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                                                                    EXHIBIT 10.4

                           EDEN BIOSCIENCE CORPORATION

                            2000 STOCK INCENTIVE PLAN

                               SECTION 1. PURPOSE

        The purpose of the Eden Bioscience Corporation Stock Incentive Plan (the
"Plan") is to enhance the long-term shareholder value of Eden Bioscience
Corporation, a Washington corporation (the "Company"), by offering opportunities
to selected persons to participate in the Company's growth and success, and to
encourage them to remain in the service of the Company and its Related
Corporations (as defined in Section 2) and to acquire and maintain stock
ownership in the Company.

                             SECTION 2. DEFINITIONS

        For purposes of the Plan, the following terms shall be defined as set
forth below:

        "AWARD" means a grant of Options or Stock Awards, or any combination
thereof, pursuant to the Plan.

        "BOARD" means the Board of Directors of the Company.

        "CAUSE," unless otherwise defined in an employment or services agreement
between the Company or a Related Corporation and a Participant, means
dishonesty, fraud, misconduct, unauthorized use or disclosure of confidential
information or trade secrets, or conviction or confession of a crime punishable
by law (except minor violations), in each case as determined by the Plan
Administrator, and its determination shall be conclusive and binding.

        "CODE" means the Internal Revenue Code of 1986, as amended from time to
time.

        "COMMON STOCK" means the common stock, par value $0.0025 per share, of
the Company.

        "COMPANY" means Eden Bioscience Corporation, a Washington corporation.

        "CORPORATE TRANSACTION" means either of the following events:

        (a) Consummation of any merger or consolidation of the Company with or
into another corporation or

        (b) Consummation of any sale, lease, exchange or other transfer in one
transaction or a series of related transactions of all or substantially all the
Company's outstanding securities or all or substantially all the Company's
assets;

provided, however, that a Corporation Transaction shall not include (i) a merger
of the Company

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in which the holders of shares of Common Stock immediately prior
to the merger hold at least a majority of the shares of Common Stock in the
Successor Corporation immediately after the merger; (ii) a mere reincorporation
of the Company; (iii) a transaction undertaken for the sole purpose of creating
a holding company; or (iv) a transfer of the Company's assets to a
majority-owned subsidiary corporation (as defined in Section 8) of the Company.

        "DISABILITY," unless otherwise defined by the Plan Administrator, means
a mental or physical impairment of the Participant that is expected to result in
death or that has lasted or is expected to last for a continuous period of 12
months or more and that causes the Participant to be unable, in the opinion of
the Company, to perform his or her duties for the Company or a Related
Corporation and to be engaged in any substantial gainful activity.

        "EMPLOYMENT TERMINATION DATE" has the meaning set forth in Section 7.6.

        "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

        "FAIR MARKET VALUE" means the per share value of the Common Stock as
established in good faith by the Plan Administrator, or if the Common Stock is
(a) listed on the Nasdaq National Market, the closing sales price for the Common
Stock as reported by that market for a single trading day or (b) listed on the
New York Stock Exchange or the American Stock Exchange, the closing sales price
for the Common Stock as such price is officially quoted in the composite tape of
transactions on such exchange for a single trading day. If there is no such
reported price for the Common Stock for the date in question, then such price on
the last preceding date for which such price exists shall be determinative of
Fair Market Value.

        "GOOD REASON" means the occurrence of any of the following events or
conditions and the failure of the Successor Corporation to cure such event or
condition within 30 days after receipt of written notice from the Participant:

        (a) a change in the Participant's status, title, position or
responsibilities (including reporting responsibilities) that, in the
Participant's reasonable judgment, represents a substantial reduction in the
status, title, position or responsibilities as in effect immediately prior
thereto; the assignment to the Participant of any duties or responsibilities
that, in the Participant's reasonable judgment, are materially inconsistent with
such status, title, position or responsibilities; or any removal of the
Participant from or failure to reappoint or reelect the Participant to any of
such positions, except in connection with the termination of the Participant's
employment for Cause, as a result of his or her Disability or death, or by the
Participant other than for Good Reason;

        (b) a reduction in the Participant's annual base salary;

        (c) the Successor Corporation's requiring the Participant (without the
Participant's consent) to be based at any place outside a 50-mile radius of his
or her place of employment prior to a Corporate Transaction, except for
reasonably required travel on the Successor Corporation's business that is not
materially greater than such travel requirements prior to the Corporate

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Transaction;

        (d) the Successor Corporation's failure to (i) continue in effect any
material compensation or benefit plan (or the substantial equivalent thereof) in
which the Participant was participating at the time of a Corporate Transaction,
including, but not limited to, the Plan, or (ii) provide the Participant with
compensation and benefits substantially equivalent (in terms of benefit levels
and/or reward opportunities) to those provided for under each material employee
benefit plan, program and practice as in effect immediately prior to the
Corporate Transaction;

        (e) any material breach by the Successor Corporation of its obligations
to the Participant under the Plan or any substantially equivalent plan of the
Successor Corporation; or

        (f) any purported termination of the Participant's employment or service
relationship for Cause by the Successor Corporation that is not in accordance
with the definition of Cause under the Plan.

        "GRANT DATE" means the date on which the Plan Administrator completes
the corporate action relating to the grant of an Award and all conditions
precedent to the grant have been satisfied, provided that conditions to the
exercisability or vesting of Awards shall not defer the Grant Date.

        "INCENTIVE STOCK OPTION" means an Option to purchase Common Stock
granted under Section 7 with the intention that it qualify as an "incentive
stock option" as that term is defined in Section 422 of the Code.

        "NONQUALIFIED STOCK OPTION" means an Option to purchase Common Stock
granted under Section 7 other than an Incentive Stock Option.

        "OPTION" means the right to purchase Common Stock granted under Section
7.

        "OPTION EXPIRATION DATE" has the meaning set forth in Section 7.6.

        "OPTION TERM" has the meaning set forth in Section 7.3.

        "PARTICIPANT" means (a) the person to whom an Award is granted; (b) for
a Participant who has died, the personal representative of the Participant's
estate, the person(s) to whom the Participant's rights under the Award have
passed by will or by the applicable laws of descent and distribution, or the
beneficiary designated in accordance with Section 11; or (c) the person(s) to
whom an Award has been transferred in accordance with Section 11.

        "PLAN ADMINISTRATOR" means the Board or any committee or committees
designated by the Board or any person to whom the Board has delegated authority
to administer the Plan under Section 3.1.

        "RELATED CORPORATION" means any entity that, directly or indirectly, is
in control of or is controlled by the Company.

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        "RETIREMENT" means retirement on or after the individual's normal
retirement date under the Company's 401(k) plan or other similar successor plan
applicable to salaried employees, unless otherwise defined by the Plan
Administrator from time to time for purposes of the Plan.

        "SECURITIES ACT" means the Securities Act of 1933, as amended.

        "STOCK AWARD" means an Award of shares of Common Stock or units
denominated in Common Stock granted under Section 9, the rights of ownership of
which may be subject to restrictions prescribed by the Plan Administrator.

        "SUCCESSOR CORPORATION" has the meaning set forth in Section 12.3.1.

                            SECTION 3. ADMINISTRATION

3.1     PLAN ADMINISTRATOR

        The Plan shall be administered by the Board and/or a committee or
committees (which term includes subcommittees) appointed by, and consisting of
two or more members of, the Board (a "Plan Administrator"). If and so long as
the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act,
the Board shall consider in selecting the members of any committee acting as
Plan Administrator, with respect to any persons subject or likely to become
subject to Section 16 of the Exchange Act, the provisions regarding (a) "outside
directors" as contemplated by Section 162(m) of the Code and (b) "nonemployee
directors" as contemplated by Rule 16b-3 under the Exchange Act. Notwithstanding
the foregoing, the Board may delegate the responsibility for administering the
Plan with respect to designated classes of eligible persons to different
committees consisting of two or more members of the Board, subject to such
limitations as the Board deems appropriate. Committee members shall serve for
such term as the Board may determine, subject to removal by the Board at any
time. To the extent consistent with applicable law, the Board may authorize one
or more senior executive officers of the Company to grant Awards to designated
classes of eligible persons, within the limits specifically prescribed by the
Board.

3.2     ADMINISTRATION AND INTERPRETATION BY PLAN ADMINISTRATOR

        Except for the terms and conditions explicitly set forth in the Plan,
the Plan Administrator shall have exclusive authority, in its discretion, to
determine all matters relating to Awards under the Plan, including the selection
of individuals to be granted Awards, the type of Awards, the number of shares of
Common Stock subject to an Award, all terms, conditions, restrictions and
limitations, if any, of an Award and the terms of any instrument that evidences
the Award. The Plan Administrator shall also have exclusive authority to
interpret the Plan and the terms of any instrument evidencing the Award and may
from time to time adopt and change rules and regulations of general application
for the Plan's administration. The Plan Administrator's

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interpretation of the Plan and its rules and regulations, and all actions taken
and determinations made by the Plan Administrator pursuant to the Plan, shall be
conclusive and binding on all parties involved or affected. The Plan
Administrator may delegate administrative duties to such of the Company's
officers as it so determines.

