Document:

<PAGE>   1

                                                                    EXHIBIT 10.3

This Amendment Agreement ("Amendment") is the Second Amendment to the
Manufacturing and Engineering Services Agreement dated January 11, 1999 between
Netro Corporation ("Netro") and Microelectronics Technology, Inc. ("MTI") (the
"Agreement")

The parties desire to amend and supplement the Agreement as set forth in this
Amendment and accordingly agree as follows:

1.     Effective Dates

       This Amendment shall govern purchases by Netro from MTI for the period
       from July 1, 2000 to December 31, 2001 (the "Commitment Period"). It is
       expressly applicable retroactively to all purchase orders placed by Netro
       since July 1, 2000.

2.     Purchase Commitment

       Netro agrees to order a minimum of 25,000 units of Products during the
       Commitment Period for delivery within the lead times specified in Section
       5 of the Amendment. This commitment shall be represented by a blanket
       purchase order to be issued by Netro within two weeks following the
       signing of this Amendment (the "Blanket Purchase Order"). Releases of
       Product shall be subject to the issuance of specific releases subject to
       the Blanket Purchase Order and the terms of this Amendment. In the event
       unforeseen market conditions result in a shortfall in releases by Netro
       on December 31, 2001 (the occurrences of which shall be reasonably proved
       by Netro with written records) Netro shall have up to an additional three
       months to release the committed quantity. In case there is still a
       shortfall after this extension, Netro is liable for compensation to MTI
       for reasonable unmitigated all costs and expenses incurred to satisfy the
       Blanket Purchase Order, including but not limited to the un-consumed
       inventory resulting from the unreleased quantity.

3.     Pricing

       Pricing for AirStar 26GHz radios shall be as follows:

<TABLE>
<CAPTION>
               Quantity                            Price per Unit
               --------                            --------------
<S>                                                <C>
               Up to 3,000 units                   $****
               3,001 to 10,000 units               $****
               10,001 to 20,000 units              $****
               20,001 to 25,000 units              $****
</TABLE>

       For purposes of calculating quantities pursuant to the above schedule,
       sales of radios of all frequencies, including both complete radios and
       radio units that are substantially complete except for packaging shall be
       included.

       These prices shall apply to both BRU's and SRU's in all antenna
       polarizations and configurations. In the case of Slimline versions, the
       price will be adjusted by an amount to be mutually agreed between the
       parties reflecting only the change in material costs between AirStar and
       Slimline packages to MTI.

**** Confidential treatment has been requested for the redacted portions. The
     confidential redacted portions have been filed separately with the
     Securities and Exchange Commission.
<PAGE>   2

       The above prices shall be fixed for the volumes specified during the
       Commitment Period. Variances of any kind, including production and
       material variances, will be borne by MTI, and MTI shall enjoy the benefit
       of any cost reductions initiated by MTI, including the cost reduction
       plan submitted to Netro on June 27, 2000. However, savings from
       engineering changes initiated by Netro will be deducted from the price
       specified on a dollar for dollar basis, provided that these engineering
       charges are presented to MTI for review and assessment of cost and
       schedule impacts prior to release.

       Prices for the first 1,000 units of each frequency (aggregating all
       polarizations and configurations of that frequency) other than 26 GHz
       shall be the same as the initial price for 26GHz radios (i.e. $****), but
       Netro will also pay to MTI the amount per unit specified below as a
       non-recurring engineering expense:

<TABLE>
<CAPTION>
               Frequency                    NRE per unit
               ---------                    ------------
<S>                                         <C>
               10GHz                        $****
               28GHz                        $****
               38GHZ                        $****
</TABLE>

       Upon the completion of sale of 700 units of Product in any of the above
       frequencies, the parties shall negotiate in good faith for 30 days to
       establish volume pricing of that Product beyond the 1,000 unit level
       based on pricing for the 26GHz Products, adjusted either up or down only
       for actual cost differences to MTI between that Product and the 26GHz
       Products. In the event the parties are unable to agree on such price, the
       issue shall be submitted for mediation by a neutral third party agreed
       upon by the parties. If after mediation no agreement is reached on volume
       pricing for frequencies other than 26GHz, Netro shall have the option to
       reduce its purchase commitment pursuant to Section 2 on an equitable
       basis reflecting the exclusion of the frequencies for which no agreement
       on volume pricing has been reached. In such event the minimum commitment
       shall be at least 15,000 units, however.

