Document:

EXHIBIT 10.3.2
                                                                  --------------

                               AMENDMENT NUMBER 1

                          EXTENDED SYSTEMS INCORPORATED
                          EMPLOYEE STOCK PURCHASE PLAN

Extended Systems Incorporated, pursuant to and in accordance with the provisions
of Section 20 of the Extended Systems Incorporated Employee Stock Purchase Plan,
does hereby amend said Plan, effective as of June 30, 2000, as follows:

1.          Section 2, paragraph (e), is replaced in its entirety with the
            following sentence:

"Compensation" shall mean all gross earnings, including commissions, bonuses and
other incentive compensation, but excluding payments for overtime and shift
premium.EXHIBIT 10.4.2
                                                                  --------------

                               AMENDMENT NUMBER 1

             EXTENDED SYSTEMS INCORPORATED 1998 DIRECTOR OPTION PLAN

Extended Systems Incorporated, pursuant to and in accordance with the provisions
of Section 11 of the Extended Systems Incorporated 1998 Director Option Plan,
does hereby amend said Plan, effective as of January 23, 2001, as follows:

2.   Section 2, paragraph (h), titled "Fair Market Value", subparagraph (i), is
     replaced in its entirety with the following sentence:

            "If the Common Stock is listed on any established stock exchange or
            a national market system, including without limitation The Nasdaq
            National Market or The Nasdaq SmallCap Market of The Nasdaq Stock
            Market, its Fair Value shall be the closing sales price for such
            stock (or the closing bid, if no sales were reported) as quoted on
            such exchange or system on the date of determination, as reported in
            THE WALL STREET JOURNAL or such other source as the Administrator
            deems reliable;"

3.   To section 2, add the following definition as subparagraph (r),

            '"Annual Meeting of Stockholders" means the annual meeting of
            stockholders held each year on a date and at a time designated by
            the Board and as defined in the Company's bylaws.

4.   Section 4, paragraph (a), titled Procedure for Grants, subparagraph (vi)
     (D), is replaced in its entirety with the following sentence:

            "subject to Section 10, hereof, the Subsequent Option shall become
            vested and exercisable, in whole or in part, on the earlier of the
            first anniversary of the date of grant or the date of the next
            Annual Meeting of Stockholders."EXHIBIT 10.8
                                                                    ------------

                   RULES OF THE EXTENDED SYSTEMS INCORPORATED
                        2001 APPROVED SHARE OPTION SCHEME
                        ---------------------------------

DEFINITIONS AND INTERPRETATION
------------------------------

IN THESE RULES THE FOLLOWING WORDS AND EXPRESSIONS HAVE THE FOLLOWING MEANINGS:

         "ADOPTION DATE" the date on which the Scheme is adopted by the Company
         in general meeting.

         "APPROPRIATE PERIOD" means:

         (a)      in a case to which rule 7.1 applies, the period of six months
                  commencing on the date when the person making the offer
                  referred to in that rule obtains Control of the Company and
                  any conditions subject to which the offer is made have been
                  satisfied;

         (b)      in a case falling within rule 7.2, the period of six months
                  commencing on the date on which the court sanctions the
                  compromise or arrangement described in rule 7.2.

         "ASSOCIATED COMPANY" the meaning given in Section 416 of ICTA.

         "BOARD" the Board of Directors of the Company or, save for the purposes
         of rule 11.4, the Committee or any other duly constituted committee of
         the said Board of Directors.

         "COMPANY" Extended Systems Incorporated is registered in the State of
         Delaware in the United States of America and whose head office is
         situated at 5777 N. Meeker Avenue, Boise, Idaho 83713, USA.

         "COMMITTEE" the remuneration committee from time to time of the Board.

         "CONTROL" the meaning given in Section 840 of ICTA 1988.

         "DATE OF GRANT" in relation to any Option the date on which that Option
         is, was, or is to be granted under the Scheme.

         "ELIGIBLE EMPLOYEE" any director of any Participating Company who is
         required to devote to his duties not less than 25 hours per week
         (excluding meal breaks) or any employee (other than one who is a
         director) of any Participating Company, provided that the director or
         employee is not precluded by paragraph 8 of Schedule 9 from
         participating in the Scheme.

