Document:

<PAGE>

                                                                  Exhibit 10.8.1

Note:  Portions of this exhibit indicated by "[*]" are subject to a confidential
treatment request, and have been omitted from this exhibit. Complete, unredacted
copies of this exhibit have been filed with the Securities and Exchange
Commission as part of Expedia's confidential treatment request.

                                Amendment No. 4
             to CRS Marketing, Services and Development Agreement

This Amendment No. 4 to the CRS Marketing, Services and Development Agreement
(the "Amendment") is entered into as of July 1, 2001 (the "Amendment Effective
Date"), by and between Expedia, Inc. ("EI"), a Washington corporation with its
principal office at 13810 SE Eastgate Way, Suite 400, Bellevue, WA 98005, and
Worldspan, L.P., a Delaware limited partnership ("Worldspan"), with its
principal office at 300 Galleria Parkway, NW, Atlanta, Georgia 30339.

                                   Recitals

     Microsoft Corporation ("Microsoft") and Worldspan entered into that certain
CRS Marketing, Services and Development Agreement dated December 15, 1995, as
amended by the parties pursuant to that certain Amendment No. 1 dated January 1,
1997, Amendment No. 2 dated July 1, 1998, and Amendment No. 3 dated April 1,
1999 (collectively, the "Agreement").

     Microsoft's rights and obligations under the Agreement have been assigned
to and assumed by EI, which is the successor in interest to Microsoft for all
purposes relating to the Agreement.

     EI and Worldspan now desire to modify the Agreement as set forth herein.

     Now, Therefore, in consideration of the above recitals, the mutual
undertakings of the parties as contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties to this Amendment hereby agree as follows:

     1. Definitions
        -----------

     Terms in capitalized form not defined in the text of this Amendment No. 4
shall have the meanings set forth in the Agreement.

     2. Term
        ----

        (a) Section 7.1 of the Agreement is hereby deleted and replaced in its
     entirety with the following:

        7.1. Unless earlier terminated as provided herein, the term of this
     Agreement (the "Term") shall commence as of December 15, 1995, and shall
     continue thereafter until December 15, 2010.

        (b) Section 7.5 of the Agreement is hereby deleted and replaced in its
     entirety with the following:

                                       1

<PAGE>

        7.5 EI shall have the option to terminate this Agreement upon written
     notice to WORLDSPAN in the event that WORLDSPAN migrates EI and EI Systems
     users to a computer reservation system not operated by WORLDSPAN.

     3. Financial Arrangements
        ----------------------

        The last sentence of Section 2(a) of Amendment No. 3 is hereby deleted
in its entirety. Section 11.1.B of the Agreement, as set forth in Amendment No.
3, is hereby deleted and replaced in its entirety with the following:

        11.1.B (i) The parties agree that WORLDSPAN shall pay to EI the revenue
     share amount indicated in Schedule 11.1 of this Agreement (the "Revenue
     Share"). Within thirty (30) days from the end of each calendar month,
     WORLDSPAN shall furnish EI with a statement together with payment for all
     amounts shown thereby to be due to EI. That statement shall be based upon
     the Revenue Share for the month preceding the month then ended, and shall
     contain information sufficient to discern how the Revenue Share was
     computed.

               (ii) At the end of each calendar year, WORLDSPAN shall reconcile
     the amounts billed to and paid by Participating Airlines, Participating
     Cars and Participating Hotels (collectively, "Participating Vendors") for
     Net Segments (as defined in Schedule 11.1) made by EI System users. In the
     event a Participating Vendor fails to pay and WORLDSPAN, despite using
     reasonable business efforts, is unable to collect fees from such
     Participating Vendor, WORLDSPAN shall notify EI in writing of such
     uncollected amounts. Within thirty (30) days of receipt of WORLDSPAN's
     notice, EI will refund (or WORLDSPAN may set off from amounts owed by
     WORLDSPAN to EI hereunder) the amounts paid to EI by WORLDSPAN for such Net
     Segments. EI shall not be required to refund any amounts where WORLDSPAN
     fails to collect due to a marketing or other arrangement with a
     Participating Vendor.

