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                                                                    EXHIBIT 10.3

                               MAINCONTROL, INC.
                             1996 STOCK OPTION PLAN
                             ----------------------
                         (as amended to July 23, 1999)

                                  ARTICLE ONE

                               GENERAL PROVISIONS
                               ------------------

I.  PURPOSE OF THE PLAN

          This 1996 Stock Option Plan is intended to promote the interests of
MainControl, Inc., a Delaware corporation, by providing eligible persons with
the opportunity to acquire a proprietary interest, or otherwise increase their
proprietary interest, in the Corporation as an incentive for them to remain in
the service of the Corporation.

          Capitalized terms herein shall have the meanings assigned to such
terms in the attached Appendix.

II.  ADMINISTRATION OF THE PLAN

          A.  The Plan shall be administered by the Board.  However, any or all
administrative functions otherwise exercisable by the Board may be delegated to
the Committee.  Members of the Committee shall serve for such period of time as
the Board may determine and shall be subject to removal by the Board at any
time.  The Board may also at any time terminate the functions of the Committee
and reassume all powers and authority previously delegated to the Committee.

          B.  The Plan Administrator shall have full power and authority
(subject to the provisions of the Plan) to establish such rules and regulations
as it may deem appropriate for proper administration of the Plan and to make
such determinations under, and issue such interpretations of, the Plan and any
outstanding options as it may deem necessary or advisable.  Decisions of the
Plan Administrator shall be final and binding on all parties who have an
interest in the Plan or any option or shares issued thereunder.

III.  ELIGIBILITY

          A.  The persons eligible to receive option grants under the Plan are
as follows:

               (i)  Employees,

               (ii) non-employee members of the Board or the non-employee
     members of the board of directors of any Parent or Subsidiary, and

               (iii)  consultants and independent contractors who provide
     services to the Corporation (or any Parent or Subsidiary).
<PAGE>

          B.  The Plan Administrator shall have full authority to determine
which eligible persons are to receive option grants under the Plan, the time or
times when such option grants are to be made, the number of shares to be covered
by each such grant, the status of the granted option as either an Incentive
Option or a Non-Statutory Option, the time or times at which each option is to
become exercisable, the vesting schedule (if any) applicable to the option
shares and the maximum term for which the option is to remain outstanding.

IV.  STOCK SUBJECT TO THE PLAN

          A.  The stock issuable under the Plan shall be shares of authorized
but unissued or reacquired Common Stock.  The maximum number of shares of Common
Stock which may be issued over the term of the Plan shall not exceed 6,000,000
shares.

          B.  Shares of Common Stock subject to outstanding options shall be
available for subsequent issuance under the Plan to the extent (i) the options
expire or terminate for any reason prior to exercise in full or (ii) the options
are canceled in accordance with the cancellation-regrant provisions of Article
Two.  All shares issued under the Plan, whether or not those shares are
subsequently repurchased by the Corporation pursuant to its repurchase rights
under the Plan, shall reduce on a share-for-share basis the number of shares of
Common Stock available for subsequent issuance under the Plan.

          C.  Should any change be made to the Common Stock by reason of any
stock split, stock dividend, recapitalization, combination of shares, exchange
of shares or other change affecting the outstanding Common Stock as a class
without the Corporation's receipt of consideration, appropriate adjustments
shall be made to (i) the maximum number and/or class of securities issuable
under the Plan and (ii) the number and/or class of securities and the exercise
price per share in effect under each outstanding option in order to prevent the
dilution or enlargement of benefits thereunder.  The adjustments determined by
the Plan Administrator shall be final, binding and conclusive.  In no event
shall any such adjustments be made in connection with the conversion of one or
more outstanding shares of the Corporation's preferred stock into shares of
Common Stock.

                                       2
<PAGE>

                                   ARTICLE TWO

                              OPTION GRANT PROGRAM
                              --------------------

I.  OPTION TERMS

          Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator; provided, however, that each such document
                                    --------
shall comply with the terms specified below.  Each document evidencing an
Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options.

          A.  Exercise Price.
              --------------

                1. The exercise price per share shall be fixed by the Plan
     Administrator, but shall not be less than eighty-five percent (85%) of the
     Fair Market Value per share of Common Stock on the option grant date.

