Document:

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                                                                    EXHIBIT 4.05

                                NIKU CORPORATION

                       RESTRICTED STOCK PURCHASE AGREEMENT

     This Restricted Stock Purchase Agreement (the "Agreement") is made as of
February 25, 2000 by and between Niku Corporation, a Delaware corporation (the
"Company"), and JOHN DANFORTH ("Purchaser").

     1.   SALE OF STOCK. Subject to the terms and conditions of this Agreement,
on the Purchase Date (as defined below) the Company will issue and sell to
Purchaser, and Purchaser agrees to purchase from the Company, an aggregate of
Two Hundred Thousand (200,000) shares of the Company's Common Stock (the
"Shares") at a purchase price of $11.00 per Share for a total purchase price of
$2,200,000.00. The term "Shares" refers to the purchased Shares and all
securities received in replacement of or in connection with the Shares pursuant
to stock dividends or splits, all securities received in replacement of the
Shares in a recapitalization, merger, reorganization, exchange or the like, and
all new, substituted or additional securities or other properties to which
Purchaser is entitled by reason of Purchaser's ownership of the Shares.

     2.   PURCHASE. The purchase and sale of the Shares under this Agreement
shall occur at the principal office of the Company simultaneously with the
execution of this Agreement by the parties (the " Purchase Date"). On the
Purchase Date, the Company will deliver to Purchaser a certificate representing
the Shares to be purchased by Purchaser (which shall be issued in Purchaser's
name) against payment of the purchase price therefor by Purchaser, by delivery
of $20 as payment of the par value and a Full Recourse Promissory Note, attached
hereto as Exhibit D, in the amount of $2,199,980.

     3.   LIMITATIONS ON TRANSFER. In addition to any other limitation on
transfer created by applicable securities laws, Purchaser shall not assign,
encumber or dispose of any interest in the Shares while the Shares are subject
to the Company's Repurchase Option (as defined below). After any Shares have
been released from such Repurchase Option, Purchaser shall not assign, encumber
or dispose of any interest in such Shares except in compliance with the
provisions below and applicable securities laws.

          (a)  REPURCHASE OPTION.

               (i)  In the event of the voluntary or involuntary termination of
Purchaser's employment or consulting relationship with the Company for any
reason (including death or disability), with or without cause, the Company shall
upon the date of such termination (the "Termination Date") have an irrevocable,
exclusive option (the "Repurchase Option") for a period of 90 days from such
date to repurchase all or any portion of the Shares held by Purchaser as of the
Termination Date which have not yet been released from the Company's Repurchase
Option at the original purchase price per Share specified in Section 1 (adjusted
for any stock splits, stock dividends and the like). Shares subject to the
Company's Repurchase Option are referred to herein

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as "Unvested Shares" and shares that have been released from the Company's
Repurchase Option are referred to as "Vested Shares".

               (ii) The Repurchase Option shall be exercised by the Company by
written notice to Purchaser or Purchaser's executor and, at the Company's
option, (A) by delivery to Purchaser or Purchaser's executor with such notice of
a check in the amount of the purchase price for the Shares being purchased, or
(B) in the event Purchaser is indebted to the Company (whether or not said
indebtedness is then due and payable), by cancellation by the Company of an
amount of such indebtedness equal to the purchase price for the Shares being
repurchased, or (C) by a combination of (A) and (B) so that the combined payment
and cancellation of indebtedness equals such purchase price. Upon delivery of
such notice and payment of the purchase price in any of the ways described
above, the Company shall become the legal and beneficial owner of the Shares
being repurchased and all rights and interest therein or related thereto, and
the Company shall have the right to transfer to its own name the number of
Shares being repurchased by the Company, without further action by Purchaser.

               (iii) 100% of the Shares shall initially be subject to the
Repurchase Option with one-fourth (1/4th) of the total number of Shares being
released from the Repurchase Option on the one year anniversary of the Vesting
Commencement Date (as set forth on the signature page of this Agreement), and an
additional 1/48th of the total number of Shares shall be released from the
Repurchase Option each month thereafter, so that all shares are fully vested
after four years. Fractional shares shall be rounded to the nearest whole share.

          (b)  ADJUSTMENTS UPON CHANGE IN CONTROL. In the event of (i) a merger,
reorganization, consolidation or other transaction in which the shareholders of
the Company before such merger, reorganization, consolidation or other
transaction own, as a result of their ownership of the Company's securities,
less than fifty percent (50%) of the outstanding voting equity securities of the
surviving corporation (or in the case of a triangular merger, the parent
corporation of the surviving corporation), (ii) a sale or other transfer of all
or substantially all of the assets of the Company, or (iii) a transfer of more
than fifty percent (50%) of the outstanding voting equity securities of the
Company in one transaction or a series of related transactions, any remaining
Unvested Shares will immediately become Vested Shares.

          (c)  RIGHT OF FIRST REFUSAL. Before any Vested Shares held by
Purchaser or any transferee of Purchaser (either being sometimes referred to
herein as the "Holder") may be sold or otherwise transferred (including transfer
by gift or operation of law), the Company or its assignee(s) shall have a right
of first refusal to purchase the Shares on the terms and conditions set forth in
this Section 3(c) (the "Right of First Refusal"). Unvested Shares may not be
transferred unless otherwise approved by the Company.

               (i)  NOTICE OF PROPOSED TRANSFER. The Holder of the Shares shall
deliver to the Company a written notice (the "Notice") stating: (A) the Holder's
bona fide intention to sell or otherwise transfer such Shares; (B) the name of
each proposed purchaser or other transferee ("Proposed Transferee"); (C) the
number of Shares to be transferred to each Proposed Transferee; and (D) the
terms and conditions of each proposed sale or transfer. The Holder shall offer
the Shares at the same price (the "Offered Price") and upon the same terms (or
terms as similar as reasonably possible) to the Company or its assignee(s).

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               (ii) EXERCISE OF RIGHT OF FIRST REFUSAL. At any time within 30
days after receipt of the Notice, the Company and/or its assignee(s) may, by
giving written notice to the Holder, elect to purchase all, but not less than
all, of the Shares proposed to be transferred to any one or more of the Proposed
Transferees, at the purchase price determined in accordance with subsection
(iii) below.

               (iii) PURCHASE PRICE. The purchase price ("Purchase Price") for
the Shares purchased by the Company or its assignee(s) under this Section 3(c)
shall be the Offered Price. If the Offered Price includes consideration other
than cash, the cash equivalent value of the non-cash consideration shall be
determined by the Board of Directors of the Company in good faith.

               (iv) PAYMENT. Payment of the Purchase Price shall be made, at the
option of the Company or its assignee(s), in cash (by check), by cancellation of
all or a portion of any outstanding indebtedness of the Holder to the Company
(or, in the case of repurchase by an assignee, to the assignee), or by any
combination thereof within 30 days after receipt of the Notice or in the manner
and at the times set forth in the Notice.

               (v)  HOLDER'S RIGHT TO TRANSFER. If all of the Shares proposed in
the Notice to be transferred to a given Proposed Transferee are not purchased by
the Company and/or its assignee(s) as provided in this Section 3(c), then the
Holder may sell or otherwise transfer such Shares to that Proposed Transferee at
the Offered Price or at a higher price, provided that such sale or other
transfer is consummated within 60 days after the date of the Notice and provided
further that any such sale or other transfer is effected in accordance with any
applicable securities laws and the Proposed Transferee agrees in writing that
the provisions of this Section 3 shall continue to apply to the Shares in the
hands of such Proposed Transferee. If the Shares described in the Notice are not
transferred to the Proposed Transferee within such period, or if the Holder
proposes to change the price or other terms to make them more favorable to the
Proposed Transferee, a new Notice shall be given to the Company, and the Company
and/or its assignees shall again be offered the Right of First Refusal before
any Shares held by the Holder may be sold or otherwise transferred.

               (vi) EXCEPTION FOR CERTAIN FAMILY TRANSFERS. Anything to the
contrary contained in this Section 3(c) notwithstanding, the transfer of any or
all of the Shares during Purchaser's lifetime or on Purchaser's death by will or
intestacy to Purchaser's Immediate Family (as defined below) or to a trust for
the benefit of Purchaser's Immediate Family shall be exempt from the provisions
of this Section. "Immediate Family" as used herein shall mean spouse, lineal
descendant or antecedent, father, mother, brother or sister. In such case, the
transferee or other recipient shall receive and hold the Shares so transferred
subject to the provisions of this Section, and there shall be no further
transfer of such Shares except in accordance with the terms of this Section.

          (d)  INVOLUNTARY TRANSFER.