4.     Changes in Configuration

       Netro shall have the right at any time and without charge or expense to
       change the mix of frequencies, configurations and antenna polarizations
       ("Changes") reflected in the Blanket Purchase Order for which releases
       have not yet been issued; provided that such Changes made by Netro are
       pursuant to Section 4.a and 4.b of the Agreement.

       Netro shall at all times release at least the next 2-month's worth of
       Product deliveries under the Blanket Purchase Order. With respect to
       Products for which a release has been issued, Netro shall have the right
       to request changes among frequencies, configurations and antenna
       polarizations, and MTI shall use its best efforts to comply with any such
       changes on the same schedule as originally ordered. However, Netro shall
       be liable for any additional costs and expenses incurred as a result
       Changes to released Products so requested by Netro. In

**** Confidential treatment has been requested for the redacted portions. The
     confidential redacted portions have been filed separately with the
     Securities and Exchange Commission.
<PAGE>   3

       addition, releases may be rescheduled pursuant to the terms of Section
       4.b(iv) of the Agreement

5.     Lead Times

       Provided that releases of Products pursuant to the Blanket Purchase Order
       are reflected in the latest Netro forecast (including a flex plan of up
       to 30%) delivered pursuant to Section 4.a of the Agreement, MTI agrees to
       deliver Products within four weeks of the date of release of such
       Products by Netro.

6.     First Articles

       With respect to approximately 25 units of 28GHz Products and 20 units of
       39 GHz Products designated as first articles, Netro agrees to pay to MTI
       an additional amount to be mutually agreed between the parties for
       non-recurring engineering expenses and purchase price variances.

       Both parties understand that MTI has purchased limited quantities of 28
       and 39 Ghz material at lower volume and higher cost and has proposed an
       additional purchase price variance to Netro. This proposed variance will
       be settled by both parties negotiating in good faith within two weeks
       after the signing of this Amendment.

7.     Non Compete

       The quantities specified in this Amendment are agreed to be sufficient to
       require MTI to comply with the provisions of Section 14 of the Agreement.

8.     Capitalized Terms

       Capitalized terms used in this Amendment shall have the meanings
       specified in the Agreement.

9.     Effect on Agreement

       Except as expressly amended by this Amendment, the Agreement shall remain
       in full force and effect.

The parties have signed this Agreement as of the date indicated in the preamble.

Netro Corporation                           Microelectronics Technology, Inc.

By:  /s/ Michael T. Everett                 By:  /s/ Chi C. Hsieh
   ---------------------------------           ---------------------------------
        Michael T. Everett                         Dr. Chi. C. Hsieh
        Executive Vice President                   Vice Chairman
        and Chief Financial Officer

     /s/ Gideon Ben-Efraim                      /s/ Wesley Huang
   ---------------------------------           ---------------------------------<PAGE>   1
                                                                    EXHIBIT 10.3

                              ACCRUE SOFTWARE, INC.

                                 1996 STOCK PLAN

                  (AS AMENDED BY APPROVAL OF THE STOCKHOLDERS
                             AS OF AUGUST 31, 2000)

        1. PURPOSES OF THE PLAN. The purposes of this 1996 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 and stock bonuses 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 6 of the Plan.

            (b) "AFFILIATE" means an entity other than a Subsidiary in which the
Company owns an equity interest or which, together with the Company, is under
common control of a third person or entity.

            (c) "APPLICABLE LAWS" means the legal requirements relating to the
administration of stock option, restricted stock purchase and stock bonus plans
under applicable U.S. state corporate laws, U.S. federal and applicable state
securities laws, the Code, any stock exchange rules or regulations and the
applicable laws of any other country or jurisdiction where Options, Stock
Purchase Rights or Stock Bonuses are granted under the Plan, as such laws,
rules, regulations and requirements shall be in place from time to time.

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

            (e) "CODE" means the Internal Revenue Code of 1986, as amended.

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

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

            (h) "COMPANY" means Accrue Software, Inc., a Delaware corporation.

            (i) "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.

