Document:

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Exhibit 10.1

                                  LOUDEYE CORP.

                             2000 STOCK OPTION PLAN

                        ADOPTED BY THE BOARD OF DIRECTORS

                        AND APPROVED BY THE STOCKHOLDERS

                                IN DECEMBER, 1999

(AS AMENDED BY THE BOARD JUNE 4, 2004, AND APPROVED BY THE STOCKHOLDERS ON JULY
                                   22, 2004)

      1. Purposes of the Plan. The purposes of this 2000 Stock Option Plan are
to attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees 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 of an option and subject to the
applicable provisions of Section 422 of the Code and the regulations promulgated
thereunder. 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 its Committee appointed pursuant to
Section 4 of the Plan.

      (b) "Affiliate" means an entity other than a Subsidiary (as defined below)
which, together with the Company, is under common control of a third person or
entity.

      (c) "Applicable Laws" means the legal requirements relating to the
administration of stock option and restricted stock purchase plans under
applicable U.S. state corporate laws, U.S. federal and applicable state
securities laws, the Code, any Stock Exchange rules or regulations and the
applicable laws of any other country or jurisdiction where Options or Stock
Purchase Rights are granted under the Plan, as such laws, rules, regulations and
requirements shall be in place from time to time.

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

      (e) "Change of Control" means a sale of all or substantially all of the
Company's assets, or any merger or consolidation of the Company with or into
another corporation other than a merger or consolidation in which the holders of
more than 50% of the shares of capital stock of the Company outstanding
immediately prior to such transaction continue to hold (either by the voting
securities remaining outstanding or by their being converted into voting
securities of the surviving entity) more than 50% of the total voting power
represented by the voting securities of the Company, or such surviving entity,
outstanding immediately after such transaction.

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

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      (g) "Committee" means one or more committees or subcommittees of the Board
appointed by the Board to administer the Plan in accordance with Section 4
below.

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

      (i) "Company" means Loudeye Corp., a Delaware corporation.

      (j) "Consultant" means any person, including an advisor, who is engaged by
the Company or any Parent, Subsidiary or Affiliate to render services and is
compensated for such services, and any director of the Company whether
compensated for such services or not.

      (k) "Continuous Status as an Employee or Consultant" means the absence of
any interruption or termination of service as an Employee or Consultant.
Continuous Status as an Employee or Consultant shall not be considered
interrupted in the case of: (i) sick leave; (ii) military leave; (iii) any other
leave of absence approved by the Administrator, provided that such leave is for
a period of not more than ninety (90) days, unless reemployment upon the
expiration of such leave is guaranteed by contract or statute, or unless
provided otherwise pursuant to Company policy adopted from time to time; or (iv)
in the case of transfers between locations of the Company or between the
Company, its Parents, Subsidiaries, Affiliates or their respective successors. A
change in status from an Employee to a Consultant or from a Consultant to an
Employee will not constitute an interruption of Continuous Status as an Employee
or Consultant.

      (l) "Corporate Transaction" means a sale of all or substantially all of
the Company's assets, or a merger, consolidation or other capital reorganization
of the Company with or into another corporation.

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

      (n) "Employee" means any person (including, if appropriate, any Named
Executive Officer, officer or Director) employed by the Company or any Parent,
Subsidiary or Affiliate, with the status of employment determined based upon
such factors as are deemed appropriate by the Administrator in its discretion,
subject to any requirements of the Code or the Applicable Laws. The payment by
the Company of a director's fee to a Director shall not be sufficient to
constitute "employment" of such Director by the Company.

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

      (p) "Fair Market Value" means, as of any date, the fair market value of
the Common Stock, as determined by the Administrator in good faith on such basis
as it deems appropriate and applied consistently with respect to Participants.
Whenever possible, the determination of Fair Market Value shall be based upon
the closing price for the Shares as reported in the Wall Street Journal for the
applicable date.

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      (q) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code, as
designated in the applicable Option Agreement.

      (r) "Listed Security" means any security of the Company that is listed or
approved for listing on a national securities exchange or designated or approved
for designation as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc.

      (s) "Named Executive" means any individual who, on the last day of the
Company's fiscal year, is the chief executive officer of the Company (or is
acting in such capacity) or among the four most highly compensated officers of
the Company (other than the chief executive officer). Such officer status shall
be determined pursuant to the executive compensation disclosure rules under the
Exchange Act.

      (t) "Nonstatutory Stock Option" means an Option not intended to qualify as
an Incentive Stock Option, as designated in the applicable Option Agreement.

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

      (v) "Option Agreement" means a written document, the form(s) of which
shall be approved from time to time by the Administrator, reflecting the terms
of an Option granted under the Plan and includes any documents attached to or
incorporated into such Option Agreement, including, but not limited to, a notice
of stock option grant and a form of exercise notice.

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

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

      (y) "Optionee" means an Employee or Consultant who receives an Option.

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

      (aa) "Participant" means any holder of one or more Options or Stock
Purchase Rights, or the Shares issuable or issued upon exercise of such awards,
under the Plan.

      (bb) "Plan" means this 2000 Stock Option Plan.

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      (cc) "Reporting Person" means an officer, Director, or greater than ten
percent stockholder of the Company within the meaning of Rule 16a-2 under the
Exchange Act, who is required to file reports pursuant to Rule 16a-3 under the
Exchange Act.

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

      (ee) "Restricted Stock Purchase Agreement" means a written document, the
form(s) of which shall be approved from time to time by the Administrator,
reflecting the terms of a Stock Purchase Right granted under the Plan and
includes any documents attached to such agreement.

      (ff) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act, as
amended from time to time, or any successor provision.

      (gg) "Share" means a share of the Common Stock, as adjusted in accordance
with Section 14 of the Plan.

      (hh) "Stock Exchange" means any stock exchange or consolidated stock price
reporting system on which prices for the Common Stock are quoted at any given
time.

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

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

      (kk) "Ten Percent Holder" means a person who 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.

      3. Stock Subject to the Plan. Subject to the provisions of Section 14 of
the Plan, the maximum aggregate number of Shares that may be sold under the Plan
is 17,416,137 Shares of Common Stock, plus an annual increase on the first day
of the Company's fiscal year beginning in 2005 equal to the lesser of (i)
2,500,000 Shares, (ii) five percent (5%) of the Shares outstanding on the last
day of the immediately preceding fiscal year, or (iii) such lesser number of
Shares as the Board shall determine. The Shares may be authorized, but unissued,
or reacquired Common Stock. If an award should expire or become unexercisable
for any reason without having been exercised in full, or is surrendered pursuant
to an Option Exchange Program, the unpurchased Shares that were subject thereto
shall, unless the Plan shall have been terminated, become available for future
grant under the Plan. In addition, any Shares of Common Stock which are retained
by the Company upon exercise of an Option or Stock Purchase Right in order to
satisfy the exercise or purchase price for such Option or Stock Purchase Right
or any withholding taxes due with respect to such exercise or purchase shall be
treated as not issued and shall continue to be available under the Plan. Shares
issued under the Plan and later repurchased by the Company pursuant to any
repurchase right which the Company may have shall not be available for future
grant under the Plan.

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      4. Administration of the Plan.

            (a) General. The Plan shall be administered by the Board or a
Committee, or a combination thereof, as determined by the Board. The Plan may be
administered by different administrative bodies with respect to different
classes of Participants and, if permitted by the Applicable Laws, the Board may
authorize one or more officers to make awards under the Plan.

            (b) Committee Composition. If a Committee has been appointed
pursuant to this Section 4, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board. From time to time the
Board may increase the size of any Committee and appoint additional members
thereof, remove members (with or without cause) and appoint new members in
substitution therefor, fill vacancies (however caused) and remove all members of
a Committee and thereafter directly administer the Plan, all to the extent
permitted by the Applicable Laws and, in the case of a Committee administering
the Plan in accordance with the requirements of Rule 16b-3 or Section 162(m) of
the Code, to the extent permitted or required by such provisions.

