 2005 Directors Stock Option Plan, as amended.

(3)Estimated solely for the purpose of calculating the registration fee in accordance with Rules 457(c) and (h) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), based on the average of the high and low prices of the Registrant’s Common Stock as reported by the Nasdaq Capital Market on July 24, 2008 ($26.51).

VERSANT CORPORATION

REGISTRATION STATEMENT ON FORM S-8

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. Incorporation of Documents by Reference.

The following documents, previously filed by the Registrant with the Securities and Exchange Commission (the “Commission”), are incorporated by reference in this Registration Statement and made a part hereof:

(a)   The Registrant’s Annual Report on Form 10-K for the fiscal year ended October 31, 2007 filed with the Commission on January 29, 2008;

(b)   All other reports filed by the Registrant pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) since the end of the fiscal year covered by the Registrant’s Annual Report on Form 10-K referred to in (a) above; and

(c)   The description of the Registrant’s Common Stock contained in the Registrant’s Registration Statement on Form 8-A filed under Section 12(g) of the Exchange Act, including any amendment or report filed for the purpose of updating such description.

All reports and other documents subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities offered hereby then remaining unsold, shall be deemed to be incorporated by reference herein and to be part of this Registration Statement from the date of filing of such documents. Unless expressly incorporated into this Registration Statement, a report furnished on Form 8-K prior or subsequent to the date hereof shall not be incorporated by reference into this Registration Statement. Any statement contained in any document, all or a portion of which is 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 or incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.

Item 4. Description of Securities.

Not applicable.

Item 5. Interests of Named Experts and Counsel.

As of the date of this Registration Statement, attorneys of Fenwick & West LLP beneficially own an aggregate of approximately 70 shares of the Registrant’s Common Stock.

Item 6. Indemnification of Directors and Officers.

Section 317 of the California Code authorizes a court to award, or a corporation’s board of directors, to grant indemnity to directors and officers in terms sufficiently broad to indemnify such persons, under certain circumstances, for liabilities (including reimbursement of expenses incurred) arising under the Securities Act of 1933, as amended. The Registrant’s Amended and Restated Articles of Incorporation (the “Articles”) include a provision that eliminates the liability of the Registrant’s directors for monetary damages to the fullest extent permissible under California law (the “Exculpation Provision”). This elimination of liability has no effect on a director’s liability (i) for acts or omissions that involve intentional misconduct or a knowing and culpable violation of law, (ii) for acts or omissions that a director believes to be contrary to the best interests of the Registrant or its shareholders or that involve the absence of good faith on the part of the director, (iii) for any transaction from which a director derived an improper personal benefit, (iv) for

acts or omissions that show a reckless disregard for the director’s duty to the Registrant or its shareholders in circumstances in which the director was aware, or should have been aware, in the ordinary course of performing a director’s duties, of a risk of a serious injury to the Registrant or its shareholders, (v) for acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the director’s duty to the Registrant or its shareholders, (vi) under Section 310 of the California Corporations Code (the “California Code”) concerning contracts or transactions between the Registrant and a director, or (vii) under Section 316 of the California Code concerning directors’ liability for improper dividends, loans and guarantees. This Exculpation Provision in the Articles does not extend to acts or omissions of a director in his capacity as an officer and will not affect the availability of injunctions and other equitable remedies available to the Registrant’s shareholders for any violation of a director’s fiduciary duty to the Registrant or its shareholders.

The Articles also authorize the Registrant to indemnify its agents (as defined in Section 317 of the California Code), through bylaw provisions, by agreement or otherwise, to the fullest extent permitted by law. Pursuant to this provision, the Registrant’s Bylaws provide that the Registrant shall indemnify and advance expenses to its directors and officers to the fullest extent permissible under California law, subject to certain exceptions. In addition, the Registrant, at its discretion, may provide indemnification to persons whom the Registrant is not obligated to indemnify. The Registrant’s Bylaws also allow the Registrant to enter into indemnity agreements with individual directors, officers, employees and other agents. The Registrant has entered into indemnity agreements with all of its directors and officers providing the maximum indemnification permitted by law, subject to certain exceptions.  These agreements, together with the Registrant’s Bylaws and Articles, may require the Registrant, among other things, to indemnify these directors or officers against certain liabilities that may arise by reason of their status or service as directors or officers and to advance expenses to them as such expenses are incurred (provided that they undertake to repay the amount advanced if it is ultimately determined by a court that they are not entitled to indemnification).   The Registrant maintains directors’ and officers’ liability insurance and has extended that coverage for public securities matters.