               (i)  COMPANY'S RIGHT TO PURCHASE UPON INVOLUNTARY TRANSFER. In
the event, at any time after the date of this Agreement, of any transfer by
operation of law or other involuntary transfer (including divorce or death, but
excluding, in the event of death, a transfer to Immediate Family as set forth in
Section 3(c)(vi) above) of all or a portion of the Shares by the record holder
thereof, the Company shall have the right to purchase all of the Shares
transferred at the greater of the purchase price paid by Purchaser pursuant to
this Agreement or the fair market value (as determined in good faith by the
Company's Board of Directors) of the Shares on the date

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of transfer. Upon such a transfer, the person acquiring the Shares shall
promptly notify the Secretary of the Company of such transfer. The right to
purchase such Shares shall be provided to the Company for a period of 30 days
following receipt by the Company of written notice by the person acquiring the
Shares.

               (ii) PRICE FOR INVOLUNTARY TRANSFER. With respect to any stock to
be transferred pursuant to Section 3(d)(i), the price per Share shall be a price
set by the Board of Directors of the Company that will reflect the current value
of the stock in terms of present revenues, earnings and future prospects of the
Company. The Company shall notify Purchaser or his or her executor of the price
so determined within 30 days after receipt by it of written notice of the
transfer or proposed transfer of Shares. However, if Purchaser does not agree
with the valuation as determined by the Board of Directors of the Company,
Purchaser shall be entitled to have the valuation determined by an independent
appraiser to be mutually agreed upon by the Company and Purchaser and whose fees
shall be borne equally by the Company and Purchaser.

          (e)  ASSIGNMENT. The right of the Company to purchase any part of the
Shares may be assigned in whole or in part to any stockholder or stockholders of
the Company or other persons or organizations; provided, however, that an
assignee, other than a corporation that is the Parent (defined as a "parent
corporation"; whether now or hereafter existing, as defined in Section 424(e) of
the Internal Revenues Code) or a 100% owned subsidiary of the Company, must pay
the Company, upon assignment of such right, cash equal to the difference between
the original purchase price and Fair Market Value, if the original purchase
price is less than the Fair Market Value of the Shares subject to the
assignment.

          (f)  RESTRICTIONS BINDING ON TRANSFEREES. All transferees of Shares or
any interest therein will receive and hold such Shares or interest subject to
the provisions of this Agreement, including, insofar as applicable, the
Repurchase Option. Any sale or transfer of the Shares shall be void unless the
provisions of this Agreement are satisfied.

          (g)  TERMINATION OF RIGHTS. The Right of First Refusal and the
Company's right to repurchase the Shares in the event of an involuntary transfer
pursuant to Section 3(d) above shall terminate upon the first sale of Common
Stock of the Company to the general public pursuant to a registration statement
filed with and declared effective by the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Securities Act" ). Upon
termination of the Right of First Refusal and the expiration or exercise of the
Repurchase Option, a new certificate or certificates representing the Shares not
repurchased shall be issued, on request, without the legend referred to in
Section 6(a)(ii) below and delivered to Purchaser.

     4.   ESCROW OF UNVESTED SHARES. For purposes of facilitating the
enforcement of the provisions of Section 3 above, Purchaser agrees, immediately
upon receipt of the certificate(s) for the Shares subject to the Repurchase
Option, to deliver such certificate(s), together with an Assignment Separate
from Certificate in the form attached to this Agreement as Exhibit A executed by
Purchaser and by Purchaser's spouse (if required for transfer), in blank, to the
Secretary of the Company, or the Secretary's designee, to hold such
certificate(s) and Assignment Separate from Certificate in escrow and to take
all such actions and to effectuate all such transfers and/or releases as are in
accordance with the terms of this Agreement. Purchaser hereby acknowledges that
the Secretary of the Company, or the Secretary's designee, is so appointed as
the escrow holder with the foregoing authorities as a material inducement to
make this Agreement and that said appointment is coupled with an interest and is
accordingly irrevocable. Purchaser agrees that said escrow holder

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shall not be liable to any party hereof (or to any other party). The escrow
holder may rely upon any letter, notice or other document executed by any
signature purported to be genuine and may resign at any time. Purchaser agrees
that if the Secretary of the Company, or the Secretary's designee, resigns as
escrow holder for any or no reason, the Board of Directors of the Company shall
have the power to appoint a successor to serve as escrow holder pursuant to the
terms of this Agreement.

     5.   INVESTMENT AND TAXATION REPRESENTATIONS. In connection with the
purchase of the Shares, Purchaser represents to the Company the following:

          (a)  Purchaser is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the Shares. Purchaser is
purchasing the Shares for investment for his or her own account only and not
with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act.

          (b)  Purchaser understands that the Shares have not been registered
under the Securities Act by reason of a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Purchaser's
investment intent as expressed herein.

          (c)  Purchaser understands that the Shares are "restricted securities"
under applicable U.S. federal and state securities laws and that, pursuant to
these laws, Purchaser must hold the Shares indefinitely unless they are
registered with the Securities and Exchange Commission and qualified by state
authorities, or an exemption from such registration and qualification
requirements is available. Purchaser acknowledges that the Company has no
obligation to register or qualify the Shares for resale. Purchaser further
acknowledges that if an exemption from registration or qualification is
available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Shares, and
requirements relating to the Company which are outside of Purchaser's control,
and which the Company is under no obligation and may not be able to satisfy.

          (d)  Purchaser understands that Purchaser may suffer adverse tax
consequences as a result of Purchaser's purchase or disposition of the Shares.
Purchaser represents that Purchaser has consulted any tax consultants Purchaser
deems advisable in connection the purchase or disposition of the Shares and that
Purchaser is not relying on the Company for any tax advice.

     6.   RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.

          (a)  LEGENDS. The certificate or certificates representing the Shares
shall bear the following legends (as well as any legends required by applicable
state and federal corporate and securities laws):

               (i)  THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED

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THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

               (ii) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE
COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY.

          (b)  STOP-TRANSFER NOTICES. Purchaser agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate "stop transfer" instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.

          (c)  REFUSAL TO TRANSFER. The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such Shares shall have been so transferred.

     7.   NO EMPLOYMENT RIGHTS. Nothing in this Agreement shall affect in any
manner whatsoever the right or power of the Company, or a Parent or Subsidiary
of the Company, to terminate Purchaser's employment or consulting relationship,
for any reason, with or without cause.

     8.   SECTION 83(b) ELECTION. Purchaser understands that Section 83(a) of
the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary
income the difference between the amount paid for the Shares and the Fair Market
Value of the Shares as of the date any restrictions on the Shares lapse. In this
context, "restriction" means the right of the Company to buy back the Shares
pursuant to the Repurchase Option set forth in Section 3(a) of this Agreement.
Purchaser understands that Purchaser may elect to be taxed at the time the
Shares are purchased, rather than when and as the Repurchase Option expires, by
filing an election under Section 83(b) (an "83(b) Election") of the Code with
the Internal Revenue Service within 30 days from the date of purchase. Even if
the Fair Market Value of the Shares at the time of the execution of this
Agreement equals the amount paid for the Shares, the election must be made to
avoid income under Section 83(a) in the future. Purchaser understands that
failure to file such an election in a timely manner may result in adverse tax
consequences for Purchaser. Purchaser further understands that an additional
copy of such election form should be filed with his or her federal income tax
return for the calendar year in which the date of this Agreement falls.
Purchaser acknowledges that the foregoing is only a summary of the effect of
United States federal income taxation with respect to purchase of the Shares
hereunder, and does not purport to be complete. Purchaser further acknowledges
that the Company has directed Purchaser to seek independent advice regarding the
applicable provisions of the Code, the income tax laws of any municipality,
state or foreign country in which Purchaser may reside, and the tax consequences
of Purchaser's death.

     Purchaser agrees that he will execute and deliver to the Company with this
executed Agreement a copy of the Acknowledgment and Statement of Decision
Regarding Section 83(b) Election (the "Acknowledgment"), attached hereto as
Exhibit B. Purchaser further agrees that

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Purchaser will execute and submit with the Acknowledgment a copy of the 83(b)
Election, attached hereto as Exhibit C, if Purchaser has indicated in the
Acknowledgment his or her decision to make such an election.

     9.   MARKET STANDOFF AGREEMENT. In connection with the initial public
offering of the Company's securities and upon request of the Company or the
underwriters managing such underwritten offering of the Company's securities,
Purchaser agrees not to sell, make any short sale of, loan, grant any option for
the purchase of, or otherwise dispose of any Shares (other than those included
in the registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed 180
days) from the effective date of such registration as may be requested by the
Company or such managing underwriters and to execute an agreement reflecting the
foregoing as may be requested by the underwriters at the time of the Company's
initial public offering.

     10.  MISCELLANEOUS.

          (a)  GOVERNING LAW. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.

          (b)  STOCK PLEDGE AGREEMENT. As a condition of entering into this
Agreement, Purchaser agrees to enter into the Stock Pledge Agreement attached as
Exhibit E.