            (c) 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, the Administrator shall have the authority, in its
discretion:

                  (i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(p) of the Plan;

                  (ii) to select the Employees and Consultants to whom Options
and Stock Purchase Rights may from time to time be granted;

                  (iii) to determine whether and to what extent Options and
Stock Purchase Rights are granted;

                  (iv) to determine the number of Shares of Common Stock to be
covered by each award granted;

                  (v) to approve the form(s) of agreement(s) used under the
Plan;

                  (vi) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder, which terms and
conditions include but are not limited to the exercise or purchase 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,
Optioned Stock, Stock Purchase Right or Restricted Stock, based in each case on
such factors as the Administrator, in its sole discretion, shall determine;

                  (vii) to determine whether and under what circumstances an
Option may be settled in cash under Section 10(f) instead of Common Stock;

                  (viii) to implement an Option Exchange Program on such terms
and conditions as the Administrator in its discretion deems appropriate;
provided however that no amendment or adjustment to an Option that would
materially and adversely affect the rights of any Optionee shall be made without
the prior

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written consent of the Optionee;

                  (ix) to adjust the vesting of an award held by an Employee or
Consultant as a result of a change in the terms and conditions under which such
person is providing services to the Company;

                  () to construe and interpret the terms of the Plan and awards
granted under the Plan, which constructions, interpretations and decisions shall
be final and binding on all Participants; and

                  xi) in order to fulfill the purposes of the Plan and without
amending the Plan, to modify grants of Options or Stock Purchase Rights to
Participants who are foreign nationals or employed outside of the United States
in order to recognize differences in local law, tax policies or customs.

      5. Eligibility.

            (a) Recipients of Grants. Nonstatutory Stock Options and Stock
Purchase Rights may be granted to Employees and Consultants. Incentive Stock
Options may be granted only to Employees, provided that Employees of Affiliates
shall not be eligible to receive Incentive Stock Options.

            (b) Type of Option. Each Option shall be designated in the Option
Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.

            (c) ISO $100,000 Limitation. Notwithstanding any designation under
Section 5(b), to the extent that the aggregate Fair Market Value of Shares with
respect to which Options designated as Incentive Stock Options are exercisable
for the first time by any Optionee during any calendar year (under all plans of
the Company or any Parent or Subsidiary) exceeds $100,000, such excess Options
shall be treated as Nonstatutory Stock Options. For purposes of this Section
5(c), Incentive Stock Options shall be taken into account in the order in which
they were granted, and the Fair Market Value of the Shares subject to an
Incentive Stock Option shall be determined as of the date of the grant of such
Option.

            (d) No Employment Rights. The Plan shall not confer upon any
Participant any right with respect to continuation of an employment or
consulting relationship with the Company, nor shall it interfere in any way with
such Participant's right or the Company's right to terminate his or her
employment or consulting relationship at any time, with or without cause.

      6. Term of Plan. The Plan shall become effective upon its adoption by
the Board of Directors. It shall continue in effect for a term of ten (10) years
unless sooner terminated under Section 15 of the Plan.

      7. Term of Option. The term of each Option shall be the term stated in
the Option Agreement; provided that the term shall be no more than ten (10)
years from the date of grant thereof or such shorter term as may be provided in
the Option Agreement and provided further that, in the case of an Incentive
Stock Option granted to a person who at the time of such grant is a Ten Percent
Holder, the term of the Option shall be five (5) years from the date of grant
thereof or such shorter term as may be provided in the Option Agreement.

      8. Limitation on Grants to Employees. Subject to adjustment as provided
in Section 14 below, the maximum number of Shares which may be subject to
Options and Stock Purchase Rights granted to any one Employee under this Plan
for any fiscal year of the Company shall be 2,500,000.

      9. Option Exercise Price and Consideration.

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            (a) Exercise Price. The per Share exercise price for the Shares to
be issued pursuant to exercise of an Option shall be such price as is determined
by the Administrator and set forth in the Option Agreement, 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 is a
Ten Percent Holder, the per Share exercise price shall be no less than 110% of
the Fair Market Value per Share on the date of grant; or

                        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

                        () granted prior to the date, if any, on which the
Common Stock becomes a Listed Security to a person who is at the time of grant
is a Ten Percent Holder, the per Share exercise price shall be no less than 110%
of the Fair Market Value per Share on the date of grant if required by the
Applicable Laws and, if not so required, shall be such price as is determined by
the Administrator;

                        (B) granted to a person who, at the time of the grant of
such Option, is a Named Executive of the Company, the per share Exercise Price
shall be no less than 100% of the Fair Market Value on the date of grant if such
Option is intended to qualify as performance-based compensation under Section
162(m) of the Code and if not so intended shall be such price as is determined
by the Administrator; or

                        (C) granted prior to the date, if any, on which the
Common Stock becomes a Listed Security to any person other than a Named
Executive or a Ten Percent Holder, the per Share exercise price shall be no less
than 85% of the Fair Market Value per Share on the date of grant if required by
Applicable Law and, if not so required, shall be such price as is determined by
the Administrator.

                  (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) Permissible Consideration. The consideration to be paid for the
Shares to be issued upon exercise of an Option, including the method of payment,
shall be determined by the Administrator (and, in the case of an Incentive Stock
Option, shall be determined at the time of grant) and may consist entirely of
(1) cash; (2) check; (3) delivery of Optionee's promissory note with such
recourse, interest, security and redemption provisions as the Administrator
determines to be appropriate (subject to the provisions of Section 153 of the
Delaware General Corporation Law); (4) cancellation of indebtedness; (5) other
Shares that (x) in the case of Shares acquired upon exercise of an Option either
have been owned by the Optionee for more than six months on the date of
surrender (or such other period as may be required to avoid a charge to the
Company's earnings) or were not acquired, directly or indirectly, from the
Company, and (y) have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which the Option is exercised; (6)
delivery of a properly executed exercise notice together with such other
documentation as the Administrator and the broker, if applicable, shall require
to effect exercise of the Option and prompt delivery to the Company of the sale
or

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loan proceeds required to pay the exercise price and any applicable withholding
taxes; (7) any combination of the foregoing methods of payment; or (8) such
other consideration and method of payment for the issuance of Shares to the
extent permitted under the Applicable Laws. 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 and the Administrator may refuse to accept a particular form of
consideration at the time of any Option exercise if, in its sole discretion,
acceptance of such form of consideration is not in the best interests of the
Company at such time.

      10. Exercise of Option.

            (a) General.

                  (i) Exercisability. Any Option granted hereunder shall be
exercisable at such times and under such conditions as determined by the
Administrator, consistent with the term of the Plan and reflected in the Option
Agreement, including vesting requirements and/or performance criteria with
respect to the Company and/or the Optionee; provided however that, if required
by the Applicable Laws, any Option granted prior to the date, if any, upon which
the Common Stock becomes a Listed Security shall become exercisable at the rate
of at least 20% per year over five years from the date the Option is granted. In
the event that any of the Shares issued upon exercise of an Option (which
exercise occurs prior to the date, if any, upon which the Common Stock becomes a
Listed Security) should be subject to a right of repurchase in the Company's
favor, such repurchase right shall, if required by the Applicable Laws, lapse at
the rate of at least 20% per year over five years from the date the Option is
granted. Notwithstanding the above, in the case of an Option granted to an
officer, Director or Consultant of the Company or any Parent, Subsidiary or
Affiliate of the Company, the Option may become fully exercisable, or a
repurchase right, if any, in favor of the Company shall lapse, at any time or
during any period established by the Administrator. In addition, following the
date, if any, upon which the Common Stock becomes a Listed Security, the
Administrator shall not, unless otherwise instructed by the Board, issue any
Options that may be exercised prior to vesting.

                  (ii) Minimum Exercise Requirements. An Option may not be
exercised for a fraction of a Share. The Administrator may require that an
Option be exercised as to a minimum number of Shares, provided that such
requirement shall not prevent an Optionee from exercising the full number of
Shares as to which the Option is then exercisable.

                  (iii) Procedures for and Results of Exercise. An Option shall
be deemed exercised when written notice of such exercise has been given to the
Company in accordance with the terms of the Option by the person entitled to
exercise the Option and the Company has received full payment for the Shares
with respect to which the Option is exercised. Full payment may, as authorized
by the Administrator, consist of any consideration and method of payment
allowable under Section 9(b) of the Plan; provided that the Administrator may
refuse to accept any form of consideration if, at the time of exercise, the
Administrator determines in its sole discretion that acceptance of such form of
consideration is not in the best interests of the Company at that time.

                  Exercise of an Option in any manner shall result in a decrease
in the number of Shares that thereafter may be 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.

                  (iv) Rights as Stockholder. Until the issuance (as evidenced
by the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such Shares,
no right to vote or receive dividends or any other rights as a stockholder shall
exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. No adjustment will be made for a dividend or other right for which the
record date is prior to the date the stock certificate is issued, except as
provided in

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Section 12 of the Plan.