Item 7. Exemption from Registration Claimed.

Not applicable.

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Item 8.  Exhibits.

Incorporated by Reference

Exhibit No.	Description
4.01	Registrant’s Amended and Restated Articles of Incorporation filed with the Secretary of State of California on March 18, 2004.
4.02	Certificate of Amendment of Registrant’s Amended and Restated Articles of Incorporation, filed with the California Secretary of State on August 22, 2005.
4.03	Registrant’s Amended and Restated Bylaws (incorporated by reference to Exhibit 3.01 to Registrant’s Form 8-K, filed with the Commission on March 8, 2007).
5.01	Opinion of Fenwick & West LLP.
23.01	Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02	Consent of Grant Thornton LLP, Independent Registered Public Accounting Firm.
24.01	Power of Attorney (incorporated by reference to Page 5 (signature page) of this Registration Statement).
99.01	Registrant’s 2005 Directors Stock Option Plan, as amended.
99.02	Forms of Stock Option Grants and Stock Option Exercise Agreements under Registrant’s 2005 Directors Stock Option 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 the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the 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 the Registration Statement — notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) (§230.424(b) of this chapter) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) shall not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in  reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement.

(2)   That, for the purpose of determining any liability under the Securities Act of 1933, 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.

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(3)   To remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the termination of the offering.

(b)The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in 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 Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 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 Securities Act of 1933 and will be governed by the final adjudication of such issue.

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POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS that each individual whose signature appears below constitutes and appoints Jochen Witte and Jerry Wong, and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement on Form S-8, and to file the same with all exhibits thereto and all 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 and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his or her or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, 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 Redwood City,State of California, on this 25th day of July, 2008.

VERSANT CORPORATION
By:	/s/ Jerry Wong
	Jerry Wong
	Vice President, Finance and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

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

Signature	Title	Date
Principal Executive Officer:
/s/ Jochen Witte
Jochen Witte	President and Chief Executive Officer and Director	July 25, 2008
Principal Financial Officer and Principal Accounting Officer:	Vice President, Finance and Chief Financial Officer	July 25, 2008
/s/ Jerry Wong
Jerry Wong
Additional Directors:
/s/ Uday Bellary
Uday Bellary	Director	July 25, 2008
/s/ William Henry Delevati
William Henry Delevati	Chairman of the Board and Director	July 25, 2008
/s/ Herbert May
Herbert May	Director	July 25, 2008
/s/ Bernhard Woebker
Bernhard Woebker	Director	July 25, 2008

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EXHIBIT INDEX

		Incorporated by Reference
Exhibit No.	Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed  Herewith
4.01	Registrant’s Amended and Restated Articles of Incorporation filed with the Secretary of State of California on March 18, 2004.	S-8	333-113871	4.01	03/24/04
4.02	Certificate of Amendment of Registrant’s Amended and Restated Articles of Incorporation, filed with the California Secretary of State on August 22, 2005.	8-K	000-28540	3.1	08/26/05
4.03	Registrant’s Amended and Restated Bylaws (incorporated by reference to Exhibit 3.01 to Registrant’s Form 8-K, filed with the Commission on March 8, 2007).	8-K	000-28540	3.01	03/02/07
5.01	Opinion of Fenwick & West, LLP.					X
23.01	Consent of Fenwick & West, LLP (included in Exhibit 5.01).					X
23.02	Consent of Grant Thornton, LLP.					X
24.01	Power of Attorney (incorporated by reference to Page 5 (signature page) of this Registration Statement).					X
99.01	Registrant’s 2005 Directors Stock Option Plan, as amended.					X
99.02	Forms of Stock Option Grants and Stock Option Exercise Agreements under Registrant’s 2005 Directors Stock Option Plan.	S-8	333-130601	99.04	03/24/04