          (c)  ENTIRE AGREEMENT; ENFORCEMENT OF RIGHTS. This Agreement and the
Exhibits hereto set forth the entire agreement and understanding of the parties
relating to the subject matter herein and merges all prior discussions between
them. No modification of or amendment to this Agreement, nor any waiver of any
rights under this Agreement, shall be effective unless in writing signed by the
parties to this Agreement. The failure by either party to enforce any rights
under this Agreement shall not be construed as a waiver of any rights of such
party.

          (d)  SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (iii)
the balance of the Agreement shall be enforceable in accordance with its terms.

          (e)  CONSTRUCTION. This Agreement is the result of negotiations
between and has been reviewed by each of the parties hereto and their respective
counsel, if any; accordingly, this Agreement shall be deemed to be the product
of all of the parties hereto, and no ambiguity shall be construed in favor of or
against any one of the parties hereto.

          (f)  NOTICES. Any notice required or permitted by this Agreement shall
be in writing and shall be deemed sufficient when delivered personally or sent
by telegram or fax or 48 hours after being deposited in the U.S. mail, as
certified or registered mail, with postage prepaid, and addressed to the party
to be notified at such party's address as set forth below or as subsequently
modified by written notice.

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          (g)  COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.

          (h)  SUCCESSORS AND ASSIGNS. The rights and benefits of this Agreement
shall inure to the benefit of, and be enforceable by the Company's successors
and assigns. The rights and obligations of Purchaser under this Agreement may
only be assigned with the prior written consent of the Company.

               (i)  CALIFORNIA CORPORATE SECURITIES LAW. THE SALE OF THE
SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF
THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION
THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES
IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

                            [Signature Page Follows]

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     The parties have executed this Agreement as of the date first set forth
above.

                                        NIKU CORPORATION

                                        By:
                                           -------------------------------------
                                        Title:
                                              ----------------------------------
                                        Address:

                                        ----------------------------------------

                                        ----------------------------------------

                                        PURCHASER:

                                        JOHN DANFORTH

                                        ----------------------------------------
                                        (Signature)

                                        Address:

                                        ----------------------------------------

                                        ----------------------------------------

Vesting Commencement
Date:  February 21, 2000

I, ________________________________, spouse of John Danforth, have read and
hereby approve the foregoing Agreement. In consideration of the Company's
granting my spouse the right to purchase the Shares as set forth in the
Agreement, I hereby agree to be irrevocably bound by the Agreement and further
agree that any community property or similar interest that I may have in the
Shares shall be similarly bound by the Agreement. I hereby appoint my spouse as
my attorney-in-fact with respect to any amendment or exercise of any rights
under the Agreement.

                                        ----------------------------------------
                                        Spouse of John Danforth

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                                    EXHIBIT A

                      ASSIGNMENT SEPARATE FROM CERTIFICATE

     FOR VALUE RECEIVED and pursuant to that certain Restricted Stock Purchase
Agreement between the undersigned ("Purchaser") and Niku Corporation (the
"Company") dated February 25, 2000 (the "Agreement"), Purchaser hereby sells,
assigns and transfers unto the Company _________________________________
(________) shares of the Common Stock of the Company, standing in Purchaser's
name on the books of the Company and represented by Certificate No. ____, and
hereby irrevocably constitutes and appoints

________________________________________________ to transfer said stock on the
books of the Company with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS
THERETO.

Dated:
      -------------------------
                                        Signature:

                                        ----------------------------------------
                                        John Danforth

                                        ----------------------------------------
                                        Spouse of John Danforth (if applicable)

INSTRUCTION: PLEASE DO NOT FILL IN ANY BLANKS OTHER THAN THE SIGNATURE LINE. The
purpose of this assignment is to enable the Company to exercise its repurchase
option set forth in the Agreement without requiring additional signatures on the
part of Purchaser.

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                                    EXHIBIT B

                    ACKNOWLEDGMENT AND STATEMENT OF DECISION
                        REGARDING SECTION 83(b) ELECTION

     The undersigned (which term includes the undersigned's spouse), a purchaser
of 200,000 shares of Common Stock of Niku Corporation, a Delaware corporation
(the "Company") by exercise of stock purchase right (the "Shares") granted to
the undersigned, hereby states as follows:

     1.   The undersigned has carefully reviewed the stock purchase agreement
pursuant to which the Shares were purchased.

     2.   The undersigned either [check and complete as applicable]:

          (a)  ____ has consulted, and has been fully advised by, the
                    undersigned's own tax advisor, regarding the federal, state
                    and local tax consequences of purchasing shares under the
                    Plan, and particularly regarding the advisability of making
                    elections pursuant to Section 83(b) of the Internal Revenue
                    Code of 1986, as amended (the "Code") and pursuant to the
                    corresponding provisions, if any, of applicable state law;
                    or

          (b)  ____ has knowingly chosen not to consult such a tax advisor.

     3.   The undersigned hereby states that the undersigned has decided [check
as applicable]:

          (a)  ____ to make an election pursuant to Section 83(b) of the Code,
                    and is submitting to the Company, together with the
                    undersigned's executed Restricted Stock Purchase Agreement,
                    an executed form entitled "Election Under Section 83(b) of
                    the Internal Revenue Code of 1986;" or

          (b)  ____ not to make an election pursuant to Section 83(b) of the
                    Code.

     4.   Neither the Company nor any subsidiary or representative of the
Company has made any warranty or representation to the undersigned with respect
to the tax consequences of the undersigned's purchase of shares under the Plan
or of the making or failure to make an election pursuant to Section 83(b) of the
Code or the corresponding provisions, if any, of applicable state law.

Date:
     ----------------------             ----------------------------------------
                                        John Danforth

Date:
     ----------------------             ----------------------------------------
                                        Spouse of John Danforth

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                                    EXHIBIT C

                          ELECTION UNDER SECTION 83(b)
                      OF THE INTERNAL REVENUE CODE OF 1986

     The undersigned Taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code, as amended, to include in gross income for the Taxpayer's
current taxable year the excess, if any, of the fair market value of the
property described below at the time of transfer over the amount paid for such
property, as compensation for services:

     1.   The name, address, taxpayer identification number and taxable year of
the undersigned is as follows:

          NAME OF TAXPAYER:   JOHN DANFORTH
                              -------------------------------

          ADDRESS:
                              -------------------------------

                              -------------------------------

         IDENTIFICATION NO. OF TAXPAYER:
                                        ---------------------

         TAXABLE YEAR:
                                        ---------------------

     2.   The property with respect to which the election is made is described
as follows:

          200,000 shares of the Common Stock ($0.0001 par value) of Niku
          Corporation, a Delaware corporation (the "Company").

     3.   The date on which the property was transferred is: _______________

     4.   The property is subject to the following restrictions:

          Repurchase option at cost in favor of the Company upon termination of
          taxpayer's employment or consulting relationship.

     5.   The fair market value at the time of transfer, determined without
          regard to any restriction other than a restriction which by its terms
          will never lapse, of such property is:

          $______________.

     6.   The amount (if any) paid for such property: $______________

The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.

The undersigned understands that the foregoing election may not be revoked
except with the consent of the Commissioner.

Dated:
      ---------------------             ----------------------------------------
                                        John Danforth

<PAGE>   13

                                    EXHIBIT D

                      SECURED FULL RECOURSE PROMISSORY NOTE

                            Redwood City, California

$2,199,980.00                                                  February 25, 2000

     1.   OBLIGATION. In exchange for the issuance to the undersigned
("Purchaser") of 200,000 shares (the "Shares") of the Common Stock of Niku
Corporation, a Delaware corporation (the "Company"), receipt of which is hereby
acknowledged, Purchaser hereby promises to pay to the order of the Company on
February 25, 2003, or at such earlier dates as provided in Sections 3 and 6
below, at the Company's principal place of business at 305 Main Street, Redwood
City, California, or at such other place as the Company may direct, the
principal sum of Two Million One Hundred Ninety-Nine Thousand Nine Hundred
Eighty Dollars ($2,199,980.00) together with interest compounded annually on the
unpaid principal at the rate of 5.88%, which rate is not less than the minimum
rate established pursuant to Section 1274(d) of the Internal Revenue Code of
1986, as amended, on the earliest date on which there was a binding contract in
writing for the purchase of the Shares; provided, however, that the rate at
which interest will accrue on unpaid principal under this Note will not exceed
the highest rate permitted by applicable law.

     2.   SECURITY. Payment of this Note is secured by a security interest in
the Shares granted to the Company by Purchaser under a Stock Pledge Agreement
dated of even date herewith between the Company and Purchaser (the "Pledge
Agreement"). This Note is being tendered by Purchaser to the Company as part of
the purchase price of the Shares pursuant to that certain Restricted Stock
Purchase Agreement between Purchaser and the Company dated of even date with
this Note (the "Purchase Agreement").

