Document:

<PAGE>   1
Exhibit 10.1
                              SYMPOSIUM CORPORATION
                                 410 PARK AVENUE
                                    SUITE 830
                            NEW YORK, NEW YORK 10022

                                                              June 16, 2000

To the Holders of Symposium
Corporation Series B
Convertible Preferred Stock

                                Letter Agreement

Ladies and Gentlemen:

                  Reference is made to the Certificate of Designation (the
"Certificate") creating the series of preferred stock of Symposium Corporation,
a Delaware corporation (the "Company"), designated as the Series B Convertible
Preferred Stock, par value $.001 per share (the "Series C Shares"), and the Term
Sheet (the "Term Sheet") describing the terms upon which the Series B Shares
were offered and sold to each of you (each, a "Holder" and collectively, the
"Holders"). The Certificate and the Term Sheet are hereinafter collectively
referred to as the "Documents."

                  Pursuant to the terms and conditions set forth in the Term
Sheet, on January 28, 2000, the Company issued and sold to the Holders, for an
aggregate purchase price of $1,535,000, 15,350 Series B Shares and warrants to
purchase 383,750 shares of Common Stock at an exercise price of $1.50 per share
(the "Original Warrants"). In addition, the Company issued warrants to purchase
58,136 shares of Common Stock at an exercise price of $1.50 per share (the
"Commission Warrants") to D2 Co. LLP, as a fee for arranging the financing.

                  This letter sets forth our agreement, as follows:

         1.       Conversion.

                  On or prior to the Redemption Date (as defined below), each
Holder may, at such Holder's option, convert such Holder's Series B Shares in
accordance with the Documents. Upon such conversion, the Company will issue to
each converting Holder, without additional consideration (and in addition to the
number of shares of Common Stock issuable upon such conversion), the number of
additional shares of Common Stock equal to the excess of: (a) the number of
shares of Common Stock issuable upon such conversion assuming an effective
conversion price of $0.50 per share over (b) the number
<PAGE>   2
of shares of Common Stock issuable upon such conversion at the conversion price
then in effect pursuant to the Documents.

         2.       Redemption.

                  (a) On June 29, 2000 (the "Redemption Date"), upon surrender
         by the Holders of the certificates evidencing the Series B Shares
         (except for Series B Shares converted pursuant to Section 1 above), the
         Company will redeem all of the outstanding Series B Shares at a
         redemption price equal to the Stated Value of such shares as set forth
         in the Certificate together with accrued and unpaid dividends thereon
         through the Redemption Date. The aggregate redemption price as of the
         Redemption Date will be $1,561,436.11 (the "Redemption Price"). The
         portion of the Redemption Price payable to each Holder is set forth on
         Schedule A hereto. The Company will pay the Redemption Price by check
         payable to the order of each Holder or, if such Holder has presented
         the Company with written wire instructions prior to the Redemption
         Date, by wire transfer of immediately available funds to the account
         designated in such instructions.

                  (b) If any Holder fails to surrender to the Company the
         certificates evidencing such Holder's Series B Shares on the Redemption
         Date (or to execute and deliver to the Company a lost certificate
         indemnity in form reasonably satisfactory to the Company), the Company
         will deposit the full redemption price payable in respect of such
         Holder's Series B Shares in escrow with its counsel, Kramer Levin
         Naftalis & Frankel LLP and from and after the Redemption Date, the
         Series B Shares owned by such Holder shall cease to be outstanding and
         such Holder shall have no further rights with respect thereto, other
         than to be paid such redemption price upon surrender of such
         certificates or lost certificate indemnity, as the case may be.

                  (c) By executing and delivering this Letter Agreement, each
         Holder irrevocably waives such Holder's right to receive notice of
         redemption as set forth in the Certificate and agrees that the
         redemption of the Series B Shares in accordance with this Letter
         Agreement will constitute satisfaction in full by the Company of its
         obligation to redeem the Series B Shares pursuant to the Documents.

