Document:

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                                                                    Exhibit 10.9
                                                                    ------------

                     FIRST AMENDMENT TO SUBLEASE AGREEMENT

     This First Amendment to Sublease Agreement ("Amendment") is dated as of
September 1, 1999 (the "Effective Date") by and between Applied Materials, Inc.,
a Delaware Corporation, ("Sublessor") and enCommerce, Inc., a California
corporation ("Sublessee").

                                   Recitals

A.   Sublessor and Sublessee entered into that certain Sublease Agreement dated
May 14, 1999 (the "Sublease") pursuant to which Sublessee shall have the right
to occupy premises (the "Subleased Premises") consisting of approximately forty
thousand one hundred fifty-three (40,153 ) square feet in the building commonly
known as 2901 Patrick Henry Drive (formerly known as 4600 Old Ironsides Drive),
Santa Clara, California, as more particularly shown on EXHIBIT B to the
                                                       ---------
Sublease.

B.   Pursuant to the terms of the Sublease, Sublessor is required to perform
certain improvement work to prepare the Subleased Premises for occupancy by
Sublessee.  Sublessor and Sublessee desire to amend the Sublease (a) to
eliminate a portion of the improvement work to be performed by Sublessor, (b) to
provide that Sublessee shall perform the portion of the improvement work that
was to have been performed by Sublessor but which is being eliminated pursuant
to this Amendment, and (c) to provide for a one-time payment from Sublessor to
Sublessee to compensate Sublessee for the performance of such improvement work.

     Now, therefore, for valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Sublessor and Sublessee agree as follows:

     1.   Section 7.2 of the Sublease is hereby deleted in its entirety and the
following is substituted therefor:

          "7.2  Sublessor's Improvements.  Sublessor shall deliver the Subleased
     Premises broom-clean and free of debris but otherwise "as-is," in its
     current condition. Sublessor shall, at its sole cost and expense, (a)
     install a demising wall to separate the Subleased Premises from the
     remainder of the Building, (b) install a demising wall in the existing
     lobby in order to provide the Subleased Premises with its own lobby area,
     and (c) install a card reader or other access system on the Building's
     common break room to provide joint use (collectively, "Sublessor's
     Improvements"). Sublessor's Improvements shall be completed on or before
     July 1, 1999; provided, however, that the lobby area improvements shall be
     functional but may not be finished by that date. All such improvements
     shall be substantially completed in a good and workmanlike condition and in
     compliance with applicable building codes and governmental regulations.
     Upon substantial completion of Sublessor's Improvements, Sublessor and
     Sublessee shall conduct a walk-through inspection of the Subleased Premises
     and shall develop a punch list
<PAGE>

     of all items that are not complete or which require correction. Punch list
     items shall not delay the commencement of the term of this Sublease.
     Sublessor shall complete the punch list items within thirty (30) days after
     Sublessor receives the punch list, or if any punch list items are such that
     they cannot reasonably be completed within the thirty (30)-day period,
     Sublessor shall have commenced to complete such items and shall proceed
     with reasonable diligence thereafter to complete such punch list items."

     2.   The following is hereby added to the Sublease as section 7.3:

          "7.3  Sublessee shall, at its sole cost and expense (but subject to
     the obligation of Sublessor to pay the Sublessee's Improvements Allowance
     described below) restore the existing clean room within the Subleased
     Premises to the configuration set forth in the design plan attached hereto
     as Exhibit A or as mutually agreed to in writing by the parties
     ("Sublessee's Improvements"). Sublessee shall obtain all permits required
     to perform Sublessee's Improvements prior to commencement of such work, and
     shall perform such work in a good and workmanlike manner in accordance with
     all applicable laws, ordinances and regulations. Sublessee shall notify
     Sublessor in writing at least ten (10) days prior to the commencement of
     Sublessee's Improvements work to allow Sublessor and Master Landlord to
     post and record notices of non-responsibility. Upon completion of
     Sublessee's Improvements and receipt of unconditional lien releases from
     all parties involved in the performance of Sublessee's Improvements work,
     Sublessor shall pay Sublessee Fifty-Six Thousand Dollars ($56,000) (the
     "Sublessee's Improvements Allowance") as Sublessor's sole contribution to
     the cost of Sublessee's Improvements work.

     3.   In the event that the terms of this Amendment conflict with the terms
of the Sublease, the terms of this Amendment shall control. Except as amended
hereby, the Sublease shall remain in full force and effect and is hereby
ratified by Sublessor and Sublessee.

     IN WITNESS WHEREOF, Sublessor and Sublessee have executed this Amendment as
of the Effective Date.

SUBLESSOR                                         SUBLESSEE
---------                                         ---------

Applied Materials, Inc., a                        enCommerce, Inc., a
Delaware corporation                              California corporation

By:  /s/ [signature illegible]                    By: /s/Thomas L. Cronan III
   ---------------------------------                 ---------------------------
Its: /s/ Managing Director                        Its:  Vice President
    --------------------------------                  --------------------------
     Global Real Estate & Facilities
                                                   By:
                                                      --------------------------
                                                   Its:
                                                       -------------------------
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                                   Exhibit A
                                   ---------

              Design Plan for Restoration of Existing Clean Room

               [to be attached by enCommerce prior to execution]

                                   Exhibit B
                                   ---------

                                 [Floor Plan]
<PAGE>

                              SUBLEASE AGREEMENT
                              ------------------

     This Sublease Agreement ("Sublease") is dated as of May 14,1999 (the
"Effective Date") by and between Applied Materials, Inc., a Delaware
corporation, ("Sublessor") and enCommerce, Inc., a California corporation
("Sublessee").

     1.   PROVISIONS CONSTITUTING SUBLEASE.
          --------------------------------

          1.1  This Sublease is and at all times shall be subject and
subordinate to the Lease Agreement (Single Tenant Industrial) dated January 27,
1996 between Melchor Investment Company, as Landlord ("Landlord"), and Sublessor
as Tenant (the "Master Lease"). A copy of the Master Lease is attached hereto as
EXHIBIT A. Sublessee shall comply with all of the provisions of the Master Lease
---------
and shall perform all the obligations on the part of the Tenant under the Master
Lease as they relate to the Subleased Premises (as defined in paragraph 2.1
below). Sublessee shall indemnify and hold Sublessor harmless from and against
all liability, costs, damages, claims, demands and expenses, including
reasonable attorney's fees and costs, arising out of Sublessee's failure to
comply with or to perform Sublessee's obligations hereunder. In the event of the
termination of Sublessor's interest as Tenant under the Master Lease for any
reason other than a voluntary termination of the Master Lease by Sublessor
without Sublessee's consent, then this Sublease shall terminate concurrently
therewith without any liability of Sublessor to Sublessee.

          1.2  Except for sections 1, paragraphs 2(c), 2(d), 2(f), 2(h), 2(i),
sections 3, 4, 5, 6.1, 8.1, 8.2, 9.1, 9.2, 11, 13.2, 14.1, 14.2, 17.9, 21, 24,
37, 38.10, 39, 40 and 41 of the Master Lease all of the terms and conditions
contained in the Master Lease are incorporated herein as terms and conditions of
this Sublease, and along with all of the provisions of this Sublease shall be
the complete terms and conditions of this Sublease. All references in the
incorporated provisions of the Master Lease to the "Lease" shall be deemed to
refer to this Sublease and all references in the Master Lease to Landlord and
Tenant shall be deemed to refer to Sublessor and Sublessee, respectively, except
that any reference to "Landlord" in sections 6.5(e), 6.6, 6.7, 7, 8.3, 9.3
(except that references therein to section 9.1 shall be deemed to refer to
paragraph 22.1 of this Sublease), 9.5, 9.6, 10.1, 10.2, 10.3, 12.1, 12.2, 17,
30, 32, 34 and 35 of the Master Lease shall be deemed to refer to both Landlord
and Sublessor and any reference to "Landlord" in sections 6.5(f), 9.4 (except
that references therein to section 9.1 shall be deemed to refer to paragraph
22.1 of this Sublease), 13.1 and 13.2 of the Master Lease shall be deemed to
refer to Landlord only.