                      SECTION 4. STOCK SUBJECT TO THE PLAN

4.1     AUTHORIZED NUMBER OF SHARES

        Subject to adjustment from time to time as provided in Section 12.1, the
number of shares of Common Stock that shall be available for issuance under the
Plan shall be:

        (a) 1,500,000 shares; plus

        (b) an annual increase to be added as of the first day of the Company's
fiscal year beginning in 2002 equal to the least of (i) 1,500,000 shares and
(ii) 5% of the outstanding Common Stock of the Company as of the end of the
Company's immediately preceding fiscal year on a fully diluted basis (assuming
exercise of all outstanding Options and warrants and conversion of all
outstanding convertible preferred stock) and (iii) a lesser amount determined by
the Board; provided that any shares from any such increases in previous years
that are not actually issued shall be added to the aggregate number of shares
available for issuance under the Plan and; plus

        (c) any authorized shares (i) not issued or subject to outstanding
options under the Company's Amended and Restated 1995 Combined Incentive and
Nonqualified Stock Option Plan (the "Prior Plan") on the date the initial
registration of the Common Stock under Section 12 of the Exchange Act first
becomes effective and (ii) any shares subject to outstanding options under the
Prior Plan on such date that cease to be subject to such options (other than by
reason of exercise of the options to the extent they are exercised for vested
and nonforfeitable shares), up to an aggregate maximum of 2,824,834 shares,
which shares shall cease, as of such date, to be available for grant and
issuance under the Prior Plan, but shall be available for issuance under the
Plan.

        Shares issued under the Plan shall be drawn from authorized and unissued
shares or shares now held or subsequently acquired by the Company.

4.2     REUSE OF SHARES

        Any shares of Common Stock that have been made subject to an Award that
cease to be subject to the Award (other than by reason of exercise or settlement
of the Award to the extent it

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is exercised for or settled in vested and nonforfeitable shares) shall again be
available for issuance in connection with future grants of Awards under the
Plan. In the event shares issued under the Plan are reacquired by the Company
pursuant to any forfeiture provision or right of repurchase, such shares shall
again be available for the purposes of the Plan; provided, that the aggregate
number of shares that may be issued upon the exercise of Incentive Stock Options
shall in no event exceed the number of shares available for issuance as set
forth in Section 4.1., subject to adjustment from time to time as provided in
Section 12.1.

                             SECTION 5. ELIGIBILITY

        Awards may be granted under the Plan to those officers, directors and
employees of the Company and its Related Corporations as the Plan Administrator
from time to time selects. Awards may also be granted to consultants, agents,
advisors and independent contractors who provide services to the Company and its
Related Corporations; provided, however, that such Participants (a) are natural
persons or an alter ego entity; (b) render bona fide services that are not in
connection with the offer and sale of the Company's securities in a
capital-raising transaction; and (c) render bona fide services that do not
directly or indirectly promote or maintain a market for the Company's
securities.

                                SECTION 6. AWARDS

6.1     FORM AND GRANT OF AWARDS

        The Plan Administrator shall have the authority, in its sole discretion,
to determine the type or types of Awards to be granted under the Plan. Awards
may be granted singly or in combination.

6.2     SETTLEMENT OF AWARDS

        The Company may settle Awards through the delivery of shares of Common
Stock, the granting of replacement Awards or any combination thereof as the Plan
Administrator shall determine. Any Award settlement, including payment
deferrals, may be subject to such conditions, restrictions and contingencies as
the Plan Administrator shall determine. The Plan Administrator may permit or
require the deferral of any Award payment, subject to such rules and procedures
as it may establish, which may include provisions for the payment or crediting
of interest, or dividend equivalents, including converting such credits into
deferred stock equivalents.

6.3     ACQUIRED COMPANY AWARDS

        Notwithstanding anything in the Plan to the contrary, the Plan
Administrator may grant Awards under the Plan in substitution for awards issued
under other plans, or assume under the Plan awards issued under other plans, if
the other plans are or were plans of other acquired entities ("Acquired
Entities") (or the parent of the Acquired Entity) and the new Award is
substituted, or the old award is assumed, by reason of a merger, consolidation,
acquisition of property or stock, reorganization or liquidation (the
"Acquisition Transaction"). In the event that

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a written agreement pursuant to which the Acquisition Transaction is completed
is approved by the Board and said agreement sets forth the terms and conditions
of the substitution for or assumption of outstanding awards of the Acquired
Entity, said terms and conditions shall be deemed to be the action of the Plan
Administrator without any further action by the Plan Administrator, except as
may be required for compliance with Rule 16b-3 under the Exchange Act, and the
persons holding such awards shall be deemed to be Participants.

                          SECTION 7. AWARDS OF OPTIONS

7.1     GRANT OF OPTIONS

        The Plan Administrator is authorized under the Plan, in its sole
discretion, to issue Options as Incentive Stock Options or as Nonqualified Stock
Options, which shall be appropriately designated.

7.2     OPTION EXERCISE PRICE

        The exercise price for shares purchased under an Option shall be as
determined by the Plan Administrator, but shall not be less than 100% of the
Fair Market Value of the Common Stock on the Grant Date with respect to
Incentive Stock Options and not less than 85% of the Fair Market Value of the
Common Stock on the Grant Date with respect to Nonqualified Stock Options. For
Incentive Stock Options granted to a more than 10% shareholder, the Option
exercise price shall be as specified in Section 8.2.

7.3     TERM OF OPTIONS

        The term of each Option (the "Option Term") shall be as established by
the Plan Administrator or, if not so established, shall be ten years from the
Grant Date. For Incentive Stock Options, the Option Term shall be as specified
in Sections 8.2 and 8.4.

7.4     EXERCISE OF OPTIONS

        The Plan Administrator shall establish and set forth in each instrument
that evidences an Option the time at which, or the installments in which, the
Option shall vest and become exercisable, which provisions may be waived or
modified by the Plan Administrator at any time. The Plan Administrator may
adjust the vesting schedule of an Option held by a Participant who works less
than "full-time" as that term is defined by the Plan Administrator.

        To the extent that an Option has vested and become exercisable, the
Option may be exercised from time to time by delivery to the Company of a
written stock option exercise agreement or notice, in a form and in accordance
with procedures established by the Plan Administrator, setting forth the number
of shares with respect to which the Option is being exercised, the restrictions
imposed on the shares purchased under such exercise agreement, if any, and such
representations and agreements as may be required by the Plan Administrator,
accompanied by payment in full as described in Section 7.5. An Option may be
exercised only for whole shares and may not be exercised for less than a
reasonable number of shares at any one

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time, as determined by the Plan Administrator.

7.5     PAYMENT OF EXERCISE PRICE

        The exercise price for shares purchased under an Option shall be paid in
full to the Company by delivery of consideration equal to the product of the
Option exercise price and the number of shares purchased. Such consideration
must be paid in cash or by check (acceptable to the Plan Administrator) or,
unless the Plan Administrator in its sole discretion determines otherwise,
either at the time the Option is granted or at any time before it is exercised,
in any combination of

        (a) cash;

        (b) check (acceptable to the Plan Administrator);

        (c) tendering (either actually or, if the Common Stock is registered
under Section 12(b) or 12(g) of the Exchange Act, by attestation) shares of
Common Stock already owned by the Participant for at least six months (or any
shorter period necessary to avoid a charge to the Company's earnings for
financial reporting purposes) that on the day prior to the exercise date have a
Fair Market Value equal to the aggregate exercise price of the shares being
purchased under the Option;

        (d) if the Common Stock is registered under Section 12(b) or 12(g) of
the Exchange Act, delivery of a properly executed exercise notice, together with
irrevocable instructions to a brokerage firm designated by the Company to
deliver promptly to the Company the aggregate amount of sale or loan proceeds to
pay the Option exercise price and any withholding tax obligations that may arise
in connection with the exercise, all in accordance with the regulations of the
Federal Reserve Board; or

        (e)    such other consideration as the Plan Administrator may permit.

        In addition, to assist a Participant (including a Participant who is an
officer or a director of the Company) in acquiring shares of Common Stock
pursuant to an Award granted under the Plan, the Plan Administrator, in its sole
discretion, may authorize, either at the Grant Date or at any time before the
acquisition of Common Stock pursuant to the Award, (i) the payment by a
Participant of a full-recourse promissory note or (ii) the guarantee by the
Company of a full-recourse loan obtained by the Participant from a third party.
Subject to the foregoing, the Plan Administrator shall in its sole discretion
specify the terms of any loans or loan guarantees, including the interest rate
and terms of and security for repayment.

7.6     POST-TERMINATION EXERCISES

        The Plan Administrator shall establish and set forth in each instrument
that evidences an Option whether the Option shall continue to be exercisable,
and the terms and conditions of such exercise, if a Participant ceases to be
employed by, or to provide services to, the Company or its Related Corporations,
which provisions may be waived or modified by the Plan Administrator at

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any time. If not so established in the instrument evidencing the Option, the
Option shall be exercisable according to the following terms and conditions,
which may be waived or modified by the Plan Administrator at any time:

        (a) Any portion of an Option that is not vested and exercisable on the
date of termination of the Participant's employment or service relationship (the
"Employment Termination Date") shall expire on such date.

        (b) Any portion of an Option that is vested and exercisable on the
Employment Termination Date shall expire upon the earliest to occur of

            (i)     if the Participant's Employment Termination Date occurs for
reasons other than Cause, Retirement, Disability or death, the three-month
anniversary of such Employment Termination Date;

            (ii)    if the Participant's Employment Termination Date occurs by
reason of Retirement, Disability or death, the one-year anniversary of such
Employment Termination Date; and

            (iii)   the last day of the Option Term (the "Option Expiration
Date").

        Notwithstanding the foregoing, if the Participant dies after the
Employment Termination Date while the Option is otherwise exercisable, the
portion of the Option that is vested and exercisable on such Employment
Termination Date shall expire upon the earlier to occur of (y) the Option
Expiration Date and (z) the first anniversary of the date of death, unless the
Plan Administrator determines otherwise.