                  3.       Warrants.

                           (a) On the Redemption Date, the exercise price of the
         Original Warrants and the Commission Warrants will be reduced from
         $1.50 per share to $0.75 per share. In order to effect such reduction,
         each Holder will surrender the certificates evidencing such Holder's
         Original Warrants or Commission Warrants, as applicable, to the Company
         in exchange for a new certificate reflecting such reduced price. In
         addition, on the Redemption Date, (a) the Company will issue to the
         Holders of Original Warrants, pro rata in accordance with the
         respective
<PAGE>   3
         numbers of Original Warrants owned by them, additional warrants to
         purchase an aggregate of 122,800 shares of Common Stock at an exercise
         price of $0.75 per share (the "Additional $0.75 Warrants") and
         additional warrants to purchase an aggregate of 200,000 shares of
         Common Stock at an exercise price of $1.50 per share (the "Additional
         $1.50 Warrants and, together with the Additional $0.75 Warrants, the
         "Additional Warrants"); and (b) the Company will issue to D2 Co. LLP
         additional warrants to purchase 17,820 shares of Common Stock at an
         exercise price of $0.75 per share (the "Additional Commission
         Warrants"). The Original Warrants, as amended in accordance with this
         paragraph, the Commission Warrants, the Additional Warrants and the
         Additional Commission Warrants are hereinafter collectively referred to
         as the "Warrants." Other than the exercise prices (which shall be as
         described above), the terms and conditions of the Additional Warrants
         and the Additional Commission Warrants will be identical to those of
         the Original Warrants and the Commission Warrants and the Holders will
         be entitled to the same registration rights with respect to the shares
         of Common Stock issuable upon exercise of the Additional Warrants and
         Additional Commission Warrants as apply to the shares of Common Stock
         issuable upon exercise of the Original Warrants and Commission
         Warrants. The shares of Common Stock issuable upon exercise of all such
         Warrants are hereinafter collectively referred to as the "Warrant
         Shares."

                           (b) The Holders agree that the Company's agreement in
         Section 1 hereof to issue additional shares of Common Stock to the
         Holders upon conversion of Series B Shares, the reduction of the
         exercise price of the Original Warrants and the Commission Warrants and
         the issuance to the Holders of the Additional Warrants and Additional
         Commission Warrants satisfy in full any claims, whether or not
         previously asserted by the Holders, in respect of the amount or terms
         of securities to which they were or may have been entitled in
         connection with their $1,535,000 investment in the Company in January
         2000 or any right to commissions or fees relating to such investment
         (the "Claims"). Each such Holder, on its own behalf and on behalf of
         its respective officers, directors, partners, managers, equity owners,
         agents, affiliates, executors, administrators, successors and assigns,
         hereby waives and releases the Company, its officers, directors,
         employees, agents, affiliates, successors and assigns from, to the
         fullest extent permitted by applicable law, any claims or causes of
         action arising out of or relating to the amount or terms of securities
         issued to such Holder in connection with such investment or any such
         commissions or fees, except for claims arising under this Letter
         Agreement.

                  4.       Representations and Warranties of Holders.

                           Each of the Holders hereby severally represents and
warrants to the Company, on behalf of itself, as follows:

                           (a) Such Holder is (and on the Redemption Date and
each date on which such Holder purchases Warrant Shares upon exercise of all or
any portion of the
<PAGE>   4
Warrants, such Holder will be) an "accredited investor" within the meaning of
Regulation D, as promulgated by the Securities and Exchange Commission pursuant
to the Securities Act of 1933, as amended (the "Act");

                  (b) Such Holder has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks of
the transactions contemplated hereby and of an investment in the Company's
securities;

                  (c) Such Holder has been furnished and has reviewed the
Company's Annual Report on Form 10-K for the year ended December 31, 1999,
Quarterly Report on Form 10-Q for the quarter ended March 31, 2000 and Current
Report on Form 8-K, as filed with the Commission on June 16, 2000 (which Form
8-K describes the terms and conditions upon which the Company issued shares of
Series A Convertible Preferred Stock, Series C Preferred Stock, and warrants, a
portion of the net proceeds of which will be used to fund the redemption of the
Series B Shares contemplated by this Letter Agreement);

                  (d) Such Holder has had the opportunity to confer with the
Company's management and has obtained such additional information regarding the
Company, its business and capital structure as such Holder has requested in
connection with the transaction contemplated by this Letter Agreement;