            (b) Termination of Employment or Consulting Relationship. Subject to
Section 9(c), in the event of termination of an Optionee's Continuous Status as
an Employee or Consultant with the Company, such Optionee may, but only within
three (3) months (or such other period of time not less than thirty (30) days as
is determined by the Administrator, with such determination in the case of an
Incentive Stock Option being made at the time of grant of the Option) after the
date of such termination (but in no event later than the expiration date of the
term of such Option as set forth in the Option Agreement), exercise his or her
Option to the extent that the Optionee was entitled to exercise it at the date
of such termination. To the extent that the Optionee was not entitled to
exercise the Option at the date of such termination, or if the Optionee does not
exercise such Option to the extent so entitled within the time specified above,
the Option shall terminate. No termination shall be deemed to occur and this
Section 10(b) shall not apply if (i) the Optionee is a Consultant who becomes an
Employee; or (ii) the Optionee is an Employee who becomes a Consultant.

            (c) Disability of Optionee.

                  (i) Notwithstanding Section 10(b) above, in the event of
termination of an Optionee's Continuous Status as an Employee or Consultant as a
result of his or her total and permanent disability (within the meaning of
Section 22(e)(3) of the Code), Optionee may, but only within twelve (12) months
(or such other period of time as is determined by the Administrator, with such
determination in the case of an Incentive Stock Option made at the time of grant
of the Option) from the date of such termination (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise the Option to the extent otherwise entitled to exercise it
at the date of such termination. To the extent that Optionee was not entitled to
exercise the Option at the date of termination, or if Optionee does not exercise
such Option to the extent so entitled within the time specified above, the
Option shall terminate.

                  (ii) In the event of termination of an Optionee's Continuous
Status as an Employee or Consultant as a result of a disability which does not
fall within the meaning of total and permanent disability (as set forth in
Section 22(e)(3) of the Code), Optionee may, but only within twelve (12) months
(or such other period of time as is determined by the Administrator, with such
determination in the case of an Incentive Stock Option made at the time of grant
of the Option) from the date of such termination (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise the Option to the extent otherwise entitled to exercise it
at the date of such termination. However, to the extent that such Optionee fails
to exercise an Option which is an Incentive Stock Option ("ISO") (within the
meaning of Section 422 of the Code) within three (3) months of the date of such
termination, the Option will not qualify for ISO treatment under the Code. To
the extent that Optionee was not entitled to exercise the Option at the date of
termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified above, the Option shall terminate.

            (d) Death of Optionee. In the event of the death of an Optionee
during the period of Continuous Status as an Employee or Consultant since the
date of grant of the Option, or within thirty (30) days following termination of
Optionee's Continuous Status as an Employee or Consultant, the Option may be
exercised, at any time within twelve (12) months (or such other period of time
as is determined by the Administrator, with such determination in the case of an
Incentive Stock Option made at the time of grant of the Option) following the
date of death (but in no event later than the expiration date of the term of
such Option as set forth in the Option Agreement), by Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or inheritance,
but only to the extent of the right to exercise that had accrued at the date of
death or, if earlier, the date of termination of Optionee's Continuous Status as
an Employee or Consultant. To the extent that Optionee was not entitled to
exercise the Option at the date of death or termination, as the case may be, or
if person entitled to exercise the Option does not exercise such Option to the
extent so entitled within the time specified above, the Option shall terminate.

            (e) Extension of Exercise Period. The Administrator shall have full
power and authority to extend the period of time for which an Option is to
remain exercisable following termination of an Optionee's Continuous Service
Status from the periods set forth in Sections 10(b), 10(c) and 10(d) above or in
the Option Agreement to

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such greater time as the Administrator shall deem appropriate, provided that in
no event shall an Option be exercisable later than the date of expiration of the
term of the Option as set forth in the Option Agreement.

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

      11. Stock Purchase Rights.

            (a) Rights to Purchase. When the Administrator determines that it
will offer Stock Purchase Rights under the Plan, it shall advise the offeree in
writing 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. In the case of a Stock Purchase Right granted prior to the date, if any,
on which the Common Stock becomes a Listed Security and if required by the
Applicable Laws at such time, the purchase price of Shares subject to such Stock
Purchase Rights shall not be less than 85% of the Fair Market Value of the
Shares as of the date of the offer, or, in the case of a Ten Percent Holder, the
price shall not be less than 100% of the Fair Market Value of the Shares as of
the date of the offer. If the Applicable Laws do not impose the requirements set
forth in the preceding sentence and with respect to any Stock Purchase Rights
granted after the date, if any, on which the Common Stock becomes a Listed
Security, the purchase price of Shares subject to Stock Purchase Rights shall be
as determined by the Administrator. The offer to purchase Shares subject to
Stock Purchase Rights 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 employment 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 purchase 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; provided however that with respect to a Stock
Purchase Right granted prior to the date, if any, on which the Common Stock
becomes a Listed Security to a purchaser who is not an officer, Director or
Consultant of the Company or of any Parent or Subsidiary of the Company, it
shall lapse at a minimum rate of 20% per year if required by the Applicable
Laws.

            (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. In
addition, the provisions of Restricted Stock Purchase Agreements need not be the
same with respect to each purchaser.

            (d) Rights as a Stockholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will 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 14
of the Plan.

      12. Taxes.

            (a) As a condition of the exercise of an Option or Stock Purchase
Right granted under the Plan, the Participant (or in the case of the
Participant's death, the person exercising the Option or Stock Purchase Right)
shall make such arrangements as the Administrator may require for the
satisfaction of any applicable federal, state, local or foreign withholding tax
obligations that may arise in connection with the exercise of the Option or
Stock Purchase Right and the issuance of Shares. The Company shall not be
required to issue any Shares under the Plan until such obligations are
satisfied. If the Administrator allows the withholding or surrender of Shares to
satisfy the Participant's tax withholding obligations under this Section 12
(whether pursuant to Section 12(c) or 12(d) or otherwise), the Administrator
shall not allow Shares to be withheld or surrendered in an amount that exceeds
the minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes.

<PAGE>

            (b) In the case of an Employee and in the absence of any other
arrangement, the Employee shall be deemed to have directed the Company to
withhold or collect from his or her compensation an amount sufficient to satisfy
such tax obligations from the next payroll payment otherwise payable after the
date of an exercise of the Option or Stock Purchase Right.

            (c) This Section 12(c) shall apply only after the date, if any, upon
which the Common Stock becomes a Listed Security. In the case of Participant
other than an Employee (or in the case of an Employee where the next payroll
payment is not sufficient to satisfy such tax obligations, with respect to any
remaining tax obligations), in the absence of any other arrangement and to the
extent permitted under the Applicable Laws, the Participant shall be deemed to
have elected to have the Company withhold from the Shares to be issued upon
exercise of the Option or Stock Purchase Right that number of Shares having a
Fair Market Value determined as of the applicable Tax Date (as defined below)
equal to the amount required to be withheld. For purposes of this Section 12,
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 under the
Applicable Laws (the "Tax Date").

            (d) If permitted by the Administrator, in its discretion, a
Participant may satisfy his or her tax withholding obligations upon exercise of
an Option or Stock Purchase Right by surrendering to the Company Shares that
have a Fair Market Value determined as of the applicable Tax Date equal to the
amount required to be withheld. In the case of shares previously acquired from
the Company that are surrendered under this Section 12(d), such Shares must have
been owned by the Participant for more than six (6) months on the date of
surrender.

            (e) Any election or deemed election by a Participant to have Shares
withheld to satisfy tax withholding obligations under Section 12(c) or (d) above
shall be irrevocable as to the particular Shares as to which the election is
made and shall be subject to the consent or disapproval of the Administrator.
Any election by a Participant under Section 12(d) above must be made on or prior
to the applicable Tax Date.

            (f) In the event an election to have Shares withheld is made by a
Participant and the Tax Date is deferred under Section 83 of the Code because no
election is filed under Section 83(b) of the Code, the Participant shall receive
the full number of Shares with respect to which the Option or Stock Purchase
Right is exercised but such Participant shall be unconditionally obligated to
tender back to the Company the proper number of Shares on the Tax Date.