     2.   PREMISES.
          --------

          2.1  Sublessor leases to Sublessee and Sublessee hires from Sublessor
the premises consisting of approximately forty thousand one hundred fifty-three
(40,153 ) square feet, as more particularly shown on EXHIBIT B (the "Subleased
                                                     ---------
Premises") in the building commonly known as 2901 Patrick Henry Drive (formerly
known as 4600 Old Ironsides Drive), Santa Clara, California ("Building"),
together with the non-exclusive right to use the outside common areas and
parking at the Project and the non-exclusive right to the use of the Building
common break room by Sublessee's employees. The square footage stated includes
the demised Subleased Premises and lobby and one-half the area of the common
break room. As used herein, the term "Project" shall be deemed to refer to the
Building (including the Subleased Premises and the premises occupied by

                                       1
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Sublessor) and all parking and outside facilities and landscaping located at
2901 Patrick Henry Drive, Santa Clara, California.

          2.2  Except for the alterations to be constructed by Sublessor
pursuant to paragraph 7.2 below, Sublessee accepts the Subleased Premises, and
all improvements included therein, "AS IS," without representation or warranty
by Sublessor as to the condition of the Subleased Premises or as to the use or
occupancy which may be made thereof. Notwithstanding the foregoing, on the
commencement date all Building systems shall be in good working order and the
Subleased Premises free of Hazardous Materials. Sublessee acknowledges (a) that
it has been advised by Sublessor to satisfy itself with respect to each and
every condition of the Subleased Premises and the present and future suitability
of the Subleased Premises for Sublessee's intended use, (b) that Sublessee has
made such investigations of the Subleased Premises as it deems necessary and
assumes all responsibility therefor with respect to the occupancy of the
Subleased Premises, and (c) that neither Landlord nor Sublessor, or any of their
agents, has made any oral or written representations or warranties with respect
to such matters other than as set forth in this Sublease.

          2.3  Prior to the expiration of this Sublease, Sublessee shall remove
all of its trade fixtures and other personal property from the Subleased
Premises and shall surrender the Subleased Premises to Sublessor in broom clean
condition, ordinary wear and tear, acts of God, casualty, condemnation and
Hazardous Materials not used, stored, released, or disposed of by Sublessee, its
agents, employees or contractors excepted, and free of all Hazardous Materials
used, stored, transported, released, or disposed of by Sublessee or its agents,
employees, or contractors, and subject to the provisions of paragraph 7.1 below.
If the Subleased Premises are not so surrendered, then Sublessee shall be liable
to Sublessor for all costs incurred by Sublessor to return the Subleased
Premises to the required condition. Except to the extent that the Hazardous
Material in question was released, emitted, used, stored, manufactured,
transported or discharged by Sublessee, or its agents, employees or contractors
as between Sublessor and Sublessee, Sublessee shall not be responsible for and
hereby is released by Sublessor from any claim, remediation obligation, removal
obligation, monitoring cost, investigation obligation liability, cause of
action, penalty, attorneys' fee, cost, expense or damage owing or alleged to be
owing to any third party with respect to any Hazardous Material present on or
about the Subleased Premises, or the soil, groundwater or surface water thereof,
without regard to whether the Hazardous Materials were present on the Subleased
Premises as of the commencement date of this Sublease or whether the presence of
the Hazardous Materials was caused by any person other than Sublessor. Nothing,
contained in this paragraph shall be construed as to permit Sublessee to use,
store or transport Hazardous Materials on the Subleased Premises. Sublessee's
rights with respect to the use of Hazardous Materials on the Subleased Premises
are set forth in paragraph 14 below.

     3.   TERM.
          ----

          3.1  The term of this Sublease shall be for a period of approximately
twenty-six (26) months, commencing July 1, 1999 and ending September 6, 2001,
unless sooner terminated pursuant to any provision hereof; provided, however,
that if the improvements to be constructed by Sublessor pursuant to paragraph
7.2 below have not been substantially completed by July 1, 1999, this Sublease
shall not be void or voidable, but instead the commencement date shall be
delayed until such improvements have been substantially completed as described
in paragraph 7.2 (except for punch list items, the completion of which shall not
delay the commencement of this

                                       2
<PAGE>

Sublease). If the improvements to be constructed by Sublessor are not completed
by July 1, 1999 due to the fault of Sublessee, including any changes requested
by Sublessee, the commencement date of this Sublease shall not be delayed.

          3.2  If Sublessee remains in possession of all or any part of the
Subleased Premises after September 6, 2001 with the prior written consent of
Sublessor, such tenancy shall be month-to-month only and shall not constitute a
renewal or extension for any further term. If Sublessee remains in possession of
all or any part of the Subleased Premises after September 6, 2001 without the
prior written consent of Sublessor, Sublessor shall be entitled, without service
of any additional notice to Sublessee, to immediately commence legal proceedings
to recover possession of the Subleased Premises. If Sublessee remains in
possession after September 6, 2001, either with or without Sublessor's prior
written consent, the monthly rent shall be increased to an amount equal to two
hundred percent (200%) of the monthly rent payable during the last month of the
term, and any other sums due under this Sublease shall be payable in advance in
the amount and at the times specified in this Sublease. Such holdover tenancy
shall be subject to every other term, condition, and covenant contained herein.
If Sublessee fails to surrender the Subleased Premises to Sublessor upon the
expiration of the term, Sublessee shall indemnify and hold Sublessor harmless
from all loss or liability resulting from Sublessee's failure to surrender
including any holdover rent and damages to which Sublessor is subject for
failure to surrender the Premises to Landlord pursuant to the terms of the
Master Lease.

          3.3  Notwithstanding the provisions of Section 39 of the Master Lease,
Sublessee shall have no option to extend the term of this Sublease.

     4.   RENT.
          ----

          4.1  Sublessee shall pay to Sublessor as rent for the Subleased
Premises the sum of Forty-Six Thousand One Hundred Seventy-Five and 95/100ths
Dollars ($46,175.95) per month ("Base Rent"), in advance, on the first day of
each month of the term hereof, subject to increase as provided below. Sublessee
shall pay Sublessor upon the execution hereof the sum of Forty-Six Thousand One
Hundred Seventy-Five and 95/100ths Dollars ($46,175.95) as Base Rent for the
first full month of the term. Base Rent for any period during the term hereof
which is for less than one month shall be prorated based on the actual number of
days in such month. If the term commences on a date other than the first day of
a month, Sublessee shall pay the prorated Base Rent for such month on the first
day of the term hereof, and the payment provided for in the first sentence of
this paragraph shall be applied to the first full month of the term. On the
first anniversary of the commencement date the monthly Base Rent payable by
Sublessee hereunder shall be increased to Forty-Eight Thousand One Hundred
Eighty-Three and 60/100ths Dollars ($48,183.60), and on the second anniversary
of the commencement date the monthly Base Rent payable by Sublessee hereunder
shall be increased to Fifty Thousand One Hundred Ninety-One and 25/100ths
Dollars ($50,191.25). The term Rent shall mean Base Rent plus any additional
rent provided for herein. Rent shall be payable without notice or demand and
without any deduction, offset, or abatement in lawful money of the United States
of America to Sublessor at the address stated herein or to such other persons or
at such other places as Sublessor may designate in writing