                  (e) Such Holder acquired the Original Warrants or Commission
Warrants, is acquiring the Additional Warrants or the Additional Commission
Warrants, as applicable, and will acquire Warrant Shares upon exercise of any
such Warrants, for investment and without a view to the sale, assignment,
transfer or other distribution thereof;

                  (f) Such understands that the Warrants and the Warrant Shares
may not be offered for sale, sold or otherwise transferred except pursuant to an
effective registration statement under the Act and in compliance with the
applicable securities laws of any state or other jurisdiction, or pursuant to an
opinion of counsel satisfactory to the company that such registration is not
required and such compliance has been obtained. The Company may affix an
appropriate legend to any certificate(s) evidencing Warrants or Warrant Shares
to reflect the foregoing.

         6.       Miscellaneous.

                  This Letter Agreement will be governed by the laws of the
State of New York applicable to contracts made and to be performed entirely
within such State. Any claims or disputes relating in any way to this Letter
Agreement shall be submitted to the New York State courts or the United States
District Court for the Southern District of New York and such courts shall have
exclusive jurisdiction over such claims or disputes. The parties hereby consent
to such venue and the personal jurisdiction of such courts and agree not to
contest such venue or assert any claims to move the claim or dispute to another
venue or forum. This Letter Agreement may be executed in counterparts and by
the parties hereto in separate counterparts, each of which shall constitute an
original and all of which together shall constitute one and the same agreement.
This Letter Agreement supersedes any prior understanding or agreement, written
or oral, among the parties hereto relating to the subject matter hereof.
<PAGE>   5
         If the foregoing correctly sets forth our understanding, please so
indicate by signing an enclosed counterpart of this Letter Agreement and
returning it to the undersigned. Upon execution and delivery to the undersigned
of a counterpart of this Letter Agreement by each of the Holders, this Letter
Agreement will constitute a binding agreement among us.

                           Very truly yours,

                           SYMPOSIUM CORPORATION

                           By:________________________
                              Ronald Altbach
                              Chairman and Chief Executive Officer
<PAGE>   6
    Signature Page of Letter Agreement, dated June 16, 2000, among Symposium
    Corporation and the Holders of its Series B Convertible Preferred Shares

Accepted and agreed to as of the
date first above written:

___________________________                 Redeem   / /     Convert   / /
Dominic Chang

___________________________                 Redeem   / /     Convert   / /
Krishnan Thampi

___________________________                 Redeem   / /     Convert   / /
Dublin Holdings LLC
   By:
   Title:

___________________________                 Redeem   / /     Convert   / /
JR Squared LLC
   By:
   Title:

___________________________                 Redeem   / /     Convert   / /
Kerry Fleming

___________________________                 Redeem   / /     Convert   / /
Dominic Bassani

___________________________                 Redeem   / /     Convert   / /
David Ian Mitchell

___________________________                 Redeem   / /     Convert   / /
TCMP3 Capital LLC
   By:
   Title:

___________________________                 Redeem   / /     Convert   / /
Jodi Kirsch
<PAGE>   7
    Signature Page of Letter Agreement, dated June 16, 2000, among Symposium
    Corporation and the Holders of its Series B Convertible Preferred Shares

___________________________                 Redeem   / /     Convert   / /
Stephen J. Posner

___________________________                 Redeem   / /     Convert   / /
Jean Fresa
<PAGE>   8
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
                   SCHEDULE A
------------------------------------------------------------------------------------------
                                             CURRENT
------------------------------------------------------------------------------------------
             NAME                           OUTSTANDING        DIVIDEND          TOTAL
------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------
<S>          <C>                           <C>               <C>             <C>
B-1          Dominic Chang                 $ 150,000.00      $ 2,583.33      $ 152,583.33
------------------------------------------------------------------------------------------
B-2          Krishnan Thampi                  50,000.00          861.11         50,861.11
------------------------------------------------------------------------------------------
B-3          Dublin Holdings, Ltd            100,000.00        1,722.22        101,722.22
------------------------------------------------------------------------------------------
B-4          JR Squared LLC                  150,000.00        2,583.33        152,583.33
------------------------------------------------------------------------------------------
B-5          Kerry Fleming                   450,000.00        7,750.00        457,750.00
------------------------------------------------------------------------------------------
B-6          Dominic Bassani                 150,000.00        2,583.33        152,583.33
------------------------------------------------------------------------------------------
B-7          David Jan Mitchell              150,000.00        2,583.33        152,583.33
------------------------------------------------------------------------------------------
B-8          TCMP3 Capital LLC                60,000.00        1,033.33         61,033.33
------------------------------------------------------------------------------------------
B-9          Jodi Kirsch                     200,000.00        3,444.44        203,444.44
------------------------------------------------------------------------------------------
B-10         Stephen Posner                   25,000.00          430.56         25,430.56
------------------------------------------------------------------------------------------
B-11         Jean Fresa                       50,000.00          861.11         50,861.11
------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------
                                           $  1,535,000      $26,436.11    $ 1,561,436.11
------------------------------------------------------------------------------------------
</TABLE><PAGE>   1