      13. Non-Transferability of Options and Stock Purchase Rights. 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; provided that, after the date, if any, upon which the
Common Stock becomes a Listed Security, the Administrator may in its discretion
grant transferable Nonstatutory Stock Options pursuant to Option Agreements
specifying (i) the manner in which such Nonstatutory Stock Options are
transferable and (ii) that any such transfer shall be subject to the Applicable
Laws. The Administrator may grant transferable Nonstatutory Stock Options as
provided for in the previous sentence prior to the date, if any, upon which the
Company's Common Stock becomes a Listed Security if permitted under the
Applicable Laws. The designation of a beneficiary by an Optionee will not
constitute a transfer. An Option or Stock Purchase Right may be exercised,
during the lifetime of the holder of Option or Stock Purchase Right, only by
such holder or a transferee permitted by this Section 13.

      14. Adjustments Upon Changes in Capitalization, Merger or Certain Other
Transactions.

            (a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of Shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, the numbers of Shares set forth
in Sections 3(a)(i) and 8 above, and the number of Shares of Common Stock that
have been authorized for issuance under the Plan but as to which no Options or
Stock Purchase Rights have yet been granted or that 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,
recapitalization 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; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been
"effected without receipt of

<PAGE>

consideration." Such adjustment shall be made by the Administrator, 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 dissolution or
liquidation of the Company, each Option and Stock Purchase Right will terminate
immediately prior to the consummation of such action, unless otherwise
determined by the Administrator.

            (c) Corporate Transaction. In the event of a Corporate Transaction,
each outstanding Option or Stock Purchase Right shall be assumed or an
equivalent option or right shall be substituted by such successor corporation or
a parent or subsidiary of such successor corporation (the "Successor
Corporation"), unless the Successor Corporation does not agree to assume the
award or to substitute an equivalent option or right, in which case such Option
or Stock Purchase Right shall terminate upon the consummation of the
transaction.

            Notwithstanding the above sentence, in the event of a Change of
Control, the vesting and exercisability of each award outstanding under the Plan
shall automatically be accelerated to the extent of 25% of the Shares then
unvested and any repurchase right of the Company with respect to Shares
previously issued upon exercise of an award shall lapse as to 25% of the Shares
then subject to such repurchase right (with such vesting, exercisability and/or
repurchase right thereafter continuing on the schedule set forth in the
applicable Stock Option or Restricted Stock Purchase Agreement) and each such
outstanding award shall either be (i) assumed or replaced with equivalent option
or right by the Successor Corporation or (ii) replaced by a cash incentive
program of the Successor Corporation based on the value of the award at the time
of the consummation of the transaction; provided that if the Successor
Corporation does not agree to assume the award or replace it with an equivalent
option, stock purchase right or cash incentive program, then the vesting and
exercisability of each outstanding award shall instead accelerate in full, with
such Options becoming vested and exercisable as to one hundred percent (100%) of
underlying Shares and any repurchase right of the Company applicable to Shares
previously issued upon exercise of an award lapsing as to one hundred percent
(100%) of the underlying Shares. Any acceleration provided for under this
Section 14(c) shall occur effective immediately prior to consummation of the
Change of Control upon such conditions as the Administrator shall determine. To
the extent that an award is not exercised prior to consummation of a Change of
Control transaction in which the award is not being assumed or replaced with an
equivalent option or stock purchase right by the Successor Corporation, such
Option or Stock Purchase Right shall terminate upon such consummation.

            For purposes of this Section 14(c), an Option or a Stock Purchase
Right shall be considered assumed, without limitation, if, at the time of
issuance of the stock or other consideration upon a Corporate Transaction or a
Change of Control, as the case may be, each holder of an Option or Stock
Purchase Right would be entitled to receive upon exercise of the award the same
number and kind of shares of stock or the same amount of property, cash or
securities as such holder would have been entitled to receive upon the
occurrence of the transaction if the holder had been, immediately prior to such
transaction, the holder of the number of Shares of Common Stock covered by the
award at such time (after giving effect to any adjustments in the number of
Shares covered by the Option or Stock Purchase Right as provided for in this
Section 14); provided that if such consideration received in the transaction is
not solely common stock of the Successor Corporation, the Administrator may,
with the consent of the Successor Corporation, provide for the consideration to
be received upon exercise of the award to be solely common stock of the
Successor Corporation equal to the Fair Market Value of the per Share
consideration received by holders of Common Stock in the transaction.

            (d) Limitation on Payments. In the event that the vesting
acceleration or lapse of a repurchase right provided for in Section 14(c) above
(x) constitutes "parachute payments" within the meaning of Section 280G of the
Code, and (y) but for this Section 14(d) would be subject to the excise tax
imposed by Section 4999 of the Code (or any corresponding provisions of state
income tax law), then such vesting acceleration or lapse of a repurchase right
shall be either

                  (A) delivered in full, or

<PAGE>

                  (B) delivered as to such lesser extent which would result in
no portion of such severance benefits being subject to excise tax under Code
Section 4999,

whichever of the foregoing amounts, taking into account the applicable federal,
state and local income taxes and the excise tax imposed by Code Section 4999,
results in the receipt by the Participant on an after-tax basis of the greater
amount of acceleration or lapse of repurchase rights benefits, notwithstanding
that all or some portion of such benefits may be taxable under Code Section
4999. Any determination required under this Section 14(d) shall be made in
writing by the Company's independent auditors, whose determination shall be
conclusive and binding for all purposes on the Company and any affected
Participant. In the event that (A) above applies, then the Participant shall be
responsible for any excise taxes imposed with respect to such benefits. In the
event that (B) above applies, then each benefit provided hereunder shall be
proportionately reduced to the extent necessary to avoid imposition of such
excise taxes.

            (e) Certain Distributions. In the event of any distribution to the
Company's stockholders of securities of any other entity or other assets (other
than dividends payable in cash or stock of the Company) without receipt of
consideration by the Company, the Administrator may, in its discretion,
appropriately adjust the price per Share of Common Stock covered by each
outstanding Option or Stock Purchase Right to reflect the effect of such
distribution.

      15. 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;
provided however that in the case of any Incentive Stock Option, the grant date
shall be the later of the date on which the Administrator makes the
determination granting such Incentive Stock Option or the date of commencement
of the Optionee's employment relationship with the Company. Notice of the
determination shall be given to each Employee or Consultant to whom an Option or
Stock Purchase Right is so granted within a reasonable time after the date of
such grant.

      16. Amendment and Termination of the Plan.

            (a) Authority to Amend or Terminate. The Board may at any time
amend, alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation (other than an adjustment pursuant to Section 14
above) shall be made that would materially and adversely affect the rights of
any Optionee or holder of Stock Purchase Rights under any outstanding grant,
without his or her consent. In addition, to the extent necessary and desirable
to comply with the Applicable Laws, the Company shall obtain stockholder
approval of any Plan amendment in such a manner and to such a degree as
required.

            (b) Effect of Amendment or Termination. No amendment or termination
of the Plan shall materially and adversely affect Options or Stock Purchase
Rights already granted, unless mutually agreed otherwise between the Optionee or
holder of the Stock Purchase Rights and the Administrator, which agreement must
be in writing and signed by the Optionee or holder and the Company.

      17. Conditions Upon Issuance of Shares. Notwithstanding any other
provision of the Plan or any agreement entered into by the Company pursuant to
the Plan, the Company shall not be obligated, and shall have no liability for
failure, to issue or deliver any Shares under the Plan unless such issuance or
delivery would comply with the Applicable Laws, with such compliance determined
by the Company in consultation with its legal counsel. As a condition to the
exercise of an Option or Stock Purchase Right, the Company may require the
person exercising the award 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 by law.

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

      19. Agreements. Options and Stock Purchase Rights shall be evidenced by
Option Agreements and Restricted Stock Purchase Agreements, respectively, in
such form(s) as the Administrator shall from time to time approve.