     3.   DEFAULT; ACCELERATION OF OBLIGATION. Purchaser will be deemed to be in
default under this Note and the principal sum of this Note, together with all
interest accrued thereon, will immediately become due and payable in full: (a)
upon Purchaser's failure to make any payment when due under this Note; (b) upon
the filing by or against Purchaser of any voluntary or involuntary petition in
bankruptcy or any petition for relief under the federal bankruptcy code or any
other state or federal law for the relief under the federal bankruptcy code or
any other state or federal law for the relief of debtors; or (c) upon the
execution by Purchaser of an assignment for the benefit of creditors or the
appointment of a receiver, custodian, trustee or similar party to take
possession of Purchaser's assets or property. In addition Purchaser will be
deemed to be in default under this Note and the principal and interest will
become due and payable in full (1) thirty (30) days following any transfer of
the Shares (except (A) a transfer to the Company, or (B) a transfer to Immediate
Family as set forth in Section 3(c)(vi) of the Purchase Agreement), (ii) ninety
(90) days following the date Purchaser voluntarily terminates his employment or
consulting relationship with the Company or (iii) six (6) months following the
date Purchaser's employment or consulting relationship with the Company is
terminated (other than voluntarily) for any reason (including death or
disability), with or without cause. Purchaser also agrees that in connection
with any termination of Purchaser's

<PAGE>   14

employment or consulting relationship, for any reason, whether voluntary or
involuntary, if the Company exercises its Repurchase Option to repurchase all or
some of the Shares under the Purchase Agreement, then the Company may cancel the
appropriate amount of indebtedness due under this Note as payment for such
repurchased Shares.

     4.   REMEDIES ON DEFAULT. Upon any default of Purchaser under this Note,
the Company will have, in addition to its rights and remedies under this Note
and the Pledge Agreement, full recourse against any real, personal, tangible or
intangible assets of Purchaser, and may pursue any legal or equitable remedies
that are available to it.

     5.   RULE 144 HOLDING PERIOD. PURCHASER UNDERSTANDS THAT THE HOLDING PERIOD
SPECIFIED UNDER RULE 144(d) OF THE SECURITIES AND EXCHANGE COMMISSION WILL NOT
BEGIN TO RUN WITH RESPECT TO SHARES PURCHASED WITH THIS NOTE UNTIL EITHER (A)
THE PURCHASE PRICE OF SUCH SHARES IS PAID IN FULL IN CASH OR BY OTHER PROPERTY
ACCEPTED BY THE COMPANY, OR (B) THIS NOTE IS SECURED BY COLLATERAL, OTHER THAN
THE SHARES, HAVING A FAIR MARKET VALUE AT LEAST EQUAL TO THE AMOUNT OF
PURCHASER'S THEN OUTSTANDING OBLIGATION UNDER THIS NOTE (INCLUDING ACCRUED
INTEREST).

     6.   PREPAYMENT. Prepayment of principal and/or interest due under this
Note may be made at any time without penalty. Unless otherwise agreed in writing
by the Company, all payments will be made in lawful tender of the United States
and will be applied first to the payment of accrued interest, and the remaining
balance of such payment, if any, will then be applied to the payment of
principal. If Purchaser prepays all or a portion of the principal amount of this
Note, the Shares paid for by the portion of principal so paid will continue to
be held in pledge under the Pledge Agreement to serve as independent collateral
for the outstanding portion of this Note for the purpose of commencing the
holding period under Rule 144(d) of the Securities and Exchange Commission with
respect to other Shares purchased with this Note, unless Purchaser notifies the
Company in writing otherwise and the Company consents to release of the Shares
from the Pledge Agreement.

     7.   GOVERNING LAW; WAIVER. The validity, construction and performance of
this Note will be governed by the internal laws of the State of California,
excluding that body of law pertaining to conflicts of law. Purchaser hereby
waives presentment, notice of non-payment, notice of dishonor, protest, demand
and diligence.

     8.   ATTORNEYS' FEES. If suit is brought for collection of this Note,
Purchaser agrees to pay all reasonable expenses, including attorneys' fees,
incurred by the holder in connection therewith whether or not such suit is
prosecuted to judgment.

     9.   ENTIRE AGREEMENT. This Note and the Purchase Agreement, together with
all the Exhibits thereto, constitute and contain the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supersedes that certain Promissory Note dated February 21, 2000 by and between
the Purchaser and the Company and any and all prior negotiations,
correspondence, agreements, understandings, duties or obligations between the
parties respecting the subject matter hereof.

                                       2

<PAGE>   15

IN WITNESS WHEREOF, Purchaser has executed this Note as of the date and year
first above written.

-------------------------------------   ----------------------------------------
Purchaser's Name: John Danforth         Purchaser's Signature

                                        3

<PAGE>   16

                                    EXHIBIT E

                             STOCK PLEDGE AGREEMENT

     This Agreement is made and entered into as of February 25, 2000 between
Niku Corporation, a Delaware corporation (the "Company"), and John Danforth
("Pledgor").

                                 R E C I T A L S

     A.   In exchange for Pledgor's Secured Full Recourse Promissory Note to the
Company of even date herewith (the "Note") and $20.00 in cash, the Company has
issued and sold to Pledgor Two Hundred Thousand (200,000) shares of its Common
Stock , par value $0.0001 per share, (the "Shares") pursuant to the terms and
conditions of that Restricted Stock Purchase Agreement between the Company and
Pledgor of even date herewith (the "Purchase Agreement").

     B.   Pledgor has agreed that repayment of the Note will be secured by the
pledge of the Shares pursuant to this Agreement.

     NOW, THEREFORE, the parties agree as follows:

     1.   CREATION OF SECURITY INTEREST. Pursuant to the provisions of the
California Commercial Code, Pledgor hereby grants to the Company, and the
Company hereby accepts, a first and present security interest in the Shares as
collateral to secure the payment of Pledgor's obligation to the Company under
the Note. Pledgor herewith delivers to the Company Common Stock certificate(s)
No(s). _________, representing all the Shares, together with one stock power for
each certificate in the form attached as an Exhibit to the Purchase Agreement,
duly executed (with the date and number of shares left blank) by Pledgor and
Pledgor's spouse, if any. For purposes of this Agreement, the Shares pledged to
the Company hereby, together with any additional collateral pledged pursuant to
Section 5 hereof, will hereinafter be collectively referred to as the
"Collateral." Pledgor agrees that the Collateral pledged to the Company will be
deposited with and held by the Escrow Holder (as defined in the Purchase
Agreement) and that, notwithstanding anything to the contrary in the Purchase
Agreement, for purposes of carrying out the provisions of this Agreement, Escrow
Holder will act solely for the Company as its agent.

     2.   REPRESENTATIONS AND WARRANTIES. Pledgor hereby represents and warrants
to the Company that Pledgor has good title (both record and beneficial) to the
Collateral, free and clear of all claims, pledges, security interests, liens or
encumbrances of every nature whatsoever, and that Pledgor has the right to
pledge and grant the Company the security interest in the Collateral granted
under this Agreement. Pledgor further agrees that, except for transfers to
Immediate Family as set forth in Section 3(c)(vi) of the Purchase Agreement,
until the entire principal sum and all accrued interest due under the Note has
been paid in full, Purchaser will not, without the Company's prior written
consent, (i) sell, assign or transfer, or attempt to sell, assign or transfer,
any of the Collateral, or (ii) grant or create, or attempt to grant or create,
any security interest, lien, pledge, claim or other encumbrance with respect to
any of the Collateral.

     3.   RIGHTS ON DEFAULT. In the event of default (as defined in the Note) by
Pledgor under the Note, the Company will have full power to sell, assign and
deliver the whole or

<PAGE>   17

any part of the Collateral at any broker's exchange or elsewhere, at public or
private sale, at the option of the Company, in order to satisfy any part of the
obligations of Pledgor now existing or hereinafter arising under the Note. On
any such sale, the Company or its assigns may purchase all or any part of the
Collateral. In addition, at its sole option, the Company may elect to retain all
the Collateral in full satisfaction of Pledgor's obligation under the Note, in
accordance with the provisions and procedures set forth in the California
Commercial Code.

     4.   ADDITIONAL REMEDIES. The rights and remedies granted to the Company
herein upon default under the Note will be in addition to all the rights, powers
and remedies of the Company under the California Commercial Code and applicable
law and such rights, powers and remedies will be exercisable by the Company with
respect to all of the Collateral. Pledgor agrees that the Company's reasonable
expenses of holding the Collateral, preparing it for resale or other
disposition, and selling or otherwise disposing of the Collateral, including
attorneys' fees and other legal expenses, will be deducted from the proceeds of
any sale or other disposition and will be included in the amounts Pledgor must
tender to redeem the Collateral. All rights, powers and remedies of the Company
will be cumulative and not alternative. Any forbearance or failure or delay by
the Company in exercising any right, power or remedy hereunder will not be
deemed to be a waiver of any such right, power or remedy and any single or
partial exercise of any such right, power or remedy hereunder will not preclude
the further exercise thereof.