        Also notwithstanding the foregoing, in case of termination of the
Participant's employment or service relationship for Cause, the Option shall
automatically expire at the time the Company first notifies the Participant of
such termination, unless the Plan Administrator determines otherwise. If a
Participant's employment or service relationship with the Company is suspended
pending an investigation of whether the Participant shall be terminated for
Cause, all the Participant's rights under any Option likewise shall be suspended
during the period of investigation. If any facts that would constitute
termination for Cause are discovered after the Participant's relationship with
the Company or a Related Corporation has ended, any Option then held by the
Participant may be immediately terminated by the Plan Administrator, in its sole
discretion.

        (c) A Participant's transfer of employment or service relationship
between or among the Company and a Related Corporation, or a change in status
from an employee to a consultant, agent, advisor or independent contractor or a
change in status from a consultant, agent, advisor or independent contractor to
an employee, shall not be considered a termination of employment or service
relationship for purposes of this Section 7. The effect of a Company-approved
leave of absence on the terms and conditions of an Option shall be determined by
the Plan Administrator, in its sole discretion.

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                  SECTION 8. INCENTIVE STOCK OPTION LIMITATIONS

        To the extent required by Section 422 of the Code, Incentive Stock
Options shall be subject to the following additional terms and conditions:

8.1     DOLLAR LIMITATION

        To the extent the aggregate Fair Market Value (determined as of the
Grant Date) of Common Stock with respect to which Incentive Stock Options are
exercisable for the first time during any calendar year (under the Plan and all
other stock option plans of the Company) exceeds $100,000, such portion in
excess of $100,000 shall be treated as a Nonqualified Stock Option. In the event
the Participant holds two or more such Options that become exercisable for the
first time in the same calendar year, such limitation shall be applied on the
basis of the order in which such Options are granted.

8.2     MORE THAN 10% SHAREHOLDERS

        If an individual owns more than 10% of the total combined voting power
of all classes of the stock of the Company or of its parent or subsidiary
corporations, then the exercise price per share of an Incentive Stock Option
granted to such individual shall not be less than 110% of the Fair Market Value
of the Common Stock on the Grant Date and the Option Term shall not exceed five
years. The determination of more than 10% ownership shall be made in accordance
with Section 422 of the Code.

8.3     ELIGIBLE EMPLOYEES

        Individuals who are not employees of the Company or one of its parent or
subsidiary corporations may not be granted Incentive Stock Options.

8.4     TERM

        Subject to Section 8.2, the Option Term shall not exceed ten years.

8.5     EXERCISABILITY

        An Option designated as an Incentive Stock Option shall cease to qualify
for favorable tax treatment as an Incentive Stock Option to the extent it is
exercised (if permitted by the terms of the Option) (a) more than three months
after the Employment Termination Date if termination was for reasons other than
death or disability, (b) more than one year after the Employment Termination
Date if termination was by reason of disability, or (c) after the Participant
has been on leave of absence for more than 90 days, unless the Participant's
reemployment rights are guaranteed by statute or contract.

8.6     TAXATION OF INCENTIVE STOCK OPTIONS

        In order to obtain certain tax benefits afforded to Incentive Stock
Options under Section 422 of the Code, the Participant must hold the shares
issued upon the exercise of an

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Incentive Stock Option for two years after the Grant Date and one year from the
date of exercise. A Participant may be subject to the alternative minimum tax at
the time of exercise of an Incentive Stock Option. The Participant shall give
the Company prompt notice of any disposition of shares acquired by the exercise
of an Incentive Stock Option prior to the expiration of such holding periods.

8.7     PROMISSORY NOTES

        The amount of any promissory note delivered pursuant to Section 7.5 in
connection with an Incentive Stock Option shall bear interest at a rate
specified by the Plan Administrator, but in no case less than the rate required
to avoid imputation of interest (taking into account any exceptions to the
imputed interest rules) for federal income tax purposes.

8.8     SHAREHOLDER APPROVAL

        If the shareholders of the Company do not approve the Plan within 12
months after the Board of Director's adoption of the Plan, any outstanding
Incentive Stock Options shall become Nonqualified Stock Options.

8.9     CODE DEFINITIONS

        For purposes of this Section 8, "parent corporation," "subsidiary
corporation" and "disability" have the meanings attributed to those terms for
purposes of Section 422 of the Code.

                             SECTION 9. STOCK AWARDS

9.1     GRANT OF STOCK AWARDS

        The Plan Administrator is authorized to make Awards of Common Stock or
Awards denominated in units of Common Stock ("Stock Awards") on such terms and
conditions and subject to such repurchase or forfeiture provisions, if any
(which may be based on continuous service with the Company or the achievement of
performance goals), as the Plan Administrator shall determine, in its sole
discretion, which terms, conditions and restrictions shall be set forth in the
instrument evidencing the Award. The terms, conditions and restrictions that the
Plan Administrator shall have the power to determine shall include, without
limitation, the manner in which shares subject to Stock Awards are held during
the periods they are subject to restrictions and the circumstances under which
repurchase or forfeiture of the Stock Award shall occur by reason of termination
of the Participant's employment or service relationship.

9.2     ISSUANCE OF SHARES

        Upon the satisfaction of any terms, conditions and restrictions
prescribed in respect to a Stock Award, or upon the Participant's release from
any terms, conditions and restrictions of a Stock Award, as determined by the
Plan Administrator, the Company shall release, as soon as practicable, to the
Participant or, in the case of the Participant's death, to the personal
representative of the Participant's estate or as the appropriate court directs,
the appropriate

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number of shares of Common Stock.

9.3     WAIVER OF RESTRICTIONS

        Notwithstanding any other provisions of the Plan, the Plan Administrator
may, in its sole discretion, waive the repurchase or forfeiture period and any
other terms, conditions or restrictions on any Stock Award under such
circumstances and subject to such terms and conditions as the Plan Administrator
shall deem appropriate.

                             SECTION 10. WITHHOLDING

10.1    GENERAL

        To the extent required by applicable local, state, federal or foreign
law, a Participant shall make arrangements satisfactory to the Company for the
satisfaction of any withholding tax obligations that arise in connection with an
Award. The Company shall not be required to issue any shares of Common Stock or
make any cash distributions under the Plan until such obligations are satisfied.

10.2    SHARE WITHHOLDING

        The Plan Administrator may permit or require a Participant to satisfy
all or part of any withholding tax obligations (a) by having the Company
withhold all or a portion of any shares of Common Stock that would otherwise be
issued to the Participant pursuant to an Award (up to the employer's minimum
required tax withholding rate) or (b) by surrendering all or a portion of any
shares that the Participant previously acquired (up to the employer's minimum
required tax withholding rate to the extent the Participant has held the
surrendered shares for less than six months). Such shares of Common Stock shall
be valued at their Fair Market Value on the date when taxes otherwise would be
withheld in cash.

                            SECTION 11. ASSIGNABILITY

        Awards granted under the Plan and any interest therein may not be
assigned, pledged or transferred by the Participant and may not be made subject
to attachment or similar proceedings otherwise than by will or by the applicable
laws of descent and distribution, and, during the Participant's lifetime, such
Awards may be exercised only by the Participant. Notwithstanding the foregoing,
and to the extent permitted by Section 422 of the Code, the Plan Administrator,
in its sole discretion, may permit such assignment, transfer and exercisability
and may permit a Participant to designate a beneficiary who may exercise the
Award or receive payment under the Award after the Participant's death;
provided, however, that any Award so assigned or transferred shall be subject to
all the same terms and conditions contained in the instrument evidencing the
Award.

                             SECTION 12. ADJUSTMENTS

12.1    ADJUSTMENT OF SHARES

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        In the event that, at any time or from time to time, a stock dividend,
stock split, spin-off, combination or exchange of shares, recapitalization,
merger, consolidation, distribution to shareholders other than a normal cash
dividend, or other change in the Company's corporate or capital structure
results in (a) the outstanding shares, or any securities exchanged therefor or
received in their place, being exchanged for a different number or kind of
securities of the Company or of any other corporation or (b) new, different or
additional securities of the Company or of any other corporation being received
by the holders of shares of Common Stock of the Company, then the Plan
Administrator shall make proportional adjustments in (i) the maximum number and
kind of securities subject to the Plan and the number and kind of securities
issuable as Incentive Stock Options as set forth in Section 4 and (ii) the
number and kind of securities that are subject to any outstanding Awards and the
per share price of such securities, without any change in the aggregate price to
be paid therefor. The determination by the Plan Administrator as to the terms of
any of the foregoing adjustments shall be conclusive and binding.
Notwithstanding the foregoing, a dissolution or liquidation of the Company or a
Corporate Transaction shall not be governed by this Section 12.1 but shall be
governed by Sections 12.2 and 12.3, respectively.

12.2    DISSOLUTION OR LIQUIDATION

        To the extent not previously exercised or settled, and unless otherwise
determined by the Plan Administrator in its sole discretion, Options and Stock
Awards denominated in units shall terminate immediately prior to the dissolution
or liquidation of the Company. To the extent a forfeiture provision or
repurchase right applicable to an Award has not been waived by the Plan
Administrator, the Award shall be forfeited immediately prior to the
consummation of the dissolution or liquidation.

12.3    CORPORATE TRANSACTION

        12.3.1 OPTIONS

        (a) In the event of a Corporate Transaction, except as otherwise
provided in the instrument evidencing an Option, each outstanding Option shall
be assumed or continued or an equivalent option or right substituted by the
surviving corporation, the successor corporation or its parent corporation, as
applicable (the "Successor Corporation").

        (b) In the event the Successor Corporation refuses to assume, continue
or substitute for an Option, each such outstanding Option shall become vested
and exercisable with respect to 100% of the unvested portion of the Option. In
such case, the Plan Administrator shall notify the Participant in writing or
electronically that the unvested portion of the Option shall be fully vested and
exercisable for a specified time period after the date of such notice, and the
Option shall terminate upon the expiration of such period, in each case
conditioned on the consummation of the Corporate Transaction.