                2. The exercise price shall become immediately due upon exercise
     of the option and shall, subject to the provisions of Section I of Article
     Three and the documents evidencing the option, be payable in cash or check
     made payable to the Corporation. Should the Common Stock be registered
     under Section 12(g) of the 1934 Act at the time the option is exercised,
     then the exercise price may also be paid as follows:

                       (i) in shares of Common Stock held for the requisite
     period necessary to avoid a charge to the Corporation's earnings for
     financial reporting purposes and valued at Fair Market Value on the
     Exercise Date, or

                       (ii) to the extent the option is exercised for vested
     shares, through a special sale and remittance procedure pursuant to which
     the Optionee shall concurrently provide irrevocable written instructions
     (a) to a Corporation-designated brokerage firm to effect the immediate sale
     of the purchased shares and remit to the Corporation, out of the sale
     proceeds available on the settlement date, sufficient funds to cover the
     aggregate exercise price payable for the purchased shares plus all
     applicable Federal, state and local income and employment taxes required to
     be withheld by the Corporation by reason of such exercise and (b) to the
     Corporation to deliver the certificates for the purchased shares directly
     to such brokerage firm in order to complete the sale.

          Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.

          B.  Exercise and Term of Options.  Each option shall be exercisable at
              ----------------------------
such time or times, during such period and for such number of shares as shall be
determined by the Plan Administrator and set forth in the documents evidencing
the option.  However, no option shall have a term in excess of ten (10) years
measured from the option grant date.

                                       3
<PAGE>

          C.  Effect of Termination of Service.  The following provisions shall
              --------------------------------
govern the exercise of any options held by the Optionee at the time of cessation
of Service or death:

               1.  Should the Optionee cease to remain in Service for any reason
     other than Permanent Disability or death, then the Optionee shall have a
     period of three (3) months following the date of such cessation of Service
     during which to exercise each outstanding option held by such Optionee.

               2.  Should such Service terminate by reason of Permanent
     Disability, then the Optionee shall have a period of twelve (12) months
     following the date of such cessation of Service during which to exercise
     each outstanding option held by such Optionee.

               3.  Should the Optionee die while holding one or more outstanding
     options, then the personal representative of the Optionee's estate or the
     person or persons to whom the option is transferred pursuant to the
     Optionee's will or in accordance with the laws of descent and distribution
     shall have a period of twelve (12) months following the date of the
     Optionee's death during which to exercise each such option.

               4.  Under no circumstances, however, shall any such option be
     exercisable after the specified expiration of the option term.

               5.  During the applicable post-Service exercise period, the
     option may not be exercised in the aggregate for more than the number of
     vested shares for which the option is exercisable on the date of the
     Optionee's cessation of Service.  Upon the expiration of the applicable
     exercise period or (if earlier) upon the expiration of the option term, the
     option shall terminate and cease to be outstanding for any vested shares
     for which the option has not been exercised.  However, the option shall,
     immediately upon the Optionee's cessation of Service, terminate and cease
     to be outstanding to the extent it is not exercisable for vested shares on
     the date of such cessation of Service.

          D.  Stockholder Rights.  The holder of an option shall have no
              ------------------
stockholder rights with respect to the shares subject to the option until such
person shall have exercised the option, paid the exercise price and become a
holder of record of the purchased shares.

          E.  Unvested Shares.  The Plan Administrator shall have the discretion
              ---------------
to grant options which are exercisable for unvested shares of Common Stock under
the Plan.  Should the Optionee cease Service while holding such unvested shares,
the Corporation shall have the right to repurchase, at the exercise price paid
per share, all or any of those unvested shares.  The terms upon which such
repurchase right shall be exercisable (including the period and procedure for
exercise and the appropriate vesting schedule for the purchased shares) shall be
established by the Plan Administrator and set forth in the document evidencing
such repurchase right.

          F.  First Refusal Rights.  Until such time as the Common Stock is
              --------------------
first registered under Section 12(g) of the 1934 Act, the Corporation shall have
the right of first refusal

                                       4
<PAGE>

with respect to any proposed disposition by the Optionee (or any successor in
interest) of any shares of Common Stock issued under the Plan. Such right of
first refusal shall be exercisable in accordance with the terms established by
the Plan Administrator and set forth in the document evidencing such right.