     5.   DIVIDENDS; VOTING. All dividends hereinafter declared on or payable
with respect to the Collateral during the term of this pledge (excluding only
ordinary cash dividends, which will be payable to Pledgor so long as Pledgor is
not in default under the Note) will be immediately delivered to the Company to
be held in pledge under this Agreement. Notwithstanding this Agreement, so long
as Pledgor owns the Shares and is not in default under the Note, Pledgor will be
entitled to vote any shares comprising the Collateral, subject to any proxies
granted by Pledgor.

     6.   ADJUSTMENTS. In the event that during the term of this pledge, any
stock dividend, reclassification, readjustment, stock split or other change is
declared or made with respect to the Collateral, or if warrants or any other
rights, options or securities are issued in respect of the Collateral, then all
new, substituted and/or additional shares or other securities issued by reason
of such change or by reason of the exercise of such warrants, rights, options or
securities, will be immediately pledged to the Company to be held under the
terms of this Agreement in the same manner as the Collateral is held hereunder.

     7.   RIGHTS UNDER PURCHASE AGREEMENT. Pledgor understands and agrees that
the Company's rights to repurchase the Collateral under the Purchase Agreement,
if any, will continue for the periods and on the terms and conditions specified
in the Purchase Agreement, whether or not the Note has been paid during such
period of time, and that to the extent that the Note is not paid during such
period of time, the repurchase by the Company of the Collateral may be made by
way of cancellation of all or any part of Pledgor's indebtedness under the Note.

     8.   REDELIVERY OF COLLATERAL. Upon payment in full of the entire principal
sum and all accrued interest due under the Note, and subject to the terms and
conditions of the Purchase Agreement, the Company will immediately redeliver the
Collateral to Pledgor and this Agreement will terminate; provided, however, that
all rights of the Company to retain possession of the Shares pursuant to the
Purchase Agreement will survive termination of this Agreement.

     9.   SUCCESSORS AND ASSIGNS. This Agreement will inure to the benefit of
the respective heirs, personal representatives, successors and assigns of the
parties hereto.

                                       2
<PAGE>   18

     10.  GOVERNING LAW; SEVERABILITY. This Agreement will be governed by and
construed in accordance with the internal laws of the State of California,
excluding that body of law relating to conflicts of law. Should one or more of
the provisions of this Agreement be determined by a court of law to be illegal
or unenforceable, the other provisions nevertheless will remain effective and
will be enforceable.

     11.  MODIFICATION; ENTIRE AGREEMENT. This Agreement will not be amended
without the written consent of both parties hereto. This Agreement constitutes
the entire agreement of the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings related to such
subject matter.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.

NIKU CORPORATION                        PLEDGOR

By:
   ----------------------------------   ----------------------------------------
                                        (Signature)

                                        John Danforth
-------------------------------------   ----------------------------------------
(Please print name)                     (Please print name)

-------------------------------------
(Please print title)

          [SIGNATURE PAGE TO NIKU CORPORATION STOCK PLEDGE AGREEMENT]

                                       3<PAGE>   1

                                                                    EXHIBIT 4.06

                                NIKU CORPORATION

                            2000 STOCK INCENTIVE PLAN

                            As Adopted August 9, 2000

        1. PURPOSE. The purpose of this Plan is to provide incentives to
attract, retain, compensate and motivate eligible persons in connection with the
Company's acquisitions of ABT Corporation, bSource.com, Inc. and 600 Monkeys,
Inc. whose present and potential contributions are important to the success of
the Company, its Parent and Subsidiaries, by offering them an opportunity to
participate in the Company's future performance through awards of Options,
Restricted Stock and Stock Bonuses. Capitalized terms not defined in the text
are defined in Section 22 if they are not otherwise defined in other sections of
this Plan.

        2. SHARES SUBJECT TO THE PLAN.

               2.1 Number of Shares Available. Subject to Sections 2.2 and 17,
the total number of Shares reserved and available for grant and issuance
pursuant to this Plan will be 2,600,000 Shares. Subject to Sections 2.2 and 17,
Shares that are subject to: (a) issuance upon exercise of an Option but cease to
be subject to such Option for any reason other than exercise of such Award and
(b) an Award granted hereunder but are forfeited or are repurchased by the
Company at the original issue price because the Shares are Unvested Shares at
the time of the Participant's Termination, will again be available for grant and
issuance in connection with future Awards under this Plan. At all times the
Company shall reserve and keep available a sufficient number of Shares as shall
be required to satisfy the requirements of all outstanding Awards granted under
this Plan.

               2.2 Adjustment of Shares. If the number of outstanding shares is
changed by a stock dividend, recapitalization, stock split, reverse stock split,
subdivision, combination, reclassification or similar change in the capital
structure of the Company without consideration, then (a) the number of Shares
reserved for issuance under this Plan, (b) the Exercise Prices of and number of
Shares subject to outstanding Options, and (c) the number of Shares subject to
other outstanding Awards, will be proportionately adjusted, subject to any
required action by the Board or the stockholders of the Company and compliance
with applicable securities laws; provided, that fractions of a Share will not be
issued but will either be paid in cash at the Fair Market Value of such fraction
of a Share or will be rounded up to the nearest whole Share, as determined by
the Committee; and provided, further, that the Exercise Price of any Award may
not be decreased to below the par value of the Shares.

        3. ELIGIBILITY. Awards may be granted to employees, officers, directors,
consultants, independent contractors and advisors of the Company or any Parent
or Subsidiary of the Company; provided such consultants, independent contractors
and advisors render bona fide services not in connection with the offer and sale
of securities in a capital-raising transaction. A person may be granted more
than one Award under this Plan. Awards granted to officers and non-employee
directors may not exceed in the aggregate forty percent (40%) of all Shares that
are reserved for grant under this Plan. Awards granted as Restricted Stock to
officers and non-employee directors may not exceed in the aggregate forty
percent (40%) of all Shares that are granted as Restricted Stock.

        4. ADMINISTRATION.

               4.1 Committee Authority. This Plan will be administered by the
Committee or by the Board acting as the Committee. Subject to the general
purposes, terms and conditions of this Plan, and to the direction of the Board,
the Committee will have full power to implement and carry out this Plan. Without
limitation, the Committee will have the authority to:

                      (a) construe and interpret this Plan, any Award Agreement
and any other agreement or document executed pursuant to this Plan;

                      (b) prescribe, amend and rescind rules and regulations
relating to this Plan or any Award;

<PAGE>   2

                      (c) select persons to receive Awards;

                      (d) determine the form and terms of Awards;

                      (e) determine the number of Shares subject to Awards;

                      (f) determine whether Awards will be granted singly, in
combination with, in tandem with, in replacement of, or as alternatives to,
other Awards under this Plan or any other incentive or compensation plan of the
Company or any Parent or Subsidiary of the Company;

                      (g) grant waivers of Plan or Award conditions;

                      (h) determine the vesting, exercisability and payment of
Awards;

                      (i) correct any defect, supply any omission or reconcile
any inconsistency in this Plan, any Award or any Award Agreement;

                      (j) determine whether an Award has been earned; and

                      (k) make all other determinations necessary or advisable
for the administration of this Plan.

               4.2 Committee Discretion. Any determination made by the Committee
with respect to any Award will be made in its sole discretion at the time of
grant of the Award or, unless in contravention of any express term of this Plan
or Award, at any later time, and such determination will be final and binding on
the Company and on all persons having an interest in any Award under this Plan.
The Committee may delegate to one or more officers of the Company the authority
to grant an Award under this Plan to Participants who are not officers.

        5. OPTIONS. Only nonqualified stock options that do not qualify as
incentive stock options within the meaning of Section 422(b) of the Code may be
granted under this Plan. The Committee may grant Options to eligible persons and
will determine (i) the number of Shares subject to the Option, (ii) the Exercise
Price of the Option, (iii) the period during which the Option may be exercised,
and (iv) all other terms and conditions of the Option, subject to the following:

               5.1 Form of Option Grant. Each Option granted under this Plan
will be evidenced by a Stock Option Agreement. The Stock Option Agreement will
be in such form and contain such provisions (which need not be the same for each
Participant) as the Committee may from time to time approve, and which will
comply with and be subject to the terms and conditions of this Plan.

               5.2 Date of Grant. The date of grant of an Option will be the
date on which the Committee makes the determination to grant the Option, unless
a later date is otherwise specified by the Committee. The Stock Option Agreement
and a copy of this Plan will be delivered to the Participant within a reasonable
time after the Option is granted.