<PAGE>   2

            (j) "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.

            (k) "DIRECTOR" means a member of the Board.

            (l) "EMPLOYEE" means any person (including, if appropriate, any
Named Executive, Officer or Director), 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.

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

            (n) "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.

                                      -2-
<PAGE>   3

            (o) "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.

            (p) "LISTED SECURITY" means any security of the Company that is
listed or approved for listing on a national securities exchange or designated
or approved for designation as a national market system security on an
interdealer quotation system by the National Association of Securities Dealers,
Inc.

            (q) "NAMED EXECUTIVE" means any individual who, on the last day of
the Company's fiscal year, is the chief executive officer of the Company (or is
acting in such capacity) or among the four most highly compensated officers of
the Company (other than the chief executive officer). Such officer status shall
be determined pursuant to the executive compensation disclosure rules under the
Exchange Act.

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

            (s) "OFFICER" means a person who is an officer of the Company within
the meaning of Section 16(a) of the Exchange Act and the rules and regulations
promulgated thereunder.

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

            (u) "OPTIONED STOCK" means the Common Stock subject to an Option,
Stock Purchase Right or Stock Bonus.

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

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

            (x) "PLAN" means this 1996 Stock Plan.

            (y) "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.

            (z) "RESTRICTED STOCK" means shares of Common Stock acquired
pursuant to a grant of a Stock Purchase Right or Stock Bonus under Section 11 or
Section 12 below.

            (aa) "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.

            (bb) "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 14 of the Plan.

                                      -3-
<PAGE>   4

            (cc) "STOCK BONUS" means an award of Shares granted pursuant to
Section 12 below.

            (dd) "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.

            (ee) "STOCK PURCHASE RIGHT" means the right to purchase Common Stock
pursuant to Section 10 below.

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

            (gg) "TEN PERCENT HOLDER" means a person who owns stock representing
more than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary.

        3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 14 of
the Plan, the maximum aggregate number of Shares that may be optioned and sold
under the Plan is 9,930,0001 shares of Common Stock, plus an automatic annual
increase on the first day of each of the Company's fiscal years beginning in
2001 and ending in 2006 equal to the lesser of: (i) 4,000,000 Shares; (ii) six
percent (6%) of the Shares outstanding on a fully diluted basis on the last day
of the immediately preceding fiscal year; or (iii) such lesser number of shares
as is determined by the Board of Directors. For purposes of the foregoing
sentence, "Shares outstanding on a fully diluted basis" include in addition to
Shares issued and outstanding, all Shares reserved for issuance under all of the
Company's stock option and stock purchase plans. 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 and Shares forfeited to the Company
pursuant to Section 12 below shall not be available for future grant as
Incentive Stock Options under the Plan to the extent the future grant of such
options shall not have satisfied the stockholder approval requirements under
Section 422 of the Code.

--------
1 The 9,930,000 shares consist of 6,630,000 shares authorized pursuant to the
May 23, 1999 amendment, 800,000 additional shares authorized as of April 1, 2000
under the prior automatic increase provision set forth in Section 3 of the Plan,
and 2,500,000 shares authorized by the Board on July 6, 2000 for which
stockholder approval was sought and obtained at the Annual Meeting of
Stockholders on August 31, 2000.

                                      -4-
<PAGE>   5

        4. ADMINISTRATION OF THE PLAN.

            (a) GENERAL. The Plan shall be administered by the Board or a
Committee, or a combination thereof, as determined by the Board. The Plan may be
administered by different administrative bodies with respect to different
classes of Optionees and, if permitted by the Applicable Laws, the Board may
authorize one or more officers (who may (but need not) be Officers) to grant
Options, Stock Purchase Rights or Stock Bonuses to Employees and Consultants.

            (b) ADMINISTRATION WITH RESPECT TO REPORTING PERSONS. With respect
to Options granted to Reporting Persons and Named Executives, the Plan may (but
need not) be administered so as to permit such Options to qualify for the
exemption set forth in Rule 16b-3 and to qualify as performance-based
compensation under Section 162(m) of the Code.