<PAGE>

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

      21. Information and Documents to Optionees and Purchasers. Prior to the
date, if any, upon which the Common Stock becomes a Listed Security and if
required by the Applicable Laws, the Company shall provide financial statements
at least annually to each Optionee and to each individual who acquired Shares
pursuant to the Plan, during the period such Optionee or purchaser has one or
more Options or Stock Purchase Rights outstanding, and in the case of an
individual who acquired Shares pursuant to the Plan, during the period such
individual owns such Shares. The Company shall not be required to provide such
information if the issuance of Options or Stock Purchase Rights under the Plan
is limited to key employees whose duties in connection with the Company assure
their access to equivalent information.<PAGE>

Exhibit 10.2

ON DEMAND DISTRIBUTION LIMITED
(FORMERLY ON DEMAND DISTRIBUTION PLC)

EMPLOYEE SHARE OPTION PLAN

     ADOPTED ON      2000

     AMENDED ON               2001 AND         2003

OSBORNE CLARKE

BRISTOL OFFICE

2 Temple Back East, Temple Quay, Bristol BS1 6EG
Telephone 0117 917 3000 Facsimile 0117 917 3005

LONDON OFFICE

Hillgate House, 26 Old Bailey, London EC4M 7HW
Telephone 020 7809 1000 Facsimile 020 7809 1005

THAMES VALLEY OFFICE

Apex Plaza, Forbury Road, Reading  RG1 1AX
Telephone 0118 925 2000 Facsimile 0118 925 0038

WEB SITE: www.osborneclarke.com

<PAGE>

                                    CONTENTS
<TABLE>
<S>                                                                                  <C>
1. Definitions and interpretation...............................................     1
2. Grant of Options.............................................................     2
3. Share capital limit on Options...............................................     2
4. Exercise of Options..........................................................     3
5. Manner of exercise of Options................................................     5
6. Release of Options...........................................................     6
7. The re-grant and re-pricing  of Options......................................     6
8. Cash equivalent..............................................................     6
9. Adjustment of Options........................................................     7
10. Administration and amendment................................................     7
11. Taxation....................................................................     8
12. General.....................................................................     9
</TABLE>

<PAGE>

                   RULES OF THE ON DEMAND DISTRIBUTION LIMITED
                           EMPLOYEE SHARE OPTION PLAN

T.        Definitions and interpretation

1.                      In the Plan, unless the context otherwise requires, the
      following words have the following meanings:

         "THE BOARD"               the board of directors of the Company or
                               a duly authorised committee of the same;

         "THE COMPANY"             On Demand Distribution Limited (formerly On
                               Demand Distribution plc);

         "CONTROL"                 the meaning contained in Section 840, Taxes
                               Act;

         "DATE OF GRANT"           the date upon which the Board resolves to
                               grant an Option pursuant to rule 2.2;

         "DIRECTOR"                any non-employee director of a Group Company;

         "EMPLOYEE"                any permanent employee of a Group Company;

         "EMPLOYEES' SHARE         the meaning contained in Section 743,
    SCHEME"                    Companies Act 1985;

         "THE EXERCISE PRICE"      the amount payable per Share on the exercise
                               of an Option which amount shall be determined
                               by the Board but shall not be less than the
                               par value of a Share;

         "GROUP"                   the group of companies comprising the Company
                               and any Subsidiary or parent company;

         "GROUP COMPANY"           the Company and any other company within the
                               Group;

         "LISTING"                 the listing of any part of the
                               Ordinary Share Capital on the Official List of
                               the London Stock Exchange or its admission to AIM
                               or to any other recognised investment exchange as
                               defined in section 285, Financial Services and
                               Markets Act 2000;

         "MARKET VALUE"            the market value of a Share as determined by
                               the Board;

         "OPTION"                  a right to acquire Shares granted pursuant to
                               this Plan;

         "OPTION AGREEMENT"        an agreement between the Company and the
                               Option Holder which shall effect the grant of the
                               Option according to rule 2.3;

         "OPTION HOLDER"           a person to whom an Option has been granted
                               under the Plan or, where the context permits, the
                               legal personal representatives of such person;

         "ORDINARY SHARE           shares comprising the ordinary share capital
    CAPITAL"                   of the Company as defined in section 832(1),
                               Taxes Act;

         "THE PLAN"                this plan being the On Demand Distribution
                               Limited

                                       1
<PAGE>
                               Employee Share Option Plan approved by a
                               resolution of the Board dated - 2000 or as
                               subsequently amended in accordance with rule 10;

         "RULES"                   these rules being the rules of the Plan;

         "SALE"                means the following:

                               (a) the transfer of an interest (within the
                                   meaning of Schedule 13, Part 1 and section
                                   324, Companies Act 1985) in the Shares
                                   conferring in aggregate more than 50% of the
                                   total voting rights conferred by all the
                                   Shares for the time being in issue or, at the
                                   discretion of the Board, otherwise by which
                                   there is a change of Control of the Company;
                                   or

                               (b) the completion of an agreement whereby any
                                   person, firm or company becomes bound to
                                   purchase the whole of the Company's
                                   undertaking, business and assets;

         "SHARES"                  ordinary shares in the capital of the Company
                               (or any shares representing them);

         "SUBSIDIARY"              a company wheresoever incorporated which for
                               the time being is under the Control of the
                               Company;

         "TAX LIABILITY"           as defined in rule 11

2.                In this Plan, unless the context otherwise requires:

      a.                a reference to a statute or statutory provision includes
            any statute or statutory provision which modifies, consolidates,
            re-enacts or supersedes it; and

      b.                words in the singular include the plural and vice versa
            and words in a specified gender include any other gender.

U.          Grant of Options

1.                      Any person who is an Employee or Director at the
      relevant date will be eligible to be granted Options under this Plan.

2.                      Subject to the limit contained in rule 3 and all other
      provisions of these Rules, the Board may grant Options on any date to such
      Employees or Directors as it in its discretion determines.

3.                      The grant of an Option shall be effected by an Option
      Agreement between the Company and the Option Holder in a form determined
      by the Board in compliance with these Rules. The Option Agreement shall be
      executed as a deed, contract or otherwise as the Board may determine.

V.          Share capital limit on Options

No Option may be granted on any date if the number of Shares to be issued on its
exercise in full, when aggregated with the number of Shares issued, or remaining
capable of being issued, on the exercise of Options previously granted under the
Plan would exceed [ ]%

                                       2
<PAGE>

of the Ordinary Share Capital in issue on that date (as adjusted to the extent
appropriate to take account of any event affecting the Shares as is described in
rule 9).

W.          Exercise of Options

1.                      Options granted pursuant to rule 2 shall have the terms
      described in the following provisions of this rule 4 and may be exercised
      accordingly.

Term

2.                      No Option shall be exercisable after midnight on the day
      before the tenth anniversary of the date it was granted.

Exercise Price

3.                      The Exercise Price applying to each Option shall be
      determined by the Board and set out in the Option Agreement.

                               PERFORMANCE TARGETS

4.                      The Board may specify when granting an Option such
      objective conditions by way of performance targets which it considers fair
      and reasonable to be satisfied before that Option may be exercised, and in
      this respect the Board may in its discretion subsequently amend or waive
      such objective conditions if events happen which cause the Board
      reasonably to consider that it would be a fairer measure of performance so
      to amend or waive the conditions to ensure that they achieve their
      original purpose, provided that any amended conditions are no more
      difficult to achieve than those previously imposed. Any objective
      condition imposed when granting an Option shall be set out in the Option
      Agreement.

Normal exercise

5.                      Except as provided elsewhere in this rule 4, and subject
      to satisfying any objective conditions which apply to the Option pursuant
      to rule 4.4, the right to exercise an Option shall vest as follows:

      a.                according to the following vesting schedule, the terms
            of which shall be set out in the relevant Option Agreement:

<TABLE>
<CAPTION>
              DATE                                 VESTING
-------------------------------           -------------------------
<S>                                       <C>
[12] months after Date of Grant           -% of Shares under Option

[24] months after Date of Grant           -% of Shares under Option

[36] months after Date of Grant           -% of Shares under Option
</TABLE>

      b.                or, alternatively, in any particular case the Board may
            in its discretion determine that a different vesting schedule shall
            apply to a particular Option, in which case the terms of the
            different vesting schedule shall be set out in the relevant Option
            Agreement.

6.                      For the purposes of any vesting schedule as described
      above, the phrase "Shares under Option" shall refer to the total number of
      Shares under Option at the Date of Grant of the relevant Option.

Sale

7.                      On the occurrence of a Sale (provided that such event is
      not implemented in accordance with a reorganisation which creates a new
      holding company for the Company which has the same (or substantially the
      same) shareholders holding the same (or substantially the same)

                                       3
<PAGE>

      proportionate shareholdings as the shareholders of the Company immediately
      before such event), accelerated vesting of the right to exercise Options
      shall apply so that, notwithstanding rule 4.5, an Option Holder may
      exercise any subsisting Option of his in respect of all the Shares under
      Option (both vested and unvested) during the period of 3 months beginning
      with unconditional completion of the Sale (or, if the Board permits,
      beginning with the date falling immediately prior to such date), after
      which, unless the Option Holder has released his Option according to rule
      6, to the extent unexercised the Option shall lapse.

