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                                                                   EXHIBIT 10.33

                             MICROSOUND CORPORATION
                                 1997 STOCK PLAN

        1. Purposes of the Plan. The purposes of this 1997 Stock Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Subsidiaries and to promote the success of the Company's
business. Options granted under the Plan may be incentive stock options (as
defined under Section 422 of the Code) or nonstatutory stock options, as
determined by the Administrator at the time of grant of an option and subject to
the applicable provisions of Section 422 of the Code, as amended, and the
regulations promulgated thereunder. Stock purchase rights may also be granted
under the Plan.

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

                (a) "ADMINISTRATOR" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.

                (b) "BOARD" means the Board of Directors of the Company.

                (c) "CODE" means the Internal Revenue Code of 1986, as amended-

                (d) "COMMITTEE" means the Committee appointed by the Board of
Directors in accordance with Section 4(a) of the Plan.

                (e) "COMMON STOCK" means the Common Stock of the Company.

                (f) "COMPANY" means MicroSound Corporation, a Delaware
corporation.

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

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

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                (i) "EMPLOYEE" means any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company,
with the status of employment determined based upon such minimum number of hours
or periods worked as shall be determined by the Administrator in its discretion,
subject to any requirements of the Code. The payment by the Company of a
director's fee to a Director shall not be sufficient to constitute "employment"
of such Director by the Company.

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

                (k) "FAIR MARKET VALUE" means, as of any date, the fair market
value of Common Stock determined as follows:

                        (i) If the Common Stock is listed on any established
stock exchange or a national market system including without limitation the
National Market of the National Association of Securities Dealers, Inc.
Automated Quotation ("Nasdaq") System, its Fair Market Value shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported), as quoted on such system or exchange, or the exchange with the
greatest volume of trading in Common Stock for the last market trading day prior
to the time of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;

                        (ii) If the Common Stock is quoted on the Nasdaq System
(but not on the National Market thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
for the last market trading day prior to the time of determination, as reported
in The Wall Street Journal or such other source as the Administrator deems
reliable; or

                        (iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Administrator.

                (l) "INCENTIVE STOCK OPTION" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code, as
designated in the applicable written option agreement.

                (m) "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option, as designated in the applicable written
option agreement.

                (n) "OPTION" means a stock option granted pursuant to the Plan.

                (o) "OPTIONED STOCK" means the Common Stock subject to an Option
or a Stock Purchase Right.

                (p) "OPTIONEE" means an Employee or Consultant who receives an
Option or a Stock Purchase Right.

                (q) "PARENT" means a "parent corporation," whether now or
hereafter existing, as defend in Section 424(c) of the Code, or any successor
provision.

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                (r) "PLAN" means this 1997 Stock Plan.

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

                (t) "RESTRICTED STOCK" means shares of Common Stock acquired
pursuant to a grant of a Stock Purchase Right under Section 10 below.

                (u) "RULE 16B-3" means Rule 16b-3 promulgated under the Exchange
Act, as the same may be amended from time to time, or any successor provision.

                (v) "SHARE" means a sham of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.

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

                (x) "STOCK PURCHASE" means the fight to purchase Common Stock
pursuant to Section 10 below.

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

        3. Stock Subject to the Plan. Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of Shares that may be optioned and sold
under the Plan is 400,000 shares of Common Stock. The Shares may be authorized,
but unissued, or reacquired Common Stock. If an Option should expire or become
unexercisable for any reason without having been exercised in full, the
unpurchased Shares that were subject thereto shall, unless the Plan shall have
been terminated, become available for future grant under the Plan. In addition,
any Shares of Common Stock which are retained by the Company upon exercise of an
Option or Stock Purchase Right in order to satisfy the exercise or purchase
price for such Option or Stock Purchase Right or any withholding taxes due with
respect to such exercise shall be treated as not issued and shall continue to be
available under the Plan. Shares repurchased by the Company pursuant to any
repurchase right which the Company may have shall not be available for future
grant under the Plan.