        (c) For the purposes of this Section 12.3, the Option shall be
considered assumed, continued or substituted for if following the Corporate
Transaction the option or right confers the right to purchase or receive, for
each share of Common Stock subject to the Option immediately prior to the
Corporate Transaction, the consideration (whether stock, cash, or other
securities or

                                      -13-

<PAGE>   14

property) received in the Corporate Transaction by holders of Common Stock for
each share held on the effective date of the transaction (and if holders were
offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding shares); provided, however, that if
such consideration received in the Corporate Transaction is not solely common
stock of the Successor Corporation, the Plan Administrator may, with the consent
of the Successor Corporation, provide for the consideration to be received upon
the exercise of the Option, for each share of Common Stock subject thereto, to
be solely common stock of the Successor Corporation substantially equal in fair
market value to the per share consideration received by holders of Common Stock
in the Corporate Transaction. The determination of such substantial equality of
value of consideration shall be made by the Plan Administrator and its
determination shall be conclusive and binding.

        (d) All Options shall terminate and cease to remain outstanding
immediately following the Corporate Transaction, except to the extent assumed by
the Successor Corporation.

        12.3.2 STOCK AWARDS

        In the event of a Corporate Transaction, except as otherwise provided in
the instrument evidencing the Award, the vesting of shares subject to Stock
Awards shall accelerate, and the repurchase or forfeiture provisions to which
such shares are subject shall lapse, if and to the same extent that the vesting
of outstanding Options accelerates in connection with the Corporate Transaction.
If Options are to be assumed, continued or substituted by a Successor
Corporation without acceleration upon the occurrence of a Corporate Transaction,
the repurchase or forfeiture provisions to which such Stock Awards are subject
shall continue with respect to shares of the Successor Corporation that may be
issued in exchange for such shares.

        12.3.3 ACCELERATION

        Except as otherwise provided in the instrument evidencing the Award, any
Awards that are assumed, continued or replaced in the Corporate Transaction and
do not otherwise accelerate at that time shall automatically become 100% vested
and exercisable (and any forfeiture or repurchase provisions to which Stock
Awards are subject shall lapse to the same extent) in the event that the
Participant's employment or service relationship should terminate in
contemplation of the Corporate Transaction or within three years following such
Corporate Transaction, unless such employment or service relationship is
terminated for Cause or by the Participant voluntarily without Good Reason.

12.4    FURTHER ADJUSTMENT OF AWARDS

        Subject to Sections 12.2 and 12.3, the Plan Administrator shall have the
discretion, exercisable at any time before a sale, merger, consolidation,
reorganization, liquidation or change in control of the Company, as defined by
the Plan Administrator, to take such further action as it determines to be
necessary or advisable, and fair and equitable to the Participants, with respect
to

                                      -14-
<PAGE>   15

Awards. Such authorized action may include (but shall not be limited to)
establishing, amending or waiving the type, terms, conditions or duration of, or
restrictions on, Awards so as to provide for earlier, later, extended or
additional time for exercise, lifting restrictions and other modifications, and
the Plan Administrator may take such actions with respect to all Participants,
to certain categories of Participants or only to individual Participants. The
Plan Administrator may take such action before or after granting Awards to which
the action relates and before or after any public announcement with respect to
such sale, merger, consolidation, reorganization, liquidation or change in
control that is the reason for such action.

12.5    LIMITATIONS

        The grant of Awards shall in no way affect the Company's right to
adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.

12.6    FRACTIONAL SHARES

        In the event of any adjustment in the number of shares covered by any
Award, each such Award shall cover only the number of full shares resulting from
such adjustment.

                           SECTION 13. MARKET STANDOFF

        In connection with any underwritten public offering by the Company of
its equity securities pursuant to an effective registration statement filed
under the Securities Act, a person shall not sell, make any short sale of, loan,
hypothecate, pledge, grant any option for the purchase of, or otherwise dispose
of or transfer for value or otherwise agree to engage in any of the foregoing
transactions with respect to any shares issued pursuant to an Award granted
under the Plan without the prior written consent of the Company or its
underwriters. Such limitations shall be in effect for such period of time as may
be requested by the Company or such underwriters; provided, however, that in no
event shall such period exceed 180 days. The limitations of this Section 14
shall in all events terminate two years after the effective date of the
Company's initial public offering.

        In the event of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
Company's outstanding Common Stock effected as a class without the Company's
receipt of consideration, any new, substituted or additional securities
distributed with respect to the purchased shares shall be immediately subject to
the provisions of this Section 14, to the same extent the purchased shares are
at such time covered by such provisions.

        In order to enforce the limitations of this Section 14, the Company may
impose stop-transfer instructions with respect to the purchased shares until the
end of the applicable standoff period.

                      SECTION 14. AMENDMENT AND TERMINATION

                                      -15-
<PAGE>   16

14.1    AMENDMENT OR TERMINATION OF PLAN

        The Board may suspend, amend or terminate the Plan or any portion of the
Plan at any time and in such respects as it shall deem advisable; provided,
however, that to the extent required for compliance with Section 422 of the Code
or any applicable law or regulation, shareholder approval shall be required for
any amendment that would (a) increase the total number of shares available for
issuance under the Plan, (b) modify the class of employees eligible to receive
Options, or (c) otherwise require shareholder approval under any applicable law
or regulation. Any amendment made to the Plan that would constitute a
"modification" to Incentive Stock Options outstanding on the date of such
amendment shall not, without the consent of the Participant, be applicable to
such outstanding Incentive Stock Options but shall have prospective effect only.

14.2    TERM OF PLAN

        Unless sooner terminated as provided herein, the Plan shall terminate
ten years after the earlier of the Plan's adoption by the Board and approval by
the shareholders.

14.3    CONSENT OF PARTICIPANT

        The suspension, amendment or termination of the Plan or the amendment of
an outstanding Award shall not, without the Participant's consent, impair or
diminish any rights or obligations under any Award theretofore granted to the
Participant under the Plan. Any change or adjustment to an outstanding Incentive
Stock Option shall not, without the consent of the Participant, be made in a
manner so as to constitute a "modification" that would cause such Incentive
Stock Option to fail to continue to qualify as an Incentive Stock Option.
Notwithstanding the foregoing, any adjustments made pursuant to Section 12 shall
not be subject to these restrictions.

                               SECTION 15. GENERAL

15.1    EVIDENCE OF AWARDS

        Awards granted under the Plan shall be evidenced by a written instrument
that shall contain such terms, conditions, limitations and restrictions as the
Plan Administrator shall deem advisable and that are not inconsistent with the
Plan.

15.2    NO INDIVIDUAL RIGHTS

        Nothing in the Plan or any Award granted under the Plan shall be deemed
to constitute an employment contract or confer or be deemed to confer on any
Participant any right to continue in the employ of, or to continue any other
relationship with, the Company or any Related Corporation or limit in any way
the right of the Company or any Related Corporation to terminate a Participant's
employment or other relationship at any time, with or without Cause.

15.3    ISSUANCE OF SHARES

                                      -16-
<PAGE>   17

        Notwithstanding any other provision of the Plan, the Company shall have
no obligation to issue or deliver any shares of Common Stock under the Plan or
make any other distribution of benefits under the Plan unless such issuance,
delivery or distribution would comply with all applicable laws (including,
without limitation, the requirements of the Securities Act), and the applicable
requirements of any securities exchange or similar entity.

        The Company shall be under no obligation to any Participant to register
for offering or resale or to qualify for exemption under the Securities Act, or
to register or qualify under state securities laws, any shares of Common Stock,
security or interest in a security paid or issued under, or created by, the
Plan, or to continue in effect any such registrations or qualifications if made.
The Company may issue certificates for shares with such legends and subject to
such restrictions on transfer and stop-transfer instructions as counsel for the
Company deems necessary or desirable for compliance by the Company with federal
and state securities laws.

        To the extent that the Plan or any instrument evidencing an Award
provides for issuance of stock certificates to reflect the issuance of shares of
Common Stock, the issuance may be effected on a noncertificated basis, to the
extent not prohibited by applicable law or the applicable rules of any stock
exchange.

15.4    NO RIGHTS AS A SHAREHOLDER

        No Option or Stock Award denominated in units shall entitle the
Participant to any cash dividend, voting or other right of a shareholder unless
and until the date of issuance under the Plan of the shares that are the subject
of such Award.

15.5    COMPLIANCE WITH LAWS AND REGULATIONS

        Notwithstanding anything in the Plan to the contrary, the Plan
Administrator, in its sole discretion, may bifurcate the Plan so as to restrict,
limit or condition the use of any provision of the Plan to Participants who are
officers or directors subject to Section 16 of the Exchange Act without so
restricting, limiting or conditioning the Plan with respect to other
Participants. Additionally, in interpreting and applying the provisions of the
Plan, any Option granted as an Incentive Stock Option pursuant to the Plan
shall, to the extent permitted by law, be construed as an "incentive stock
option" within the meaning of Section 422 of the Code.

15.6    PARTICIPANTS IN FOREIGN COUNTRIES

        The Plan Administrator shall have the authority to adopt such
modifications, procedures and subplans as may be necessary or desirable to
comply with provisions of the laws of foreign countries in which the Company or
its Related Corporations may operate to assure the viability of the benefits
from Awards granted to Participants employed in such countries and to meet the
objectives of the Plan.