Listing

8.                      On the occurrence of a Listing, accelerated vesting of
      the right to exercise Options shall not apply and accordingly vesting of
      the right to exercise shall continue to be determined according to rule
      4.5 and the other provisions of this rule 4.

                                 EARLY EXERCISE

9.                      Where an Option Holder ceases to hold any office or
      employment with a Group Company by reason of:

      a.                injury, disability or ill-health; or

      b.                redundancy (within the meaning of the Employment Rights
            Act 1996 or, where relevant, any equivalent non-UK law); or

      c.                retirement at the age at which he is bound to retire
            under his contract of employment, or early retirement taken with the
            consent of the relevant Group Company; or

      d.                a subsidiary ceasing to be under the Control of the
            Company, or a business or part of a business being transferred to a
            company which the Company does not Control

         the unvested portion of any Option of his then subsisting shall lapse
      and the vested portion of such Option shall remain exercisable during the
      period of 6 months after the date of such cessation (or such longer period
      as the Board may allow) after which, to the extent unexercised such vested
      portion of the Option shall lapse.

         Exercise on death

10.                     Where an Option Holder dies the unvested portion of any
      Option of his then subsisting shall lapse and the vested portion of such
      Option shall remain exercisable by his personal representatives during the
      period of 12 months after the date of such cessation (or such longer
      period as the Board may allow) after which, to the extent unexercised such
      vested portion of the Option shall lapse.

                             DISCRETIONARY EXERCISE

11.                     Where an Option Holder ceases to hold any office or
      employment with a Group Company in circumstances different to those
      provided for in rules 4.9 and 4.10, any subsisting Option of his shall
      lapse both as to the vested and the unvested portion, except that the
      Board may in its absolute discretion determine that, notwithstanding rule
      4.5 or any other provisions of these Rules, the Option Holder may exercise
      such Option (or such portion of it as the Board may specify) during the
      period ending 6 months after the date of such cessation (or such lesser
      period as the Board may specify) after which, to the extent unexercised
      the Option shall lapse.

                                 RECONSTRUCTION

12.                     If under Section 425, Companies Act 1985 the Court
      sanctions a compromise or arrangement proposed for the purposes of or in
      connection with a

                                       4
<PAGE>

      scheme for the reconstruction of the Company or its amalgamation with any
      other company or companies, accelerated vesting of the right to exercise
      Options shall apply so that, notwithstanding rule 4.5, the Option Holder
      may exercise any subsisting Option of his in respect of all the Shares
      under Option within the period of 3 months beginning with when the Court
      sanctions the compromise or arrangement, after which, unless the Option
      Holder has released his Option according to rule 6, to the extent
      unexercised the Option shall lapse.

                                   WINDING-UP

13.                     If notice is duly given to members of a resolution at a
      general meeting for the voluntary winding-up of the Company, except for
      the purposes of reconstruction or amalgamation, accelerated vesting of the
      right to exercise Options shall apply so that, notwithstanding rule 4.5,
      an Option Holder may exercise any subsisting Option of his in respect of
      all the Shares under Option (but so that any exercise under this rule
      shall be conditional upon such resolution being passed) at any time after
      the notice is given until the resolution is duly passed or defeated or the
      general meeting adjourned sine die, whichever shall first occur. If such
      resolution is passed an Option shall, to the extent unexercised, lapse.

Transferability

14.                     Save at the discretion of the Board, an Option may not
      be transferred, assigned or charged and any purported transfer, assignment
      or charge shall cause the Option to lapse.

                                LAPSE OF OPTIONS

15.                     As well as in the circumstances provided elsewhere in
      these rules, an Option shall lapse in any of the following additional
      circumstances:

      a.                the tenth anniversary of the Date of Grant;

      b.                the commencement of any liquidation or winding-up of the
            Company (otherwise than in connection with a compromise or
            arrangement as referred to in rule 4.12 and other than a voluntary
            winding-up as referred to in rule 4.13);

      c.                at the conclusion of a period when any person becomes
            bound or entitled to acquire shares in the Company under sections
            428 to 430F, Companies Act 1985;

      d.                the Option Holder being adjudicated bankrupt.

Lock-in

16.                     In the event of the occurrence of a Listing the Board
      may determine that an Option Holder may not sell, lend, charge, grant any
      options for the purchase of or otherwise dispose of the Shares acquired on
      exercise of his Option without the prior written consent of the Company or
      the underwriters managing such Listing for 180 days (or such longer period
      as the Board may agree with the underwriters) from the effective date of
      registration of the Shares, provided that the Directors who are
      shareholders in the Company also agree to such restrictions. Any such
      terms shall be binding on the Option Holder and the Option Holder shall
      enter into an agreement with the Company accordingly.

X.                Manner of exercise of Options

1.                      An Option shall be exercised by notice in writing (in
      the form prescribed by the Board) given by the Option Holder to the
      Company in respect of all or some of the Shares comprised in the Option,
      and such notice shall be accompanied by the aggregate Exercise Price
      payable and shall be effective on the date of its receipt or deemed
      receipt by the Company according to rule 10.7. The Board shall give
      reasonable notice to an Option Holder of relevant events, including

                                       5
<PAGE>

      am imminent Sale or Listing, and in such notice shall provide to the
      Option Holder such explanation as the Board considers appropriate of the
      Option Holder's rights under the Plan and any steps that may need to be
      taken to exercise those rights. The Option Holder shall be bound to
      observe treat as confidential any commercially sensitive information
      revealed in such a notice.

2.                      As soon as reasonably practicable after the date of
      exercise of an Option according to rule 5.1 the Company shall:

      a.                issue to the Option Holder such Shares which are to be
            issued pursuant to the exercise of an Option; or

      b.                procure the transfer to the Option Holder of such Shares
            which are to be transferred pursuant to the exercise of an Option

      and cause to be registered in his name the number of Shares specified in
      the notice of exercise.

3.                      An Option may only be exercised in respect of a whole
      number of Shares, not a fraction of a Share.

4.                      When an Option is exercised only in part, the balance
      shall remain exercisable on the same terms as originally applied to the
      whole Option and an endorsement to that effect shall be noted on the
      relevant Option Agreement as soon as reasonably practicable after the
      partial exercise, and a revised option certificate shall be issued to the
      Option Holder accordingly.

5.                      Save for any right determined by reference to a date
      preceding the date upon which Shares are issued, Shares issued upon the
      exercise of an Option shall rank equally with the Shares then in issue.
      Shares transferred upon the exercise of an Option will be transferred
      without the benefit of any rights attaching to them by reference to a
      record date preceding the date of exercise.

6.                      An Option Holder to whom Shares are issued on the
      exercise of an Option shall be bound by the Company's articles of
      association as they apply to such Shares.

Y.          Release of Options

      If a company ("the Acquiring Company") obtains Control of the Company as a
      result of a Sale the Option Holder may, by an agreement in writing with
      the Acquiring Company, release his Option in consideration of the grant to
      him of an equivalent right over shares in the Acquiring Company. In any
      such event rule 4.5 shall not apply to trigger the exercise of Options on
      the occurrence of the Sale.

Z.          The re-grant and re-pricing of Options

      The Board may, with the consent in writing of the affected Option Holder,
      make arrangements for and implement:

      a.                the cancellation of any Options held by him and the
            grant in substitution therefor of new Options granted under the Plan
            over such numbers of Shares and at such Exercise Prices as may be
            agreed between the Board and the Option Holder;

      b.                the re-pricing of any Option held by him at such new
            Exercise Price and with such other new terms as may be agreed
            between the Board and the Option Holder.

AA.         Cash equivalent

1.                      Where an Option has been exercised by an Option Holder
      in respect of any number of Shares, and those Shares have not yet been
      allotted or transferred to him in accordance with 5.2, the Board may
      determine that, in substitution for his right to acquire such number of
      the Shares as the Board may

                                       6
<PAGE>

      decide (but in full and final satisfaction of his said right), the Option
      Holder shall be paid by way of additional emoluments a sum equal to the
      cash equivalent of that number of Shares.

2.                      For the purposes of this rule 8, the cash equivalent of
      any Shares is the amount by which the aggregate Market Value of those
      Shares exceeds the price at which such Shares may be acquired on the
      exercise of the Option.