        4. ADMINISTRATION OF THE PLAN.

                (a) INITIAL PLAN PROCEDURE. Prior to the date, if any, upon
which the Company becomes subject to the Exchange Act, the Plan shall be
administered by the Board or a committee appointed by the Board,

                (b) PLAN PROCEDURE AFTER THE DATE, IF ANY, UPON WHICH THE
COMPANY BECOMES SUBJECT TO THE EXCHANGE ACT.

                        (i) MULTIPLE ADMINISTRATIVE BODIES. If permitted by Rule
16b-3,

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grants under the Plan may be made by different bodies with respect to directors,
non-director officers and Employees or Consultants who are not Reporting
Persons.

                        (ii) ADMINISTRATION WITH RESPECT TO REPORTING PERSONS.
With respect to grants of Options or Stock Purchase Rights to Employees who are
Reporting Persons, such grants shall be made by (A) the Board if the Board may
make grants to Reporting Persons under the Plan in compliance with Rule 16b-3,
or (B) a committee designated by the Board to make such grants under the Plan,
which committee shall be constituted in such a manner as to permit grants under
the Plan to comply with Rule 16b-3. Once appointed, such committee shall
continue to serve in its designated capacity until otherwise directed by the
Board. From time to time the Board may increase the size of the committee and
appoint additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies, however caused,
and remove all members of the committee and thereafter directly make grants to
Reporting Persons under the Plan, all to the extent permitted by Rule 16b-3.

                        (iii) ADMINISTRATION WITH RESPECT TO CONSULTANTS AND
OTHER Employees. With respect to grants of Options or Stock Purchase Rights to
Employees or Consultants who are not Reporting Persons, the Plan shall be
administered by (A) the Board or (B) a committee designated by the Board, which
committee shall be constituted in such a manner as to satisfy the legal
requirements relating to the administration of incentive stock option plans, if
any, of California's corporate and securities laws, of the Code and of any
applicable Stock Exchange (the "Applicable Laws"). Once appointed, such
Committee shall continue to serve in its designated capacity until otherwise
directed by the Board. From time to time the Board may increase the size of the
Committee and appoint additional members thereof, remove members (with or
without cause) and appoint new members in substitution therefor, fill vacancies,
however caused, and remove all members of the Committee and thereafter directly
administer the Plan, all to the extent permitted by the Applicable Laws.

                (c) POWERS OF THE ADMINISTRATOR. Subject to the provisions of
the Plan and in the case of a Committee, the specific duties delegated by the
Board to such Committee, and subject to the approval of any relevant
authorities, including the approval, if required, of any Stock Exchange, the
Administrator shall have the authority, in its discretion:

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

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

                        (iii) to determine whether and to what extent Options
and Stock Purchase Rights or any combination thereof are granted hereunder;

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

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

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                        (vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted hereunder;

                        (vii) to determine whether and under what circumstances
an Option may be settled in cash under Section 9(f) instead of Common Stock;

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

                        (ix) to determine the terms and restrictions applicable
to Stock Purchase Rights and the Restricted Stock purchased by exercising such
Stock Purchase Rights;

                        (x) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan; and

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

                (d) EFFECT OF ADMINISTRATOR'S DECISION. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all holders of Options or Stock Purchase Rights.

        5. ELIGIBILITY.

                (a) RECIPIENTS OF GRANTS. Nonstatutory Stock Options and Stock
Purchase Rights may be granted to Employees and Consultants. Incentive Stock
Options may be granted only to Employees. An Employee or Consultant who has been
granted an Option or Stock Purchase Right may, if he or she is otherwise
eligible, be granted additional Options or Stock Purchase Rights.

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

                (c) The Plan shall not confer upon any Optionee any right with
respect to continuation of employment or consulting relationship with the
Company, nor shall it interfere in

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any way with such Optionee's right or the Company's right to terminate his or
her employment or consulting relationship at any time, with or without cause.