EX-5.01

EXHIBIT 5.01

July 25, 2008

Versant Corporation

255 Shoreline Drive, Suite 450

Redwood City, CA 94065

Ladies and Gentlemen:

At your request, we have examined the Registration Statement on Form S-8 (the “Registration Statement”) to be filed by Versant Corporation, a California corporation (the “Company”), with the Securities and Exchange Commission (the “Commission”) on or about July 25, 2008 in connection with the registration under the Securities Act of 1933, as amended, of an aggregate of 50,000 shares of the Company’s Common Stock (the “Shares”), subject to issuance by the Company upon the exercise of stock options granted or to be granted under the Company’s 2005 Directors Stock Option Plan (the “Plan”).  In rendering this opinion, we have examined such matters of fact as we have deemed necessary in order to render the opinion set forth herein, which included examination of the following.

(1)the Company’s Amended and Restated Articles of Incorporation dated March 18, 2004, certified by the California Secretary of State on March 18, 2004, and the Certificate of Amendment of Amended and Restated Articles of Incorporation, dated August 22, 2005, certified by the California Secretary of State on August 22, 2005;

(2)the Company’s Amended and Restated Bylaws, certified by the Company’s Secretary on July 25, 2008;

(3)the Registration Statement, together with the Exhibits filed as a part thereof or incorporated therein by reference;

(4)the Prospectus prepared in connection with the Registration Statement;

(5)all actions, consents and minutes of meetings of the Company’s incorporator, Board of Directors and shareholders which are contained in the minute books of the Company in our possession, including (a) the minutes of the meeting of the Compensation Committee of the Company’s Board of Directors held on March 1, 2005 approving and recommending that the Company’s Board of Directors adopt and approve the Plan, (b) the minutes of the meetings of the Company’s Board of Directors held on March 1, 2005 and June 1, 2005 adopting and approving the Plan, subject to obtaining shareholder approval, (c) the minutes of the meeting of the Company’s shareholders held on August 22, 2005 approving the adoption of the Plan, (d) the minutes of the meeting of the Company’s Board of Directors held on November 29, 2007 approving an amendment to the Plan to increase the number of shares of Common Stock reserved for issuance thereunder by 50,000 shares subject to shareholder approval (the “Plan Amendment”), (e) minutes of a meeting of the Company’s Board of Directors held on January 28, 2008 authorizing the submission of the Plan Amendment to the Plan to the Company’s shareholders for their vote and approval and authorizing the filing of the Registration Statement; and (e) the minutes of the annual

meeting of the Company’s shareholders held on April 24, 2008 approving the Plan Amendment;

(6)The Certificate and Report of Inspector of Election dated April 24, 2008, executed by Sharon D. Magidson of Mellon Investor Services LLC, Inspector of Election, regarding the shareholder voting results at the Company’s Annual Meeting of Shareholders held on April 24, 2008;

(7)a representation from the Company dated as of the date of this opinion confirming the total number of (a) all authorized shares of the Company’s capital stock as of the date of this opinion, (b) all outstanding shares of its capital stock of each class and series as of July 25, 2008, (c) all issued and outstanding options, warrants and any other rights to purchase or acquire from the Company any shares of its capital stock as of July 25, 2008 and the total number of shares of its capital stock of each class and series that are potentially issuable upon the exercise, conversion or exchange of all such issued and outstanding options, warrants and rights as of July 25, 2008, and (d) all additional shares of capital stock that are, as of July 25, 2008, reserved for future issuance in connection with the Company’s equity incentive and stock purchase plans and all other plans, agreements or rights that exist as of July 25, 2008;

(8)a verification from Mellon Investor Services, the Company’s transfer agent, dated as of July 24, 2008 verifying the number of the Company’s issued and outstanding shares of Common Stock, no par value, as of July 24, 2008; and

(9)an Opinion Certificate addressed to us and dated of even date herewith executed by the Company containing certain factual representations, including the representations set forth in Paragraph (7) above (the “Opinion Certificate”).