3.                      Subject to rule 8.4, as soon as reasonably practicable
      after a determination has been made under rule 8.1 above that an Option
      Holder shall be paid a sum in substitution for his right to acquire any
      number of Shares:

      a.                the Company shall pay to him or procure the payment to
            him of that sum in cash; and

      b.                if he has already paid the Company the Exercise Price
            for those Shares, the Company shall return to him the amount so paid
            by him.

4.                      If the Board in its discretion so decides:

      a.                the whole or part of the sum payable under rule 8.3(a)
            shall, instead of being paid to the Option Holder in cash, be
            applied on his behalf in subscribing Shares in the Company at a
            price per Share equal to the Market Value by reference to which the
            cash equivalent is calculated, or in purchasing such Shares, or
            partly in one way and partly in the other; and

      b.                the Company shall allot to him (or his nominee) or
            procure the transfer to him (or his nominee) of the Shares so
            subscribed or purchased.

5.                      There shall be made from any payment under this rule 8
      such deductions (on account of tax or similar liabilities) as may be
      required by law or as the Board may reasonably consider to be necessary or
      desirable.

BB.         Adjustment of Options

1.                      The number or amount of Shares that are the subject of
      an Option and/or the Exercise Price may be adjusted in such manner as the
      Board considers to be fair and reasonable upon the occurrence of any
      capitalisation issue or offer by way of rights (including an open offer)
      or upon any sub-division, reduction or consolidation or other variation of
      all or any part of the Ordinary Share Capital after the date on which the
      Option is granted.

2.                      An adjustment under rule 9.1 may reduce the Exercise
      Price applying to an Option to less than the nominal value of a Share but
      only if and to the extent that:

      a.                the Board is authorised both:

            (1)               to capitalise from the reserves of the Company a
                  sum equal to the amount by which the nominal value of the
                  Shares which are allotted pursuant to the exercise of an
                  Option exceeds the adjusted Exercise Price; and

            (2)               to apply that sum in paying up that amount on
                  those Shares; and

      b.                on the allotment of the Shares to be subscribed on the
            exercise of an Option, the Board proceeds to capitalise the sum
            referred to in sub-rule (i) above and applies that sum as described
            in sub-rule (ii) above.

CC.         Administration and amendment

1.                      The Plan shall be administered and implemented by the
      Board and the Board's decision on all disputes shall be final.

                                       7
<PAGE>

2.                No decision by the Board shall be invalidated or questioned on
      the grounds that any Director had a direct personal interest in such
      decision or in the exercising of any power under this Plan.

3.                Subject to rules 10.4 and 10.5, the Board may at any time
      amend these Rules in any way it thinks fit provided that, except with the
      approval of the shareholders of the Company in general meeting, no
      amendment to the material advantage of Option Holders (present or future)
      may be made.

4.                No amendment may be made to these rules to the extent to which
      it would abrogate or adversely affect the subsisting rights of Option
      Holders as a class as regards Options granted prior to the amendment being
      made unless such amendment has been approved by an extraordinary
      resolution of the Option Holders as a class passed on a 75% majority
      basis, for which purpose an Option Holder shall be regarded as holding the
      number of Shares comprised in Options granted to him remaining capable of
      being exercised. An extraordinary resolution of a meeting of Option
      Holders held in accordance with this rule shall have the power to sanction
      any scheme, compromise or arrangement affecting Options and shall be
      binding on all Option Holders.

5.                The requirement to obtain the approval of shareholders in
      general meeting in rule 10.3 shall not apply to any amendment which the
      Board considers is necessary or desirable in order to:

      a.                comply with or take account of the provisions of any
            proposed or existing legislation or take account of any changes to
            legislation; or

      b.                obtain or maintain favourable taxation treatment of any
            Participating Company or any Option Holder

         provided that any such amendment does not affect the basic principles
of the Plan.

6.                The Board shall have power from time to time to make and vary
      such regulations (not being inconsistent with these Rules) for the
      implementation and administration of this Plan as it may think fit. In the
      exercise of the power, the Board may correct any defect, omission or
      inconsistency in the Plan or in the Option Agreement relating to a
      particular Option in a manner and to the extent it shall deem necessary or
      expedient to make the Plan fully effective.

7.                Any notice or other written communication under or in
      connection with the Plan may be given by the Company to the Option Holder
      or by the Option Holder to the Company (c/o the Secretary to the Company)
      either by hand, by post, by facsimile transmission or by e-mail. Notices
      shall be deemed given at the time delivered personally by hand, 5 days
      after posting pre-paid if posted within any country or 15 days if posted
      internationally, and when receipt is acknowledged if sent by facsimile
      transmission or e-mail.

DD.         Taxation

      The Option Holder shall be accountable for any income tax or (subject to
      the following provisions) national insurance liability (or their
      equivalent in any non-UK jurisdiction) to which he may become subject in
      respect of any assessable income deriving from the exercise or other
      dealing in the Option. In respect of such assessable income the Option
      Holder shall indemnify the Company and (at the direction of the Company)
      any Subsidiary which is or may be treated as the employer of the Option
      Holder in respect of the following (together, "the Tax Liability"):

      a.                any income tax liability which falls to be paid to the
            Inland Revenue by the Company (or the relevant employing Subsidiary)
            under the PAYE system as it applies to income tax under Chapter V,
            Taxes Act and the PAYE regulations referred to in it (or the
            equivalent in any

                                        8
<PAGE>

                  foreign jurisdiction); and

      b.                any national insurance liability which falls to be paid
            to the Inland Revenue by the Company (or the relevant employing
            Subsidiary) under the modified PAYE system as it applies for
            national insurance purposes under the Social Security Contributions
            and Benefits Act 1992 and regulations referred to in it (or the
            equivalent in any foreign jurisdiction) such national insurance
            liability being the aggregate of:

            (1)               all the primary Class 1 national insurance
                  contributions; and

            (2)               such proportion of the secondary Class 1 national
                  insurance contributions as shall be set out in the Option
                  Agreement notifying the Option Holder of the grant of the
                  option as referred to in rule 2.3.

2.                Pursuant to the indemnity referred to in clause 11.1, the
      Option Holder shall make such arrangements as the Company requires to meet
      the Tax Liability, including at the direction of the Company any of the
      following:

      a.                making a cash payment of an appropriate amount to the
            relevant Group Company;

      b.                appointing the Company as agent and/or attorney for the
            sale of Shares and authorising the payment to the relevant Group
            Company of the appropriate amount out of the net proceeds of sale of
            the Shares;

      c.                entering into an election whereby the employer's
            liability for secondary national insurance contributions is
            transferred to the Option Holder on terms set out in the election
            and approved by the Inland Revenue.

EE.         General

1.                The Company shall at all times keep available sufficient
      authorised Shares to satisfy the exercise to the full extent still
      possible of any Options (excluding those the exercise of which is to be
      satisfied by the transfer of already issued Shares).

2.                In relation to an Option Holder who is an Employee, the terms
      of his employment shall not be affected in any way by his participation in
      the Plan which shall not form part of such terms (either expressly or
      impliedly) nor in any way entitle him to take into account such
      participation in calculating any compensation or damages on the
      termination of his employment (for whatever reason, and whether lawfully
      or unlawfully) which might otherwise be payable to him.

3.                In relation to an Option Holder who is a Director, nothing in
      this Plan shall confer upon such person any employment rights with the
      Company, nor shall the terms of his office be affected in any way by his
      participation in the Plan which shall not form part of such terms (either
      expressly or impliedly) nor in any way entitle him to take into account
      such participation in calculating any compensation or damages on the
      termination of his such office (for whatever reason, and whether lawfully
      or unlawfully) which might otherwise be payable to him

4.                Subject to applicable law, the Company may enter into
      arrangements (including the payment of money or making of loans) with any
      person on such terms as it thinks fit whereby, on exercise of an Option,
      already issued Shares may be transferred to an Option Holder in
      satisfaction of his rights under this Plan.

5.                This Plan shall be governed by and construed in accordance
      with the laws of England.

                                       9

<PAGE>

                                  GRANT LETTER

                      [to be typed onto Company letterhead]

Dear -

      ON DEMAND DISTRIBUTION LIMITED EMPLOYEE SHARE OPTION PLAN

      I am pleased to inform you that the Company has decided to grant you an
option over - Ordinary Shares in the capital of the Company. This grant will be
made in accordance with the Rules of the On Demand Distribution Employee Share
Option Plan ("the Plan Rules").

      For the grant of the option to take effect you are required to enter into
an option agreement with the Company. Reflecting the provisions in the Plan
Rules, this sets out your rights and obligations as an option holder. I enclose
a copy of the option agreement for you to sign and date where indicated before
returning it to the Company. You will then be issued with an option certificate
as evidence of the option grant.