         "EXERCISE PRICE" means the price at which each Share subject to an
         Option may be acquired, being (subject to Rule 9) not less than the
         Market Value of a Share on the Date of Grant, provided that, if Shares
         are to be subscribed, the Exercise Price will be not less than the
         nominal value of a Share.

         "EXTENDED SYSTEMS INCORPORATED GROUP" means Extended Systems
         Incorporated and its subsidiaries from time to time.

         "INDEMNIFIED PERSONS" the Company or any member of the group of
         companies of which the Company is a member (a "Group Company"), any
         associated company, any
<PAGE>

         trustee of an employee benefit trust established in respect of the
         Company, and/or any Group Company, and/or associated company.

         "INDEMNITY" the indemnification to the extent it is permitted by law
         given by the Optionholder (or, as the case may be his personal
         representative(s)) to the Indemnified Persons on the exercise of an
         Option in whole or in part, to indemnify and keep indemnified the
         Indemnified Persons in respect of any charges, tax or liability charged
         to suffered or incurred by the Indemnified Persons that relates to the
         liability of the Optionholder arising from the grant, exercise or
         cancellation of any Option or related rights under this scheme.

         "ICTA" the Income and Corporation Taxes Act 1988 which applies to
         Optionholders in the United Kingdom.

         "MARKET VALUE" in relation to a Share on any day means the market value
         of a Share as determined in accordance with Part VIII of the Taxation
         of Chargeable Gains Act 1992 and agreed on or before that day with the
         Shares Valuation Division of the Inland Revenue.

         "MATERIAL INTEREST" the meaning given in section 187(3) ICTA.

         "INSIDER DEALING CODE" means any legislation in the United States (US)
         or outside the US or agreement, arrangement, condition or contract
         adopted or entered into by, or which regulates the Company and its
         employees or directors in relation to insider dealing.

         "OFFICIALLY LISTED" means admitted to the Official List of the UK
         Listing Authority and admitted to trading by the Stock Exchange.

         "OPTION" a right to acquire Shares granted (or to be granted) in
         accordance with the rules of this Scheme.

         "OPTION CERTIFICATE" a certificate issued to an Optionholder in
         accordance with rule 2.

         "OPTION PERIOD" a period between the first vesting period mentioned in
         the Vesting Schedule and tenth anniversary of the Date of Grant.

         "OPTIONHOLDER" an individual to whom an Option (including, without
         limitation, a New Option as defined in Rule 8) has been granted or to
         his Personal Representatives.

         "PARTICIPATING COMPANY" the Company and any other company situated in
         the United Kingdom of which the Company has Control.

         "PERSONAL REPRESENTATIVES" in relation to an Optionholder, the
         Optionholder's legal personal representatives (being either the
         executors of his will to whom a valid grant of probate has been made or
         the duly appointed administrators of his estate) who in either case
         have provided the Board with satisfactory evidence of their
         appointment.

         "RULES" means the rules of the Scheme as from time to time amended.
         "SCHEDULE 9" Schedule 9 ICTA 1988.

         "SCHEME" The Extended Systems Incorporated Approved Share Option Scheme
         as constituted and governed by these Rules as from time to time
         amended.

         "SHARE" an ordinary share in the capital of the Company which satisfies
         the conditions specified in paragraphs 10-14 inclusive of Schedule 9.

                                       2
<PAGE>

         "STOCK EXCHANGE" the Nasdaq National Market or The Nasdaq Small Capital
         Market of The Nasdaq Stock Market.

         "SUBSISTING OPTION" an Option which has neither lapsed nor been
         exercised.

         "VESTING SCHEDULE" means a schedule which specifies the percentage of
         Shares in respect of which an Option shall become exerciseable at
         different times during the Option Period.

Where the context so admits the singular shall include the plural and vice versa
and the masculine shall include the feminine.

Any reference in the Scheme to any enactment includes a reference to that
enactment as from time to time modified, extended or re-enacted.

References to rules are to the rules of this Scheme.