     4.  Use of Logos/CRS Usage Commitment
         ---------------------------------

         Section 8 of Amendment No. 1 and Section 8 of Amendment No. 3 to the
     Agreement are hereby deleted in their entirety and a new Section 35 is
     added to the Agreement to provide as follows:

         35.  Other Agreements.
              ----------------

         35.1 Use of WORLDSPAN Logo. EI will include the "Worldspan Wired" logo
              ---------------------
     on the bottom of the Expedia home page as long as there is at least one (1)
     other third-party, non-advertising logo in the same general location.
     Placement and size of all third-party, non-advertising logos will be
     determined by EI, however, EI will use commercially reasonable best efforts
     to feature the WORLDSPAN logo in a manner similar to the presentation of
     any other third-party, non-advertising logo featured on the Expedia home
     page.

                                       2
<PAGE>

         35.2 CRS Usage Commitment. During the Term of this Agreement,
              --------------------
     WORLDSPAN agrees to provide the same or comparable significant
     functionality tools and features (such as a ticketless functionality) as
     other computer reservation systems. So long as WORLDSPAN complies with the
     foregoing, EI agrees that it will maintain during the Term of this
     Agreement, on a [*] basis, no less than [*] CRS booking share from Expedia
     on the WORLDSPAN System ("Minimum Commitment"). At any time after EI enters
     into an agreement with another CRS for Expedia, EI shall provide WORLDSPAN
     with a quarterly report that details bookings made by Expedia users. In the
     event EI does not maintain at least the Minimum Commitment CRS booking
     share from Expedia on the WORLDSPAN System, the amounts otherwise payable
     to EI pursuant to Schedule 11.1 shall be reduced by [*]. For purposes of
     this Section only, the term "CRS" shall mean the following entities and
     their successors and affiliates: [*].

     5.  Revenue Share
         -------------

         The Agreement is hereby amended by adding thereto as Schedule 11.1, the
     Schedule 11.1 attached as Appendix 1 of this Amendment No. 4. Appendix 1 of
     Amendment No. 1 and Appendix 1 of Amendment No. 3 shall be deleted and
     replaced in their entirety by such Schedule 11.1.

     6.  Confidentiality

         This Amendment shall be considered Confidential Information according
     to the Agreement.

     7.  Effective Date
         --------------

         Except as provided in this Amendment, the provisions of this Amendment
     shall be effective as of the Amendment Effective Date.

     8.  Continuation of Agreement
         -------------------------

          Except as provided in this Amendment, the Agreement shall continue in
     full force and effect.

[*] - CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS

                                       3
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their duly authorized undersigned representatives as of the date first above
written.

Expedia, Inc.                          Worldspan, L.P.

By:  /s/ Byron Bishop                  By:  /s/ Sue Powers
    ---------------------------------      ---------------------------------

Print Name: Byron Bishop               Print Name: Sue Powers

Title: Senior Vice President,          Title: Senior Vice President and General
       Transportation and Core                Manager - Worldwide E-Commerce
       Development

                                       4
<PAGE>

                                                                      Appendix 1

                                 Schedule 11.1
                                 Revenue Share

A.   Air Segment Revenue Share
     -------------------------

     WORLDSPAN shall pay EI a revenue share for Net Domestic Air Segments and
     Net International Air Segments based on the number and type of segments in
     accordance with the following:

          -------------------------------------------------------------
              Type of Net Segment                    Revenue Share
          -------------------------------------------------------------
           [*]                                             [*]
          -------------------------------------------------------------
           [*]                                             [*]
          -------------------------------------------------------------

     In the event [*]. In the event [*]. If the parties are unable to agree [*].
     At the end of such twelve (12) month period, either party may terminate
     this Agreement by providing the other party with ninety (90) days prior
     written notice thereof. [*]

B.   Car Segment Revenue Share
     -------------------------

     WORLDSPAN shall pay EI a revenue share for Net Car Segments equal to [*]
     for each Net Car Segment, except that WORLDSPAN shall not be required to
     pay any such revenue share for the [*] Net Car Segments during each
     Contract Year. For example, if the number of Net Car Segments during a
     Contract Year was [*], then WORLDSPAN would pay EI [*].