      Also enclosed is an explanatory booklet which sets out the main features
of the Plan.

      When you wish to exercise your option you must do so using a form of
exercise which can be obtained on request from the Company. This will
incorporate an indemnity from you in respect of any tax withholdings that the
Group has to settle in respect of any tax, social security or equivalent
liability that you may incur on the profit or gain that you make (the Tax
Liabilities, as defined in Rule 11).

      [In order to secure the payment of the employer's secondary national
insurance, you must, as a condition of the grant taking effect, enter into an
election whereby such liability is transferred to you on terms set out in an
election, the form of which will be approved by the Inland Revenue. This will be
sent to you shortly. Upon receipt, please complete it and return it to [insert
name] as soon as possible.]

      Yours sincerely,

      ................................
      For and on behalf of
      On Demand Distribution Limited

<PAGE>

                                         OPTION AGREEMENT

            ON DEMAND DISTRIBUTION LIMITED EMPLOYEE SHARE OPTION PLAN

<TABLE>
<CAPTION>
------------------------- --------------------------- ---------------------
  NAME OF OPTION HOLDER:  ............................("OPTION HOLDER")
------------------------- --------------------------- ---------------------
<S>                       <C>                         <C>

       NUMBER OF SHARES:  ............................("THE SHARES")

------------------------- --------------------------- ---------------------

PRICE PAYABLE PER SHARE:  Pound.......................("EXERCISE PRICE")

------------------------- --------------------------- ---------------------

 DATE OF THIS AGREEMENT:  ............................("DATE OF GRANT")

------------------------- --------------------------- ---------------------
</TABLE>

      On Demand Distribution Limited ("the Company") hereby grants to the Option
Holder an option ("the Option") to purchase the Shares at the Exercise Price in
all respects subject to the terms, definitions and provisions of the On Demand
Distribution Limited Employee Share Option Plan ("the Plan") which are
incorporated in this Agreement by reference. Unless expressly indicated
otherwise, the words and terms defined in the Plan shall have the same meanings
in this Agreement

      This Agreement witnesses as follows:

Nature and term of the Option

The Option is a right to acquire the Shares at the Exercise Price according to
the Plan. It shall expire on the day before the tenth anniversary of the Date of
Grant.

FF.         Vesting and exercise of the Option

1.                [Subject to the achievement of the performance targets
      described at clause 2.3 below, the] [The] Option shall be exercisable
      during its term in accordance with the provisions of the Plan. Subject
      thereto, the follow main exercise provisions shall apply:

Vesting

2.                The right to exercise the Option shall vest according to the
      following vesting schedule:

<TABLE>
<CAPTION>
-----------------------------------------------
         DATE                      VESTING
-----------------------------------------------
<S>                           <C>
[12] months after Date of    -% of Shares under
          Grant                       Option
-----------------------------------------------
[24] months after Date of    -% of Shares under
          Grant                       Option
-----------------------------------------------
[36] months after Date oft   -% of Shares under
          Grant                       Option
-----------------------------------------------
</TABLE>

[Note: this is the normal vesting schedule as set out in rule 4.5, but at the
discretion of the Board could be different in a particular case.]

      Performance Targets

                                       2
<PAGE>

3.                [where relevant, appropriate wording to be inserted]

      Sale or Listing

4.    On the occurrence of a Sale, accelerated vesting of the right to exercise
      the Option shall apply so that, notwithstanding the vesting schedule set
      out above, the Option Holder may exercise the Option during the period of
      3 months beginning with unconditional completion of the Sale (or, if the
      Board permits, beginning with the date falling immediately prior to the
      applicable date)

5.    On the occurrence of a Listing, accelerated vesting of the right to
      exercise Options shall not apply and accordingly vesting of the right to
      exercise shall continue to be determined according to the vesting schedule
      set out above.

      Roll-over

6.    On a Sale, the Option may be rolled-over into a new Option
      over the acquiring company's shares.

GG.         Lapse of the Option

      Save in certain circumstances as specified in the Plan, on the date the
      Option Holder ceases to hold any office or employment with a Group Company
      the Option shall normally lapse.

HH.         Taxation

         The Company may be required to make a withholding for tax and/or
      social security in respect of assessable income deriving from the exercise
      of the Option or the disposal of the Shares acquired upon such exercise.
      The Option Holder shall indemnify the Company accordingly and enter into
      such arrangements to enable the Company to make such withholding.

         You shall indemnify the Company in respect of -% of the employer's
      national insurance that your employer will become liable to pay to the
      Inland Revenue[, and it is a condition of the grant of the Option that you
      enter into an election (in the form approved by the Inland Revenue)
      whereby such liability is transferred to you].

II.         Option Holder's acknowledgement and undertaking

         The Option Holder acknowledges and undertakes the following:

      (a)   nothing in this Agreement, nor in the Plan, shall confer upon the
            Option Holder any right with respect to the continuation of [his]
            [her] employment or appointment as an officer by any Group Company;

      (b)   hereby accepts the Option be subject to all of the terms and
            provisions set out in the Plan; and

      (c)   agrees to accept as binding, conclusive and final all decisions or
            interpretations made by or on behalf of the Company in respect of
            any questions arising under the Plan.

            EXECUTED AS A DEED BY:

              -----------------------           Date---------------------2000
            (signature)

             ------------------------
            (print name)

            IN THE PRESENCE OF:

                                        3

<PAGE>

                  ..........................       (witness's signature)

                  ..........................       (witness's name)

                  ..........................       (witness's address)

                  ..........................

                  ..........................       (witness's occupation)

                  NOTE: YOUR SPOUSE SHOULD NOT WITNESS YOUR SIGNATURE

                                        4

<PAGE>

                                                           Certificate No.......

                            SHARE OPTION CERTIFICATE

            ON DEMAND DISTRIBUTION LIMITED EMPLOYEE SHARE OPTION PLAN

<TABLE>
<CAPTION>
DATE OF                   EXERCISE PRICE PER          NUMBER OF SHARES
GRANT                            SHARE                  UNDER OPTION
-------                   ------------------          ----------------
<S>                       <C>                         <C>
 -                           (pound)                         -
</TABLE>

This is to certify that, pursuant to an option agreement dated - ("the Option
Agreement")

      [Name].........................................of

      [Address]........................................

      has been granted an option ("the Option") to acquire - Ordinary Shares
each in the Company ("the Shares") at the exercise price shown above under the
Rules of the On Demand Distribution Limited Employee Share Option Plan.

      The Option is granted subject to the terms of the Option Agreement, and
this certificate is evidence of the grant thereby made. A copy of the rules of
the Plan referred to in the Option Agreement is available for inspection upon
request from the Company.

      If you are in any doubt about the financial or tax consequences for you of
the grant or exercise you are advised to take independent advice.

      .......................
For and on behalf of
On Demand Distribution Limited

        THIS CERTIFICATE IS IMPORTANT AND SHOULD BE KEPT IN A SAFE PLACE

                                        5

<PAGE>

                                FORM OF EXERCISE

            ON DEMAND DISTRIBUTION LIMITED EMPLOYEE SHARE OPTION PLAN

To:   The Company Secretary
    On Demand Distribution Limited

I wish to exercise the option in respect of ........... ordinary shares
comprised in the enclosed option certificate.

I enclose a cheque for (pound)..........in favour of On Demand Distribution
Limited as payment in full of the exercise price of (pound)........per share.

I apply for the number of shares specified above and request you to arrange the
registration of them in my name subject to the memorandum and articles of
association of On Demand Distribution Limited.

I agree:

(a)   to indemnify On Demand Distribution Limited and any of its subsidiaries in
      respect of any Tax Liability (as defined in the Plan) which arises as a
      result of the exercise of the option; and

(b)   that the issue of these option shares to me shall be conditional upon my
      first making arrangements to the satisfaction of On Demand Distribution
      Limited to discharge the Tax Liability pursuant to such indemnity,
      including the giving of an appropriate power of attorney and (if required
      by the Company) entering into an election in the form approved by the
      Inland Revenue.

Signed ___________________________________________   Date ___________________

Name ________________________

Address________________________
___________________________________________

Note:

If you are signing as a personal representative you should lodge a copy of the
Grant of Probate or Letters of Administration as evidence of your appointment.
In the event of there being more than one personal representative each must sign
the form.

                                        6

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