        6. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
stockholders of the Company as described in Section 19 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 15 of the Plan.

        7. Term of Option. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement and provided further that, in the case of an
Incentive Stock Option granted to an Optionee who, at the time the Option is
granted, owns stock representing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Option shall be five (5) years from the date of
grant thereof or such shorter term as may be provided in the written option
agreement.

        8. OPTION EXERCISE PRICE AND CONSIDERATION.

                (a) The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the
Board and set forth in the applicable agreement, but shall be subject to the
following:

                (i) In the case of an Incentive Stock Option that is:

                        (A) granted to an Employee who, at the time of the grant
of such Incentive Stock Option, owns stock representing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or any Parent or Subsidiary, the per Share exercise price shall be no less than
110% of the Fair Market Value per Share on the date of grant.

                        (B) granted to any other Employee, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.

                (ii) In the case of a Nonstatutory Stock Option that is:

                        (A) granted to a person who, at the time of the grant of
such Option, owns stock representing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of the grant.

                        (B) granted to any person, the per Share exercise price
shall be no less than 85% of the Fair Market Value per Share on the date of
grant.

                (b) The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be determined
by the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist

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entirely of (1) cash, (2) check, (3) promissory note (subject to the provisions
of Section 153 of the Delaware General Corporation Law), (4) other Shares that
(x) in the case of Shares acquired upon exercise of an Option, have been owned
by the Optionee for more than six months on the date of surrender or such other
period as may be required to avoid a charge to the Company's earnings, and (y)
have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which such Option shall be exercised, (5)
authorization for the Company to retain from the total number of Shares as to
which the Option is exercised that number of Shares having a Fair Market Value
on the date of exercise equal to the exercise price for the total number of
Shares as to which the Option is exercised, (6) delivery of a properly executed
exercise notice together with such other documentation as the Administrator and
the broker, if applicable, shall require to effect an exercise of the Option and
delivery to the Company of the sale or loan proceeds required to pay the
exercise price and any applicable income or employment taxes, (7) any
combination of the foregoing methods of payment, or (8) such other consideration
and method of payment for the issuance of Shares to the extent permitted under
Applicable Laws. In making its determination as to the type of consideration to
accept, the Administrator shall consider if acceptance of such consideration may
be reasonably expected to benefit the Company.

        9. EXERCISE OF OPTION.

                (a) PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator, and reflected in the written option
agreement, which may include vesting requirements and/or performance criteria
with respect to the Company and/or the Optionee; provided that such Option shall
become exercisable at the rate of at least twenty percent (20%) per year over
five (5) years from the date the Option is grante. In the event that any of the
Shares issued upon exercise of an Option should be subject to a right of
repurchase in the Company's favor, such repurchase right shall lapse at the rate
of at least twenty percent (20%) per year over five (5) years from the date the
Option is granted. Notwithstanding the above, in the case of an option granted
to an officer, director or consultant of the Company or any Parent or Subsidiary
of the Company, the option may be fully exercisable, or the repurchase right may
lapse in its entirety, at any time or during any period established by the
Administrator.

                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 the Company has
received full payment for the Shares with respect to which the Option is
exercised. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to the Optioned Stock,
not withstanding the exercise of the Option. The Company shall issue (or cause
to be issued) such stock certificate promptly upon exercise of the Option. No
adjustment

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will be made for a dividend or other right for which the record date is prior to
the date the stock certificate is issued, except as provided in Section 12 of
the Plan.

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

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

                (c) DISABILITY OF OPTIONEE.