C.   Hotel Segment Revenue Share
     ---------------------------

     WORLDSPAN shall pay EI a revenue share for Net Hotel Segments equal to [*]
     for each Net Hotel Segment, except that WORLDSPAN shall not be required to
     pay any such revenue share for [*]. For example, if the number of Net Hotel
     Segments during a Contract Year was [*], and of the [*] Net Hotel Segments
     after the [*] Net Hotel Segments, [*], then WORLDSPAN would pay EI [*].

D.   Review of Revenue Share
     -----------------------

     The revenue share set forth in Sections A, B and C of this Schedule 11.1
     shall be reviewed by WORLDSPAN and EI every [*]. In the event either party
     requests to renegotiate such revenue share at that time and the parties are
     unable to agree on new revenue share within sixty (60) days of the
     commencement of such negotiations, then at any time [*]. However, the [*].

E.   Weighted Message Fee
     --------------------

                         -------------------------------------------------------
                         [*] - CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED
                                 AND FILED SEPARATELY WITH THE COMMISSION.
                              CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
                                     RESPECT TO THE OMITTED PORTIONS
                         -------------------------------------------------------

                                    11.1-1
<PAGE>

     Within 30 days following the end of each month, EI will pay WORLDSPAN a
     Weighted Message Unit charge equal to (i) [*], multiplied by (ii) the
     amount, if any, by which (x) the number of [*] processed by the WORLDSPAN
     System during the then preceding six (6) calendar month period, exceeds (y)
     [*] multiplied by the number of Net Segments for that six (6) calendar
     month period.

F.   Definitions
     -----------

     "Air Segment" means each direct or through flight booked by means of
      -----------
     Expedia through the WORLDSPAN System for which WORLDSPAN receives a
     discrete payment from the applicable air carrier, as determined by the
     WORLDSPAN System.

     "Announced Rate" means Worldspan's announced rate for determining Airline
      --------------
     Fees payable to Worldspan by Participating Airlines for Net Segments.

     "Announced Rate Decrease" means a decrease in the Announced Rate below the
      -----------------------
     Announced Rate then in effect

     "Announced Rate Increase" means an increase in the Announced Rate above the
      -----------------------
     Announced Rate then in effect.

     "Car Segment" means each car rental booked by means of Expedia through the
      -----------
     WORLDSPAN System for which WORLDSPAN receives a discrete payment from the
     applicable car rental company, as determined by the WORLDSPAN System.

     "Contract Year" means each twelve (12) month period commencing, in the case
      -------------
     of the first Contract Year, on the date of Amendment No. 4 to this
     Agreement and thereafter upon the completion of the immediately preceding
     Contract Year.

     "Domestic Air Segment" means any Air Segment booked from a point of sale
      --------------------
     designated by WORLDSPAN as within Billing Conference 1.

     "Expedia" means the software code, informational databases, products, and
      -------
     other components that make up the travel services of EI and its
     subsidiaries and are branded "Expedia" or "Travelscape", which are marketed
     for use by individual end users in the United States, Belgium, Canada,
     France, Germany, the United Kingdom and/or such other locales as EI may
     elect to market its services, at its sole discretion, to enable such end
     users to shop for, reserve, book and pay for certain travel products and
     services (including, at a minimum, air travel, hotel accommodations, and
     car rentals) via a personal computer, telephone or other interactive
     device. The term "Expedia" as used in this Agreement shall be deemed to
     refer to all future versions of the above-described services, and includes
     without limitation any and all additional, follow-on, successor or
     replacement versions of such services.

[*] - CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
                                    11.1-2
<PAGE>

     "Hotel Segment" means each hotel stay booked by means of Expedia through
      -------------
     the WORLDSPAN System for which WORLDSPAN receives a discrete payment from
     the applicable hotel, as determined by the WORLDSPAN System.