                                                                    EXHIBIT 4(a)

                               IZ.COM INCORPORATED

                             1999 STOCK OPTION PLAN

     1.  Purposes of the Plan. The purposes of this Stock Option 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. Stock Purchase
Rights may also be granted under the Plan.

     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 or Stock Purchase Rights are
granted under the Plan.

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

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

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

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

         (g) "Company" means IZ.com Incorporated, a Delaware corporation

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

         (i) "Director" means a member of the Board of Directors of the Company.

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

         (k) "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 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, on the 181st day of such leave any Incentive Stock

<PAGE>   2

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.

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

         (m) "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 for
the last market trading day prior to the time 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 last market trading day prior to 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.

         (n) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code. (o)
"Nonstatutory Stock Option" means an Option not intended to qualify as an
Incentive Stock Option.

         (p) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

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

         (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) "Option Exchange Program" means a program whereby outstanding
Options are exchanged for Options with a lower exercise price.

         (t) "Optioned Stock" means the Common Stock subject to an Option or a
Stock Purchase Right.

         (u) "Optionee" means the holder of an outstanding Option or Stock
Purchase Right granted under the Plan.

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

<PAGE>   3

         (w)  "Plan" means this 1999 Stock Option Plan.

         (x)  "Restricted Stock" means shares of Common Stock acquired pursuant
to a grant of a Stock Purchase Right under Section 11 below.

         (y)  "Section 16(b)" means Section 16(b) of the Securities Exchange Act
of 1934, as amended.

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

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

         (bb) "Stock Purchase Right" means a right to purchase Common Stock
pursuant to Section 11 below.

         (cc) "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 2,000,000 Shares. The Shares may be authorized but
unissued, or reacquired Common Stock.

     If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, 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 either an Option or Stock Purchase Right, 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 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 and
Stock Purchase Rights may from time to time be granted hereunder;

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

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

<PAGE>   4

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

                  (vi)   to determine whether and under what circumstances an
Option may be settled in cash under subsection 9(e) instead of Common Stock;

                  (vii)  to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option has declined since the date the Option was granted;

                  (viii) to initiate an Option Exchange Program;

                  (ix)   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 qualifying for preferred tax treatment under
foreign tax laws;

                  (x)    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 or Stock Purchase Right that number of Shares
having a Fair Market Value equal to the 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

                  (xi)   to construe and interpret the terms of the Plan and
awards 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.

         (a) Nonstatutory Stock Options and Stock Purchase Rights may be granted
to Service Providers. Incentive Stock Options may be granted only to Employees.

         (b) 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 $1 00,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 5(b), 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.

         (c) Neither the Plan nor any Option or Stock Purchase Right shall
confer upon any Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the

<PAGE>   5

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.

     6.  Term of Plan. The Plan shall become effective upon its adoption by the
Board. It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 14 of the Plan.

     7.  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.

     8.  Option Exercise Price and Consideration.

         (a)   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) 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 (1) cash,
(2) check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option, have been owned by the Optionee for more
than six months on the date of surrender, and (y) have a Fair Market Value 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

<PAGE>   6

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.

     9.  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 shall be
tolled 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 such period of time as is specified in the Option Agreement (of at least
thirty (30) days) 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). In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for three (3) months
following the Optionee's termination. 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.