               5.3 Exercise Period and Expiration Date. Options will be
exercisable within the times or upon the occurrence of events determined by the
Committee as set forth in the Stock Option Agreement governing such Option;
provided, however, that no Option will be exercisable after the expiration of
ten (10) years from the date the Option is granted. The Committee also may
provide for Options to become exercisable at one time or from time to time,
periodically or otherwise, in such number of Shares or percentage of Shares as
the Committee determines.

               5.4 Exercise Price. The Exercise Price of an Option will be
determined by the Committee when the Option is granted and may be not less than
the par value of the Shares on the date of grant. Payment for the Shares
purchased must be made in accordance with Section 7 of this Plan.

               5.5 Method of Exercise. Options may be exercised only by delivery
to the Company of a written stock option exercise agreement (the "EXERCISE
AGREEMENT") in a form approved by the Committee (which need not be the same for
each Participant), stating the number of Shares being purchased, the
restrictions imposed on the Shares

<PAGE>   3

purchased under such Exercise Agreement, if any, and such representations and
agreements regarding Participant's investment intent and access to information
and other matters, if any, as may be required or desirable by the Company to
comply with applicable securities laws, together with payment in full of the
Exercise Price for the number of Shares being purchased.

               5.6 Termination. Notwithstanding the exercise periods set forth
in the Stock Option Agreement, exercise of an Option will always be subject to
the following:

                      (a) If the Participant is Terminated for any reason except
death or Disability, then the Participant may exercise such Participant's
Options only to the extent that such Options would have been exercisable upon
the Termination Date no later than three (3) months after the Termination Date
(or such shorter or longer time period not exceeding five (5) years as may be
determined by the Committee, but in any event, no later than the expiration date
of the Options.

                      (b) If the Participant is Terminated because of
Participant's death or Disability (or the Participant dies within three (3)
months after a Termination other than for Cause or because of Participant's
Disability), then Participant's Options may be exercised only to the extent that
such Options would have been exercisable by Participant on the Termination Date
and must be exercised by Participant (or Participant's legal representative or
authorized assignee) no later than twelve (12) months after the Termination Date
(or such shorter or longer time period not exceeding five (5) years as may be
determined by the Committee) but in any event no later than the expiration date
of the Options.

                      (c) Notwithstanding the provisions in paragraph 5.6(a)
above, if a Participant is terminated for Cause, neither the Participant, the
Participant's estate nor such other person who may then hold the Option shall be
entitled to exercise any Option with respect to any Shares whatsoever, after
termination of service, whether or not after termination of service the
Participant may receive payment from the Company or any Parent or Subsidiary of
the Company for vacation pay, for services rendered prior to termination, for
services rendered for the day on which termination occurs, for salary in lieu of
notice, or for any other benefits. In making such determination, the Board shall
give the Participant an opportunity to present to the Board evidence on his
behalf. For the purpose of this paragraph, termination of service shall be
deemed to occur on the date when the Company dispatches notice or advice to the
Participant that his service is terminated.

               5.7 Limitations on Exercise. The Committee may specify a
reasonable minimum number of Shares that may be purchased on any exercise of an
Option, provided that the minimum number will not prevent a Participant from
exercising the Option for the full number of Shares for which it is then
exercisable.

               5.8 Modification, Extension or Renewal. The Committee may modify,
extend or renew outstanding Options and authorize the grant of new Options in
substitution therefor, provided that any such action may not, without the
written consent of a Participant, impair any of such Participant's rights under
any Option previously granted. The Committee may reduce the Exercise Price of
outstanding Options without the consent of Participants affected by a written
notice to them; provided, however, that the Exercise Price may not be reduced
below the minimum Exercise Price that would be permitted under Section 5.4 of
this Plan for Options granted on the date the action is taken to reduce the
Exercise Price; and provided, further, that the Exercise Price shall not be
reduced below the par value of the Shares.

        6. RESTRICTED STOCK AND STOCK BONUSES.

               6.1 Restricted Stock Award. A Restricted Stock Award is an offer
by the Company to sell to an eligible person Shares that are subject to
restrictions. The Committee will determine to whom an offer will be made, the
number of Shares the person may purchase, the price to be paid (the "PURCHASE
PRICE"), the restrictions to which the Shares will be subject, and all other
terms and conditions of the Restricted Stock Award, subject to this section of
the Plan. All purchases under a Restricted Stock Award made pursuant to this
Plan will be evidenced by an Award Agreement ("RESTRICTED STOCK PURCHASE
AGREEMENT") that will be in such form (which need not be the same for each
Participant) as the Committee will from time to time approve, and will comply
with and be subject to the terms and conditions of this Plan. The offer of
Restricted Stock will be accepted by the Participant's execution and delivery of
the Restricted Stock Purchase Agreement and full payment for the Shares to the
Company within thirty (30) days from the date the Restricted

<PAGE>   4

Stock Purchase Agreement is delivered to the person. If such person does not
execute and deliver the Restricted Stock Purchase Agreement along with full
payment for the Shares to the Company within thirty (30) days, then the offer
will terminate, unless otherwise determined by the Committee.

               6.2 Purchase Price. The Purchase Price of Shares sold pursuant to
a Restricted Stock Award will be determined by the Committee on the date the
Restricted Stock Award is granted and may be not less than the par value of the
Shares on the date of grant. Payment of the Purchase Price may be made in
accordance with Section 7 of this Plan.

               6.3 Terms of Restricted Stock Awards. Restricted Stock Awards
shall be subject to such restrictions as the Committee may impose. These
restrictions may be based upon completion of a specified number of years of
service with the Company or upon completion of the performance goals as set out
in advance in the Participant's individual Restricted Stock Purchase Agreement.
Restricted Stock Awards may vary from Participant to Participant and between
groups of Participants. Prior to the grant of a Restricted Stock Award, the
Committee shall: (a) determine the nature, length and starting date of any
Performance Period for the Restricted Stock Award; (b) select from among the
Performance Factors to be used to measure performance goals, if any; and (c)
determine the number of Shares that may be awarded to the Participant. Prior to
the payment of any Restricted Stock Award, the Committee shall determine the
extent to which such Restricted Stock Award has been earned. Performance Periods
may overlap and Participants may participate simultaneously with respect to
Restricted Stock Awards that are subject to different Performance Periods and
having different performance goals and other criteria.

               6.4 Termination During Performance Period. If a Participant is
Terminated during a performance period for any reason, then such Participant
will be entitled to payment (whether in Shares, cash or otherwise) with respect
to the Restricted Stock Award only to the extent earned as of the date of
Termination in accordance with the Restricted Stock Purchase Agreement, unless
the Committee will determine otherwise.

               6.5 Awards of Stock Bonuses. A Stock Bonus is an award of Shares
(which may consist of Restricted Stock) for services rendered to the Company or
any Parent or Subsidiary of the Company. A Stock Bonus may be awarded for past
services already rendered to the Company, or any Parent or Subsidiary of the
Company pursuant to an Award Agreement (the "Stock Bonus Agreement") that will
be in such form (which need not be the same for each Participant) as the
Committee will from time to time approve, and will comply with and be subject to
the terms and conditions of this Plan. A Stock Bonus may be awarded upon
satisfaction of such performance goals as are set out in advance in the
Participant's individual Award Agreement (the "Performance Stock Bonus
Agreement") that will be in such form (which need not be the same for each
Participant) as the Committee will from time to time approve, and will comply
with and be subject to the terms and conditions of this Plan. Stock Bonuses may
vary from Participant to Participant and between groups of Participants, and may
be based upon the achievement of the Company, Parent or Subsidiary and/or
individual performance factors or upon such other criteria as the Committee may
determine.

               6.6 Terms of Stock Bonuses. The Committee will determine the
number of Shares to be awarded to the Participant. If the Stock Bonus is being
earned upon the satisfaction of performance goals pursuant to a Performance
Stock Bonus Agreement, then the Committee will: (a) determine the nature, length
and starting date of any Performance Period for each Stock Bonus; (b) select
from among the Performance Factors to be used to measure the performance, if
any; and (c) determine the number of Shares that may be awarded to the
Participant. Prior to the payment of any Stock Bonus, the Committee shall
determine the extent to which such Stock Bonuses have been earned. Performance
Periods may overlap and Participants may participate simultaneously with respect
to Stock Bonuses that are subject to different Performance Periods and different
performance goals and other criteria. The number of Shares may be fixed or may
vary in accordance with such performance goals and criteria as may be determined
by the Committee. The Committee may adjust the performance goals applicable to
the Stock Bonuses to take into account changes in law and accounting or tax
rules and to make such adjustments as the Committee deems necessary or
appropriate to reflect the impact of extraordinary or unusual items, events or
circumstances to avoid windfalls or hardships.

<PAGE>   5

               6.7 Form of Payment. The earned portion of a Stock Bonus may be
paid currently or on a deferred basis with such interest or dividend equivalent,
if any, as the Committee may determine. Payment may be made in the form of cash
or whole Shares or a combination thereof, either in a lump sum payment or in
installments, all as the Committee will determine.