GRANT OF OPTIONS
----------------

Subject to earlier termination of the Scheme by the Company and subject to the
Scheme having been approved by the Commissioners of the Inland Revenue pursuant
to Schedule 9, at any time or times and in any case not earlier than the
Adoption Date nor later than the tenth anniversary thereof the Board may in its
absolute discretion select any individual who is an Eligible Employee and grant
that Eligible Employee an Option by issuing to him an Option Certificate in such
manner as shall take effect as a legally binding agreement and which is signed
by the Corporate Secretary and Chief Executive Officer. The Option Certificate
will form part of the Rules, and shall be in such form as the Board shall
determine from time to time (subject to the approval of the Inland Revenue and
shall state:

            2.1.1       the Date of Grant;

            2.1.2       the number of Shares subject to the Option;

            2.1.3       the Exercise Price in respect of each Share under the
                        Option;

            2.1.4       any performance-related conditions or other conditions
                        ("the Conditions") to which the exercise of the Option
                        is subject; and

            2.1.5       any Vesting Schedule.

For the avoidance of doubt the grant of an Option in accordance with Rule 2.1
can, subject to Rule 2.6, be made at any time to an Eligible Employee.

Each Eligible Employee to whom an Option is granted may within 30 days of the
Date of Grant accept the Option by signing and returning one copy of the Option
Certificate to the Company, or such other person as the Company shall direct. In
the absence of such acceptance, the Option will be deemed never to have been
granted under the Scheme.

The maximum number of Shares over which that individual may be granted an Option
will be determined at the absolute discretion of the Board subject to Rule 4.

                                       3
<PAGE>

The exercise of any Option granted pursuant to Rule 2.1 shall be subject always
to the Company achieving the appropriate objective performance criteria as
determined by the Company in accordance with the Rule 3 (performance related
conditions of exercise).

No Option shall be granted:

            2.6.1       to any Optionholder at a time when it would be in breach
                        of the Insider Dealing Code;

            2.6.2       after the earlier of the expiry of the period of ten
                        years from the Adoption Date and the termination of the
                        Plan by a resolution of the Board or of the Company in
                        general meeting;

The maximum period between the determination of the Market Value of the Shares
which is used to calculate the Exercise Price and the date of grant of an Option
is thirty days.

No Option may be transferred, assigned or charged (save for any transfer or
assignment to the Personal Representatives of an Optionholder who has died) and
any purported transfer, assignment or charge shall cause the Option to lapse
immediately. Each Option certificate shall carry a statement to this effect.

Optionholders are not required to pay for the grant of an Option.

PERFORMANCE-RELATED CONDITIONS OF EXERCISE
------------------------------------------

Subject to the following provisions of this Rule 3, the Board may, at its
discretion, determine that the vesting and/or exercise of any Option shall be
conditional upon the satisfaction of such objective criteria relating to the
performance of the Company and/or any Associated Company and/or the Optionholder
as the Board may decide at the Date of Grant.

Any conditions imposed in accordance with Rule 3.1 that relate to the vesting of
an Option may provide for that Option to vest at such times and in such
proportions as the Board may determine.

No Conditions shall be determined or amended in relation to any Option granted
to a director of any Participating Company without the consent of the Committee.

The Board may amend any Conditions to which a Subsisting Option is subject if
events occur which cause the Board acting fairly and reasonably to consider
that:

            3.4.1       the Conditions provide a materially less effective
                        incentive than they did at the Date of Grant; or

            3.4.2       the Conditions are no longer appropriate following the
                        occurrence of any event involving the Company, any
                        Associated Company or the Optionholder (including,
                        without limitation any event described in Rules 7 or 8);
                        and

            3.4.3       in either case, the amended Conditions are no more
                        difficult to satisfy than the original Conditions when
                        first set.

                                       4
<PAGE>

INDIVIDUAL LIMITS ON OPTION GRANTS
----------------------------------

Any Option granted to an Eligible Employee shall be limited and take effect so
that the aggregate Market Value of the Shares subject to that Option, when
aggregated with:

            4.1.1       the Market Value of Shares subject to Subsisting
                        Options; and

            4.1.2       the aggregate market value of any shares which the
                        Eligible Employee may acquire by exercising options
                        granted under any other scheme which has been
                        established by the Company or any Associated Company and
                        approved under Schedule 9 (other than any
                        savings-related option scheme)

            does not exceed (pound)30,000, or such other limit imposed from time
to time under paragraph 28(1) of Schedule 9.