          4.2  It is understood and agreed that the Base Rent paid by Sublessee
pursuant to paragraph 4.1 represents Base Rent only and does not include any of
the expenses to be

                                       3
<PAGE>

paid by Sublessor as Tenant under the Master Lease, either directly or
indirectly, to Landlord. Sublessee shall be responsible for its pro rata share
of all such expenses as additional rent and shall pay such expenses to Sublessor
by the date that Sublessor is required to pay same to Landlord under the Master
Lease. In addition, Sublessee shall be responsible for its pro rata share of all
expenses incurred by Sublessor in connection with the performance of any of its
obligations under the Master Lease except for such expenses related exclusively
to Sublessor's premises. Such expenses include, without limitation, insurance
carried by Sublessor pursuant to the Master Lease, real property taxes for the
Project and maintenance of any Project facilities used in common by Sublessor or
any other tenant of the Project and Sublessee. Sublessee shall also be
responsible for its pro rata share of charges for the cost of operation and
maintenance of the common break room and water service provided to the Project.
For purposes of this Sublease, Sublessee's pro rata share of the foregoing
expenses is forty-eight and 8/10ths percent (48.8%). Sublessee acknowledges that
electricity and gas charges for the Project are set forth on a single invoice
but Sublessee's usage is separately metered, and that Sublessor shall determine
Sublessee's share of such costs by reading Sublessee's meter. Sublessee shall
also reimburse Sublessor, as additional rent, all expenses incurred by Sublessor
in connection with the operation and maintenance of the HVAC system serving the
Subleased Premises. Sublessee shall pay all such charges on a monthly basis as
billed by Sublessor, as additional rent.

          4.3  Sublessee acknowledges that late payment by Sublessee to
Sublessor of Rent and other charges provided for under this Sublease will cause
Sublessor to incur costs not contemplated by this Sublease, the exact amount of
such costs being extremely difficult or impracticable to fix. Therefore, if any
installment of Rent or any other charge due from Sublessee is not received by
Sublessor within five (5) days after the day on which such payment was due,
Sublessee shall pay to Sublessor an additional sum equal to six percent (6%) of
the amount overdue as a late charge. The parties agree that this late charge
represents a fair and reasonable estimate of the costs that Sublessor will incur
by reason of the late payment by Sublessee.

Initials:

/s/ [signature illegible]                 /s/ [signature illegible]
--------------------------                --------------------------
Sublessor                                 Sublessee

     5.   SECURITY DEPOSIT.  Upon execution of this Sublease, Sublessee shall
          ----------------
provide Sublessor an irrevocable letter of credit, in the form of EXHIBIT C and
                                                                  ---------
otherwise approved by Sublessor, in the amount of Two Hundred Seventy-Seven
Thousand Fifty-Five and 70/100ths Dollars ($277,055.70), issued by a bank
approved by Sublessor, and with an expiry date of no earlier than August 1,
2000. The letter of credit shall be replaced no less than fifteen (15) days
prior to its expiry date, and if not timely replaced, Sublessor shall have the
right to draw upon the letter of credit in the face amount. If no monetary
default by Sublessee occurs prior to July 1, 2000, Sublessee may substitute a
letter of credit, satisfying the same conditions, in the amount of One Hundred
Ninety-Two Thousand Seven Hundred Thirty-Four and 40/100ths Dollars
($192,734.40) with an expiry date no earlier than August 1, 2001. If no monetary
default by Sublessee occurs prior to July 1, 2001, Sublessee may substitute a
letter of credit, satisfying the same conditions, in the amount of One Hundred
Thousand Three Hundred Eighty-Two and 50/100ths Dollars ($100,382.50) and with
an expiry date no earlier than September 30, 2001. Upon delivery of the
replacement letter of credit,
                                       4
<PAGE>

the previous letter of credit shall be returned. The letter of credit shall
provide for partial draws and shall require only a written statement from
Sublessor that it is being drawn upon in connection with this Sublease. The
letter of credit or any proceeds realized by draw thereon shall be security for
Sublessee's faithful performance of Sublessee's obligations hereunder. If
Sublessee fails to pay Rent or other charges due hereunder, or otherwise
defaults with respect to any provision of this Sublease, Sublessor may draw upon
the letter of credit, at Sublessor's election, in the amount of such default,
and if Sublessee fails to accept delivery of the Premises or fails to commence
to pay Rent on the Commencement Date for the Premises or fails to timely replace
an expiring letter of credit, Sublessor may draw upon the letter of credit to
the full extent thereof. Sublessor shall hold any amount realized by draw upon
the letter of credit as a security deposit (the "deposit"). Sublessor may use,
apply or retain all or any portion of said deposit for the payment of any rent
or other charge in default or for the payment of any other sum to which
Sublessor may become obligated by reason of Sublessee's default, or to
compensate Sublessor for any loss or damage which Sublessor may suffer thereby.
If Sublessor so uses or applies all or any portion of said deposit, Sublessee
shall within ten (10) days after written demand therefor deposit cash with
Sublessor in an amount sufficient to restore said deposit to the full amount
hereinabove stated and Sublessee's failure to do so shall be a breach of this
Sublease. Sublessor shall not be required to keep said deposit separate from its
general accounts. If Sublessee performs all of Sublessee's obligations
hereunder, said letter of credit, or if it has been drawn upon, such deposit or
so much thereof as had not theretofore been applied by Sublessor, shall be
returned without payment of interest for its use, to Sublessee (or, at
Sublessor's option, to the last assignee, if any, of Sublessee's interest
hereunder) within ten (10) days after the expiration of the term hereof or ten
(10) days after the date Sublessee has vacated the Premises, whichever is later.

     6.   USE.  The Subleased Premises shall be used and occupied only for
          ----
purposes permitted under applicable laws and for no other purpose without the
prior written consent of Landlord and Sublessor. Sublessee shall not use or
permit the use of the Subleased Premises in a manner that creates waste or a
nuisance, or that disturbs owners or occupants of neighboring properties.
Sublessee shall use the Subleased Premises only in conformance with applicable
governmental laws, regulations, ordinances and orders. Sublessee shall have
access to the Subleased Premises twenty-four (24) hours a day, seven (7) days a
week.

     7.   ALTERATIONS.
          -----------

          7.1  Sublessee's Alterations.  Notwithstanding the provisions of
               -----------------------
Section 14.1 of the Master Lease, Sublessee shall not make any alterations,
additions or improvements to the Subleased Premises without the prior written
consent of Sublessor and Landlord. Sublessee shall pay all costs charged by
Landlord, and actual costs incurred by Sublessor not to exceed five hundred
dollars ($500), in connection with the review and approval of any Sublessee-
proposed alterations, additions or improvements. Upon obtaining Sublessor's and
Landlord's consent to the initial alterations desired by Sublessee, and the
surrender of possession by the current tenant, Sublessee shall be permitted to
enter onto the Subleased Premises to perform such alterations and to install
Sublessee's trade fixtures and equipment. Such early occupancy shall be subject
to all of the terms and conditions set forth herein; provided, however, that
Sublessee shall have no obligation to pay any Rent prior to the commencement
date. Sublessee shall not interfere with Sublessor's Improvements work
(described in paragraph 7.2) during the early occupancy period. Any alterations,
additions or improvements approved by Sublessor and Landlord shall be made in

                                       5
<PAGE>

accordance with the terms of the Master Lease. At the expiration or sooner
termination of this Sublease, all alterations, additions or improvements
installed in or made to the Subleased Premises by Sublessee shall be removed
from the Subleased Premises unless Landlord or Sublessor notifies Sublessee in
writing at the time that consent to such alterations, additions or improvements
is granted that such alterations, additions or improvements are to remain in the
Subleased Premises. If Sublessor or Landlord does not notify Sublessee that the
alterations, additions or improvements are to remain in the Subleased Premises,
such alterations, additions or improvements shall be removed, and any damage
caused by such removal shall be repaired, at Sublessee's sole cost and expense.
If Sublessor or Landlord does not require such alterations, additions or
improvements to be removed from the Subleased Premises, they shall become the
property of Sublessor or Landlord at no cost (except that any trade fixtures and
equipment may be removed by Sublessee provided that Sublessee repair any damage
to the Subleased Premises caused by such removal).