In our examination of documents for purposes of this opinion, we have assumed, and express no opinion as to, the genuineness of all signatures on original documents, the authenticity and completeness of all documents submitted to us as originals, the conformity to originals and completeness of all documents submitted to us as copies, the legal capacity of all persons or entities executing the same, the lack of any undisclosed termination, modification, waiver or amendment to any document reviewed by us and the due authorization, execution and delivery of all documents where due authorization, execution and delivery are prerequisites to the effectiveness thereof.  We have also assumed that the certificates representing the Stock have been, or will be when issued, properly signed by authorized officers of the Company or their agents.

As to matters of fact relevant to this opinion, we have relied solely upon our examination of the documents referred to above and have assumed the current accuracy and completeness of the information obtained from the documents referred to above and the representations and warranties made by representatives of the Company to us, including but not limited to those set forth in the Opinion Certificate.  We have made no independent investigation or other attempt to verify the accuracy of any of such information or to determine the existence or non-existence of any other factual matters.

We are admitted to practice law in the State of California, and we render this opinion only with respect to, and express no opinion herein concerning the application or effect of the laws of any jurisdiction other than, the existing laws of the United States of America and of the State of California.

Based upon the foregoing, it is our opinion that the 50,000 shares of the Company’s Common Stock comprising the Shares that may be issued and sold by the Company upon the exercise of stock options granted or to be granted under the Plan, when issued, sold and delivered in accordance with the

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applicable plan agreements to be entered into thereunder and in the manner and for the consideration stated in the Registration Statement and the relevant Prospectus, will be validly issued, fully paid and nonassessable.

We consent to the use of this opinion as an exhibit to the Registration Statement and further consent to all references to us, if any, in the Registration Statement, the Prospectus constituting a part thereof and any amendments thereto.  This opinion is intended solely for use in connection with issuance and sale of the Shares subject to the Registration Statement and is not to be relied upon for any other purpose.  We assume no obligation to advise you of any fact, circumstance, event or change in the law or the facts that may hereafter be brought to our attention, whether or not such occurrence would affect or modify the opinions expressed herein.

Very truly yours,

FENWICK & WEST LLP

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EX-23.02

EXHIBIT 23.02

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our report dated January 28, 2008 with respect to the consolidated financial statements of Versant Corporation and Subsidiaries appearing in the 2008 Annual Report of Versant Corporation and Subsidiaries to its shareholders on Form 10-K for the year ended October 31, 2007 which are incorporated by reference in this Registration Statement. We consent to the incorporation by reference in the Registration Statement of the aforementioned report.

/s/ Grant Thornton LLP

San Francisco, California

July 24, 2008

EX-99.01

EXHIBIT 99.01

VERSANT CORPORATION

2005 DIRECTORS STOCK OPTION PLAN

As Adopted June 1, 2005, as amended through April 24, 2008
(approved by shareholders August 22, 2005)(1)

1.Purpose.  This 2005 Directors Stock Option Plan (this “Plan”) is established to provide equity incentives for nonemployee members of the Board of Directors of Versant Corporation (the “Company”), who are described in Section 6.1 below, by granting such persons options to purchase shares of stock of the Company.

2.Adoption and Shareholder Approval.  This Plan will become effective on the first date (the “Effective Date”) that it has been both (i) adopted by the Board of Directors of the Company (the “Board”) and (ii) approved by the shareholders of the Company.  This Plan shall be approved by the shareholders of the Company, consistent with applicable laws, within twelve (12) months after the date this Plan is adopted by the Board.  Options to purchase Shares (“Options”) may be granted under this Plan on and after the Effective Date provided that, in the event that shareholder approval is not obtained within the time period provided herein, this Plan, and all Options granted hereunder, shall terminate.  No Option that is issued as a result of any increase in the number of shares authorized to be issued under this Plan shall be exercised prior to the time such increase has been approved by the shareholders of the Company and all such Options granted pursuant to such increase shall similarly terminate if such shareholder approval is not obtained.  So long as the Company is subject to Section 16(b) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) the Company will comply with the applicable requirements of Rule 16b-3.