            For the purposes of this Rule 4, the market value of shares shall be
            calculated as at the time the options in relation to those Shares
            were granted or such earlier time as may have been agreed with the
            Inland Revenue.

SCHEME LIMITS
-------------

            The Board will decide the maximum number of Shares which may be
            placed under Option under this Scheme.

EXERCISE OF OPTIONS
-------------------

Subject to Rule 7 and Rule 8 but notwithstanding the remaining provisions of
this Rule 6, no Option may be exercised at any time unless any Conditions to
which that Option is subject have been satisfied.

If the exercise of Options or the allotment or transfer of Shares to an
Optionholder could be in contravention of the Insider Dealing Code, or any
securities, exchange control, tax or other laws which may be applicable to the
Extended Systems Incorporated Group, or any Optionholder, such exercise,
allotment or transfer shall be deferred until such time when such exercise,
allotment or transfer would not be in contravention of the above. The Option may
be exercised and/or the Shares allotted or transferred to the Optionholder as
soon as reasonably practicable following the first date on which the exercise,
allotment or transfer would not be in such contravention.

If and so long as the Shares are listed on the Stock Exchange or any other stock
exchange, the Company shall apply for any Shares allotted under this Scheme to
be admitted to the list of such exchange.

Every exercise of an Option, whether in whole or in part must comply with the
provisions of Rule 10.

Any Option which has not lapsed may in accordance with any Vesting Schedule be
exercised in whole or in part at any time following the earliest of the
following events:

            6.5.1       the commencement of the relevant Option Period;

            6.5.2       the death of the Optionholder;

            6.5.3       the Optionholder ceasing to be a director or employee of
                        any Participating Company by reason of injury,
                        disability or ill health (evidenced to the satisfaction
                        of the Board);

                                       5
<PAGE>

            6.5.4       redundancy or retirement on reaching age 65 or any
                        earlier age at which he is bound to retire in accordance
                        with the terms of his contract of employment or in the
                        case of a non-executive director his letter of
                        appointment;

            6.5.5       the date of any resolution by the Board to allow the
                        exercise of an Option by any Optionholder who has ceased
                        to be a director or employee of any Participating
                        Company for any reason other than one specified in Rules
                        6.5.3 and 6.5.4.

            6.5.6       the occurrence of the event specified in Rule 7.

An Option shall lapse on the earliest of the following events:

            6.6.1       the day immediately before the tenth anniversary of the
                        Date of the Grant;

            6.6.2       the day immediately before the first anniversary of the
                        Optionholder's death;

            6.6.3       the day immediately before the first anniversary of the
                        date the Optionholder ceased to be a director or
                        employee of any participating Company for any reason
                        specified in Rule 6.5.3;

            6.6.4       three months after the date on which an Optionholder has
                        ceased to be a director or employee of any Participating
                        Company for any reason specified in Rule 6.5.4;

            6.6.5       unless the Board has previously resolved under Rule
                        6.5.5 that the Option may be exercised, the date on
                        which an Optionholder ceases to be a director or
                        employee of any Participating Company other than by
                        reason referred to in Rules 6.5.3 or 6.5.4 above;

            6.6.6       the expiry of the period specified by the Board in a
                        resolution made pursuant to Rule 6. 5.5 as the period
                        during which the Option may be exercised;

            6.6.7       unless a release has been offered under Rule 8 15 days
                        after the date any person has obtained control of the
                        Company;

            6.6.8       the Optionholder being adjudicated bankrupt;

An Option which is subject to Conditions will lapse to the extent that it does
not vest or does not become exercisable as a result of any Conditions not being
satisfied. The date on which such Option lapses whether in whole or in part,
shall be the first date on which it is apparent to the Board that the Conditions
cannot be satisfied.

MERGER OR ASSET SALE AND LIQUIDATIONS
-------------------------------------

If any person obtains Control of the Company as a result of a merger of the
Company with or into another corporation or the sale of substantially all of the
assets of the Company the vested portion of any unexercised Option may be
exercised only if no release is offered under Rule 8 on the earlier of the end
of the Option Period and the Appropriate Period. If unexercised after this
period, the Option will lapse without further notice. For the purposes of this
Rule 7.1 a person shall be deemed to have obtained Control of the Company if he
and others acting in concert with him have together obtained control of it.