15.7    NO TRUST OR FUND

        The Plan is intended to constitute an "unfunded" plan. Nothing contained
herein shall

                                      -17-
<PAGE>   18

require the Company to segregate any monies or other property, or shares of
Common Stock, or to create any trusts, or to make any special deposits for any
immediate or deferred amounts payable to any Participant, and no Participant
shall have any rights that are greater than those of a general unsecured
creditor of the Company.

15.8    SEVERABILITY

        If any provision of the Plan or any Award is determined to be invalid,
illegal or unenforceable in any jurisdiction, or as to any person, or would
disqualify the Plan or any Award under any law deemed applicable by the Plan
Administrator, such provision shall be construed or deemed amended to conform to
applicable laws, or, if it cannot be so construed or deemed amended without, in
the Plan Administrator's determination, materially altering the intent of the
Plan or the Award, such provision shall be stricken as to such jurisdiction,
person or Award, and the remainder of the Plan and any such Award shall remain
in full force and effect.

15.9    CHOICE OF LAW

        The Plan and all determinations made and actions taken pursuant hereto,
to the extent not otherwise governed by the laws of the United States, shall be
governed by the laws of the State of Washington without giving effect to
principles of conflicts of laws.

                           SECTION 16. EFFECTIVE DATE

        The effective date of the Plan is the date on which it is adopted by the
Board so long as it is approved by the Company's shareholders at any time within
12 months of such adoption.

        Adopted by the Board on July 6, 2000 and approved by the Company's
shareholders on August 9, 2000.

                                      -18-
<PAGE>   19

                    PLAN ADOPTION AND AMENDMENTS/ADJUSTMENTS
                                  SUMMARY PAGE

<TABLE>
<CAPTION>
                                                  SECTION/EFFECT OF       DATE OF SHAREHOLDER
DATE OF BOARD ACTION      ACTION                  AMENDMENT               APPROVAL
<S>                       <C>                     <C>                     <C>
July 6, 2000              Initial Plan Adoption                           August 9, 2000
</TABLE><PAGE>   1
                                                                    EXHIBIT 10.5

                           EDEN BIOSCIENCE CORPORATION

                        2000 EMPLOYEE STOCK PURCHASE PLAN

                               SECTION 1. PURPOSE

        The purposes of the Eden Bioscience Corporation 2000 Employee Stock
Purchase Plan (the "Plan") are (a) to assist employees of Eden Bioscience
Corporation, a Washington corporation (the "Company"), and its designated
subsidiaries in acquiring a stock ownership interest in the Company pursuant to
a plan that is intended to qualify as an "employee stock purchase plan" under
Section 423 of the Internal Revenue Code of 1986, as amended, and (b) to
encourage employees to remain in the employ of the Company and its subsidiaries.

                             SECTION 2. DEFINITIONS

        For purposes of the Plan, the following terms shall be defined as set
forth below:

        "ADDITIONAL SHARES" has the meaning set forth in Section 6.

        "BOARD" means the Board of Directors of the Company.

        "CODE" means the Internal Revenue Code of 1986, as amended from time to
time.

        "COMMITTEE" means the Company's Compensation Committee or any other
Board committee appointed by the Board to administer the Plan.

        "COMMON STOCK" means the common stock, par value $0.0025 per share, of
the Company.

        "COMPANY" means Eden Bioscience Corporation, a Washington corporation.

        "CORPORATE TRANSACTION" means either of the following events:

        (a) Consummation of any merger or consolidation of the Company with or
into another corporation or

        (b) Consummation of any sale, lease, exchange or other transfer in one
transaction or a series of related transactions of all or substantially all the
Company's outstanding securities or all or substantially all the Company's
assets;

provided, however, that a Corporate Transaction shall not include (i) a merger
of the Company in which the holders of shares of Common Stock immediately prior
to the merger hold at least a majority of the shares of Common Stock in a
surviving corporation, a successor corporation or its parent corporation, as
applicable, immediately after the merger; (ii) a mere reincorporation of the
Company; (iii) a transaction undertaken for the sole purpose

<PAGE>   2

of creating a holding company; or (iv) a transfer of the Company's assets to a
majority-owned subsidiary corporation of the Company.

        "DESIGNATED SUBSIDIARY" has the meaning set forth under the definition
of "Eligible Employee" in this Section 2.

        "ELIGIBLE COMPENSATION" means all base straight time gross earnings and
does not include overtime, cash bonuses, commissions, severance pay, hiring and
relocation bonuses, pay in lieu of vacations, sick leave, gain from stock option
exercises or any other special payments.

        "ELIGIBLE EMPLOYEE" means any employee of the Company or a domestic
Subsidiary Corporation or any other Subsidiary Corporation designated by the
Board or the Committee (each, a "Designated Subsidiary"), who is in the employ
of the Company (or any Designated Subsidiary) on one or more Offering Dates and
who meets the following criteria:

        (a) the employee does not, immediately after the Option is granted, own
stock (as defined by the Code) possessing 5% or more of the total combined
voting power or value of all classes of stock of the Company or of a Parent
Corporation or Subsidiary Corporation of the Company;

        (b) the employee's customary employment is for 20 hours or more per
week; provided, however, that the Plan Administrator may decrease this minimum
hours requirement for a future Offering;

        (c) if specified by the Plan Administrator for a future Offering, the
employee customarily works a minimum of five months per year or any lesser
number of months established by the Plan Administrator; and

        (d) if specified by the Plan Administrator for a future Offering, the
employee has been employed for a certain minimum period of time as of an
Offering Date; provided, however, that any such minimum employment period may
not exceed two years.

If the Company permits any employee of a Designated Subsidiary to participate in
the Plan, then all employees of that Designated Subsidiary who meet the
requirements of this paragraph shall also be considered Eligible Employees.

        "ENROLLMENT PERIOD" has the meaning set forth in Section 7.1.

        "ESPP BROKER" has the meaning set forth in Section 10.1.

        "FAIR MARKET VALUE" shall be as established in good faith by the Plan
Administrator or (a) if the Common Stock is listed on the Nasdaq National
Market, the closing sales price for the Common Stock as reported by the Nasdaq
National Market on the Offering Date or the Purchase Date, as applicable, unless
the Plan Administrator determines otherwise for a future Offering or (b) if the
Common Stock is listed on the New York Stock Exchange or the

                                      -2-
<PAGE>   3

American Stock Exchange, the closing sales price for the Common Stock as such
price is officially quoted in the composite tape of transactions on such
exchange on the Offering Date or the Purchase Date, as applicable, unless the
Plan Administrator determines otherwise for a future Offering; provided,
however, that for the first Offering Date under the Plan that occurs on the IPO
Date, Fair Market Value shall be equal to the Common Stock's initial public
offering price as set forth in Section 6(a). If there is no such reported price
for the Common Stock for the date in question, then such price on the last
preceding date for which such price exists shall be determinative of Fair Market
Value.

        "IPO DATE" means the day on which shares of Common Stock are first
offered to the public in an underwritten initial public offering of the Common
Stock pursuant to a registration statement filed with and declared effective by
the Securities and Exchange Commission (such day being the first trading day for
the Common Stock on the Nasdaq National Market, the New York Stock Exchange or
other applicable trading market).

        "OFFERING" has the meaning set forth in Section 5.1.

        "OFFERING DATE" means the first day of an Offering.

        "OPTION" means an option granted under the Plan to an Eligible Employee
to purchase shares of Common Stock.

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

        "PARTICIPANT" means any Eligible Employee who has elected to participate
in an Offering in accordance with the procedures set forth in Section 7.1 and
who has not withdrawn from the Plan or whose participation in the Plan is not
otherwise terminated.

        "PLAN" means the Eden Bioscience Corporation 2000 Employee Stock
Purchase Plan.

        "PLAN ADMINISTRATOR" has the meaning set forth in Section 3.1.

        "PURCHASE DATE" means the last day of each Purchase Period.

        "PURCHASE PERIOD" has the meaning set forth in Section 5.2.

        "PURCHASE PRICE" has the meaning set forth in Section 6.

        "SECURITIES ACT" means the Securities Act of 1933, as amended.

        "SUBSCRIPTION" has the meaning set forth in Section 7.1.

        "SUBSIDIARY CORPORATION" means any corporation, other than the Company,
in an unbroken chain of corporations beginning with the Company, if, at the time
of the granting of

                                      -3-
<PAGE>   4

the Option, each of the corporations, other than the last corporation in the
unbroken chain, owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.

                            SECTION 3. ADMINISTRATION

3.1     PLAN ADMINISTRATOR

        The Plan shall be administered by the Board and/or the Committee or, if
and to the extent the Board or the Committee designates an executive officer of
the Company to administer the Plan, by such executive officer (each, the "Plan
Administrator"). Any decisions made by the Plan Administrator shall be
applicable equally to all Eligible Employees.

3.2     ADMINISTRATION AND INTERPRETATION BY THE PLAN ADMINISTRATOR

        Subject to the provisions of the Plan, the Plan Administrator shall have
the authority, in its sole discretion, to determine all matters relating to
Options granted under the Plan, including all terms, conditions, restrictions
and limitations of Options; provided, however, that all Participants granted
Options pursuant to the Plan shall have the same rights and privileges within
the meaning of Code Section 423. The Plan Administrator shall also have
exclusive authority to interpret the Plan and may from time to time adopt, and
change, rules and regulations of general application for the Plan's
administration. The Plan Administrator's interpretation of the Plan and its
rules and regulations, and all actions taken and determinations made by the Plan
Administrator pursuant to the Plan, unless reserved to the Board or the
Committee, shall be conclusive and binding on all parties involved or affected.
The Plan Administrator may delegate administrative duties to such of the
Company's other officers or employees as the Plan Administrator so determines.