          7.2  Sublessor's Improvements.  Sublessor shall deliver the Subleased
               ------------------------
Premises broom-clean and free of debris but otherwise "as-is," in its current
condition. Sublessor shall, at its sole cost and expense, (a) install a demising
wall to separate the Subleased Premises from the remainder of the Building, (b)
install a demising wall in the existing lobby in order to provide the Subleased
Premises with its own lobby area, (c) install a card reader or other access
system on the Building's common break room to provide joint use, and (d) restore
the existing clean room to open office configuration (collectively, "Sublessor's
Improvements"). Sublessor's Improvements shall be completed on or before July 1,
1999; provided, however, that the lobby area improvements shall be functional
but may not be finished by that date. All such improvements shall be
substantially completed in a good and workmanlike condition and in compliance
with applicable building codes and governmental regulations. Upon substantial
completion of Sublessor's Improvements, Sublessor and Sublessee shall conduct a
walk-through inspection of the Subleased Premises and shall develop a punch list
of all items that are not complete or which require correction. Punch list items
shall not delay the commencement of the term of this Sublease. Sublessor shall
complete the punch list items within thirty (30) days after Sublessor receives
the punch list, or if any punch list items are such that they cannot reasonably
be completed within the thirty (30)-day period, Sublessor shall have commenced
to complete such items and shall proceed with reasonable diligence thereafter to
complete such punch list items.

     8.   ASSIGNMENT AND SUBLETTING.  Sublessee shall not assign this Sublease
          -------------------------
or sublease all or any portion of the Subleased Premises. Any attempted or
purported assignment or sublease shall be void and confer no rights upon any
third person and, at Sublessor's election, shall terminate this Sublease.

     9.   DAMAGE AND DESTRUCTION.
          ----------------------

          9.1  If an event occurs which would give the Sublessor as Tenant under
the Master Lease the right to terminate the Master Lease and Sublessor
terminates the Master Lease, this Sublease shall terminate as of the date of
termination of the Master Lease without cost or liability to Sublessor. If an
event occurs which affects solely the Subleased Premises and which would give
Sublessor as Tenant under the Master Lease the right to terminate the Master
Lease, then the provisions of section 11.1 of the Master Lease shall be
applicable; provided, however, that the reference to section 9.1(a) in the
Master Lease shall be deemed to refer to paragraph 22.1 of this Sublease and the
reference to Landlord in section 11.1 shall refer solely to Landlord under the

                                       6
<PAGE>

Master Lease. If the Subleased Premises are damaged but neither party under the
Master Lease would have the right to terminate the Master Lease, the provisions
of section 11.1 of the Master Lease shall apply; provided, however, that the
reference in section 11.1 of the Master Lease to sections 9.1(a) and 9.1(c)
shall be deemed to refer to paragraphs 22.1(a) and 22.1(c) of this Sublease, and
provided further, that all references in section 11.1 (including the provisions
of section 11.4 that would be applicable) to Landlord shall refer only to
Landlord under the Master Lease (and not Sublessor), and any reference to
Premises therein shall be deemed to refer to the Subleased Premises. Sublessee
acknowledges, however, that Sublessor shall have no obligation to repair or
restore the Subleased Premises following any damage or destruction nor to
provide funds to Landlord to do so pursuant to any provision of section 11 of
the Master Lease. If an event occurs which would give the Landlord under the
Master Lease the right of termination pursuant to section 11 of the Master
Lease, and if such right is exercised, this Sublease shall terminate as of the
date of termination of the Master Lease without cost or liability to Sublessor.

          9.2  Sublessee hereby expressly waives any rights to terminate this
Sublease upon damage or destruction to the Subleased Premises, except as
provided in paragraph 9.1 above, including without limitation any rights
pursuant to the provisions of Section 1932, subsection 2, and Section 1933,
subsection 4, of the California Civil Code, as amended from time to time, and
the provisions of any similar law hereinafter enacted.

          9.3  In no event shall Sublessor have any liability for nor shall it
be required to repair or restore any injury or damage to Sublessee's personal
property or any other property installed or constructed in or upon the Subleased
Premises by Sublessee or at the expense of Sublessee, including alterations to
the Subleased Premises made by Sublessee.

     10.  SIGNAGE.  Subject to the prior written approval of Landlord and
          -------
compliance with applicable governmental regulations, Sublessee shall have the
right to install signage on the existing monument signs at the Subleased
Premises, which monument signs shall be shared equally with Sublessor or any
other tenant of the Project. All costs associated with such signage shall be
paid by Sublessee. Sublessee agrees not to install any signage unless and until
Landlord's and any applicable governmental agency's consent to such signage has
been obtained.

     11.  BROKERS.  Sublessor has retained Craig Leiker of Wayne Mascia
          -------
Associates and Sublessee has retained Michael L. Filice of CPS, the Commercial
Property Services Company, and Matt Arya of Wayne Mascia Associates. Sublessor
shall be responsible for payment of the commission to said brokers in accordance
with the terms of its written agreement with Wayne Mascia Associates. Sublessee
and Sublessor each warrants and represents to the other that it has had no
dealings with any other real estate broker or agent in connection with the
negotiation of this Sublease and that it knows of no other real estate broker or
agent who is or might be entitled to a commission in connection with this
Sublease. Sublessee and Sublessor shall indemnify, defend and hold the other
harmless from and against any and all liabilities or expenses, including
attorneys' fees and costs, arising from any claims made by any other broker or
individual for commissions or fees who claims to have represented the
indemnifying party in connection with this Sublease.

     12.  LANDLORD'S CONSENT.  Sublessee acknowledges that this Sublease is
          ------------------
subject to the consent of the Landlord under the Master Lease. Accordingly, this
Sublease shall not be effective unless and until Landlord has consented to this
Sublease in writing. Sublessor shall use

                                       7
<PAGE>

diligent efforts to obtain such consent as soon as reasonably possible following
execution of this Sublease by Sublessor and Sublessee. Sublessor shall have no
liability whatsoever to Sublessee, however, if Sublessor is unable to obtain
such consent from Landlord on terms and conditions reasonably acceptable to
Sublessor.

     13.  ADDRESSES FOR NOTICES.  Any notice shall be served by certified mail,
          ---------------------
return receipt requested, overnight courier or hand delivery.  Notices shall be
deemed effective when received if served by hand delivery, one day after being
sent if delivered by overnight carrier or three (3) days after deposit in the U.
S. Mail if sent by certified mail.  Sublessor's address for notices, and the
address to which sublessee shall make all payments of Rent due hereunder, shall
be 3135 Kifer Road, M/S 2962, Santa Clara, CA 95051, Attention: Corporate Real
Estate Manager.  Rent installment payments shall be sent to the address stated,
Attn: Deborah Norris.  A copy of any notice to Sublessor shall be sent to:
Applied Materials, Inc., Legal Department, 2881 Scott Boulevard, M/S 2062, Santa
Clara, CA 95051.  Sublessee's address for notices shall be the address of the
Subleased Premises.  Either party may change the address for notices (or for
rent payments) by giving written notice as set forth in this section.