In the event the Company passes a resolution for voluntary winding up the vested
portion of his or her Subsisting Option may be exercised on the earlier of the
end of the Option Period and the Appropriate Period whereupon, if not exercised,
the Option will lapse without further notice.

                                       6
<PAGE>

EXCHANGE OF OPTIONS ON A MERGER OR ASSET SALE
---------------------------------------------

Notwithstanding the provisions of Rule 7, if any person ("the Acquiring
Company") obtains Control of the Company or becomes bound or entitled to acquire
shares in the Company within the circumstances specified in Rule 7.1, any
Optionholder may at any time within the Appropriate Period, by agreement with
the Acquiring Company, release his Option ("the Old Option") in consideration of
the grant to him of a new option ("the New Option") which is equivalent to the
Old Option (by virtue of satisfying the requirements of paragraph 15(3) of
Schedule 9) but relates to shares in a different company (whether the Acquiring
Company itself or some other company which, on the assumption that the Acquiring
Company were the grantor, would be a company falling within paragraph (b) or (c)
of paragraph 10 of Schedule 9). Where any New Options are granted pursuant to
this Rule 8.1 they shall be regarded for the purposes of the subsequent
application of the provisions of this Scheme as having been granted at the time
when the corresponding Old Options were granted and, with effect from the date
on which the New Options are granted, these Rules shall, in relation to the New
Options, be construed as if references to the Company and to the Shares were
references to the Acquiring Company and to shares in the Acquiring Company or,
as the case may be, to the other company to whose shares the New Options relate
and to the shares in that other company, but references to Participating
Companies shall continue to be construed as if references to the Company were
references to Extended Systems Incorporated.

As soon as practicable after having granted the New Option in accordance with
the provisions of Rule 8.1, the Acquiring Company shall issue an option
certificate in respect of such Option or shall procure that such an option
certificate is issued. The option certificate shall state:

the date on which the Old Option (which has been released in consideration of
the grant of the New Option) was granted;

            the number and class of Shares subject to the New Option;

            the Exercise Price payable for each Share under the New Option; and

            the last date on which a notice exercising the New Option can be
            given,

            and subject as aforesaid shall be issued in such form and manner as
            the Board may from time to time prescribe.

VARIATION OF SHARE CAPITAL
--------------------------

In the event of any variation of the share capital of the Company by way of
capitalisation or rights issue, consolidation, subdivision or reduction of
capital or otherwise, the number of Shares subject to any Option and the
Exercise Price for each of those Shares shall be adjusted in such manner as the
Board consider fair and reasonable provided that:

            9.1.1       the aggregate amount payable on the exercise of an
                        Option in full is not increased;

            9.1.2       the Exercise Price for a Share is not reduced below its
                        nominal value;

            9.1.3       no adjustment shall be made without the prior approval
                        of the Board of Inland Revenue; and

            9.1.4       following such adjustment the Shares continue to satisfy
                        the conditions specified in paragraphs 10 to 14
                        inclusive of Schedule 9 ICTA.

                                       7
<PAGE>

The Company may take such steps as it considers necessary to notify
Optionholders of any adjustment made under Rule 9.1 and to call in, cancel,
endorse, issue or re-issue any Option Certificate consequent upon such
adjustment.

MANNER OF EXERCISE OF OPTIONS
-----------------------------

No Option may be exercised by an individual at any time when he is precluded by
paragraph 8 of Schedule 9 from participating in the Scheme.

No Option may be exercised at any time when the shares which may be acquired as
a result do not satisfy the conditions specified in paragraphs 10 to 14
inclusive of Schedule 9.

The allotment or transfer of Shares subject to an Option shall be conditional
upon the Optionholder complying with arrangements specified by the Company for
the payment of any taxation (including without limitation the deduction of tax
as source) and/or social security contributions. The Company or any other
Participating Company which employs an Optionholder shall be entitled to make
arrangements for the sale of some of the Shares to be alloted or transferred to
an Optionholder to satisfy such Optionholder's tax liability and/or liability to
social security contributions.