3.Types of Options and Shares.  Options granted under this Plan shall be non-qualified stock options (“NQSOs”).  The shares of stock that may be purchased upon exercise of Options granted under this Plan (the “Shares”) are shares of the Common Stock of the Company.

4.Number of Shares.  Subject to adjustment as provided in this Plan, the total number of Shares reserved and available for grant and issuance pursuant to this Plan (the “Reserved Shares”) will be the sum of (a) the Available Prior Plan Shares (as defined below) plus (b) any and all Forfeited Prior Plan Shares (as defined below) plus (c) 50,000 Shares; provided, that the number of Reserved Shares shall not exceed an aggregate of 99,000 Shares, as constituted on April 24, 2008.  “Available Prior Plan Shares” means the number of shares of the Company’s Common Stock reserved for issuance under the Company’s 1996 Directors

(1) All numbers of shares stated in the plan have been adjusted to reflect a 10-for-1 reverse split of the Company’s outstanding Common Stock that occurred on August 22, 2005

Stock Option Plan, as amended (the “Prior Plan”) on the Effective Date that, on the Effective Date, are not (i) issued and outstanding as a result of the exercise of options granted under the Prior Plan or (ii) subject to stock options granted under the Prior Plan that are then outstanding.  “Forfeited Prior Plan Shares” means (i) shares of Common Stock issued under the Prior Plan that are outstanding on the Effective Date and are thereafter repurchased by the Company at their original issuance price pursuant to the terms of the Prior Plan and/or agreements entered pursuant thereto and (ii) the shares of Common Stock that, on the Effective Date, are subject to any then outstanding stock option granted under the Prior Plan and which thereafter cease to be subject to such stock option for any reason other than its exercise.  All Available Prior Plan Shares and Forfeited Prior Plan Shares will no longer be available for grant and issuance under the Prior Plan but will be available for grant and issuance under this Plan.  Subject to the limitations on the maximum number of Shares issuable under this Plan, Shares that are subject to issuance upon exercise of an Option granted under this Plan but cease to be subject to such Option for any reason other than exercise of such Option, and Shares issued pursuant to this Plan that are repurchased by the Company at their original issue price, will again be available for grant under other Options granted under this Plan.   At all times during the term of this Plan, the Company shall reserve and keep available such number of Shares as shall be required to satisfy the requirements of outstanding Options granted under this Plan.

5.Administration.  This Plan shall be administered by the Board or by a committee of not less than two members of the Board appointed to administer this Plan (the “Committee”) so as to exempt the grant and exercise of Options from the application of Section 16(b) of the Exchange Act pursuant to Rule 16b-3.  As used in this Plan, references to the Committee shall mean either such Committee or the Board if no Committee has been established.  The interpretation by the Committee of any of the provisions of this Plan or any Option granted under this Plan shall be final and binding upon the Company and all persons having an interest in any Option or any Shares purchased pursuant to an Option.

6.Eligibility and Award Formula.

6.1Eligibility.  Options shall be granted only to directors of the Company who are not employees of the Company or any Parent, Subsidiary or Affiliate of the Company, as those terms are defined in Section 18 below (each such person referred to as an “Optionee”).

6.2Initial Grant.  Each Optionee who becomes a member of the Board for the first time on or after the Effective Date will automatically on such date be granted an Option for 4,000 Shares (the “Initial Grant”).  No person who is a member of the Board immediately prior to the Effective Date will be granted an Option pursuant to this Section 6.2.  The reference in this Section 6.2 to 4,000 Shares shall be subject to adjustment from time to time in accordance with the provisions of Section 12 of this Plan.

6.3Succeeding Grants.  A grant of an Option pursuant to the provisions of this Section 6.3 is referred to herein as a “Succeeding Grant”.