            (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(n) of the Plan;

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

                (iii) to determine whether and to what extent Options, Stock
Purchase Rights and Stock Bonuses 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;

                (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 10(g) 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 Stock Bonuses and the Restricted Stock purchased by
exercising such Stock Purchase Rights or received through such Stock Bonuses;
and

                                      -5-
<PAGE>   6

                (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, Stock Purchase Rights or Stock
Bonuses 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, Stock Purchase Rights or Stock Bonuses.

        5. ELIGIBILITY.

            (a) RECIPIENTS OF GRANTS. Nonstatutory Stock Options, Stock Purchase
Rights and Stock Bonuses may be granted to Employees and Consultants. Incentive
Stock Options may be granted only to Employee, provided however that Employees
of Affiliates shall not be eligible to receive Incentive Stock Options. An
Employee or Consultant who has been granted an Option, Stock Purchase Right or
Stock Bonus may, if he or she is otherwise eligible, be granted additional
Options, Stock Purchase Rights or Stock Bonuses.

            (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 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 20 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 17 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
Option granted to an Optionee who, at the time the Option is

                                      -6-
<PAGE>   7

granted is a Ten Percent Holder, 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. LIMITATION ON GRANTS TO EMPLOYEES. Subject to adjustment as provided
in Section 14 below, the maximum number of Shares which may be subject to
Options, Stock Purchase Rights and Stock Bonuses granted to any one Employee
under this Plan for any fiscal year of the Company shall be 2,000,000 Shares.

        9. 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, is a Ten Percent Holder, 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 prior to the date, if any, on which the Common
Stock becomes a Listed Security, to a person who, at the time of the grant of
such Option, is a Ten Percent Holder, 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 a person who, at the time of the grant of
such Option, is a Named Executive of the Company, the per share Exercise Price
shall be no less than 100% of the Fair Market Value on the date of grant if such
Option is intended to qualify as performance-based compensation under Section
162(m) of the Code;

                    (C) granted prior to the date, if any, on which the Common
Stock becomes a Listed Security, to any person other than a Named Executive or
Ten Percent Holder, the per Share exercise price shall be no less than 85% of
the Fair Market Value per Share on the date of grant if required by the
Applicable Laws and, if not so required, shall be such price as is determined by
the Administrator; or

                (iii) Notwithstanding the foregoing, Options may be granted with
a per Share exercise price other than as required above pursuant to a merger or
other corporate transaction.

                                      -7-
<PAGE>   8

            (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 entirely of (1) cash, (2)
check, (3) promissory note, (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) delivery of an irrevocable subscription
agreement for the Shares that irrevocably obligates the option holder to take
and pay for the Shares not more than twelve months after the date of delivery of
the subscription agreement, (8) any combination of the foregoing methods of
payment, or (9) 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.

        10. 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 if required by
the Applicable Laws, any option granted prior to the date, if any, upon which
the Common Stock becomes a Listed Security, shall become exercisable at the rate
of at least twenty percent (20%) per year over five (5) years from the date the
Option is granted. In the event that any of the Shares issued upon exercise of
an Option (which exercise occurs prior to the date, if any, upon which the
Common Stock becomes a Listed Security) should be subject to a right of
repurchase in the Company's favor, such repurchase right shall, if required by
the Applicable Laws, lapse at the rate of at least twenty percent (20%) per year
over five (5) years from the date the Option is granted.

                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 9(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a

                                      -8-
<PAGE>   9

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 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 13 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 10(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 10(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 10(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(e)(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

                                      -9-
<PAGE>   10

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.

            (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 thirty (30) days 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) EXTENSION OF EXERCISE PERIOD. The Administrator shall have full
power and authority to extend the period of time for which an Option is to
remain exercisable following termination of an Optionee's Continuous Status as
an Employee or Consultant from the periods set forth in Sections 10(b), 10(c)
and 10(d) above or in the Option Agreement to such greater time as the Board
shall deem appropriate, provided that in no event shall such Option be
exercisable later than the date of expiration of the term of such Option as set
forth in the Option Agreement.

            (f) 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.

            (g) 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.