     "International Air Segment" means any Air Segment booked from a point of
      -------------------------
     sale designated by WORLDSPAN as outside of Billing Conference 1.

     "Message" means each electronic transmission to the WORLDSPAN System
      -------
     generated by Expedia, EI, any employee, agent, or contractor of EI, or any
     Expedia user, and the associated response. The types of Messages as of the
     date of Amendment No. 4 to this Agreement are set forth in Exhibit A to
     this Schedule 11.1.

     "Net Car Segments" means, for any applicable time period, the number of Car
      ----------------
     Segments booked during that period less the number of Car Segments canceled
     during that period, as determined by the WORLDSPAN System.

     "Net Domestic Air Segments" means, for any applicable time period, the
      -------------------------
     number of Domestic Air Segments booked during that period less the number
     of Domestic Air Segments cancelled during that period, as determined by the
     WORLDSPAN System.

     "Net Hotel Segments" means, for any applicable time period, the number of
      ------------------
     Hotel Segments booked during that period less the number of Hotel Segments
     cancelled during that period, as determined by the WORLDSPAN System.

     "Net International Air Segments" means, for any applicable time period, the
      ------------------------------
     number of International Air Segments booked during that period less the
     number of International Air Segments cancelled during that period, as
     determined by the WORLDSPAN System.

     "Net Segments" means, for any applicable time period, all of the Net
      ------------
     Domestic Air Segments, Net International Air Segments, Net Car Segments,
     and Net Hotel Segments for that period.

     "Weighted Message Unit" means a unit of measurement for Messages that
      ---------------------
     reflects the respective average amount of computer and related resources
     required for the WORLDSPAN System to process a given type of Message, as
     determined in accordance with the methodology used by WORLDSPAN in the
     ordinary course of its business for that purpose. The number of Weighted
     Message Units for a given Message is determined by the Message Weight for
     that type of Message. The Message Weight for each of the types of Messages
     as of the date of Amendment No. 4 to this Agreement are set forth on
     Exhibit A to this Schedule 11.1.

                                    11.1-3
<PAGE>

                                    Exhibit A
                            Message Weight Categories

Message Type                                                      Message Weight
------------                                                      --------------
[*]                                                               [*]

                                    [*] - TWO PAGES HAVE BEEN OMITTED AND FILED
                                          SEPARATELY WITH THE COMMISSION.
                                          CONFIDENTIAL TREATMENT HAS BEEN
                                          REQUESTED WITH RESPECT TO THE OMITTED
                                          PAGES

                                   11.1-A-1<PAGE>

                                                                   Exhibit 10.10

                                 EXPEDIA, INC.

                  1999 AMENDED AND RESTATED STOCK OPTION PLAN

     1.   Purpose of the Plan.  The purposes of this Stock Option Plan are to
          -------------------
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to such individuals, and to
promote the success of the Company's business by aligning employee financial
interests with long-term shareholder value.

     Options granted hereunder are Nonqualified Stock Options.

     2.   Definitions.  As used herein, the following definitions shall apply:
          -----------

          (a)  "Board" shall mean the Committee, if such Committee has been
                -----
appointed, or the Board of Directors of the Company, if such Committee has not
been appointed.

          (b)  "Code" shall mean the Internal Revenue Code of 1986, as amended.
                ----

          (c)  "Committee" shall mean the Committee appointed by the Board of
                ---------
Directors in accordance with paragraph (a) of Section 4 of the Plan, if one is
appointed; provided, however, if the Board of Directors appoints more than one
Committee pursuant to Section 4, then "Committee" shall refer to the appropriate
Committee, as indicated by the context of the reference.

          (d)  "Common Shares" shall mean the common shares of Expedia, Inc.
                -------------

          (e)  "Company" shall mean Expedia, Inc., a Washington corporation and
                -------
any successor thereto.