Each Optionholder agrees to indemnify the Indemnified Persons against any tax or
social security claim of whatever nature or any liability or obligation incurred
by the Indemnified Persons which relates to the liability of an Optionholder in
the Plan to taxation or social security contributions.

            Any liability of the Company or any other of the Indemnified Persons
            to make employer social security contributions for its own account
            in respect of an Option provided under the Plan, shall not be the
            liability of the Optionholder.

An Option shall be exercised by the Optionholder or his Personal Representatives
serving a written or electronic notice in the form set out (or in such other
form as the Board may reasonably require) on the Company which:

            10.5.1      states the number of Shares in respect of which the
                        Option is to be exercised;

            10.5.2      is accompanied by a payment equal to the product of the
                        number of Shares stated in the notice and the Exercise
                        Price; and

            10.5.3      is accompanied by payment under the Indemnity if and to
                        the extent that in relation to an Option granted under
                        the Scheme, any of the Indemnified Persons is liable, or
                        is in accordance with current practice believed by the
                        Board to be liable, to account to any revenue or other
                        authority for any sum in respect of any tax or social
                        security charges which may arise on grant, exercise,
                        release or other disposal of the Option for which the
                        Optionholder is liable.

            10.6        The notice of exercise may take effect on the day when
                        the Company, having received the notice, is satisfied
                        that:

            10.6.1      payment has been made by the Optionholder in respect of
                        the Shares; and

            10.6.2.     where reasonably required by the Board payment has been
                        made under the Indemnity to satisfy the Optionholder's
                        libility to any tax or social security charges for which
                        the Optionholder is liable.

10.7        The number of Shares specified in any notice served under Rule 10.5
            shall be allotted and issued within 30 days of the date on which
            notice of exercise on the Company comes into force under Rule 10.4
            above. A definitive share certificate may be issued to the

                                       8
<PAGE>

            Optionholder as soon as reasonably practicable after the allotment
            and issue of the Shares. Save for any rights determined by reference
            to a date preceding the date of allotment, such Shares shall rank
            pari passu with the other shares of the same class in issue at the
            date of allotment.

10.8        When an Option is exercised only in part, the balance shall remain
            exercisable on the same terms as originally applied to the whole
            Option and a new option certificate may be issued accordingly by the
            Company as soon as possible after the partial exercise.

ADMINISTRATION AND AMENDMENT
----------------------------

The Scheme shall be administered by the Board whose decision on all disputes
shall be final.

The Board may from time to time amend these Rules provided that:

            11.2.1      no amendment may affect an Optionholder as regards an
                        Option granted prior to the amendment being made;

            11.2.2      no amendment may be made which would make the terms on
                        which Options may be granted materially more generous or
                        would increase the limits specified in rule 5 without
                        the prior approval of the Company in general meeting,
                        and

            11.2.3      no amendment shall have effect until approval by the
                        Board of the Inland Revenue.

The cost of establishing and operating the Scheme shall be borne by the
Participating Companies in such proportions as the Board shall determine.

The Board may establish a committee consisting of not less than two Board
members to whom any or all of its powers in relation to the Scheme may be
delegated. The Board may at any time dissolve such committee, alter its
constitution or direct the manner in which it shall act.

Any notification or other notice which the Company is required to give or may
desire to give to any Optionholder pursuant to the Scheme must be sent by fax or
delivered in electronic form or sent by ordinary post in a prepaid envelope
addressed to the Optionholder's address last known to the Company.

Any notice sent electronically shall be deemed to be properly received on the
same day the notice is sent. Any notice sent by post (by airmail if overseas)
shall be deemed to be properly served four working days after an envelope
containing such notice and properly addressed has been posted by first class
prepaid post (or if sent airmail from or to overseas on the fifth day following
the day of posting). Share certificates and other communications sent by post
will be sent at the risk of the Optionholder. The Company shall only accept
liability in respect of any notification, document, or other communication so
given or sent to it by an Optionholder, where the sender can prove
postage/electronic or fax transmission.