        7. PAYMENT FOR SHARE PURCHASES.

               7.1 Payment. Payment for Shares purchased on exercise of an Award
may be made in cash (by check) or, where expressly approved for the Participant
by the Committee and where permitted by law:

                      (a) by cancellation of indebtedness of the Company to the
Participant;

                      (b) by surrender of shares that either: (1) have been
owned by Participant for more than six (6) months and have been paid for within
the meaning of SEC Rule 144 (and, if such shares were purchased from the Company
by use of a promissory note, such note has been fully paid with respect to such
shares); or (2) were obtained by Participant in the public market;

                      (c) by tender of a full recourse promissory note having
such terms as may be approved by the Committee and bearing interest at a rate
sufficient to avoid imputation of income under Sections 483 and 1274 of the
Code; provided, however, that a Participant who is not an employee of the
Company may not purchase Shares with a promissory note unless the note is
adequately secured by collateral other than the Shares; and provided, further,
that the portion of the Exercise Price equal to the par value of the Shares must
be paid in cash;

                      (d) by waiver of compensation due or accrued to the
Participant for services rendered;

                      (e) provided that a public market for the Company's stock
exists:

                             (1) through a "same day sale" commitment from the
Participant and a broker-dealer that is a member of the National Association of
Securities Dealers (an "NASD DEALER") whereby the Participant irrevocably elects
to exercise the Option and to sell a portion of the Shares so purchased to pay
for the Exercise Price, and whereby the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the Exercise Price directly to the Company; or

                             (2) through a "margin" commitment from the
Participant and a NASD Dealer whereby the Participant irrevocably elects to
exercise the Option and to pledge the Shares so purchased to the NASD Dealer in
a margin account as security for a loan from the NASD Dealer in the amount of
the Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt
of such Shares to forward the Exercise Price directly to the Company; or

                      (f) by any combination of the foregoing.

               7.2 Loan Guarantees. The Committee may help the Participant pay
for Shares purchased under this Plan by authorizing a guarantee by the Company
of a third-party loan to the Participant.

        8. WITHHOLDING TAXES.

               8.1 Withholding Generally. Whenever Shares are to be issued on
exercise of Awards granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. If a payment in satisfaction of an
Award is to be made in cash, such payment will be net of an amount sufficient to
satisfy federal, state, and local withholding tax requirements.

               8.2 Stock Withholding. When, under applicable tax laws, a
Participant incurs tax liability in connection with the exercise or vesting of
any Award that is subject to tax withholding and the Participant is obligated to
pay the Company the amount required to be withheld, the Committee may in its
sole discretion allow the Participant to

<PAGE>   6

satisfy the minimum withholding tax obligation by electing to have the Company
withhold from the Shares to be issued that number of Shares having a Fair Market
Value equal to the minimum amount required to be withheld, determined on the
date that the amount of tax to be withheld is to be determined. All elections by
a Participant to have Shares withheld for this purpose will be made in
accordance with the requirements established by the Committee and be in writing
in a form acceptable to the Committee

        9. PRIVILEGES OF STOCK OWNERSHIP.

               9.1 Voting and Dividends. No Participant will have any of the
rights of a stockholder with respect to any Shares until the Shares are issued
to the Participant. After Shares are issued to the Participant, the Participant
will be a stockholder and have all the rights of a stockholder with respect to
such Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, however, that
if such Shares are Restricted Stock, any new, additional or different securities
the Participant may become entitled to receive with respect to the Shares by
virtue of a stock dividend, stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as the
Restricted Stock; provided, further that the Participant will have no right to
retain such dividends or distributions with respect to Shares that are
repurchased at the Participant's original Exercise Price pursuant to Section 11.

               9.2 Financial Statements. The Company will provide financial
statements to each Participant prior to such Participant's purchase of Shares
under this Plan, and to each Participant annually during the period such
Participant has Awards outstanding; provided, however, that the Company will not
be required to provide such financial statements to Participants whose services
in connection with the Company assure them access to equivalent information.

        10. TRANSFERABILITY.

               10.1 Except as otherwise provided in this Section 10, Awards
granted under this Plan, and any interest therein, will not be transferable or
assignable by Participant, and may not be made subject to execution, attachment
or similar process, otherwise than by will or by the laws of descent and
distribution or as determined by the Committee and set forth in the Award
Agreement.

               10.2 Unless otherwise restricted by the Committee, an Option
shall be exercisable: (i) during the Participant's lifetime only by (A) the
Participant, (B) the Participant's guardian or legal representative, (C) a
Family Member of the Participant who has acquired the Option by "permitted
transfer;" and (ii) after Participant's death, by the legal representative of
the Participant's heirs or legatees. "Permitted transfer" means, as authorized
by this Plan and the Committee in an Option, any transfer effected by the
Participant during the Participant's lifetime of an interest in such Option but
only such transfers which are by gift or domestic relations order. A permitted
transfer does not include any transfer for value and neither of the following
are transfers for value: (a) a transfer of under a domestic relations order in
settlement of marital property rights or (b) a transfer to an entity in which
more than fifty percent of the voting interests are owned by Family Members or
the Participant in exchange for an interest in that entity.

               10.3 Unless otherwise restricted by the Committee, a Restricted
Stock may be transferred during the Participant's lifetime, only to (A) the
Participant, or (B) the Participant's guardian or legal representative.

        11. RESTRICTIONS ON SHARES. At the discretion of the Committee, the
Company may reserve to itself and/or its assignee(s) in the Award Agreement a
right to repurchase at the Participant's Exercise Price a portion of or all
Unvested Shares held by a Participant following such Participant's Termination
at any time within ninety (90) days after the later of Participant's Termination
Date and the date Participant purchases Shares under this Plan, for cash and/or
cancellation of purchase money indebtedness, at the Participant's Exercise Price
or Purchase Price, as the case may be.

        12. CERTIFICATES. All certificates for Shares or other securities
delivered under this Plan will be subject to such stock transfer orders, legends
and other restrictions as the Committee may deem necessary or advisable,
including restrictions under any applicable federal, state or foreign securities
law, or any rules, regulations and other requirements of the SEC or any stock
exchange or automated quotation system upon which the Shares may be listed or
quoted.

        13. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a
Participant's Shares, the Committee may require the Participant to deposit all
certificates representing the Shares, together with stock powers or other

<PAGE>   7

instruments of transfer approved by the Committee, appropriately endorsed in
blank, with the Company or an agent designated by the Company to hold in escrow
until such restrictions have lapsed or terminated, and the Committee may cause a
legend or legends referencing such restrictions to be placed on the
certificates. Any Participant who is permitted to execute a promissory note as
partial or full consideration for the purchase of Shares under this Plan will be
required to pledge and deposit with the Company all or part of the Shares so
purchased as collateral to secure the payment of Participant's obligation to the
Company under the promissory note; provided, however, that the Committee may
require or accept other or additional forms of collateral to secure the payment
of such obligation and, in any event, the Company will have full recourse
against the Participant under the promissory note notwithstanding any pledge of
the Participant's Shares or other collateral. In connection with any pledge of
the Shares, Participant will be required to execute and deliver a written pledge
agreement in such form as the Committee will from time to time approve. The
Shares purchased with the promissory note may be released from the pledge on a
pro rata basis as the promissory note is paid.

        14. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or
from time to time, authorize the Company, with the consent of the respective
Participants, to issue new Awards in exchange for the surrender and cancellation
of any or all outstanding Awards. The Committee may at any time buy from a
Participant an Award previously granted with payment in cash, Shares (including
Restricted Stock) or other consideration, based on such terms and conditions as
the Committee and the Participant may agree.

        15. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award will not be
effective unless such Award is in compliance with all applicable federal and
state securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which the
Shares may then be listed or quoted, as they are in effect on the date of grant
of the Award and also on the date of exercise or other issuance. Notwithstanding
any other provision in this Plan, the Company will have no obligation to issue
or deliver certificates for Shares under this Plan prior to: (a) obtaining any
approvals from governmental agencies that the Company determines are necessary
or advisable; and/or (b) completion of any registration or other qualification
of such Shares under any state or federal law or ruling of any governmental body
that the Company determines to be necessary or advisable. The Company will be
under no obligation to register the Shares with the SEC or to effect compliance
with the registration, qualification or listing requirements of any state
securities laws, stock exchange or automated quotation system, and the Company
will have no liability for any inability or failure to do so.

        16. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award granted
under this Plan will confer or be deemed to confer on any Participant any right
to continue in the employ of, or to continue any other relationship with, the
Company or any Parent or Subsidiary of the Company or limit in any way the right
of the Company or any Parent or Subsidiary of the Company to terminate
Participant's employment or other relationship at any time, with or without
cause.