          (f)  "Continuous Status as an Employee" shall mean the absence of any
                --------------------------------
interruption or termination of service as an Employee.  Continuous Status as an
Employee shall not be considered interrupted in the case of sick leave,
maternity leave, infant care leave, medical emergency leave, military leave, or
any other leave of absence authorized in writing by a Vice President of the
Company prior to its commencement.

          (g)  "Employee" shall mean any person, including officers, employed by
                --------
the Company or any Subsidiary of the Company. For purposes of clarification,
"employed by the Company" includes persons employed by the Company for services
rendered as a consultant, independent contractor or under similar arrangements.

          (h)  "Immediate Family" shall mean the Optionee and the Optionee's
                ----------------
spouse, parents, children or grandchildren (including adopted children,
stepchildren and stepgrandchildren.

          (i)  "Non-Employee Director" shall have the same meaning as defined or
                ---------------------
interpreted for purposes of Rule 16b-3 (including amendments and successor
provisions) as promulgated by the Securities and Exchange Commission pursuant to
its authority under the Exchange Act ("Rule 16-3").
<PAGE>

          (j)  "Nonqualified Stock Option" shall mean an Option that does not
                -------------------------
meet the requirements of Section 422 of the Code.

          (k)  "Option" shall mean a stock option granted pursuant to the Plan.
                ------

          (l)  "Optionee" shall mean an Employee who receives an Option.
                --------

          (m)  "Outside Director" shall have the same meaning as defined or
                ----------------
interpreted for purposes of Section 162(m) of the Code.

          (n)  "Plan" shall mean this 1999 Amended and Restated Stock Option
                ----
Plan, including any amendments thereto.

          (o)  "Share" shall mean one Common Share, as adjusted in accordance
                -----
with Section 11 of the Plan.

          (p)  "Subsidiary" shall mean a "subsidiary corporation," whether now
                ----------
or hereafter existing, as defined in Section 424(f) of the Code, and, in
addition to, a limited liability company, partnership or other entity in which
the Company controls 50 percent or more of the voting power or equity interests.

     3.   Shares Subject to the Plan. Subject to the provisions of Section 11 of
          --------------------------
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 11,500,000 Common Shares. The maximum aggregate number of
Shares that may be optioned and sold under the Plan shall be automatically
increased annually, beginning on the first day of fiscal year 2001, in an amount
equal to (i) the lesser of (a) 5% of the outstanding Common Shares as of the end
of the immediately preceding fiscal year and (b) 5,000,000 Shares; or (ii) the
lesser amount determined by the Plan administrator; provided that any Shares
from any such increase in previous years that are not actually issued will be
added to the aggregate number of Shares available for issuance under the Plan.
The Shares may be authorized, but unissued, or reacquired Common Shares.

          If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant under the Plan.

     4.   Administration of the Plan.
          --------------------------

          (a)  Procedure. The Plan shall be administered by the Board of
               ---------
Directors of the Company.

               (1)  The Board of Directors may appoint one or more Committees
each consisting of not less than two members of the Board of Directors to
administer the Plan on behalf of the Board of Directors, subject to such terms
and conditions as the Board of Directors may prescribe. Once appointed, such
Committees shall continue to serve until otherwise directed by the Board of
Directors.

               (2)  Any grants of Options to officers who are subject to Section
16 of the Securities Exchange Act of 1934 (the "Exchange Act") shall be made by
(i) a Committee of two or

                                       2
<PAGE>

more directors, each of whom is a Non-Employee Director and an Outside Director
or (ii) as otherwise permitted by both Rule 16b-3, Section 162(m) of the Code
and other applicable regulations.

               (3)  Subject to the foregoing subparagraphs (1) and (2), from
time to time the Board of Directors may increase the size of the Committee(s)
and appoint additional members thereof, remove members (with or without cause)
and appoint new members in substitution therefor, or fill vacancies however
caused.