Any notice given by an Optionholder to the Company pursuant to the Scheme must
be given in writing or electronic form and signed by the Optionholder as the
case may be and shall be acted upon by the Company as soon as practicable after
receipt. Any such notice shall be properly given if sent by fax or in electronic
form or prepaid registered post (by airmail if overseas) or delivered to the
Company at its registered offices.

GENERAL
-------

This Scheme shall commence upon the date of its approval by the Inland Revenue
and shall (unless previously terminated by a resolution of the Board terminate
on the tenth anniversary from

                                       9
<PAGE>

the date of being adopted by the Board. Upon termination (however occurring) no
further Options may be granted but such termination shall be without prejudice
to any accrued rights in existence at the date hereof.

The Company shall at all times keep available sufficient authorised and unissued
Shares to satisfy the exercise to the full extent still possible of all Options
which have neither lapsed nor been fully exercised, taking account of any other
obligations of the Company to issue unissued Shares.

All Optionholders agree as a condition of their participation in the Scheme that
any personal data in relation to them may be held by any company in the Extended
Systems Incorporated Group and/or passed to any third party where necessary for
the administration of the Scheme.

This Scheme and all Options granted under it shall be governed by and construed
in accordance with English law.

RELATIONSHIP WITH CONTRACT OF EMPLOYMENT
----------------------------------------

The grant of an Option does not form part of the Optionholder's entitlement to
remuneration or benefits pursuant to his contract of employment.

The rights and obligations of an Optionholder under the terms of his contract of
employment with the Company or any current or former Associated Company shall
not be affected by the grant of an Option.

An Optionholder shall not be entitled to any compensation or damages for any
loss or potential loss which he may suffer by reason of being or becoming unable
to exercise an Option in consequence of the loss or termination of his office or
employment (including, without limitation, any breach of contract by his
employer) or in any other circumstances whatsoever.

                                       10
<PAGE>

                                   APPENDIX A
                                   ----------

LETTER OF INVITATION:  TO BE TYPED ON THE LETTERHEAD OF
EXTENDED SYSTEMS INCORPORATED

                                              Date

Dear

THE EXTENDED SYSTEMS INCORPORATED APPROVED SHARE OPTION  SCHEME ("the Scheme")

            Extended Systems has a strong belief in rewarding our employees
based on contribution and has a significant interest in retaining our key
personnel. Therefore, to recognize your efforts and dedication to Extended
Systems and to encourage your continued contributions to our team, you have been
awarded an Extended Systems stock option grant from the Scheme, the details of
which are below.

Number of Shares:
Exercise Price:
Grant Date:

            This option has been granted to you in accordance with the Scheme
and provides for a four-year vesting period, the details of which will be
defined in the option certificate, and the exercise price will (subject to the
agreement of the Shares Valuation Division of the Inland Revenue) be equal to
the closing price of Extended Systems stock as listed on the Nasdaq Stock
Exchange on the day prior to the grant.

            Three Option Certificate will be distributed to you within the next
three to four weeks. When you receive these Option Certificates, could you
please sign all three Option Certificates in the presence of a witness and
return two of the Option Certificates to [ ] (in the pre-addressed envelope
provided) within 7 days from the date of receiving the Option Certificates. Keep
the third option certificate for your records.

            The purpose of the Scheme is to attract and retain the best
personnel possible, to provide additional incentives to our personnel and to
promote the success of Extended Systems by making employees shareholders as well
as employees of Extended Systems.

            Thank you very much for your efforts for our team and we look
forward to sharing much success with you in the future.

                                            Sincerely,

                                       11
<PAGE>

                                   APPENDIX B
                                   ----------

                               OPTION CERTIFICATE

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

  THE EXTENDED SYSTEMS INCORPORATED APPROVED SHARE OPTION SCHEME ("THE SCHEME")

Option Certificate

Note:   The words in this Option Certificate shall bear the same meaning as the
words defined in the rules of the Scheme (the "Scheme Rules")

This is to certify that

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

is the holder of an Option to acquire up to a maximum of .......................
ordinary shares of ...................each in Extended Systems Incorporated at a
price of .......................per ordinary share.

This Option was granted on ..........................................under the
Rules of the Scheme.