     14.  PERMITTED HAZARDOUS MATERIALS.  To the extent permitted by the Master
          -----------------------------
Lease, Sublessee shall be permitted to use on the Subleased Premises ordinary
office products such as cleaning substances and toner for photocopying machines
in normal and customary amounts, and the use of such products shall not be
deemed a breach of this Sublease.  Notwithstanding anything contained in
paragraph 6.5(c) of the Master Lease to the contrary, no other hazardous
substances (as defined in section 6.5(b) of the Master Lease) are to be used in
or brought onto the Subleased Premises without the prior written consent of
Sublessor, which consent may be withheld in Sublessor's sole and absolute
discretion.

     15.  SUBLESSOR'S ENVIRONMENTAL INDEMNITY.
          -----------------------------------

          15.1  Sublessor agrees to, and shall, protect, indemnify, defend (with
counsel reasonably acceptable to Sublessee) and hold Sublessee harmless from and
against any and all claims, judgments, damages, foreseeable and unforeseeable
consequential damages, penalties, fines, liabilities, losses, suits,
administrative proceedings and costs (including, but not limited to, attorneys'
and consultant fees and court costs) arising in connection with or directly
related to, the use, presence, transportation, storage, disposal, migration,
removal, spill, release or discharge of Hazardous Materials on, in or about any
portion of the Subleased Premises as a result of the intentional or negligent
acts or omissions of Sublessor or Sublessor's agents which are in violation of
Environmental Laws. In addition, Sublessor agrees that, as between Sublessor and
Sublessee, Sublessor shall be responsible for Landlord's obligations set forth
in the first and last sentences of Paragraph 6.5(f) of the Master Lease.

          15.2  Sublessee agrees to, and shall, protect, indemnify, defend (with
counsel reasonably acceptable to Sublessor) and hold Sublessor harmless from and
against any and all claims, judgments, damages, foreseeable and unforeseeable
consequential damages, penalties, fines, liabilities, losses, suits,
administrative proceedings and costs (including, but not limited to, attorneys'
and consultant fees and court costs) arising in connection with or directly
related to, the use, presence, transportation, storage, disposal, migration,
removal, spill, release or discharge of Hazardous Materials on, in or about any
portion of the Subleased Premises as a result of the

                                       8
<PAGE>

intentional or negligent acts or omissions of Sublessee or Sublessee's agents
which are in violation of Environmental Laws.

     16.  SUBLESSOR'S OBLIGATIONS.
          -----------------------

          16.1  With respect to work, services, repairs, restoration or the
performance of any other obligation of Landlord under the Master Lease, the sole
obligation of Sublessor shall be to request the same in writing from Landlord as
and when requested to do so by Sublessee, and to use Sublessor's reasonable
efforts (without requiring Sublessor to spend more than a nominal sum) to obtain
the Landlord's performance. Sublessor shall perform all obligations of Tenant
under the Master Lease as they relate to building operating systems and common
areas of the Project (including operation and maintenance of the common break
room), and shall submit monthly invoices to Sublessee for Sublessee's pro rata
share of such costs as provided in paragraph 4.2, above. Sublessor shall
maintain and repair the HVAC system serving the Subleased Premises at
Sublessee's cost, which costs shall be paid to Sublessor together with those
sums set forth in paragraph 4.2.

          16.2  If Sublessor fails to perform its obligations under 16.1 with
respect to building operating systems or the HVAC system serving the Subleased
Premises, then Sublessee may give Sublessor notice specifying in what manner
Sublessor has defaulted, and if such default shall not be cured by Sublessor
within ten (10) days thereafter (except that if such default cannot be cured
within such ten (10) day period, this period shall be extended for an additional
reasonable time, provided that Sublessor commences to cure such default within
such ten (10) day period and proceeds diligently thereafter to effect such cure
as quickly as practicable), then Sublessee shall be entitled to cure such
default and Sublessee's reasonable expenses in so doing shall be due upon
demand. Sublessee shall not be required, however, to wait the entire cure period
described herein if earlier action is required to comply with the Master Lease
or with any governmental regulations.

     17.  SUBLESSEE'S OBLIGATTONS.  Sublessee shall be responsible for each of
          -----------------------
Sublessor's obligations as Tenant under the Master Lease as they relate
exclusively to the Subleased Premises, excluding, however, maintenance of the
HVAC equipment serving the Subleased Premises, which shall be performed by
Sublessor as provided in paragraph 16, above.  If Sublessee fails to perform any
such obligation, Sublessor shall, in addition to any other remedies available to
it, be entitled to perform such obligation and to collect from Sublessee the
cost therefor.

     18.  SUBLESSOR'S REPRESENTATION.  Sublessor represents and warrants, to the
          --------------------------
best of Sublessor's knowledge, that the Master Lease is in full force and
effect, and there exists under the Master Lease no default or event of default
by either Landlord or Sublessor, has any event occurred, or any circumstances
exist, which, with the giving of notice or passage of time or both, could
constitute such a default or event of default.

     19.  DEFAULT; BREACH AND REMEDIES.  The provisions set forth in section 19
          ----------------------------
of the Master Lease are incorporated into this Sublease as if set forth fully
herein. In the event Sublessee breaches any obligation of this Sublease
(including the terms of the Master Lease incorporated herein), Sublessor shall
have the rights and remedies available to Landlord under the Master Lease.

                                       9
<PAGE>

     20.  SUBLESSOR'S ENTRY.  Notwithstanding anything to the contrary contained
          -----------------
in the Master Lease or this Sublease, in entering upon the Subleased Premises,
Sublessor shall minimize interference with Sublessee's use of the Subleased
Premises to the extent possible and shall comply with Sublessee's reasonable
safety and security regulations.

     21.  CONSENTS.  Except as otherwise provided in the Master Lease or this
          --------
Sublease, whenever the consent of Sublessor or Landlord is required to an act by
or for Sublessee, such consent shall not be unreasonably withheld or delayed.
Sublessor's and Landlord's actual costs and expenses incurred in the
consideration of, or response to, a request by Sublessee for any Sublessor or
Landlord consent pursuant to this Sublease shall be paid by Sublessee to
Sublessor or Landlord, as applicable, upon receipt of an invoice therefor.
Sublessor's consent to any act by Sublessee shall not constitute an
acknowledgment that no default or breach of this Sublease exists, nor shall such
consent be deemed to be a waiver of any then existing default or breach, except
as may otherwise specifically be stated in writing by Sublessor at the time of
such consent.

     22.  INSURANCE.
          ---------

          22.1  Sublessee's Insurance Coverage.  Commencing on the commencement
date of this Sublease and continuing throughout the term hereof, Sublessee
shall, at its sole cost and expense, procure and keep in force the following
insurance:

                (a)  "All risk" property, fire, extended coverage, and special
extended insurance (including without limitation vandalism, malicious mischief,
and inflation endorsement, an endorsement providing coverage for any increased
cost by reason of any ordinance or law, sprinkler leakage endorsement, and
boiler and machinery coverage), covering Sublessee's equipment, trade fixtures,
inventory, and personal property located at the Subleased Premises and
alterations to the Subleased Premises. Such insurance shall be in the amount of
the full replacement value of the aggregate of the foregoing, as the same may
from time to time increase as a result of inflation or otherwise;

                (b)  Full coverage plate glass insurance;

                (c)  Comprehensive general liability insurance protecting
against any and all claims for personal injury, death, property damage, or other
liabilities related to the condition, use or occupancy of the Subleased
Premises, with a combined single limit of not less than Five Million Dollars
($5,000,000), and including a standard ISO extended liability endorsement;

                (d)  Worker's compensation, statutory limits and employer
liability, $1,000,000; and

                (e)  Such other insurance as may be required by law.