(a)2005 Annual Meeting.  Immediately after the annual meeting of the Company’s shareholders held in calendar year 2005 (the “2005 Annual Meeting”), each

Optionee who was elected to the Board at the 2005 Annual Meeting and who was a member of the Board immediately prior to the 2005 Annual Meeting (a “Section 6.3(a) Optionee”) will automatically be granted an Option to purchase a number of Shares equal to 2,000 Shares multiplied by a fraction (i) whose numerator is the number of days between the date preceding the Effective Date on which such Section 6.3(a) Optionee was most recently granted a stock option under the Prior Plan and the 2005 Annual Meeting Date (as defined below) and (ii) whose denominator is three hundred sixty-five (365), and then rounding down the resulting number to the nearest whole number of Shares.  The date on which the 2005 Annual Meeting is held is referred to herein as the “2005 Annual Meeting Date.”   The reference in this Section 6.3(a) to 2,000 Shares shall be subject to adjustment from time to time in accordance with the provisions of Section 12 of this Plan.

(b)After 2005 Annual Meeting.  On each anniversary of the 2005 Annual Meeting Date (each, an “Anniversary”), each Optionee who is then a member of the Board and who has previously received either (i) an Initial Grant pursuant to Section 6.2 of this Plan or (ii) a Succeeding Grant pursuant to Section 6.3(a) or Section 6.3(b) of this Plan, will automatically be granted an Option to purchase 4,000 (2) Shares (or, if such Optionee has not been a member of the Board for the entire one (1) year period immediately prior to such Anniversary, a prorated option to purchase a number of Shares equal to 4,000 Shares multiplied by a fraction (i) whose numerator is the number of days between the date within the one (1) year period immediately preceding such Anniversary on which such Optionee became a member of the Board and such Anniversary and (ii) three hundred sixty-five (365), and then rounding down the resulting number to the nearest whole number of Shares.  The reference in this Section 6.3(b) to 4,000 Shares shall be subject to adjustment from time to time in accordance with the provisions of Section 12 of this Plan.

7.Terms and Conditions of Options.  Subject to the following and to Section 6 above:

7.1Form of Option Grant.  Each Option granted under this Plan shall be evidenced by a written Stock Option Grant (“Grant”) in such form (which need not be the same for each Optionee) as the Committee shall from time to time approve, which Grant shall comply with and be subject to the terms and conditions of this Plan.

7.2Vesting.  The date an Optionee receives an Initial Grant or a Succeeding Grant is referred to in this Plan as the “Start Date” for such Initial Grant or Succeeding Grant.

(a)Initial Grants.  Each Initial Grant will vest as to fifty percent (50%) of the Shares subject to such Initial Grant upon each of the first two successive anniversaries of the Start Date for such Initial Grant, so long as the Optionee continuously remains a director or a consultant of the Company.

(b)Succeeding Grants.  Each Succeeding Grant will vest as to fifty percent (50%) of the Shares subject to such Succeeding Grant on each of the first two

(2) For options granted under this paragraph prior to August 22, 2007 each reference in this paragraph to 4,000 shares previously referred to 2,000 shares.

successive anniversaries of the Start Date for such Succeeding Grant, so long as the Optionee continuously remains a director or a consultant of the Company.

7.3Exercise Price.  The exercise price of an Option shall be the Fair Market Value (as defined in Section 18.4) of the Shares, at the time that the Option is granted.

7.4Termination of Option.  Except as provided below in this Section, each Option shall expire ten (10) years after its Start Date (the “Expiration Date”).  The Option shall cease to vest and unvested Options shall expire when the Optionee ceases to be a member of the Board or a consultant of the Company.  The date on which the Optionee ceases to be a member of the Board or a consultant of the Company shall be referred to as the “Termination Date”.  An Option may be exercised after the Termination Date only as set forth below:

(a)Termination Generally.  If an Optionee ceases to be a member of the Board or a consultant of the Company for any reason except death or disability, then each Option then held by such Optionee may, to the extent that it is vested on the Termination Date, be exercised by the Optionee within seven (7) months after the Termination Date, but in no event later than the Expiration Date.

(b)Death or Disability.  If the Optionee ceases to be a member of the Board or a consultant of the Company because of the death of the Optionee or the disability of the Optionee within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), then each Option then held by such Optionee may, to the extent that it is vested and exercisable on the Termination Date, be exercised by the Optionee (or the Optionee’s legal representative) within twelve (12) months after the Termination Date, but in no event later than the Expiration Date.