                        SECTION 4. STOCK SUBJECT TO PLAN

        Subject to adjustment from time to time as provided in Section 20.1, the
maximum number of shares of Common Stock that shall be available for issuance
under the Plan shall be:

        (a) 500,000 shares, plus

        (b) an annual increase to be added as of the first day of the Company's
fiscal year beginning in 2002 equal to the least of (i) 250,000 shares and (ii)
1% of the outstanding shares of Common Stock of the Company as of the end of the
Company's immediately preceding fiscal year on a fully diluted basis (assuming
exercise of all outstanding options and warrants and conversion of all
outstanding convertible preferred stock) and (iii) a lesser amount determined by
the Board; provided, however, that any shares from any increases in previous
years that are not actually issued shall be added to the aggregate number of
shares available for issuance under the Plan.

                                      -4-
<PAGE>   5

        Shares issued under the Plan shall be drawn from authorized and unissued
shares or shares subsequently acquired by the Company.

                            SECTION 5. OFFERING DATES

5.1     OFFERINGS

        (a) Except as otherwise set forth below, the Plan shall be implemented
by a series of Offerings that each last twenty-four months (each, an
"Offering"). Offerings shall commence on May 1st and November 1st of each year
and end on the second April 30th and October 31st, respectively, occurring
thereafter; provided, however, that the first Offering shall begin on the IPO
Date and shall end on October 31, 2002.

        (b) Notwithstanding the foregoing, the Plan Administrator may establish
(i) a different term for one or more future Offerings and (ii) different
commencing and ending dates for such future Offerings; provided, however, that
an Offering may not exceed five years; and provided, further, that if the
Purchase Price may be less than 85% of the Fair Market Value of the Common Stock
on the Purchase Date, the Offering may not exceed 27 months.

        (c) In the event the first or the last day of an Offering is not a
regular business day, then the first day of the Offering shall be deemed to be
the next regular business day and the last day of the Offering shall be deemed
to be the last preceding regular business day.

5.2     PURCHASE PERIODS

        (a) Each Offering shall consist of four consecutive purchase periods of
six months' duration (each, a "Purchase Period"). The last day of each Purchase
Period shall be the Purchase Date for such Purchase Period. Except as otherwise
set forth below, a Purchase Period shall commence on May 1st and November 1st of
each year and end on the next October 31st and April 30th, respectively,
occurring thereafter; provided, however, that the Purchase Period for the first
Offering shall commence on the IPO Date and shall end on April 30th, 2001.

        (b) Notwithstanding the foregoing, the Plan Administrator may establish
for a future Offering (i) a different term for one or more future Purchase
Periods and (ii) different commencing and ending dates for any such Purchase
Period.

        (c) In the event the first or last day of a Purchase Period is not a
regular business day, then the first day of the Purchase Period shall be deemed
to be the next regular business day and the last day of the Purchase Period
shall be deemed to be the last preceding regular business day.

                                      -5-
<PAGE>   6

5.3     GOVERNMENTAL APPROVAL; SHAREHOLDER APPROVAL

        Notwithstanding any other provision of the Plan to the contrary, an
Option granted pursuant to the Plan shall be subject to (a) obtaining all
necessary governmental approvals and qualifications for the Plan and (b)
obtaining shareholder approval of the Plan.

                            SECTION 6. PURCHASE PRICE

        (a) The purchase price (the "Purchase Price") at which Common Stock may
be acquired in an Offering pursuant to the exercise of all or any portion of an
Option shall be 85% of the lesser of (i) the Fair Market Value of the Common
Stock on the Offering Date of such Offering and (ii) the Fair Market Value of
the Common Stock on the Purchase Date; provided, however, that the Purchase
Price for the first Offering that begins on the IPO Date shall be the lesser of
(A) 100% of the initial public offering price per share of Common Stock, before
underwriters' discounts or concessions, set forth in that certain underwriting
agreement between the Company and the representatives of the underwriters and
executed in connection with the Company's initial public offering of the Common
Stock and (B) 85% of the Fair Market Value of the Common Stock on the Purchase
Date.

        (b) Notwithstanding the foregoing, if an increase in the number of
shares authorized for issuance under the Plan (other than an annual increase
pursuant to Section 4) is approved and all or a portion of such additional
shares are to be issued during one or more Offerings that are underway at the
time of shareholder approval of such increase (the "Additional Shares"), then,
if as of the date of such shareholder approval, the Fair Market Value of a share
of Common Stock is higher than the Fair Market Value on the Offering Date for
any such Offering, the Purchase Price for the Additional Shares shall be 85% of
the lesser of (i) the Common Stock's Fair Market Value on the date of such
shareholder approval and (ii) the Fair Market Value of the Common Stock on the
Purchase Date.

                      SECTION 7. PARTICIPATION IN THE PLAN

7.1     INITIAL PARTICIPATION

        An Eligible Employee shall become a Participant on the first Offering
Date after satisfying the eligibility requirements and delivering to the Plan
Administrator during the enrollment period established by the Plan Administrator
(the "Enrollment Period") a subscription (the "Subscription"):

        (a) indicating the Eligible Employee's election to participate in the
Plan;

        (b) authorizing payroll deductions and stating the amount to be deducted
regularly from the Participant's pay; and

        (c) authorizing the purchase of Common Stock for the Participant in each
Purchase Period.

                                      -6-
<PAGE>   7

        An Eligible Employee who does not deliver a Subscription as provided
above during the Enrollment Period shall not participate in the Plan for that
Offering or for any subsequent Offering unless such Eligible Employee
subsequently enrolls in the Plan by filing a Subscription with the Company
during the Enrollment Period for such subsequent Offering. The Company may, from
time to time, change the Enrollment Period for a future Offering as deemed
advisable by the Plan Administrator, in its sole discretion, for the proper
administration of the Plan.

        An employee who becomes eligible to participate in the Plan after an
Offering has commenced shall not be eligible to participate in such Offering but
may participate in any subsequent Offering, provided that such employee is still
an Eligible Employee as of the commencement of any such subsequent Offering.
Eligible Employees may not participate in more than one Offering at a time.

7.2     CONTINUED PARTICIPATION

        A Participant shall automatically participate in the next Offering until
such time as such Participant withdraws from the Plan pursuant to Section 11.3
or terminates employment as provided in Section 13.

                                      -7-
<PAGE>   8

               SECTION 8. LIMITATIONS ON RIGHT TO PURCHASE SHARES

8.1     NUMBER OF SHARES PURCHASED

        (a) No Participant shall be entitled to purchase Common Stock under the
Plan (or any other employee stock purchase plan that is intended to meet the
requirements of Code Section 423 sponsored by the Company, a Parent Corporation
or a Subsidiary Corporation) with a Fair Market Value exceeding $25,000 (such
value determined as of the Offering Date for each Offering or such other limit
as may be imposed by the Code) in any calendar year in which a Participant
participates in the Plan (or any other employee stock purchase plan described in
this Section 8.1).

        (b) No Participant shall be entitled to purchase more than 1,000 shares
of Common Stock (or such other number as the Board or the Committee shall
specify for a future Offering) under the Plan in any single Purchase Period. In
addition, no more than an aggregate of 125,000 shares of Common Stock (or such
other number as the Board or the Committee shall specify for a future Offering)
may be purchased by all the Participants under the Plan in any single Purchase
Period.

        (c) For a future Offering, the Board or the Committee may specify a
maximum number of shares that may be purchased by any Participant, as well as a
maximum aggregate number of shares that may be purchased by all Participants,
pursuant to such Offering.

8.2     PRO RATA ALLOCATION

        In the event the number of shares of Common Stock that might be
purchased by all Participants exceeds the number of shares of Common Stock
available in the Plan, in a Purchase Period or in an Offering, the Plan
Administrator shall make a pro rata allocation of the remaining shares of Common
Stock in as uniform a manner as shall be practicable and as the Plan
Administrator shall determine to be equitable. Fractional shares may not be
issued under the Plan unless the Plan Administrator determines otherwise for a
future Offering.

                      SECTION 9. PAYMENT OF PURCHASE PRICE

9.1     GENERAL RULES

        Subject to Section 9.11, Common Stock that is acquired pursuant to the
exercise of all or any portion of an Option may be paid for only by means of
payroll deductions from the Participant's Eligible Compensation. Except as set
forth in this Section 9, the amount of compensation to be withheld from a
Participant's Eligible Compensation during each pay period shall be determined
by the Participant's Subscription.

9.2     PERCENT WITHHELD

        The amount of payroll withholding for each Participant for purchases
pursuant to the Plan during any pay period shall be at least 1% but shall not
exceed 15% of the Participant's

                                      -8-
<PAGE>   9

Eligible Compensation for such pay period (or such other higher percentage as
the Plan Administrator may establish from time to time for a future Offering).
Amounts shall be withheld in whole percentages only.

9.3     PAYROLL DEDUCTIONS

        Payroll deductions shall commence on the first payday following the
Offering Date and shall continue through the last payday of the Offering unless
sooner altered or terminated as provided in the Plan.

9.4     MEMORANDUM ACCOUNTS

        Individual accounts shall be maintained for each Participant for
memorandum purposes only. All payroll deductions from a Participant's
compensation shall be credited to such account but shall be deposited with the
general funds of the Company. All payroll deductions received or held by the
Company may be used by the Company for any corporate purpose.

9.5     NO INTEREST

        No interest shall be paid on payroll deductions received or held by the
Company.

9.6     ACQUISITION OF COMMON STOCK

        On each Purchase Date of an Offering, each Participant shall
automatically acquire, pursuant to the exercise of the Participant's Option, the
number of shares of Common Stock arrived at by dividing the total amount of the
Participant's accumulated payroll deductions for the Purchase Period by the
Purchase Price; provided, however, that the number of shares of Common Stock
purchased by the Participant shall not exceed the number of whole shares of
Common Stock so determined, unless the Plan Administrator has determined for a
future Offering that fractional shares may be issued under the Plan; and
provided, further, that the number of shares of Common Stock purchased by the
Participant shall not exceed the number of shares for which Options have been
granted to the Participant pursuant to Section 8.1.