                        (i) Notwithstanding Section 9(b) above, in the event of
termination of an Optionee's Continuous Status as an Employee or Consultant as a
result of his or her total and permanent disability (within the meaning of
Section 22(e)(3) of the Code), Optionee may, but only within twelve (12) months
from the date of such termination (but in no event later than the expiration
date of the term of such Option as set forth in the Option Agreement), exercise
the Option to the extent otherwise entitled to exercise it at the date of such
termination. To the extent that Optionee was not entitled to exercise the Option
at the date of termination, or if Optionee does not exercise such Option to the
extent so entitled within the time specified herein, the Option shall terminate.

                        (ii) In the event of termination of an Optionee's
Continuous Status as an Employee or Consultant as a result of a disability which
does not fall within the meaning of total and permanent disability (as set forth
in Section 22(c)(3) of the Code), Optionee may, but only within six (6) months
from the date of such termination (but in no event later than the expiration
date of the term of such Option as set forth in the Option Agreement), exercise
the Option to the extent otherwise entitled to exercise it at the date of such
termination. However, to the extent that such Optionee fails to exercise an
Option which is an Incentive Stock Option ("ISO") (within the meaning of Section
422 of the Code) within three (3) months of the date of such termination, the
Option will not qualify for ISO treatment under the Code. To the extent that
Optionee was not entitled to exercise the Option at the date of termination, or
if Optionee does not exercise such Option to the extent so entitled within six
months (6) from the date of termination, the Option shall terminate.

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                (d) DEATH OF OPTIONEE. In the event of the death of an Optionee
during the period of Continuous Status as an Employee or Consultant since the
date of grant of the Option, or within three (3) months following termination of
Optionee's Continuous Status as an Employee or Consultant, the Option may be
exercised, at any time within six (6) months following the date of death (but in
no event later than the expiration date of the term of such Option as set forth
in the Option Agreement), by Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only to the extent
of the right to exercise that had accrued at the date of death or, if earlier,
the date of termination of Optionee's Continuous Status as an Employee or
Consultant. To the extent that Optionee was not entitled to exercise the Option
at the date of death or termination, as the case may be, or if Optionee does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate.

                (e) RULE 16B-3. Options granted to Reporting Persons shall
comply with Rule 16b-3 and shall contain such additional conditions or
restrictions as may be required thereunder to qualify for the maximum exemption
for Plan transactions.

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

        10. STOCK PURCHASE RIGHTS.

                (a) RIGHTS TO PURCHASE. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it shall
advise the offeree in writing of the terms, conditions and restrictions related
to the offer, including the number of Shares that such person shall be entitled
to purchase, the price to be paid (which price shall not be less than 85% of the
Fair Market Value of the Shares as of the date of the offer, or, in the case of
a person owning stock representing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Parent or
Subsidiary, the price shall not be less than one hundred percent (100%) of the
Fair Market Value of the Shares as of the date of the offer), and the time
within which such person must accept such offer, which shall in no event exceed
thirty (30) days from the date upon which the Administrator made the
determination to grant the Stock Purchase Right. The offer shall be accepted by
execution of a Restricted Stock purchase agreement in the form determined by the
Administrator. Shares purchased pursuant to the grant of a Stock Purchase Right
shall be referred to herein as "Restricted Stock."

                (b) REPURCHASE OPTION. Unless the Administrator determines
otherwise, the Restricted Stock purchase agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with the Company for any reason (including death or
disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original purchase price paid by
the purchaser and may be paid by cancellation of any indebtedness of the
purchaser to the

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Company. The repurchase option shall lapse at such rate as the Administrator may
determine, but at a minimum rate of 20% per year, except that in the case of
Shares held by an officer, director or consultant of the Company or any Parent
or Subsidiary of the Company, the repurchase option may lapse in its entirety at
any time or during any period established by the Administrator.

                (c) OTHER PROVISIONS. The Restricted Stock purchase agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion. In
addition, the provisions of Restricted Stock purchase agreements need not be the
same with respect to each purchaser.

                (d) RIGHTS AS A STOCKHOLDER. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section i2
of the Plan.