          (b)  Powers of the Board. Subject to the provisions of the Plan, the
               -------------------
Board shall have the authority, in its discretion: (i) to grant Nonqualified
Stock Options; (ii) to determine, in accordance with Section 8(b) of the Plan,
the fair market value of the Shares; (iii) to determine, in accordance with
Section 8(a) of the Plan, the exercise price per share of Options to be granted;
(iv) to determine the Employees to whom, and the time or times at which, Options
shall be granted and the number of Shares to be represented by each Option; (v)
to interpret the Plan; (vi) to prescribe, amend, and rescind rules and
regulations relating to the Plan; (vii) to determine the terms and provisions of
each Option granted (which need not be identical) and, with the consent of the
holder thereof, modify or amend each Option; (viii) to reduce the exercise price
per share of outstanding and unexercised Options; (ix) to accelerate or defer
(with the consent of the Optionee) the exercise date of any Option; (x) to
authorize any person to execute on behalf of the Company any instrument required
to effectuate the grant of an Option previously granted by the Board; and (xi)
to make all other determinations deemed necessary or advisable for the
administration of the Plan.

          (c)  Effect of Board's Decision.  All decisions, determinations, and
               --------------------------
interpretations of the Board shall be final and binding on all Optionees and any
other holders of any Options granted under the Plan.

     5.   Eligibility.
          -----------

          (a)  Options may be granted only to Employees. For avoidance of doubt,
directors are not eligible to participate in the Plan unless they are full-time
Employees.

          (b)  Each Option shall be designated in the written option agreement
as a Nonqualified Stock Option.

          (c)  For purposes of Section 5(b), Options shall be taken into account
in the order in which they were granted, and the fair market value of the Shares
shall be determined as of the time the Option with respect to such Shares is
granted.

          (d)  Nothing in the Plan or any Option granted hereunder shall confer
upon any Optionee any right with respect to continuation of employment with the
Company, nor shall it interfere in any way with the Optionee's right or the
Company's right to terminate the employment relationship at any time, with or
without cause.

     6.   Term of Plan. The Plan shall become effective upon its adoption by the
          ------------
Board. It shall continue in effect until the date 10 years after such adoption,
unless sooner terminated under Section 14 of the Plan, but shall continue
thereafter until all then outstanding options have been exercised, terminated or
expired.

                                       3
<PAGE>

     7.   Term of Option. The term of each Option shall be no more than ten (10)
          --------------
years from the date of grant.

     8.   Exercise Price and Consideration.
          --------------------------------

          (a)  The per Share exercise price under each Option shall be such
price as is determined by the Board, except the per Share exercise price may be
less than, equal to, or greater than the fair market value per Share on the date
of grant.

          (b)  The fair market value per Share shall be the closing price per
share of the Common Share on the Nasdaq Stock Market ("Nasdaq") on the date of
grant. If the Shares cease to be listed on Nasdaq, the Board shall designate an
alternative method of determining the fair market value of the Shares.

          (c)  The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Board at the time of grant and may consist of cash and/or check. Payment may
also be made by delivering a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to the Company the
amount of sale proceeds necessary to pay the exercise price. If the Optionee is
an officer of the Company within the meaning of Section 16 of the Exchange Act,
he may in addition be allowed to pay all or part of the purchase price with
Shares. Shares used by officers to pay the exercise price shall be valued at
their fair market value on the exercise date.

          (d)  Prior to issuance of the Shares upon exercise of an Option, the
Optionee shall pay any federal, state, and local withholding obligations of the
Company, if applicable.  If an Optionee is an officer of the Company within the
meaning of Section 16 of the Exchange Act, he may elect to pay such withholding
tax obligations by having the Company withhold Shares having a value equal to
the amount required to be withheld.  The value of the Shares to be withheld
shall equal the fair market value of the Shares on the day the Option is
exercised.  The right of an officer to dispose of Shares to the Company in
satisfaction of withholding tax obligations shall be deemed to be approved as
part of the initial grant of an option, unless thereafter rescinded, and shall
otherwise be made in compliance with Rule 16b-3 and other applicable
regulations.