          22.2  Form of Liability Insurance.  Sublessee's liability insurance
                ---------------------------
shall be primary and not contributing to any insurance available to Sublessor
and Landlord and, except to the extent arising from Sublessor's and Landlord's
negligence or intentional misconduct, Sublessor's and Landlord's insurance,
respectively, (if any) shall be in excess thereto. The liability insurance
policy maintained by Sublessee shall specifically insure Sublessee's performance
of the indemnity

                                      10
<PAGE>

obligations of Sublessee set forth in this Sublease, although Sublessee's
indemnity obligations shall not be limited to the amount of any insurance
required of or carried by Sublessee under this paragraph.

          22.3  Form of Policies in General.  All insurance policies required
                ---------------------------
under paragraph 22.1 shall include Sublessor and Landlord as additional insureds
and shall provide that such party may, although additional insureds, recover for
any loss suffered by reason of Sublessee's negligence. All policies provided for
in paragraph 22.1 shall be with companies that have an A.M. Best rating of not
less than A Class VII. Certificates of insurance evidencing the policies
provided for herein shall be delivered to Sublessor prior to the commencement
date of this Sublease. Within fifteen (15) days after request from Sublessor,
Sublessee shall deliver to Sublessor information reasonably requested with
regard to the insurance policies required hereunder. All policies provided for
in paragraph 22.1 shall certify that the policy may not be canceled or altered
without thirty (30) days' prior written notice to Sublessor and shall contain
the insurer's written obligation to notify Sublessor in writing of any
delinquency in premium payments and at least thirty (30) days prior to any
cancellation or material modification of any policy.

     23.  PARKING.  Sublessee shall have the night to use Sublessee's pro rata
          -------
share of the parking spaces in the Project's parking facilities on a
nonexclusive basis, in common with the other tenants and occupants of the
Project. Sublessee agrees not to overburden the Project's parking facilities.
Sublessor, at its discretion, shall have the right to impose reasonable
restrictions in order to ensure that no party places an excessive burden on the
parking facilities, which restrictions may include, without limitation, the
designation of parking areas for the exclusive use of Sublessee and other
tenants and occupants of the Project.

     24.  ASSIGNMENT AND SUBLETTING.  Sublessee's rights with respect to
          -------------------------
assignments of this Sublease and sub-subleases of the Subleased Premises shall
be subject to section 17 of the Master Lease (excluding section 17.9). Sublessee
shall have the right to assign this Sublease or sub-sublease the Subleased
Premises to an affiliate of Sublessee without Sublessor's consent, provided,
however, that Landlord's consent shall be obtained as described in section 17 of
the Master Lease.

                                      11
<PAGE>

     25.  MERGER.  This Sublease (including the applicable provisions of the
          ------
Master Lease) contains all agreements between Sublessor and Sublessee with
respect to Sublessee's hiring of the Subleased Premises, and no other prior or
contemporaneous agreement or understanding shall be effective.

     IN WITNESS WHEREOF, Sublessor and Sublessee have executed this Sublease as
of the Effective Date.

SUBLESSOR                                       SUBLESSEE
---------                                       ---------

Applied Materials, Inc., a                      enCommerce, Inc., a
Delaware corporation                            California corporation

By: /s/ [signature illegible]                   By: /s/  Thomas L. Cronan, III
   ----------------------------                    -----------------------------
Its:  Vice President, Operations                Its: /s/ Vice President
                                                    ----------------------------
                                                By: /s/  Theresa J. Win
                                                   -----------------------------
                                                Its: Secretary
                                                    ----------------------------

                                      12<PAGE>

                                                                   EXHIBIT 10.10

                           ENTRUST TECHNOLOGIES INC.

                AMENDED AND RESTATED 1996 STOCK INCENTIVE PLAN

1.   Purpose
     -------

     The purpose of this Amended and Restated 1996 Stock Incentive Plan (the
"Plan") of Entrust Technologies Inc., a Maryland corporation (the "Company"), is
to advance the interests of the Company's stockholders by enhancing the
Company's ability to attract, retain and motivate persons who make (or are
expected to make) important contributions to the Company by providing such
persons with equity ownership opportunities and performance-based incentives and
thereby better aligning the interests of such persons with those of the
Company's stockholders.  Except where the context otherwise requires, the term
"Company" shall include any present or future subsidiary corporations of Entrust
Technologies Inc. as defined in Section 424(f) of the Internal Revenue Code of
1986, as amended, and any regulations promulgated thereunder (the "Code").

2.   Eligibility
     -----------

     All of the Company's employees, officers, directors, consultants and
advisors are eligible to be granted options, restricted stock, or other stock-
based awards (each, an "Award") under the Plan.  Any person who has been granted
an Award under the Plan shall be deemed a "Participant."

3.   Administration, Delegation
     --------------------------

     a.   Administration by Board of Directors.  The Plan will be administered
          ------------------------------------
by the Board of Directors of the Company (the "Board"). The Board shall have
authority to grant Awards and to adopt, amend and repeal such administrative
rules, guidelines and practices relating to the Plan as it shall deem advisable.
The Board may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem expedient to carry the Plan into effect and it shall be the sole and final
judge of such expediency. All decisions by the Board shall be made in the
Board's sole discretion and shall be final and binding on all persons having or
claiming any interest in the Plan or in any Award. No director or person acting
pursuant to the authority delegated by the Board shall be liable for any action
or determination relating to or under the Plan made in good faith.

     b.   Delegation to Executive Officers.  To the extent permitted by
          --------------------------------
applicable law, the Board may delegate to one or more executive officers of the
Company the power to make Awards and exercise such other powers under the Plan
as the Board may determine, provided that the Board shall fix the maximum number
of shares subject to Awards and the maximum number of shares for any one
Participant to be made by such executive officers.

     c.   Appointment of Committees.  To the extent permitted by applicable law,
          -------------------------
the Board may delegate any or all of its powers under the Plan to one or more
committees or subcommittees of the Board (a "Committee"). If and when the Series
A Common Stock, $.01 par value per share, of the Company (after giving effect to
the redesignation of the Company's Series A Common Stock into Common Stock upon
the filing of Articles of Amendment and
<PAGE>

Restatement, the "Common Stock") is registered under the Securities Exchange Act
of 1934 (the "Exchange Act"), the Board shall appoint one such Committee of not
less than two members, each member of which shall be an "outside director"
within the meaning of Section 162(m) of the Code and a "non-employee director"
as defined in Rule 16b-3 promulgated under the Exchange Act. All references in
the Plan to the "Board" shall mean the Board or a Committee of the Board or the
executive officer referred to in Section 3(b) to the extent that the Board's
powers or authority under the Plan have been delegated to such Committee or
executive officer.