        11. Stock Withholding to Satisfy Withholding Tax Obligations. At the
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph. When an Optionee incurs tax liability in
connection with an Option or Stock Purchase Right, which tax liability is
subject to tax withholding under applicable tax laws, and the Optionee is
obligated to pay the Company an amount required to be withheld under applicable
tax laws, the Optionee may satisfy the withholding tax obligation by one or some
combination of the following methods: (a) by cash payment, or (b) out of
Optionee's current compensation, (c) if permitted by the Administrator, in its
discretion, by surrendering to the Company Shares that (i) in the case of Shares
previously acquired from the Company, have been owned by the Optionee for more
than six months on the date of surrender, and (ii) have a fair market value on
the date of surrender equal to or less than Optionee's marginal tax rate times
the ordinary income recognized, or (d) by electing to have the Company withhold
from the Shares to be issued upon exercise of the Option, or the Shares to be
issued in connection with the Stock Purchase Right, if any, that number of
Shares having a fair market value equal to the amount required to be withheld.
For this purpose, the fair market value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be determined
(the "Tax Date").

                Any surrender by a Reporting Person of previously owned Shares
to satisfy tax withholding obligations arising upon exercise of this Option must
comply with the applicable provisions of Rule 16b-3.

                All elections by an Optionee to have Shares withheld to satisfy
tax withholding obligations shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:

                (a) the election must be made on or prior to the applicable Tax
Date;

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                (b) once made, the election shall be irrevocable as to the
particular Shares of the Option or Stock Purchase Right as to which the election
is made; and

                (c) all elections shall be subject to the consent or disapproval
of the Administrator.

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

        12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, MERGER OR CERTAIN OTHER
TRANSACTIONS.

                (a) CHANGES IN CAPITALIZATION. Subject to any required action by
the stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, and the number of shares of
Common Stock that have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or that have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination, recapitalization or reclassification of the Common Stock, or any
other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration." Such adjustment shall
be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an Option or Stock Purchase Right.

                (b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Board shall notify the Optionee
at least fifteen (15) days prior to such proposed action. To the extent it has
not been previously exercised, the Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.

                (c) MERGER OR SALE OF ASSETS. In the event of a sale of all or
substantially all of the Company's assets or a merger of the Company with or
into another corporation where, the successor corporation issues its securities
to the Company's stockholders, each outstanding Option or Stock Purchase Right
shall be assumed or an equivalent option or right shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation,
unless the successor corporation does not agree to assume the Option or Stock
Purchase Right or to substitute an equivalent option or right, in which case
such Option shall become fully vested

                                       11
<PAGE>   12

and exercisable and the Company's repurchase option on Restricted Stock shall
immediately terminate upon the consummation of the merger or sale of assets. For
purposes of this Section 12, an Option or Stock Purchase Right shall be
considered assumed, without limitation, if, at the time of issuance of the stock
or other consideration upon such merger or sale of assets, each Optionee or
Stock Purchase Right Holder would be entitled to receive upon exercise of an
Option or Stock Purchase Right the same number and kind of shares of stock or
the same amount of property, cash or securities as the Optionee or Stock
Purchase Right Holder would have been entitled to receive upon the occurrence of
such transaction if the Optionee or Stock Purchase Right Holder had been,
immediately prior to such transaction, the holder of the number of Shares of
Common Stock covered by the Option or Stock Purchase Right at such time (after
giving effect to any adjustments in the number of Shares covered by the Option
or Stock Purchase Right as provided for in this Section 12).

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

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

        14. Time of Granting Options and Stock Purchase Rights. The date of
grant of an Option or Stock Purchase Right shall, for all purposes, be the date
on which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Board; provided,
however, that in the case of any Incentive Stock Option, the grant date shall be
the later of the date on which the Administrator makes the determination
granting such Incentive Stock Option or the date of commencement of the
Optionee's employment relationship with the Company. Notice of the determination
shall be given to each Employee or Consultant to whom an Option or Stock
Purchase Right is so granted within a reasonable time after the date of such
grant.