          G.  Limited Transferability of Options.  During the lifetime of the
              ----------------------------------
Optionee, the option shall be exercisable only by the Optionee and shall not be
assignable or transferable other than by will or by the laws of descent and
distribution following the Optionee's death.  However, a Non-Statutory Option
may be assigned in whole or in part during Optionee's lifetime in accordance
with the terms of a Qualified Domestic Relations Order.  The assigned portion
may only be exercised by the person or persons who acquire a proprietary
interest in the option pursuant to such Qualified Domestic Relations Order.  The
terms applicable to the assigned portion shall be the same as those in effect
for the option immediately prior to such assignment and shall be set forth in
such documents issued to the assignee as the Plan Administrator may deem
appropriate.

          H.  Withholding.  The Corporation's obligation to deliver shares of
              -----------
Common Stock upon the exercise of any options granted under the Plan shall be
subject to the satisfaction of all applicable Federal, state and local income
and employment tax withholding requirements.

     II.  INCENTIVE OPTIONS

          The terms specified below shall be applicable to all Incentive
Options.  Except as modified by the provisions of this Section II, all the
provisions of the Plan shall be applicable to Incentive Options.  Options which
are specifically designated as Non-Statutory Options shall not be subject to the
                                                           ---
terms of Section II.

          A.  Eligibility.  Incentive Options may only be granted to Employees.
              -----------

          B.  Exercise Price.  The exercise price per share shall not be less
              --------------
than one hundred percent (100%) of the Fair Market Value per share of Common
Stock on the option grant date.

          C.  Dollar Limitation.  The aggregate Fair Market Value of the shares
              -----------------
of Common Stock (determined as of the respective date or dates of grant) for
which one or more options granted to any Employee under the Plan (or any other
option plan of the Corporation or any Parent or Subsidiary) may for the first
time become exercisable as Incentive Options during any one (1) calendar year
shall not exceed the sum of One Hundred Thousand Dollars ($100,000).  To the
extent the Employee holds two (2) or more such options which become exercisable
for the first time in the same calendar year, the foregoing limitation on the
exercisability of such options as Incentive Options shall be applied on the
basis of the order in which such options are granted.

          D.  10% Stockholder.  If any Employee to whom an Incentive Option is
              ---------------
granted is a 10% Stockholder, then the option term shall not exceed five (5)
years measured from the option grant date and the exercise price per share shall
not be less than one hundred ten percent (110%) of the Fair Market Value per
share of Common Stock on the option grant date.

                                       5
<PAGE>

III.   CORPORATE TRANSACTION

A.    Immediately prior to the consummation of any Corporate Transaction, the
outstanding Repurchase Right for fifty percent (50%) of the Purchased Shares
subject to such Repurchase Right shall terminate automatically and the affected
Purchased Shares shall vest in full (and the remaining shares still subject to
such Repurchase Right shall continue to vest over the remaining vesting period
at the same rate provided in the documents evidencing the option), provided,
that this percentage shall increase to one hundred percent (100%) if the
Optionee/employee (or member of the Board of Directors) holding shares subject
to such Repurchase Right is terminated without Cause from employment (or removed
without Cause from the Board) by the successor corporation within one year
following the consummation of the Coporate Transaction and if pooling of
interests accounting treatment for the Corporate Transaction is not precluded by
this increased percentage.

          B.  To the extent the Repurchase Right remains in effect following a
Corporate Transaction, such right shall apply to the new capital stock or other
property (including any cash payment) received in exchange for the Purchased
Shares in consummation of the Corporate Transaction, but only to the extent the
Purchased Shares are at the time covered by such right.  Appropriate adjustments
shall be made to the price per share payable upon exercise of the Repurchase
Right to reflect the effect of the Corporate Transaction upon the Corporation's
capital structure; provided, however, that the aggregate purchase price shall
                   --------
remain the same.

          C.  The grant of options under the Plan shall in no way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.

     IV.  CANCELLATION AND REGRANT OF OPTIONS

          The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Plan and to grant in
substitution therefor new options covering the same or different number of
shares of Common Stock but with an exercise price per share based on the Fair
Market Value per share of Common Stock on the new option grant date.

                                       6
<PAGE>

                                 ARTICLE THREE

                                 MISCELLANEOUS
                                 -------------


     I.  FINANCING

          The Plan Administrator may permit any Optionee to pay the option
exercise price by delivering a promissory note payable in one or more
installments.  The terms of any such promissory note (including the interest
rate and the terms of repayment) shall be established by the Plan Administrator
in its sole discretion.  Promissory notes may be authorized with or without
security or collateral.  In all events, the maximum credit available to the
Optionee may not exceed the sum of (i) the aggregate option exercise price
                            ---
payable for the purchased shares (less the par value of such shares) plus (ii)
any Federal, state and local income and employment tax liability incurred by the
Optionee in connection with the option exercise.