4.   Stock Available for Awards
     --------------------------

     a.   Number of Shares.  Subject to adjustment under Section 4(c), Awards
          ----------------
may be made under the Plan for up to 9,600,000 shares of Common Stock (after
giving effect to the four-for-one split of the Common Stock in the form of a
stock dividend declared by the Board on June 15, 1998 (the "Split")). If any
Award expires or is terminated, surrendered or canceled without having been
fully exercised or is forfeited in whole or in part or results in any Common
Stock not being issued, the unused Common Stock covered by such Award shall
again be available for the grant of Awards under the Plan, subject, however, in
the case of Incentive Stock Options (as hereinafter defined), to any limitation
required under the Code. Shares issued under the Plan may consist in whole or in
part of authorized but unissued shares or treasury shares.

     b.   Per-Participant Limit.  Subject to adjustment under Section 4(c), for
          ---------------------
Awards granted after the Common Stock is registered under the Exchange Act, the
maximum number of shares with respect to which an Award may be granted to any
Participant under the Plan shall be 5,000,000 per calendar year (after giving
effect to the Split). The per-participant limit described in this Section 4(b)
shall be construed and applied consistently with Section 162(m) of the Code.

     c.   Adjustment to Common Stock.  In the event of any stock split, stock
          --------------------------
dividend, recapitalization, reorganization, merger, consolidation, combination,
exchange of shares, liquidation, spin-off or other similar change in
capitalization or event, or any distribution to holders of Common Stock other
than a normal cash dividend, (i) the number and class of securities available
under this Plan, (ii) the number and class of security and exercise price per
share subject to each outstanding option, (iii) the repurchase price per
security subject to each outstanding Restricted Stock Award and (iv) the terms
of each other outstanding stock-based Award shall be appropriately adjusted by
the Company (or substituted Awards may be made, if applicable) to the extent the
Board shall determine, in good faith, that such an adjustment (or substitution)
is necessary and appropriate.  If this Section 4(c) applies and Section 8(e)(i)
also applies to any event, Section 8(e)(i) shall be applicable to such event,
and this Section 4(c) shall not be applicable.

5.   Stock Options
     -------------

     a.   General.  The Board may grant options to purchase Common Stock
          -------
(each, an "Option") and determine the number of shares of Common Stock to be
covered by each option, the exercise price of each option and the conditions and
limitations applicable to the exercise of each option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable. An option which is not intended to be an Incentive Stock
Option (as hereinafter defined) shall be designated a "Nonstatutory Stock
Option."

                                       2
<PAGE>

     b.   Incentive Stock Options.  An Option that the Board intends to be an
          -----------------------
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock option") shall only be granted to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of Section
422 of the Code.  The Company shall have no liability to a Participant, or any
other party, if an Option (or any part thereof) which is intended to be an
Incentive Stock Option is not an Incentive Stock Option.

     c.   Exercise Price.  The Board shall establish the exercise price at the
          --------------
time each Option is granted and specify it in the applicable option agreement.

     d.   Duration of Options.  Each option shall be exercisable at such times
          -------------------
and subject to such terms and conditions as the Board may specify in the
applicable option agreement.

     e.   Exercise of Option.  Options may be exercised only by delivery to the
          ------------------
company of a written notice of exercise signed by the proper person together
with payment in full as specified in Section 5(f) for the number of shares for
which the Option is exercised.

     f.   Payment Upon Exercise.  Common Stock purchased upon the exercise of an
          ---------------------
option granted under the Plan shall be paid for as follows:

          i.    in cash or by check, payable to the order of the Company;

          ii.    except as the Board may otherwise provide in an option
Agreement, delivery of an irrevocable and unconditional undertaking by a
creditworthy broker to deliver promptly to the Company sufficient funds to pay
the exercise price, or delivery by the Participant to the Company of a copy of
irrevocable and unconditional instructions to a creditworthy broker to deliver
promptly to the Company cash or a check sufficient to pay the exercise price;

          iii.   to the extent permitted by the Board and explicitly provided in
an Option Agreement (i) by delivery of shares of Common Stock owned by the
Participant valued at their fair market value as determined by the Board in good
faith ("Fair Market Value"), which Common Stock was owned by the Participant at
least six months prior to such delivery, (ii) by delivery of a promissory note
of the Participant to the Company on terms determined by the Board, or (iii) by
payment of such other lawful consideration as the Board may determine; or

          iv.    any combination of the above permitted forms of payment.

6.   Restricted Stock
     ----------------

     a.   Grants.  The Board may grant Awards entitling recipients to acquire
          ------
shares of Common Stock, subject to the right of the Company to repurchase all or
part of such shares at their issue price or other stated or formula price (or to
require forfeiture of such shares if issued at no cost) from the recipient in
the event that conditions specified by the Board in the applicable Award are not
satisfied prior to the end of the applicable restriction period or periods
established by the Board for such Award (each, "Restricted Stock Award").

     b.   Terms and Conditions.  The Board shall determine the terms and
          --------------------
conditions of any such Restricted Stock Award, including the conditions for
repurchase (or forfeiture) and the

                                       3
<PAGE>

issue price, if any. Any stock certificates issued in respect of a Restricted
Stock Award shall be registered in the name of the Participant and, unless
otherwise determined by the Board, deposited by the Participant, together with a
stock power endorsed in blank, with the Company (or its designee). At the
expiration of the applicable restriction periods, the Company (or such designee)
shall deliver the certificates no longer subject to such restrictions to the
Participant or if the Participant has died, to the beneficiary designated, in a
manner determined by the Board, by a Participant to receive amounts due or
exercise rights of the Participant in the event of the Participant's death (the
"Designated Beneficiary"). In the absence of an effective designation by a
Participant, Designated Beneficiary shall mean the Participant's estate.

7.   Other Stock-Based Awards
     ------------------------

     The Board shall have the right to grant other Awards based upon the Common
Stock having such terms and conditions as the Board may determine, including the
grant of shares based upon certain conditions, the grant of securities
convertible into Common Stock and the grant of stock appreciation rights.

8.   General Provisions Applicable to Awards
     ---------------------------------------

     a.   Transferability of Awards.  Except as the Board may otherwise
          -------------------------
determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the laws
of descent and distribution, and, during the life of the Participant, shall be
exercisable only by the Participant. References to a Participant, to the extent
relevant in the context, shall include references to authorized transferees.

     b.   Documentation.  Each Award under the Plan shall be evidenced by a
          -------------
written instrument in such form as the Board shall determine. Each Award may
contain terms and conditions in addition to those set forth in the Plan.

     c.   Board Discretion.  Except as otherwise provided by the Plan, each type
          ----------------
of Award may be made alone or in addition or in relation to any other type of
Award. The terms of each type of Award need not be identical, and the Board need
not treat Participants uniformly.

     d.   Termination of Status.  The Board shall determine the effect on an
          ---------------------
Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, the Participant's legal
representative, conservator, guardian or Designated Beneficiary may exercise
rights under the Award.

     e.   Acquisition Events
          ------------------

          i.   Consequences of Acquisition Events.  Upon the occurrence of an
               ----------------------------------
Acquisition Event (as defined below), or the execution by the Company of any
agreement with respect to an Acquisition Event, the Board shall take any one or
more of the following actions with respect to then outstanding Awards: (i)
provide that outstanding Options shall be assumed, or equivalent Options shall
be substituted, by the acquiring or succeeding corporation (or an affiliate
thereof), provided that any such Options substituted for Incentive Stock options
shall

                                       4
<PAGE>

satisfy, in the determination of the Board, the requirements of Section 424(a)
of the Code; (ii) upon written notice to the Participants, provide that all then
unexercised Options will become exercisable in full and will terminate
immediately prior to the consummation of such Acquisition Event, except to the
extent exercised by the Participants within a specified period following the
date of such notice; (iii) in the event of an Acquisition Event under the terms
of which holders of Common Stock will receive upon consummation thereof a cash
payment for each share of Common Stock surrendered pursuant to such Acquisition
Event (the "Acquisition Price"), provide that all outstanding Options shall
terminate upon consummation of the Acquisition Event and that Participants shall
receive, in exchange therefor, a cash payment equal to the amount (if any) by
which (A) the Acquisition Price multiplied by the number of shares of Common
Stock subject to such outstanding Options (whether or not then exercisable),
exceeds (B) the aggregate exercise price of such options; (iv) provide that all
Restricted Stock Awards then outstanding shall become free of all restrictions
prior to the consummation of the Acquisition Event; and (v) provide that any
other stock-based Awards outstanding (A) shall become exercisable, realizable or
vested in full, or shall be free of all conditions or restrictions, as
applicable to each such Award, prior to the consummation of the Acquisition
Event, or (B) shall be assumed, or equivalent Awards shall be substituted, by
the acquiring or succeeding corporation (or an affiliate thereof).