        15. AMENDMENT AND TERMINATION OF THE PLAN.

                (a) AUTHORITY TO AMEND OR TERMINATE. The Board may at any time
amend, alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation shall be made that would impair the rights of any
Optionee under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with Rule 16b-3 or
with Section 422 of the Code (or any other applicable law or regulation,
including the requirements of any Stock Exchange), the Company shall obtain
stockholder approval of any Plan amendment in such a manner and to such a degree
as required.

                                       12
<PAGE>   13

                (b) EFFECT OF AMENDMENT OR TERMINATION. No amendment or
termination of the Plan shall adversely affect Options already granted, unless
mutually agreed otherwise between the Optionee and the Board, which agreement
must be in writing and signed by the Optionee and the Company,

        16. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option or Stock Purchase Right unless the
exercise of such Option or Stock Purchase Right 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. As a condition to the exercise of an Option,
the Company may require the person exercising such Option to represent and
warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required by law.

        17. 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. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.

        18. Agreements. Options and Stock Purchase Rights shall be evidenced by
written agreements in such form as the Administrator shall approve from time to
time.

        19. Stockholder Approval. Continuance of the Plan shall be subject to
approval by the stockholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such stockholder approval shall be obtained
in the degree and manner required under applicable state and federal law and the
rules of any Stock Exchange upon which the Common Stock is listed. All Options
and Stock Purchase Rights issued under the Plan shall become void in the event
such approval is not obtained.

        20. Information and Documents to Optionees and Purchasers. The Company
shall provide financial statements at least annually to each Optionee and to
each individual who acquired Shares Pursuant to the Plan, during the period such
Optionee or purchaser has one or more Options or Stock Purchase Rights
outstanding, and in the case of an individual who acquired Shares pursuant to
the Plan, during the period such individual owns such Shares. The Company shall
not be required to provide such information if the issuance of Options or Stock
Purchase Rights under the Plan, is limited to key employees whose duties in
connection with the Company assure their access to equivalent information. In
addition, at the time of issuance of any securities under the Plan, the Company
shall provide to the Optionee or the Purchaser a copy of the Plan and any
agreement(s) pursuant to which securities under the Plan are issued.

                                       13<PAGE>   1
                                                                   EXHIBIT 10.26

February 28, 2000

F. Terry Bean
2644 Yorktown Place
Houston, TX 77506

Dear Terry:

We are very pleased to extend you an offer to serve as Senior Vice President -
Human Resources for Webvan Group, Inc. ("Webvan Group").

Terry, all of us at Webvan Group believe that your skills, experience, and
personal attributes will enable us to be a leader in the development of this
internet commerce company.

This letter serves as an offer of employment to you from Webvan Group. The terms
of the offer supersede all prior oral and written communications between you and
Webvan Group or any representative thereof. Please sign this offer letter and
hand deliver or return by FAX (650-627-3921).

POSITION

Your job title will be Senior Vice President - Human Resources.

EFFECTIVE DATE

Your first date to report to work at Webvan Group, 310 Lakeside Drive, Foster
City, CA 94404, will be March 14, 2000, or earlier if possible.

DUTIES

You will report to the President and Chief Executive Officer of Webvan Group.
Your primary responsibility will be to lead the human resources department for
Webvan Group and its subsidiaries, along with all other duties as assigned by
the President and Chief Executive Officer.

SALARY; HOUSING LOAN

Your salary shall be $25,000.00 per month. This salary shall be paid bi-weekly.
Your salary shall be reviewed on an annual basis in accordance with review
procedures established in connection with salary review for officers of Webvan
Group.

<PAGE>   2

In addition, you will receive a "sign-on" bonus of $50,000.00. In the event that
your employment with Webvan Group is terminated voluntarily, by you, or by
Webvan Group for Cause, prior to September 14, 2000, you agree to reimburse
Webvan Group for the full amount of this "sign-on" bonus ($50,000.00).