     II.  ADDITIONAL AUTHORITY

          A.  The Plan Administrator shall have the discretion, exercisable
either at the time an option is granted or at any time while the option remains
outstanding, to extend the period of time for which the option is to remain
exercisable following the Optionee's cessation of Service or death from the
limited period otherwise in effect for that option to such greater period of
time as the Plan Administrator shall deem appropriate, but in no event beyond
the expiration of the option term.

     III.  EFFECTIVE DATE AND TERM OF THE PLAN

          A.  The Plan shall become effective when adopted by the Board, but no
option granted under the Plan may be exercised until the Plan is approved by the
Corporation's stockholders.  If such stockholder approval is not obtained within
twelve (12) months after the date of the Board's adoption of the Plan, then all
options previously granted under the Plan shall terminate and cease to be
outstanding, and no further options shall be granted.  Subject to such
limitation, the Plan Administrator may grant options under the Plan at any time
after the effective date of the Plan and before the date fixed herein for
termination of the Plan.

          B.  The Plan shall terminate upon the earliest of (i) the expiration
                                                --------
of the ten (10)-year period measured from the date the Plan is adopted by the
Board, (ii) the date on which all shares available for issuance under the Plan
shall have been issued or (iii) the termination of all outstanding options in
connection with a Corporate Transaction.  Upon such Plan termination, all
options outstanding under the Plan shall continue to have full force and effect
in accordance with the provisions of the documents evidencing such options or
issuances.

     IV.  AMENDMENT OF THE PLAN

          A.  The Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects.  However, no such amendment or
modification shall, without the consent of the Optionees, adversely affect their
rights and obligations under their

                                       7
<PAGE>

outstanding options. In addition, the Board shall not, without the approval of
the Corporation's stockholders, (i) increase the maximum number of shares
issuable under the Plan, except for permissible adjustments in the event of
certain changes in the Corporation's capitalization, (ii) materially modify the
eligibility requirements for Plan participation or (iii) materially increase the
benefits accruing to Plan participants.

          B.  Options may be granted under the Plan to purchase shares of Common
Stock in excess of the number of shares then available for issuance under the
Plan, provided any such options actually granted may not be exercised until
there is obtained stockholder approval of an amendment sufficiently increasing
the number of shares of Common Stock available for issuance under the Plan.  If
such stockholder  approval is not obtained within twelve (12) months after the
date the excess grants are first made, then any options granted on the basis of
such excess shares shall terminate and cease to be outstanding.

     V.  USE OF PROCEEDS

          Any cash proceeds received by the Corporation from the sale of shares
of Common Stock under the Plan shall be used for general corporate purposes.

     VI.  REGULATORY APPROVALS

          The implementation of the Plan, the granting of any options under the
Plan and the issuance of any shares of Common Stock upon the exercise of any
option shall be subject to the Corporation's procurement of all approvals and
permits required by regulatory authorities having jurisdiction over the Plan,
the options granted under it and the shares of Common Stock issued pursuant to
it.

     VII.  NO EMPLOYMENT OR SERVICE RIGHTS

          Nothing in the Plan shall confer upon the Optionee any right to
continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or any Parent or
Subsidiary employing or retaining Optionee) or of the Optionee, which rights are
hereby expressly reserved by each, to terminate the Optionee's Service at any
time for any reason, with or without cause.

                                       8
<PAGE>

                                    APPENDIX
                                    --------


          The following definitions shall be in effect under the Plan:


     A.  Board shall mean the Corporation's Board of Directors.
         -----

     A1.  Cause shall mean (i) violation by Optionee/employee or member of the
          -----
Board of Directors of any of the terms and provisions of any agreement between
Optionee/employee or member of the Board of Directors and Corporation; (ii)
dishonesty, fraud, embezzlement or willful disloyalty of Optionee/employee or
member of the Board of Directors; (iii) the Optionee/employee or member of the
Board of Directors being convicted of a felony; and (iv) gross negligence by
Optionee/employee or member of the Board of Directors in the performance of any
material responsibility assigned by the Corporation or required by the law or
the Corporation's Bylaws.

     B.  Code shall mean the Internal Revenue Code of 1986, as amended.
         ----

     C.  Committee shall mean a committee of two (2) or more Board members
         ---------
appointed by the Board to exercise one or more administrative functions under
the Plan.