The Option is exercisable in accordance with the terms of the Rules of the
Scheme, the terms of the letter to you of [date of invitation letter], as they
are amended from time to time and with the Vesting Schedule outlined below and
the conditions of exercise set out in the appendix to the Option Certificate. If
there is to be no charge to income tax on the exercise of an Option then, in
addition to complying with the rules of the Scheme, the exercise must be

o    made at a time when the Scheme retains Inland Revenue approval;

o    not earlier than 3 or later than 10 years after the Option was granted; and

o    not earlier than 3 years following the latest previous exercise by the
     participant of an Option (obtained under this or any other Option Plan
     (except a savings related Share Option Plan) approved by the Inland
     Revenue) which enjoyed relief from income tax.

This Option is not transferable, and will lapse upon the occasion of an
assignment, charge, disposal or other dealing with the rights conveyed by it in
any other circumstances.

Vesting Schedule:

EXECUTED as a Deed by
Extended Systems Incorporated
acting by:

                                                CORPORATE SECRETARY

                                                CHIEF EXECUTIVE OFFICER

                                       12
<PAGE>

Signed by [Optionholder]............            )
in the presence of:     ............            )

Signature:            .....................................

Print in capitals

Name of witness:      .....................................

Address:              .....................................

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

Occupation:           .....................................

Date:                   ...................................

                                       13
<PAGE>

                                   APPENDIX C
                                   ----------

                       NOTICE OF EXERCISE OF SHARE OPTION
                       ----------------------------------

To:         The Corporate Secretary, Extended Systems Incorporated

I hereby exercise the Option referred to in the Option Certificate dated
([                     ]) in respect of all/............................* of the
shares over which the Option may be exercised, and:

      I enclose a cheque made payable to Extended Systems Incorporated in the
      sum of (pound)............... being the aggregate Exercise Price of such
      shares and any payment to satisfy any arising tax liability that I have
      agreed to pay by way of indemnity.

Name (block letters)                              Signature

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

Address
 .....................................
 .....................................
 .....................................             Date .........................

NOTES:

1.       This form provides that payment of the Exercise Price for the shares in
         respect of which the Option is exercised and any additional payment of
         such sum as may require to be paid under a duly executed power of
         attorney in accordance with the conditions of exercise set out in the
         Appendix to the Option Certificate and/or a duly executed agreement
         and/or joint election.

2.       Where the Option is exercised by personal representatives, an office
         copy of the Probate or Letters of Administration should accompany the
         form.

3.       IMPORTANT: The Plan has been approved by the Inland Revenue under
         Schedule 9 to the Income and Corporation Taxes Act 1988. However,
         Extended Systems Incorporated does not undertake to advise you on the
         tax consequences of exercising your Option. If you are unsure of the
         tax liabilities which may arise, you should take appropriate
         professional advice before exercising your Option.

* Delete/insert number as appropriate

                                       14
<PAGE>

                                   APPENDIX D
                                   ----------

TO BE TYPED ON THE LETTERHEAD OF  EXTENDED SYSTEMS INCORPORATED

I declare that the shares to be issued in the Extended Systems Incorporated
Approved Share Option Scheme satisfy the conditions in paragraphs 10 to 14
(inclusive), Schedule 9, ICTA 1988. Namely that the shares are:

1.       part of the ordinary share capital of the grantor;

2.       shares in a company not controlled by another company

3.       fully paid up and irredeemable;

4.       not subject to any restrictions not attaching to all shares of the same
         class; and

5.       part of the only class of ordinary shares.

Signed................................................................

Corporate Secretary..............................................

Date...................................................................

                                       15
<PAGE>

                                   APPENDIX E
                                   ----------

TO BE TYPED ON THE LETTERHEAD OF  EXTENDED SYSTEMS INCORPORATED

We the Directors of Extended Systems Incorporated declare that we will not use
our power to vote for the transfer of shares in any way to discriminate against
the transfer of shares acquired under the Extended Systems Incorporated Approved
Share Option Scheme ("the Scheme"), and that employees participating in the
Scheme will be informed of this declaration.

Signed for and
 on behalf of all the Directors
of Extended Systems Incorporated................................................

Chairman....................................................
(duly authorised to sign on behalf of the Directors of Extended Systems
Incorporated)

Date..........................................................

            Adopted by the Company on

Approved by the Inland Revenue on

                                       16

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