     9.   Exercise of Option.
          ------------------

          (a)  Procedure for Exercise; Rights as a Shareholder. Any Option
               -----------------------------------------------
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Board at the time of grant, and as shall be permissible
under the terms of the Plan.

          An Option may not be exercised for a fraction of a Share.

          An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company.  Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 8(c) of the Plan.
Until the issuance (as evidenced by the

                                       4
<PAGE>

appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the share certificate evidencing such Shares, no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such share certificate promptly
upon exercise of the Option. No adjustment will be made for a dividend or other
right for which the record date is prior to the date the share certificate is
issued, except as provided in Section 11 of the Plan.

          Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.

          (b)  Termination of Status as Employee. In the event of termination of
               ---------------------------------
an Optionee's Continuous Status as an Employee, such Optionee may exercise stock
options to the extent exercisable on the date of termination. Such exercise must
occur within three (3) months (or such shorter time as may be specified in the
grant), after the date of such termination (but in no event later than the date
of expiration of the term of such Option as set forth in the Option Agreement).
To the extent that the Optionee was not entitled to exercise the Option at the
date of such termination, or does not exercise such Option within the time
specified herein, the Option shall terminate.

          (c)  Disability of Optionee. Notwithstanding the provisions of Section
               ----------------------
9(b) above, in the event of termination of an Optionee's Continuous Status as an
Employee as a result of total and permanent disability (i.e., the inability to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
twelve (12) months), the Optionee may exercise the Option, but only to the
extent of the right to exercise that would have accrued had the Optionee
remained in Continuous Status as an Employee for a period of twelve (12) months
after the date on which the Employee ceased working as a result of the total and
permanent disability. Such exercise must occur within eighteen (18) months (or
such shorter time as is specified in the grant) from the date on which the
Employee ceased working as a result of the total and permanent disability (but
in no event later than the date of expiration of the term of such Option as set
forth in the Option Agreement). To the extent that the Optionee was not entitled
to exercise such Option within the time specified herein, the Option shall
terminate.

          (d)  Death of Optionee. Notwithstanding the provisions of Section 9(b)
               -----------------
above, in the event of the death of an Optionee:

               (i)   who is at the time of death an Employee of the Company, the
Option may be exercised, at any time within six (6) months following the date of
death (but in no event later than the date of expiration of the term of such
Option as set forth in the Option Agreement), by the Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or inheritance,
but only to the extent of the right to exercise that would have accrued had the
Optionee continued living and remained in Continuous Status as an Employee
twelve (12) months after the date of death; or

               (ii)  whose Option has not yet expired but whose Continuous
Status as an Employee terminated prior to the date of death, the Option may be
exercised, at any time within six (6) months following the date of death (but in
no event later than the date of expiration of the term of such Option as set
forth in the Option Agreement), by the Optionee's estate or by a person who
acquired the

                                       5
<PAGE>

right to exercise the Option by bequest or inheritance, but only to the extent
of the right to exercise that had accrued at the date of termination.

          (e)  Notwithstanding subsections (b), (c), and (d) above, the Board
shall have the authority to extend the expiration date of any outstanding option
in circumstances in which it deems such action to be appropriate (provided that
no such extension shall extend the term of an option beyond the date on which
the option would have expired if no termination of the Employee's Continuous
Status as an Employee had occurred).

     10.  Transferability of Options.  Except as otherwise provided herein, the
          --------------------------
Option may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised, during the lifetime of the Optionee, only by
the Optionee; provided that the Board may permit further transferability, on a
general or specific basis, and may impose conditions and limitations on any
permitted transferability.  The Option is transferable, in whole or in part, by
gift or, with the consent of the compensation committee of the Board, for value,
to immediate family members of the Holder, partnerships of which the only
partners are members of the Optionee's Immediate Family, and trusts established
solely for the benefit of Optionee's Immediate Family, provided that such
transferability shall be limited to vested Options.  Transfers to Optionee's
Immediate Family shall be subject to the terms and conditions of this Plan and
the applicable stock option grant agreement and shall not be permitted to effect
a cashless exercise. Optionee's Immediate Family members shall not have any
right to further transfer the Option other than by will or by the laws of
descent and distribution.