8.Exercise of Options.

8.1Exercise Period.  Subject to the provisions of Section 8.5 of the Plan, Options shall be exercisable immediately (subject to repurchase pursuant to Section 10 of the Plan).

8.2Notice.  Options may be exercised only by delivery to the Company of an exercise agreement in a form approved by the Committee stating the number of Shares being purchased, the restrictions imposed on the Shares and such representations and agreements regarding the Optionee’s investment intent and access to information as may be required by the Company to comply with applicable securities laws, together with payment in full of the exercise price for the number of Shares being purchased.

8.3Payment.  Payment for the Shares purchased upon exercise of an Option may be made (a) in cash or by check; (b) by surrender of shares of Common Stock of the Company that have been owned by the Optionee for more than six (6) months (and which have been paid for within the meaning of SEC Rule 144 and, if such shares were purchased from the Company by use of a promissory note, such note has been fully paid with respect to such shares) or were obtained by the Optionee in the open public market, having a Fair Market

Value equal to the exercise price of the Option; (c) by waiver of compensation due or accrued to the Optionee for services rendered; (d) provided that a public market for the Company’s stock exists, through a “same day sale” commitment from the Optionee and a broker-dealer that is a member of the National Association of Securities Dealers (an “NASD Dealer”) whereby the Optionee irrevocably elects to exercise the Option and to sell a portion of the Shares so purchased to pay for the exercise price and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the exercise price directly to the Company; (e) provided that a public market for the Company’s stock exists, through a “margin” commitment from the Optionee and an NASD Dealer whereby the Optionee irrevocably elects to exercise the Option and to pledge the Shares so purchased to the NASD Dealer in a margin account as security for a loan from the NASD Dealer in the amount of the exercise price, and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the exercise price directly to the Company; or (f) by any combination of the foregoing.

8.4Withholding Taxes.  Prior to issuance of the Shares upon exercise of an Option, the Optionee shall pay or make adequate provision for any federal or state withholding obligations of the Company, if applicable.

8.5Limitations on Exercise.  Notwithstanding the exercise periods set forth in the Grant, exercise of an Option shall always be subject to the following limitations:

(a)An Option shall not be exercisable until such time as this Plan (or, in the case of Options granted pursuant to an amendment increasing the number of shares that may be issued pursuant to this Plan, such amendment) has been approved by the shareholders of the Company in accordance with Section 16 hereof.

(b)An Option shall not be exercisable unless such exercise is in compliance with the Securities Act and all applicable state securities laws, as they are in effect on the date of exercise.

(c)The Committee may specify a reasonable minimum number of Shares that may be purchased upon any exercise of an Option, provided that such minimum number will not prevent the Optionee from exercising the full number of Shares as to which the Option is then exercisable.

9.Nontransferability of Options.  During the lifetime of the Optionee, an Option shall be exercisable only by the Optionee or by the Optionee’s guardian or legal representative, unless otherwise permitted by the Committee.  No Option may be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent and distribution.

10.Restrictions on Shares.  The Company shall reserve to itself and/or its assignee(s) in the Grant a right to repurchase all unvested Shares held by an Optionee if the Optionee ceases to be a member of the Board or a consultant of the Company.  The Company shall exercise such repurchase right within ninety (90) days after the Optionee’s Termination Date for cash at the Optionee’s original exercise price.

11.Privileges of Stock Ownership.  No Optionee shall have any of the rights of a shareholder with respect to any Shares subject to an Option until the Option has been validly exercised.  No adjustment shall be made for dividends or distributions or other rights for which the record date is prior to the date of exercise, except as provided in this Plan.  The Company shall provide to each Optionee a copy of the annual financial statements of the Company, at such time after the close of each fiscal year of the Company as they are released by the Company to its shareholders.