        11. 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, 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. In the case of a Stock Purchase Right granted prior to the date, if any,
on which the Common Stock becomes a Listed Security and if required by the
Applicable Laws at such time, the purchase price of Shares subject to such Stock
Purchase

                                      -10-
<PAGE>   11

Rights 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 Ten Percent Holder, the price shall
not be less than 100% of the Fair Market Value of the Shares as of the date of
the offer. If the Applicable Laws do not impose the requirements set forth in
the preceding sentence and with respect to any Stock Purchase Rights granted
after the date, if any, on which the Common Stock becomes a Listed Security, the
purchase price of Shares subject to Stock Purchase Rights shall be as determined
by the Administrator. 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 Company. The repurchase option shall lapse at such rate as the
Administrator may determine, provided, however, that with respect to a Stock
Purchase Right granted prior to the date, if any, on which the Common Stock
becomes a Listed Security to a purchaser who is not an officer (including an
Officer), Director or Consultant of the Company or any Parent or Subsidiary of
the Company, it shall lapse at a minimum rate of 20% per year.

            (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 13
of the Plan.

        12. STOCK BONUSES.

            (a) AWARDS OF STOCK BONUSES. Stock Bonuses 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. A Stock Bonus may be awarded for
past services already rendered to the Company, or any Parent, Subsidiary or
Affiliate of the Company pursuant to an agreement (a "Stock Bonus Agreement")
that shall be in such form (which shall not be the same for each recipient) as
the Administrator shall from time to time approve, and shall comply with and be
subject to the terms and conditions of the Plan. Stock Bonuses may vary from
recipient to recipient and between groups of recipients, and may be based upon
achievement of the

                                      -11-
<PAGE>   12

Company, Parent, Subsidiary or Affiliate and/or individual performance factors
or upon such other criteria as the Administrator may determine.

            (b) FORFEITURE PROVISIONS. Unless the Administrator determines
otherwise, the Stock Bonus Agreement shall provide for the forfeiture of Stock
Bonus Shares to the Company without payment of consideration upon the voluntary
or involuntary termination of the recipient's employment with the Company for
any reason (including death or disability). The forfeiture provision shall lapse
at such rate as the Administrator may determine.

            (c) OTHER PROVISIONS. The Stock Bonus 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 Stock Bonus Agreements need not be the same with respect to each
purchaser.

            (d) RIGHTS AS A STOCKHOLDER. Once the Stock Bonus is awarded, the
recipient shall have the rights equivalent to those of a stockholder, and shall
be a stockholder when his or her award 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
Bonus is awarded, except as provided in Section 14 of the Plan.

        13. TAXES.

            (a) As a condition of the exercise of an Option or Stock Purchase
Right or the award of a Stock Bonus granted under the Plan, the Participant (or
in the case of the Participant's death, the person exercising or receiving the
Option, Stock Purchase Right or Stock Bonus) shall make such arrangements as the
Administrator may require for the satisfaction of any applicable federal, state,
local or foreign withholding tax obligations that may arise in connection with
the exercise of Option or Stock Purchase Right or the award of a Stock Bonus and
the issuance of Shares. The Company shall not be required to issue any Shares
under the Plan until such obligations are satisfied.

            (b) In the case of an Employee and in the absence of any other
arrangement, the Employee shall be deemed to have directed the Company to
withhold or collect from his or her compensation an amount sufficient to satisfy
such tax obligations from the next payroll payment otherwise payable after the
date of an exercise of the Option or Stock Purchase Right or the award of the
Stock Bonus.

            (c) This Section 13(c) shall apply only after the date, if any, upon
which the Common Stock becomes a Listed Security. In the case of Participant
other than an Employee (or in the case of an Employee where the next payroll
payment is not sufficient to satisfy such tax obligations, with respect to any
remaining tax obligations), in the absence of any other arrangement and to the
extent permitted under the Applicable Laws, the Participant shall be deemed to
have elected to have the Company withhold from the Shares to be issued upon
exercise of the Option or Stock Purchase Right or award of the Stock Bonus that
number of Shares having a Fair Market Value determined as of the applicable Tax
Date (as defined below) equal to the amount required to be withheld. For
purposes of this Section 13, the Fair Market

                                      -12-
<PAGE>   13

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 under the Applicable Laws (the
"Tax Date").