         (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 such period of time as is specified in the Option Agreement
(of at least six (6) months) 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). In the absence of a specified time
in the Option Agreement, the Option shall remain exercisable for twelve (12)
months following the Optionee's termination. 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

<PAGE>   7

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 such period of time as is specified in the
Option Agreement (of at least six (6) months) 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
estate or by a person who acquires the right to exercise the Option by bequest
or inheritance. In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination. If, at the time of death, the Optionee is not vested as to the
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.

         (e) Buyout Provisions. The Administrator may at any time offer to buy
out for a payment in cash or Shares, an Option previously granted, based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.

     10. Non-Transferability of Options and Stock Purchase Rights. The Options
and Stock Purchase Rights may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee.

     11. Stock Purchase Rights.

         (a) Rights to Purchase. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing or electronically of the terms, conditions and restrictions
related to the offer, including the number of Shares that such person shall be
entitled to purchase, the price to be paid, and the time within which such
person must accept such offer. The terms of the offer shall comply in all
respects with Section 260.140.42 of Title 10 of the California Code of
Regulations. The offer shall be accepted by execution of a Restricted Stock
purchase agreement in the form determined by the Administrator.

         (b) Repurchase Option. Unless the Administrator determines otherwise,
the Restricted Stock purchase agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
purchaser's service with the Company for any reason (including death or
disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at such rate as the
Administrator may determine. Except, with respect to Shares purchased by
Officers, Directors and Consultants, the repurchase option shall in no case
lapse at a rate of less than 20% per year over five (5) years from the date of
purchase.

         (c) Other Provisions. The Restricted Stock purchase agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.

<PAGE>   8

         (d) Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have rights equivalent to those of a shareholder
and shall be a shareholder when his or her purchase is entered upon the records
of the duly authorized transfer agent of the Company. No adjustment shall be
made for a dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in Section 12 of
the Plan.

     12. Adjustments Upon Changes in Capitalization, Merger or Asset Sale.

         (a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock 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 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 or price
of shares of Common Stock subject to an Option or Stock Purchase Right.

         (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 or Stock Purchase Right until
fifteen (15) days prior to such transaction as to all of the Optioned Stock
covered thereby, including Shares as to which the Option or Stock Purchase Right
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 or Stock Purchase Right 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 or Stock Purchase Right will terminate immediately prior to the
consummation of such proposed action.

         (c) Merger or Asset Sale. In the event of a merger of the Company with
or into another corporation, or the sale of substantially all of the assets of
the Company, each outstanding Option and Stock Purchase Right shall be assumed
or an equivalent option or right substituted by the successor corporation or a
Parent or Subsidiary of this successor corporation. In the event that the
successor corporation refuses to assume or substitute for the Option or Stock
Purchase Right, the Optionee shall fully vest in and have the right to exercise
the Option or Stock Purchase Right as to all of the Optioned Stock, including
Shares as to which it would not otherwise be vested or exercisable. If an Option
or Stock Purchase Right becomes fully vested and exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Stock Purchase Right shall be fully exercisable for a period of
fifteen (15) days from the date of such notice, and the Option or Stock Purchase
Right shall terminate upon the expiration of such period. For the purposes of
this paragraph, the Option or Stock Purchase Right shall be considered assumed
if, following the merger or sale of assets, the option or right confers the
right to purchase or receive, for each Share of Optioned Stock

<PAGE>   9

subject to the Option or Stock Purchase Right immediately prior to the merger or
sale of assets, the consideration (whether stock, cash or other securities or
property) received in the merger or sale of assets 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 Share); provided, however, that if such
consideration received in the merger or sale of assets 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 or Stock Purchase Right, for each Share
of Optioned Stock subject to the Option or Stock Purchase Right, to be solely
common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders of Common Stock in the
merger or sale of assets.

     13. Time of Granting, Options and Stock Purchase Rights. The date of grant
of an Option or Stock Purchase Right shall, for all purposes, be the date on
which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Administrator. Notice
of the determination shall be given to each Service Provider to whom an Option
or Stock Purchase Right is so granted within 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) Stockholder Approval. The Board shall obtain stockholder approval
of any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.

         (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.

<PAGE>   10

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

     19. Information to Optionees and Purchasers. The Company shall provide to
each Optionee, not less frequently than annually, copies of annual financial
statements. The Company shall also provide such statements to each individual
who acquires Shares pursuant to the Plan while such individual owns such Shares.
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.

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