Webvan Group will reimburse you for the costs of your accommodations in the Bay
area for three months following the Effective Date, up to a maximum of $3000 per
month. In addition, Webvan Group will reimburse you for all actual reasonable
moving expenses. In each case reimbursement will be made following presentation
to Webvan Group of receipts therefor.

Webvan Group will loan you an amount, up to $500,000, in connection with your
purchase of a house in the Bay Area. This loan will have a term of 36 months and
have an interest rate (compounded semi-annually) equal to the minimum applicable
federal rate (as published by the Internal Revenue Service). You will not be
obligated to pay the first year of interest and thereafter will pay interest on
a quarterly basis, in accordance with a schedule to be attached to the loan. The
principal on the loan is due and payable at the end of the loan term. However,
both the principal and interest may be prepaid by you with no penalty.

INCENTIVE PLAN

You shall be granted a stock option (the "Option") to purchase 500,000 shares of
Webvan Group's common stock at the fair market value thereof, which will be
determined by the Board of Directors on the date of grant. This Option will be
an incentive stock option to the extent permitted under the IRS rules and a
nonstatutory stock option as to any remaining shares. The Option shall vest at
the rate of 25% of the shares subject to the Option at the end of twelve months
from the vesting commencement date (being the date on which you first report to
work for Webvan Group) (the "First Anniversary") and at the rate of 6.25% of the
shares subject to the Option each three months thereafter, so that 100% of the
Option shall be vested after four years, subject to your continued full-time
employment with the Webvan Group as of each vesting date. Except as specified
herein, the Option is in all respects subject to the terms and conditions of
Webvan Group's 1997 Stock Plan (the "Stock Plan") and standard form of option
agreement thereunder.

You shall also be granted an additional stock option (the "Additional Option")
to purchase 50,000 shares of Webvan Group's common stock at the fair market
value thereof, which will be determined by the Board of Directors on the date of
grant. This Additional Option will be an incentive stock option to the extent
permitted under the IRS rules and a nonstatutory stock option as to any
remaining shares. The Additional Option shall vest on the date your employment
commences; provided, however, that in the event that your employment with Webvan
Group is terminated voluntarily, by you, or for Cause, prior to September 14,
2000, the Additional Option shall be forfeited as follows: (1) the Additional
Option to the extent not then exercised, shall terminate as of the date

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<PAGE>   3

of termination of your employment and (2) any shares purchased by you upon
exercise of the Additional Option prior to September 14, 2000 shall be subject
to Webvan Group's right to repurchase such shares at the price paid therefor by
you and shall, accordingly, be subject to restrictions on sale by you prior to
September 14, 2000 unless prior to such date (I) such restrictions are waived by
the President and CEO of Webvan Group or (II) your employment is terminated
prior to such date other than voluntarily by you or with Cause. Except as
specified herein, the Additional Option is in all respects subject to the terms
and conditions of the Stock Plan and standard form of option agreement
thereunder.

BENEFITS

You will receive the standard benefits for full-time Associates at Webvan Group
("Benefits"). These Benefits are listed and explained in the Webvan Group
Associate Handbook, administered via TriNet Employer Group. A copy of the
policies and benefits section of the handbook will be provided for your
information.

In addition, Webvan Group makes available a 401(k) plan to all employees at the
beginning of the month following Employee's date of hire. Eligible Employees may
elect to contribute up to 15% of their salary to the 401(k) plan, subject to the
legal maximum per year. Webvan Group will match 100% of the first $500 and 25%
thereafter up to a maximum employer match of $2,000 per year of qualifying
Employee contributions. Further details will be provided in the 401(k) Plan
Handbook at the time of enrollment.