     D.  Common Stock shall mean the Corporation's common stock.
         ------------

     E.  Corporate Transaction shall mean either of the following stockholder-
         ---------------------
approved transactions to which the Corporation is a party:

               (i) a merger or consolidation in which securities possessing more
     than fifty percent (50%) of the total combined voting power of the
     Corporation's outstanding securities are transferred to a person or persons
     different from the persons holding those securities immediately prior to
     such transaction, or

               (ii) the sale, transfer or other disposition of all or
     substantially all of the Corporation's assets in complete liquidation or
     dissolution of the Corporation.

     F.  Corporation shall mean MainControl, Inc., a Delaware corporation.
         -----------

     G.  Domestic Relations Order shall mean any judgment, decree or order
         ------------------------
(including approval of a property settlement agreement) which provides or
otherwise conveys, pursuant to applicable State domestic relations laws
(including community property laws), marital property rights to any spouse or
former spouse of the Optionee.

     H.  Employee shall mean an individual who is in the employ of the
         --------
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.

                                      A-i
<PAGE>

     I.  Exercise Date shall mean the date on which the Corporation shall have
         -------------
received written notice of the option exercise.

     J.  Fair Market Value per share of Common Stock on any relevant date shall
         -----------------
be determined in accordance with the following provisions:

               (i) If the Common Stock is at the time traded on the Nasdaq
     National Market, then the Fair Market Value shall be the closing price per
     share of Common Stock on the date in question, as such price is reported by
     the National Association of Securities Dealers on the Nasdaq National
     Market or any successor system.  If there is no closing selling price for
     the Common Stock on the date in question, then the Fair Market Value shall
     be the closing selling price on the last preceding date for which such
     quotation exists.

               (ii) If the Common Stock is at the time listed on any Stock
     Exchange, then the Fair Market Value shall be the closing selling price per
     share of Common Stock on the date in question on the Stock Exchange
     determined by the Plan Administrator to be the primary market for the
     Common Stock, as such price is officially quoted in the composite tape of
     transactions on such exchange.  If there is no closing selling price for
     the Common Stock on the date in question, then the Fair Market Value shall
     be the closing selling price on the last preceding date for which such
     quotation exists.

               (iii)  If the Common Stock is at the time neither listed on any
     Stock Exchange nor traded on the Nasdaq National Market, then the Fair
     Market Value shall be determined by the Plan Administrator after taking
     into account such factors as the Plan Administrator shall deem appropriate.

     K.  Incentive Option shall mean an option which satisfies the requirements
         ----------------
of Code Section 422.

     L.  1934 Act shall mean the Securities Exchange Act of 1934, as amended.
         --------

     M.  Non-Statutory Option shall mean an option not intended to satisfy the
         --------------------
requirements of Code Section 422.

     N.  Optionee shall mean any person to whom an option is granted under the
         --------
Plan.

     O.  Parent shall mean any corporation (other than the Corporation) in an
         ------
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

     P.  Permanent Disability shall mean the inability of the Optionee to engage
         --------------------
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment

                                     A-ii
<PAGE>

that is expected to result in death or has lasted or can be expected to last for
a continuous period of twelve (12) months or more.

     Q.  Plan shall mean the Corporation's 1996 Stock Option Plan, as set forth
         ----
in this document.

     R.  Plan Administrator shall mean either the Board or the Committee, to the
         ------------------
extent the Committee is at the time responsible for the administration of the
Plan.

     S.  Qualified Domestic Relations Order shall mean a Domestic Relations
         ----------------------------------
Order which substantially complies with the requirements of Code Section 414(p).
The Plan Administrator shall have the sole discretion to determine whether a
Domestic Relations Order is a Qualified Domestic Relations Order.

     T.  Service shall mean the provision of services to the Corporation (or any
         -------
Parent or Subsidiary) by a person in the capacity of an Employee, a non-employee
member of the board of directors or a consultant, except to the extent otherwise
specifically provided in the documents evidencing the option grant.

     U.  Stock Exchange shall mean either the American Stock Exchange or the New
         --------------
York Stock Exchange.

     V.  Subsidiary shall mean any corporation (other than the Corporation) in
         ----------
an unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

     W.  10% Stockholder shall mean the owner of stock (as determined under Code
         ---------------
Section 424(d)) possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Corporation (or any Parent or
Subsidiary).

                                     A-iii