9.7     REFUND OF EXCESS AMOUNTS

        Any cash balance remaining in the Participant's account at the
termination of a Purchase Period that is not sufficient to purchase a whole
share of Common Stock shall be applied to the purchase of Common Stock in the
new Purchase Period, provided the Participant participates in the next Purchase
Period and the purchase complies with Section 8.1. All other amounts remaining
in a Participant's account after a Purchase Date shall be refunded to the
Participant as soon as practical after the Purchase Date without the payment of
any interest.

                                      -9-
<PAGE>   10

9.8     WITHHOLDING OBLIGATIONS

        At the time the Option is exercised, in whole or in part, or at the time
some or all the Common Stock is disposed of, the Participant shall make adequate
provision for local, state, federal and foreign withholding obligations of the
Company, if any, that arise upon exercise of the Option or upon disposition of
the Common Stock. The Company may withhold from the Participant's compensation
the amount necessary to meet such withholding obligations.

9.9     TERMINATION OF PARTICIPATION

        No Common Stock shall be purchased on behalf of a Participant on a
Purchase Date if his or her participation in the Offering or the Plan has
terminated on or before such Purchase Date.

9.10    PROCEDURAL MATTERS

        The Company may, from time to time, establish (a) limitations on the
frequency and/or number of any permitted changes in the amount withheld during
an Offering, as set forth in Section 11.1, (b) an exchange ratio applicable to
amounts withheld in a currency other than U.S. dollars, (c) payroll withholding
in excess of the amount designated by a Participant in order to adjust for
delays or mistakes in the Company's processing of properly completed withholding
elections, and (d) such other limitations or procedures as deemed advisable by
the Company in the Company's sole discretion that are consistent with the Plan
and in accordance with the requirements of Code Section 423.

9.11    LEAVES OF ABSENCE

        During leaves of absence approved by the Company and meeting the
requirements of the applicable treasury regulations promulgated under the Code,
a Participant may elect to continue participation in the Plan by delivering cash
payments to the Company on the Participant's normal paydays equal to the amount
of his or her payroll deduction under the Plan had the Participant not taken a
leave of absence. Currently, the treasury regulations provide that a Participant
may continue participation in the Plan only during the first 90 days of a leave
of absence unless the Participant's reemployment rights are guaranteed by
statute or contract.

                     SECTION 10. COMMON STOCK PURCHASED UNDER THE PLAN

10.1    ESPP BROKER

        If the Plan Administrator designates or approves a stock brokerage or
other financial services firm (the "ESPP Broker") to hold shares purchased under
the Plan for the accounts of Participants, the following procedures shall apply.
Promptly following each Purchase Date, the number of shares of Common Stock
purchased by each Participant shall be deposited into an account established in
the Participant's name with the ESPP Broker. Each Participant shall be the
beneficial owner of the Common Stock purchased under the Plan and shall have

                                      -10-
<PAGE>   11

all rights of beneficial ownership in such Common Stock. A Participant shall be
free to undertake a disposition of the shares of Common Stock in his or her
account at any time, but, in the absence of such a disposition, the shares of
Common Stock must remain in the Participant's account at the ESPP Broker until
the holding period set forth in Code Section 423 has been satisfied. With
respect to shares of Common Stock for which the holding period set forth above
has been satisfied, the Participant may move those shares of Common Stock to
another brokerage account of the Participant's choosing or request that a stock
certificate be issued and delivered to him or her. Dividends paid in the form of
shares of Common Stock with respect to Common Stock in a Participant's account
shall be credited to such account. A Participant who is not subject to payment
of U.S. income taxes may move his or her shares of Common Stock to another
brokerage account of his or her choosing or request that a stock certificate be
delivered to him or her at any time, without regard to the Code Section 423
holding period.

10.2    NOTICE OF DISPOSITION

        By entering the Plan, each Participant agrees to promptly give the
Company notice of any Common Stock disposed of within the later of one year from
the Purchase Date and two years from the Offering Date for such Common Stock,
showing the number of such shares disposed of and the Purchase Date and Offering
Date for such Common Stock. This notice shall not be required if and so long as
the Company has a designated ESPP Broker.

                 SECTION 11. CHANGES IN WITHHOLDING AMOUNTS AND
                              VOLUNTARY WITHDRAWAL

11.1    CHANGES IN WITHHOLDING AMOUNTS

        (a) Unless the Plan Administrator determines otherwise for a future
Offering, a Participant may elect to increase or decrease the amount to be
withheld from his or her compensation for future Purchase Periods by filing with
the Plan Administrator an amended Subscription; provided, however, that notice
of such election must be delivered to the Plan Administrator at least ten days
prior to such Purchase Period in such form and in accordance with such terms as
the Plan Administrator may establish for an Offering. An amended

                                      -11-
<PAGE>   12

Subscription shall remain in effect until the Participant changes such
Subscription in accordance with the terms of the Plan.

        (b) Notwithstanding the foregoing, to the extent necessary to comply
with Code Section 423 and Section 8.1, a Participant's payroll deductions may be
decreased to 0% during any Purchase Period if the aggregate of all payroll
deductions accumulated with respect to one or more Purchase Periods ending
within the same calendar year exceeds $25,000 of Fair Market Value of the Common
Stock determined as of the first day of an Offering ($21,250 to the extent the
Purchase Price may be 85% of the Fair Market Value of the Common Stock on the
Offering Date of the Offering). Payroll deductions shall re-commence at the rate
provided in such Participant's Subscription at the beginning of the first
Purchase Period that is scheduled to end in the following calendar year, unless
the Participant terminates participation in an Offering or the Plan as provided
in Section 11.2 or Section 11.3 or indicates otherwise in an amended
Subscription. Also notwithstanding the foregoing, a Participant's payroll
deductions may be decreased to 0% at such time that the aggregate of all payroll
deductions accumulated with respect to a Purchase Period exceeds the amount
necessary to purchase (i) 1,000 shares of Common Stock in such Purchase Period
(or such other number as the Board or Committee shall specify for a future
offering) or (ii) the aggregate number of shares of Common Stock available for
purchase by all Participants in any single Purchase Period or Offering as set
forth in Section 8.1. Payroll deductions shall re-commence at the rate provided
in such Participant's Subscription at the beginning of the next Purchase Period,
provided the Participant continues to participate in the Plan and such
participation complies with Section 8.1.

11.2    WITHDRAWAL FROM AN OFFERING

        A Participant may withdraw from an Offering by completing and delivering
to the Plan Administrator a written notice of withdrawal on a form provided by
the Company for such purpose. Such notice must be delivered prior to the end of
the Purchase Period for which such withdrawal is to be effective. Unless
otherwise indicated by a Participant, withdrawal from an Offering shall not
result in a withdrawal from the Plan or any succeeding Offering therein. A
Participant may not resume participation in the same Offering at any time upon
withdrawal from such Offering.

11.3    WITHDRAWAL FROM THE PLAN

        A Participant may withdraw from the Plan by completing and delivering to
the Plan Administrator a written notice of withdrawal on a form provided by the
Plan Administrator for such purpose. Such notice must be delivered prior to the
end of the Purchase Period for which such withdrawal is to be effective, or by
any other date specified by the Plan Administrator for a future Offering.

11.4    NOTICE OF WITHDRAWAL; EFFECT OF WITHDRAWAL ON PRIOR PURCHASE PERIODS;
        RE-ENROLLMENT IN THE PLAN

        (a) The Company may, from time to time, impose a requirement that any
notice of withdrawal be on file with the Company for a reasonable period prior
to the effectiveness of the Participant's withdrawal.

                                      -12-
<PAGE>   13

        (b) If a Participant withdraws from an Offering or the Plan after the
Purchase Date for a Purchase Period, the withdrawal shall not affect Common
Stock acquired by the Participant in any earlier Purchase Periods.

        (c) In the event a Participant voluntarily elects to withdraw from an
Offering, the Participant may not resume participation in the
Plan during the same Offering, but may participate in any subsequent Offering
under the Plan by again satisfying the definition of Eligible Employee. In the
event a Participant voluntarily elects to withdraw from the Plan, the
Participant may participate in any subsequent Offerings under the Plan by again
satisfying the definition of Eligible Employee and re-enrolling in the Plan in
accordance with Section 7.

11.5    RETURN OF PAYROLL DEDUCTIONS

        Upon withdrawal from an Offering pursuant to Section 11.2 or from the
Plan pursuant to Section 11.3, the withdrawing Participant's accumulated payroll
deductions that have not been applied to the purchase of Common Stock shall be
returned as soon as practical after the withdrawal, without the payment of any
interest, to the Participant and the Participant's interest in the Offering
shall terminate. Such accumulated payroll deductions may not be applied to any
other Offering under the Plan.

                        SECTION 12. AUTOMATIC WITHDRAWAL

        If the Fair Market Value of the Common Stock on any Purchase Date of an
Offering is less than the Fair Market Value of the Common Stock on the Offering
Date for such Offering, then every Participant shall automatically (a) be
withdrawn from such Offering at the close of such Purchase Date and after the
acquisition of the shares of Common Stock for such Purchase Period and (b) be
enrolled in the Offering commencing on the first business date subsequent to
such Purchase Period, provided the Participant is eligible to participate in the
Plan and has not elected to terminate participation in the Plan.