12.Adjustment of Option Shares.  In the event that the number of outstanding shares of Common Stock of the Company is changed by a stock dividend, stock split, reverse stock split, combination, reclassification or similar change in the capital structure of the Company without consideration, the number of Shares available under this Plan, the number of Shares subject to outstanding Options, the exercise price per share of such outstanding Options, the maximum number of Reserved Shares referenced in Section 4 of this Plan and the number of shares that are subject to an Option awarded as an Initial Grant or a Succeeding Grant under Section 6.2 or Section 6.3 of this Plan, shall each be proportionately adjusted, subject to any required action by the Board or shareholders of the Company and compliance with applicable securities laws; provided, however, that no fractional shares shall be issued upon exercise of any Option as a result of any such adjustment and any resulting fractions of a Share shall be rounded up to the nearest whole Share.

13.No Obligation to Continue as Director.  Nothing in this Plan or any Option granted under this Plan shall confer on any Optionee any right to continue in any capacity with the Company or any Parent or Subsidiary.

14.Compliance With Laws.  The grant of Options and the issuance of Shares upon exercise of any Options shall be subject to and conditioned upon compliance with all applicable requirements of law, including without limitation compliance with the Securities Act, compliance with all other applicable state securities laws and compliance with the requirements of any stock exchange or national market system on which the Shares may be listed.  The Company shall be under no obligation to register the Shares with the SEC or to effect compliance with the registration or qualification requirement of any state securities laws, stock exchange or national market system.

15.Assumption or Replacement of Options by Successor.  In the event of (a) a dissolution or liquidation of the Company, (b) a merger or consolidation in which the Company is not the surviving corporation (other than a merger or consolidation with a wholly-owned subsidiary, a reincorporation of the Company in a different jurisdiction, or other transaction in which there is no substantial change in the shareholders of the Company or their relative stock holdings and the Options granted under this Plan are assumed or replaced by the successor corporation, which assumption will be binding on all Optionees), (c) a merger or consolidation in which the Company is the surviving corporation but after which the shareholders of the Company immediately prior to such merger or consolidation (other than any shareholder which merges or consolidates (or which owns or controls another corporation which merges or consolidates) with the Company in such merger or consolidation) own less than 50% of the shares or other equity interests in the Company immediately after such merger or

consolidation, (d) the sale of substantially all of the assets of the Company, or (e) the acquisition, sale or transfer of a majority of the outstanding shares of the Company by tender offer or similar transaction, the vesting of all Options will accelerate and such Options will fully vest and become exercisable in full prior to the consummation of such event at such times and on such conditions as the Committee determines, and if such Options are not exercised prior to the consummation of the corporate transaction described herein, they shall terminate in accordance with the provisions of this Plan.

16.          Amendment or Termination of Plan.  The Committee may at any time terminate or amend this Plan (but may not terminate or amend the terms of any outstanding option without the consent of the Optionee); provided, however, that the Committee shall not, without the approval of the shareholders of the Company, increase the total number of Shares available under this Plan (except by operation of the provisions of Sections 4 and 12 above) or change the class of persons eligible to receive Options.  In any case, no amendment of this Plan may adversely affect any then outstanding Options or any unexercised portions thereof without the written consent of the Optionee.

17.          Term of Plan.  Options may be granted pursuant to this Plan from time to time within a period of ten (10) years from the date this Plan is adopted by the Board.

18.          Certain Definitions.  As used in this Plan, the following terms shall have the following meanings:

18.1“Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if, at the time of the granting of the Option, each of such corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

18.2“Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of granting of the Option, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

18.3“Affiliate” means any corporation that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, another corporation, where “control” (including the terms “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to cause the direction of the management and policies of the corporation, whether through the ownership of voting securities, by contract or otherwise.

18.4“Fair Market Value” means, as of any date, the value of a share of the Company’s Common Stock determined as follows:

(a)if such Common Stock is then quoted on the Nasdaq National Market or the

Nasdaq SmallCap Market, then its closing price on such market on the date of determination as reported in The Wall Street Journal;

(b)if such Common Stock is publicly traded and is then listed on a national securities exchange, its closing price on the date of determination on the principal national securities exchange on which the Common Stock is listed or admitted to trading as reported in The Wall Street Journal; or

(c)if none of the foregoing is applicable, by the Committee in good faith.