NON-DISCRIMINATION

Webvan Group is an equal-opportunity employer, and will not discriminate against
its employees or applicants in any employment decision or practice because of
race, color, religion, sex, national origin, marital status, pregnancy, age,
ancestry, physical handicaps, or medical condition.

PROPRIETARY INFORMATION

You will be required, as a condition of employment, to sign a Proprietary
Information Agreement. A sample Proprietary Information Agreement is attached
hereto.

OUTSIDE WORK

All Webvan Group Associates are expected to devote their full energies, efforts,
and abilities to their employment. Accordingly, full-time Associates are not
permitted to accept outside employment on a full-time or part-time basis without
first obtaining their supervisor's written approval.

3

<PAGE>   4

AT-WILL EMPLOYMENT

The relationship between you and Webvan Group will be for an unspecified term
and will be considered at will. No employment contract is created by the
existence of any policy, rule or procedure in the Webvan Group Associate
Handbook, any Webvan Group document, or any verbal statements made to you by
representatives of Webvan Group. Consequently, the employment relationship
between you and Webvan Group can be terminated at will, either by you or Webvan
Group, with or without Cause or advance notice.

In the event that your employment with Webvan Group is terminated by Webvan
Group without Cause prior to the First Anniversary, Webvan Group agrees that 25%
of the shares subject to the Option shall vest and become exercisable; in the
event that your employment with Webvan Group is terminated by Webvan Group
without Cause on or after the First Anniversary, Webvan Group agrees that the
portion of the Option which is unvested on the effective date of your
termination shall vest and become exercisable to the extent it would have been
exercisable had you remained employed for a period of six (6) months following
the effective date of such termination. In the event that your employment with
Webvan Group is terminated by Webvan Group without Cause, Webvan Group agrees
that you will receive six months salary and Benefits as severance; in addition
to this six month severance package, if you have not obtained other employment
during such six month period, you will continue to receive full salary and
Benefits (but, for the sake of clarity, not additional vesting of the Option)
for a period of up to another six (6) months or, if earlier, until subsequent
employment is obtained.

"Cause" as used in this offer letter shall mean (i) your engaging in conduct
that constitutes willful gross neglect of or gross misconduct in carrying out
your duties hereunder (other than a failure to perform your duties resulting
from your incapacity due to mental or physical illness), (ii) any act of fraud,
embezzlement or dishonesty, or any other act or acts on your part constituting a
felony under the laws of the United States or any state thereof, (iii) the
unauthorized use or disclosure of confidential information or trade secrets of
Webvan Group or any other intentional misconduct that adversely affects the
business or affairs of Webvan Group in a material manner, or (iv) your use of
narcotics, liquor or illicit drugs which, as determined by Webvan Group's Board
of directors, has a detrimental effect on your ability to perform your
employment responsibilities.

PERSONNEL POLICIES

Webvan Group has an Associate Handbook. The policies in the Associate Handbook
and such other policies as Webvan Group adopts for its employees govern the
relationship between Webvan Group and its Associates. The policies are hereby
incorporated by reference. Acceptance of this offer binds the offeree to follow
the policies.

4

<PAGE>   5

This offer is contingent on compliance with the Immigration Reform and Control
Act of 1986, which requires the company to verify that each employee hired is
legally entitled to work in the United States. Enclosed is a copy of the
Employment Verification form I-9, with instructions, as required by such act.
Please review and execute this document and be prepared to bring the appropriate
documentation on the day you first report to work.

5

<PAGE>   6

We look forward to your favorable consideration of this offer and to the
commencement of a long and rewarding relationship.

Sincerely,

/s/ George T. Shaheen

George T. Shaheen
President and Chief Executive Officer

I hereby acknowledge that I have reviewed the terms and conditions of this offer
of employment and have had the opportunity to consult with counsel. I hereby
accept the offer of employment upon the terms and conditions contained in this
letter.

Accepted:    /s/ F. Terry Bean   Date:   February 28, 2000

6

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