                      SECTION 13. TERMINATION OF EMPLOYMENT

        Termination of a Participant's employment with the Company for any
reason, including retirement, death or the failure of a Participant to remain an
Eligible Employee, shall immediately terminate the Participant's participation
in the Plan. The payroll deductions credited to the Participant's account since
the last Purchase Date shall, as soon as practical, be returned to the
Participant or, in the case of a Participant's death, to the Participant's legal
representative or designated beneficiary as provided in Section 14.2, and all
the Participant's rights under the Plan shall terminate. Interest shall not be
paid on sums returned to a Participant pursuant to this Section 13.

                                      -13-
<PAGE>   14

                     SECTION 14. RESTRICTIONS ON ASSIGNMENT

14.1    TRANSFERABILITY

        An Option granted under the Plan shall not be transferable and such
Option shall be exercisable during the Participant's lifetime only by the
Participant. The Company will not recognize, and shall be under no duty to
recognize, any assignment or purported assignment by a Participant of the
Participant's interest in the Plan, of his or her Option or of any rights under
his or her Option.

14.2    BENEFICIARY DESIGNATION

        The Plan Administrator may permit a Participant to designate a
beneficiary who is to receive any shares and cash, if any, from the
Participant's account under the Plan in the event the Participant dies after the
Purchase Date for an Offering but prior to delivery to such Participant of such
shares and cash. In addition, the Plan Administrator may permit a Participant to
designate a beneficiary who is to receive any cash from the Participant's
account under the Plan in the event that the Participant dies before the
Purchase Date for an Offering. Such designation may be changed by the
Participant at any time by written notice to the Plan Administrator.

            SECTION 15. NO RIGHTS AS SHAREHOLDER UNTIL SHARES ISSUED

        With respect to shares of Common Stock subject to an Option, a
Participant shall not be deemed to be a shareholder of the Company, and he or
she shall not have any of the rights or privileges of a shareholder. A
Participant shall have the rights and privileges of a shareholder of the Company
when, but not until, a certificate or its equivalent has been issued to the
Participant for the shares following exercise of the Participant's Option.

    SECTION 16. LIMITATIONS ON SALE OF COMMON STOCK PURCHASED UNDER THE PLAN

        The Plan is intended to provide Common Stock for investment and not for
resale. The Company does not, however, intend to restrict or influence any
Participant in the conduct of his or her own affairs. A Participant, therefore,
may sell Common Stock purchased under the Plan at any time he or she chooses
subject to compliance with Company policies and any applicable federal and state
securities laws. A Participant assumes the risk of any market fluctuations in
the price of the Common Stock.

                SECTION 17. AMENDMENT OR TERMINATION OF THE PLAN

        (a) The Board may amend the Plan in such respects as it shall deem
advisable; provided, however, that, to the extent required for compliance with
Code Section 423 or any applicable law or regulation, shareholder approval will
be required for any amendment that will (i) increase the total number of shares
as to which Options may be granted under the

                                      -14-
<PAGE>   15

Plan, (ii) modify the class of employees eligible to receive Options, or (iii)
otherwise require shareholder approval under any applicable law or regulation;
and provided further, that except as provided in this Section 17, no amendment
to the Plan shall make any change in any Option previously granted which
adversely affects the rights of any Participant.

        (b) The Plan shall continue in effect for ten years after the date of
its adoption by the Board. Notwithstanding the foregoing, the Board may at any
time and for any reason terminate or suspend the Plan. During any period of
suspension or upon termination of the Plan, no Options shall be granted.

        (c) Except as provided in Section 20, no such termination of the Plan
may affect Options previously granted, provided that the Plan or an Offering may
be terminated by the Board on a Purchase Date or by the Board's setting a new
Purchase Date with respect to an Offering and a Purchase Period then in progress
if the Board determines that termination of the Plan and/or the Offering is in
the best interests of the Company and the shareholders or if continuation of the
Plan and/or the Offering would cause the Company to incur adverse accounting
charges as a result of a change after the effective date of the Plan in the
generally accepted accounting rules applicable to the Plan.

                      SECTION 18. NO RIGHTS AS AN EMPLOYEE

        Nothing in the Plan shall be construed to give any person (including any
Eligible Employee or Participant) the right to remain in the employ of the
Company or a Parent Corporation or Subsidiary Corporation or to affect the right
of the Company or a Parent Corporation or Subsidiary Corporation to terminate
the employment of any person (including any Eligible Employee or Participant) at
any time with or without cause.

                       SECTION 19. EFFECT UPON OTHER PLANS

        The adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company or any Parent Corporation or
Subsidiary Corporation. Nothing in the Plan shall be construed to limit the
right of the Company, any Parent Corporation or Subsidiary Corporation to (a)
establish any other forms of incentives or compensation for employees of the
Company, a Parent Corporation or Subsidiary Corporation or (b) grant or assume
options otherwise than under the Plan in connection with any proper corporate
purpose, including, but not by way of limitation, the grant or assumption of
options in connection with the acquisition, by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of any corporation,
firm or association.

                             SECTION 20. ADJUSTMENTS

20.1    ADJUSTMENT OF SHARES

        In the event that, at any time or from time to time, a stock dividend,
stock split, spin-off, combination or exchange of shares, recapitalization,
merger, consolidation, distribution to shareholders other than a normal cash
dividend, or other change in the

                                      -15-
<PAGE>   16

Company's corporate or capital structure results in (a) the outstanding shares,
or any securities exchanged therefor or received in their place, being exchanged
for a different number or kind of securities of the Company or of any other
corporation or (b) new, different or additional securities of the Company or of
any other corporation being received by the holders of shares of Common Stock,
then (subject to any required action by the Company's shareholders), the Board
or the Committee, in its sole discretion, shall make such equitable adjustments
as it shall deem appropriate in the circumstances in (i) the maximum number and
kind of shares of Common Stock subject to the Plan as set forth in Section 4,
(ii) the number and kind of securities that are subject to any outstanding
Option and the per share price of such securities and (iii) the maximum number
of shares of Common Stock that may be purchased by a Participant in a Purchase
Period. The determination by the Board or the Committee as to the terms of any
of the foregoing adjustments shall be conclusive and binding. Notwithstanding
the foregoing, a merger, asset sale, dissolution or liquidation of the Company
shall not be governed by this Section 20.1 but shall be governed by Sections
20.2 and 20.3, respectively.

20.2    DISSOLUTION OR LIQUIDATION OF THE COMPANY

        In the event of the proposed dissolution or liquidation of the Company,
the Offering then in progress shall be shortened by setting a new Purchase Date
and shall terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Board. The new
Purchase Date shall be a specified date before the date of the Company's
proposed dissolution or liquidation. The Board shall notify each Participant in
writing prior to the new Purchase Date that the Purchase Date for the
Participant's Option has been changed to the new Purchase Date and that the
Participant's Option shall be exercised automatically on the new Purchase Date,
unless prior to such date the Participant has withdrawn from an Offering then in
progress or the Plan as provided in Section 11.

20.3    CORPORATE TRANSACTION

        In the event of a proposed Corporate Transaction, each outstanding
Option shall be assumed or an equivalent option substituted by the successor
corporation or parent thereof (the "Successor Corporation"). In the event that
the Successor Corporation refuses to assume or substitute for the Option, any
Offering then in progress shall be shortened by setting a new Purchase Date. The
new Purchase Date shall be a specified date before the date of the Corporate
Transaction. The Board shall notify each Participant in writing, prior to the
new Purchase Date, that the Purchase Date for the Participant's Option has been
changed to the new Purchase Date and that the Participant's Option shall be
exercised automatically on the new Purchase Date, unless prior to such date the
Participant has withdrawn from an Offering then in progress or the Plan as
provided in Section 11.

                                      -16-
<PAGE>   17

20.4    LIMITATIONS

        The grant of Options shall in no way affect the Company's right to
adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.

                SECTION 21. REGISTRATION; CERTIFICATES FOR SHARES

         Notwithstanding any other provision of the Plan, the Company shall have
no obligation to issue or deliver any shares of Common Stock under the Plan or
make any other distribution of benefits under the Plan unless such issuance,
delivery or distribution would comply with all applicable laws (including,
without limitation, the requirements of the Securities Act), and the applicable
requirements of any securities exchange or similar entity.

        The Company shall be under no obligation to any Participant to register
for offering or resale or to qualify for exemption under the Securities Act, or
to register or qualify under state securities laws, any shares of Common Stock,
security or interest in a security paid or issued under, or created by, the
Plan, or to continue in effect any such registrations or qualifications if made.
The Company may issue certificates for shares with such legends and subject to
such restrictions on transfer and stop-transfer instructions as counsel for the
Company deems necessary or desirable for compliance by the Company with federal
and state securities laws.

        To the extent that the Plan or any instrument evidencing shares of
Common Stock provides for issuance of stock certificates to reflect the issuance
of such shares, the issuance may be effected on a noncertificated basis, to the
extent not prohibited by applicable law or the applicable rules of any stock
exchange.

                           SECTION 22. EFFECTIVE DATE

        The Plan will become effective on the IPO Date, so long as it is
approved by the Company's shareholders as of such date.

        Adopted by the Board on July 6, 2000 and approved by the shareholders on
August 9, 2000.

                                      -17-
<PAGE>   18

                    PLAN ADOPTION AND AMENDMENTS/ADJUSTMENTS
                                  SUMMARY PAGE

<TABLE>
<CAPTION>
                                                  SECTION/EFFECT OF       DATE OF SHAREHOLDER
DATE OF BOARD ACTION      ACTION                  AMENDMENT               APPROVAL
<S>                       <C>                     <C>                     <C>
July 6, 2000              Initial Plan Adoption                           August 9, 2000
</TABLE>

                                      R-1

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