     11.  Adjustments Upon Changes in Capitalization or Merger. Subject to any
          ----------------------------------------------------
required action by the shareholders of the Company, the number of Shares covered
by each outstanding Option, the Maximum Annual Employee Grant and the number of
Shares which have been authorized for issuance under the Plan but as to which no
Options have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Option, as well as the price per Share covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued Shares resulting from a stock
split, reverse stock split, stock dividend, combination, or reclassification of
the Shares, or any other increase or decrease in the number of issued Shares
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration."  Such adjustment shall
be made by the Board, whose determination in that respect shall be final,
binding, and conclusive.  Except as expressly provided herein, no issuance by
the Company of shares of any class, or securities convertible into shares of
stock of any class, shall affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of Shares subject to an Option.

          In the event of the proposed dissolution or liquidation of the
Company, the Option will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board. The Board may, in the
exercise of its sole discretion in such instances, declare that any Option shall
terminate as of a date fixed by the Board and give each Optionee the right to
exercise an Option as to all or any part of the Optioned Stock, including Shares
as to which the Option would not otherwise be exercisable. In the event of a
proposed sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, each Option shall be
assumed or an equivalent option shall be substituted by such successor
corporation or a parent or subsidiary of such successor corporation, unless such
successor corporation does not agree to assume the Option or to

                                       6
<PAGE>

substitute an equivalent option, in which case the Board shall, in lieu of such
assumption or substitution, provide for the Optionee to have the right to
exercise the Option as to all of the Optioned Stock, including Shares as to
which the Option would not otherwise be exercisable. If the Board makes an
Option fully exercisable in lieu of assumption or substitution in the event of a
merger or sale of assets, the Board shall notify the Optionee that the Option
shall be fully exercisable for a period of fifteen (15) days from the date of
such notice, and the Option will terminate upon the expiration of such period.

     12.  Time of Granting Options.  The date of grant of an Option shall, for
          ------------------------
all purposes, be the date on which the Company completes the corporate action
relating to the grant of an option and all conditions to the grant have been
satisfied, provided that conditions to the exercise of an option shall not defer
the date of grant.  Notice of a grant shall be given to each Employee to whom an
Option is so granted within a reasonable time after the determination has been
made.

     13.  Substitutions and Assumptions.  The Board shall have the right to
          -----------------------------
substitute or assume Options in connection with mergers, reorganizations,
separations, or other transactions to which Section 424(a) of the Code applies,
provided such substitutions and assumptions are permitted by Section 424 of the
Code and the regulations promulgated thereunder.  The number of Shares reserved
pursuant to Section 3 may be increased by the corresponding number of Options
assumed and, in the case of a substitution, by the net increase in the number of
Shares subject to Options before and after the substitution.

     14.  Amendment and Termination of the Plan.
          -------------------------------------

          (a)  Amendment and Termination. The Board may amend or terminate the
               -------------------------
Plan from time to time in such respects as the Board may deem advisable
(including, but not limited to amendments which the Board deems appropriate to
enhance the Company's ability to claim deductions related to stock option
exercises); provided that any increase in the number of Shares subject to the
Plan, other than in connection with an adjustment under Section 11 of the Plan,
shall require approval of or ratification by the shareholders of the Company.

          (b)  Employees in Foreign Countries. The Board 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 Subsidiaries may operate to assure the
viability of the benefits from Options granted to Employees employed in such
countries and to meet the objectives of the Plan.

          (c)  Effect of Amendment or Termination. Any such amendment or
               ----------------------------------
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.

     15.  Conditions Upon Issuance of Shares.  Shares shall not be issued
          ----------------------------------
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.

                                       7
<PAGE>

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

     17.  Shareholder Approval.  The original Plan was approved by the sole
          --------------------
shareholder of the Company on November 4, 1999; the amendments to the Plan were
approved by the shareholders of the Company on November 9, 2000.

                                       8

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