     An "Acquisition Event" shall mean:  (a) any merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving or acquiring entity)
less than 60% of the combined voting power of the voting securities of the
Company or such surviving or acquiring entity outstanding immediately after such
merger or consolidation; (b) any sale of all or substantially all of the assets
of the Company; (c) the complete liquidation of the Company; or (d) the
acquisition of "beneficial ownership" (as defined in Rule 13d-3 under the
Exchange Act) of securities of the Company representing 60% or more of the
combined voting power of the Company's then outstanding securities (other than
through an acquisition of securities directly from the Company) by any "person,"
as such term is used in Sections 13(d) and 14(d) of the Exchange Act other than
the Company, any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or any corporation owned directly or indirectly by
the stockholders of the Company in substantially the same proportion as their
ownership of stock of the Company.  Notwithstanding the foregoing, the exercise
of the Triggering event option (as defined in the Company's Articles of
Incorporation) by the holders of the Company's Series B Common Stock shall not
be deemed to be an Acquisition Event.

          ii.  Assumption of Options Upon Certain Events.  The Board may grant
               -----------------------------------------
Awards under the Plan in substitution for stock and stock-based awards held by
employees of another corporation who become employees of the Company as a result
of a merger or consolidation of the employing corporation with the Company or
the acquisition by the Company of property or stock of the employing
corporation. The substitute Awards shall be granted on such terms and conditions
as the Board considers appropriate in the circumstances.

     f.   Withholding.  Each Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in connection with Awards to such Participant no later than the date
of the event creating the tax liability. The

                                       5
<PAGE>

Board may allow Participants to satisfy such tax obligations in whole or in part
in shares of Common Stock, including shares retained from the Award creating the
tax obligation, valued at their Fair Market Value. The Company may, to the
extent permitted by law, deduct any such tax obligations from any payment of any
kind otherwise due to a Participant.

     g.   Amendment of Award.  The Board may amend, modify or terminate any
          ------------------
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
option, provided that the Participant's consent to such action shall be required
unless the Board determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.

     h.   Conditions on Delivery of Stock.  The Company will not be obligated to
          -------------------------------
deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.

     i.   Acceleration.  The Board may at any time provide that any Options
          ------------
shall become immediately exercisable in full or in part, that any Restricted
Stock Awards shall be free of all restrictions or that any other stock-based
Awards may become exercisable in full or in part or free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be.

9.   Miscellaneous
     -------------

     a.   No Right To Employment or Other Status.  No person shall have any
          --------------------------------------
claim or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.

     b.   No Rights As Stockholder.  Subject to the provisions of the applicable
          ------------------------
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed with
respect to an Award until becoming the record holder of such shares.

      c.  Effective Date and Term of Plan.  The Plan shall become effective on
the date on which it is adopted by the Board, but no Award granted to a
Participant designated as subject to Section 162(m) by the Board shall become
exercisable, vested or realizable, as applicable to such Award, unless and until
the Plan has been approved by the Company's stockholders. No Awards shall be
granted under the Plan after the completion of ten years from the earlier of (i)
the date on

                                       6
<PAGE>

which the Plan was adopted by the Board or (ii) the date the Plan was approved
by the Company's stockholders, but Awards previously granted may extend beyond
that date.

     d.   Amendment of Plan.  The Board may amend, suspend or terminate the Plan
          -----------------
or any portion thereof at any time, provided that no Award granted to a
Participant designated as subject to Section 162(m) by the Board after the date
of such amendment shall become exercisable, realizable or vested, as applicable
to such Award (to the extent that such amendment to the Plan was required to
grant such Award to a particular Participant), unless and until such amendment
shall have been approved by the Company's stockholders.

     e.   Stockholder Approval.  For purposes of this Plan, stockholder approval
          --------------------
shall mean approval by a vote of the stockholders in accordance with the
requirements of Section 162(m) of the Code.

     f.  Governing Law.  The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Maryland, without regard to any applicable conflicts of law.

                              Adopted by the Board of Directors on June 18, 1998

                              Approved by the Stockholders on July 7, 1998

                                       7
<PAGE>

                                AMENDMENT NO. 1
                                    TO THE
                AMENDED AND RESTATED 1996 STOCK INCENTIVE PLAN
                                      OF
                           ENTRUST TECHNOLOGIES INC.

     The Amended and Restated 1996 Stock Incentive Plan (the "Plan") of Entrust
Technologies Inc. is hereby amended as follows (capitalized terms used herein
and not defined herein shall have the respective meanings ascribed to such terms
in the Plan):

1.   Section 5(e) of the Plan shall be deleted in its entirety and replaced with
the following:

          "(e) Exercise of Option.  Options may be exercised by delivery to the
               ------------------
     Company of a written notice of exercise signed by the proper person or by
     any other form of notice (including electronic notice) approved by the
     Board together with payment in full as specified in Section 5(f) for the
     number of shares for which the Option is exercised."

2.   Section 8(b) of the Plan shall be deleted in its entirety and replaced with
the following:

          "(b) Documentation.  Each Award shall be evidenced by a written
               -------------
     instrument in such form as the Board shall determine, it being understood
     that an electronic form of Award shall be deemed to be a written instrument
     for purposes of the Plan.  Each Award may contain terms and conditions in
     addition to those set forth in the Plan."

3.   Except as aforesaid, the Plan shall remain in full force and effect.

                    Adopted by the Board of Directors on December 10, 1999
<PAGE>

                                AMENDMENT NO. 2
                                    TO THE
                AMENDED AND RESTATED 1996 STOCK INCENTIVE PLAN
                                      OF
                           ENTRUST TECHNOLOGIES INC.

     The Amended and Restated 1996 Stock Incentive Plan, as amended (the
"Plan"), of Entrust Technologies Inc. is hereby further amended as follows (all
capitalized terms used herein and not defined herein shall have the respective
meanings ascribed to such terms in the Plan):

1.   The first sentence of Section 4(a) of the Plan shall be deleted in its
entirety and replaced with the following:

          "(a) Number of Shares.  Subject to adjustment under Section 4(c),
               ----------------
     Awards may be made under the Plan for up to 14,600,000 shares of Common
     Stock, plus an annual increase to be added on each of January 1, 2001 and
     January 1, 2002, equal to the lower of (i) 5% of the total number of
     outstanding shares of Common Stock on such date or (ii) a lesser amount
     determined by the Board; provided, however, that the maximum number of
     shares of Common Stock available for issuance hereunder shall be 26,000,000
     shares.  (The foregoing share numbers reflect a four-for-one split of the
     Common Stock which was effected in the form of a stock dividend declared by
     the Board on June 15, 1998.)"

2.   Except as aforesaid, the Plan shall remain in full force and effect.

                        Adopted by the Board of Directors on January 28, 2000

                        Approved by the Stockholders on April 27, 2000

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