            (d) If permitted by the Administrator, in its discretion, a
Participant may satisfy his or her tax withholding obligations upon exercise of
an Option or Stock Purchase Right or award of a Stock Bonus by surrendering to
the Company Shares that (i) in the case of Shares previously acquired from the
Company, have been owned by the Participant for more than six (6) months on the
date of surrender, and (ii) have a Fair Market Value determined as of the
applicable Tax Date equal to the amount required to be withheld.

            (e) Any election or deemed election by a Participant to have Shares
withheld to satisfy tax withholding obligations under Section 13(c) or (d) above
shall be irrevocable as to the particular Shares as to which the election is
made and shall be subject to the consent or disapproval of the Administrator.
Any election by a Participant under Section 13(d) above must be made on or prior
to the applicable Tax Date.

            (f) In the event an election to have Shares withheld is made by a
Participant 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 Participant shall receive
the full number of Shares with respect to which the Option or Stock Purchase
Right is exercised or Stock Bonus is awarded but such Participant shall be
unconditionally obligated to tender back to the Company the proper number of
Shares on the applicable Tax Date.

        14. 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, Stock Purchase Right or Stock Bonus, and the number of
shares of Common Stock that have been authorized for issuance under the Plan but
as to which no Options, Stock Purchase Rights or Stock Bonuses have yet been
granted or that have been returned to the Plan upon cancellation or expiration
of an Option, Stock Purchase Right or Stock Bonus, the number of Shares
described in Section 3(a)(i) and 8 above, 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, Stock Purchase Right or Stock Bonus.

                                      -13-
<PAGE>   14

            (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 proposed 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 or Stock Purchase Right shall terminate upon the consummation of the
merger or sale of assets.

            (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.

        15. 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, provided that, after the date, if any, upon which the
Common Stock becomes a Listed Security, the Administrator may in its discretion
grant transferable Nonstatutory Stock Options pursuant to Option Agreements
specifying (i) the manner in which such Nonstatutory Stock Options are
transferable and (ii) that any such transfer shall be subject to the Applicable
Laws. The designation of a beneficiary by an Optionee will not constitute a
transfer. An Option or Stock Purchase Right may be exercised, during the
lifetime of the holder of Option or Stock Purchase Right, only by such holder or
a transferee permitted by this Section 16.

        16. TIME OF GRANTING OPTIONS, STOCK PURCHASE RIGHTS AND STOCK BONUSES.
The date of grant of an Option, Stock Purchase Right or Stock Bonus shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option, Stock Purchase Right or Stock Bonus, 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, Stock Purchase Right or Stock Bonus is so granted
within a reasonable time after the date of such grant.

        17. 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

                                      -14-
<PAGE>   15

theretofore made, without his or her consent. In addition, to the extent
necessary and desirable to comply with the Applicable Laws, the Company shall
obtain stockholder approval of any Plan amendment in such a manner and to such a
degree as required.

            (b) EFFECT OF AMENDMENT OR TERMINATION. No amendment or termination
of the Plan shall adversely affect Options, Stock Purchase Rights or Stock
Bonuses 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.

        18. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Option or Stock Purchase Right or the award of a
Stock Bonus unless the exercise of such Option or Stock Purchase Right or the
award of such Stock Bonus 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 or Stock Purchase Right
and the award of a Stock Bonus, the Company may require the person exercising
such Option or Stock Purchase Right or receiving such Stock Bonus to represent
and warrant at the time of any such exercise or award that the Shares are being
purchased or received 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.

        19. 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.

        20. AGREEMENTS. Options, Stock Purchase Rights and Stock Bonuses shall
be evidenced by written agreements in such form as the Administrator shall
approve from time to time.

        21. STOCKHOLDER APPROVAL. If required by the Applicable Laws,
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 the Applicable Laws. All Options, Stock Purchase Rights and Stock Bonuses
issued under the Plan shall become void in the event such approval is not
obtained.

        22. INFORMATION AND DOCUMENTS TO OPTIONEES, PURCHASERS AND RECIPIENTS.
Prior to the date, if any, upon which the Common Stock becomes a Listed Security
and if required by the Applicable Laws, 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, purchaser
or recipient has one or more Options, Stock Purchase Rights or Stock

                                      -15-
<PAGE>   16

Bonuses 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, Stock Purchase Rights or Stock Bonuses 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.

                                      -16-

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