        17. CORPORATE TRANSACTIONS.

               17.1 Assumption or Replacement of Awards by Successor. In the
event of (a) a dissolution or liquidation of the Company, (b) a merger or
consolidation in which the Company is not the surviving corporation (other than
a merger or consolidation with a wholly-owned subsidiary, a reincorporation of
the Company in a different jurisdiction, or other transaction in which there is
no substantial change in the stockholders of the Company or their relative stock
holdings and the Awards granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the stockholders of the Company immediately prior to such merger
(other than any stockholder that merges, or which owns or controls another
corporation that merges, with the Company in such merger) cease to own their
shares or other equity interest in the Company, (d) the sale of substantially
all of the assets of the Company, or (e) the acquisition, sale, or transfer of
more than 50% of the outstanding shares of the Company by tender offer or
similar transaction (each, a "CORPORATE TRANSACTION"), (i) the vesting of all
outstanding Awards will accelerate as to an additional 25% of the Shares that
are unvested on the date of the Corporate Transaction and, (ii) thereafter,
unless otherwise set forth below, all unvested shares subject to outstanding
Awards will continue to vest in equal monthly installments over the remaining
original vesting term as set forth in the Award Agreement. Upon a Corporate
Transaction, all outstanding Awards shall be assumed by the successor or
acquiring corporation (if any), which assumption will be binding on all
Participants. In the alternative, the successor or acquiring corporation may
substitute equivalent Awards or provide substantially similar consideration to
Participants as was provided to shareholders (after taking into account the

<PAGE>   8

existing provisions of the Awards). The successor corporation may also issue, in
place of outstanding unvested Shares of the Company held by the Participants,
substantially similar shares or other property subject to repurchase
restrictions no less favorable to the Participant. In the event such successor
corporation (if any) refuses to assume or substitute Awards, as provided above,
pursuant to a Corporate Transaction described in this Subsection 17.1, such
Awards will expire on such Corporate Transaction at such time and on such
conditions as the Committee will determine. Notwithstanding anything in this
Plan to the contrary, the Committee may, in its sole discretion, provide that
the vesting of any or all Awards granted pursuant to this Plan will accelerate
upon a Corporate Transaction described in this Section 17. If the Committee
exercises such discretion with respect to Options, such Options will become
exercisable in full prior to the consummation of such event at such time and on
such conditions as the Committee determines, and if such Options are not
exercised prior to the consummation of the Corporate Transaction, they shall
terminate at such time as determined by the Committee.

               17.2 Other Treatment of Awards. Subject to any greater rights
granted to Participants under the foregoing provisions of this Section 17, in
the event of the occurrence of any Corporate Transaction described in Section
17.1, any outstanding Awards will be treated as provided in the applicable
agreement or plan of merger, consolidation, dissolution, liquidation, or sale of
assets.

               17.3 Assumption of Awards by the Company. The Company, from time
to time, also may substitute or assume outstanding awards granted by another
company, whether in connection with an acquisition of such other company or
otherwise, by either; (a) granting an Award under this Plan in substitution of
such other company's award; or (b) assuming such award as if it had been granted
under this Plan if the terms of such assumed award could be applied to an Award
granted under this Plan. Such substitution or assumption will be permissible if
the holder of the substituted or assumed award would have been eligible to be
granted an Award under this Plan if the other company had applied the rules of
this Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award will remain unchanged
(except that the exercise price and the number and nature of Shares issuable
upon exercise of any such option will be adjusted appropriately pursuant to
Section 424(a) of the Code). In the event the Company elects to grant a new
Option rather than assuming an existing option, such new Option may be granted
with a similarly adjusted Exercise Price.

        18. ADOPTION. This Plan will become effective on the date that it is
adopted by the Board (the "EFFECTIVE DATE").

        19. TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as provided
herein, this Plan will terminate ten (10) years from the Effective Date. This
Plan and all agreements thereunder shall be governed by and construed in
accordance with the laws of the State of California.

        20. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time
terminate or amend this Plan in any respect, including without limitation
amendment of any form of Award Agreement or instrument to be executed pursuant
to this Plan.

        21. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by the
Board, nor any provision of this Plan will be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock option and bonuses otherwise than under this Plan, and such
arrangements may be either generally applicable or applicable only in specific
cases.

        22. DEFINITIONS. As used in this Plan, the following terms will have the
following meanings:

               "AWARD" means any award under this Plan, including any Option or
Restricted Stock.

               "AWARD AGREEMENT" means, with respect to each Award, the signed
written agreement between the Company and the Participant setting forth the
terms and conditions of the Award.

               "BOARD" means the Board of Directors of the Company.

<PAGE>   9

               "CAUSE" means the commission of an act of theft, embezzlement,
fraud, dishonesty or a breach of fiduciary duty to the Company or a Parent or
Subsidiary of the Company.

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

               "COMMITTEE" means the Compensation Committee of the Board.

               "COMPANY" means NIKU Corporation or any successor corporation.

               "DISABILITY" means a disability, whether temporary or permanent,
partial or total, as determined by the Committee.

               "EXERCISE Price" means the price at which a holder of an Option
may purchase the Shares issuable upon exercise of the Option.

               "FAIR MARKET VALUE" means, as of any date, the value of a share
of the Company's Common Stock determined as follows:

                        (a)     if such Common Stock is then quoted on the
                                Nasdaq National Market, its closing price on the
                                Nasdaq National Market on the date of
                                determination as reported in The Wall Street
                                Journal;

                        (b)     if such Common Stock is publicly traded and is
                                then listed on a national securities exchange,
                                its closing price on the date of determination
                                on the principal national securities exchange on
                                which the Common Stock is listed or admitted to
                                trading as reported in The Wall Street Journal;
                                or

                        (c)     if such Common Stock is publicly traded but is
                                not quoted on the Nasdaq National Market nor
                                listed or admitted to trading on a national
                                securities exchange, the average of the closing
                                bid and asked prices on the date of
                                determination as reported in The Wall Street
                                Journal;

                        (d)     if none of the foregoing is applicable, by the
                                Committee in good faith.

               "FAMILY MEMBER" includes any of the following:

                        (a)     child, stepchild, grandchild, parent,
                                stepparent, grandparent, spouse, former spouse,
                                sibling, niece, nephew, mother-in-law,
                                father-in-law, son-in-law, daughter-in-law,
                                brother-in-law, or sister-in-law of the
                                Participant, including any such person with such
                                relationship to the Participant by adoption;

                        (b)     any person (other than a tenant or employee)
                                sharing the Participant's household;

                        (c)     a trust in which the persons in (a) and (b) have
                                more than fifty percent of the beneficial
                                interest;

                        (d)     a foundation in which the persons in (a) and (b)
                                or the Participant control the management of
                                assets; or

                        (e)     any other entity in which the persons in (a) and
                                (b) or the Participant own more than fifty
                                percent of the voting interest.

               "OPTION" means an award of an option to purchase Shares pursuant
to Section 5.

<PAGE>   10

               "PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if each of such
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

               "PARTICIPANT" means a person who receives an Award under this
Plan.

               "PERFORMANCE FACTORS" means the factors selected by the Committee
from among the following measures to determine whether the performance goals
established by the Committee and applicable to Awards have been satisfied:

               (a) Net revenue and/or net revenue growth;

               (b) Earnings before income taxes and amortization and/or earnings
before income taxes and amortization growth;

               (c) Operating income and/or operating income growth;

               (d) Net income and/or net income growth;

               (e) Earnings per share and/or earnings per share growth;

               (f) Total stockholder return and/or total stockholder return
growth;

               (g) Return on equity;

               (h) Operating cash flow return on income;

               (i) Adjusted operating cash flow return on income;

               (j) Economic value added; and

               (k) Individual confidential business objectives.

               "PERFORMANCE PERIOD" means the period of service determined by
the Committee, not to exceed five years, during which years of service or
performance is to be measured for Restricted Stock Awards or Stock Bonuses.

               "PLAN" means this NIKU Corporation 2000 Stock Incentive Plan, as
amended from time to time.

               "RESTRICTED STOCK AWARD" means an award of Shares pursuant to
Section 6.

               "SEC" means the Securities and Exchange Commission.

               "SECURITIES ACT" means the Securities Act of 1933, as amended.

               "SHARES" means shares of the Company's Common Stock reserved for
issuance under this Plan, as adjusted pursuant to Sections 2 and 17, and any
successor security.

               "STOCK BONUS" means an award of Shares, or cash in lieu of
Shares, pursuant to Section 6.

               "STOCK OPTION AGREEMENT" means, with respect to each Option, the
signed written agreement between the Company and the Participant setting forth
the terms and conditions of the Option.

               "SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain owns stock

<PAGE>   11

possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

               "TERMINATION" or "TERMINATED" means, for purposes of this Plan
with respect to a Participant, that the Participant has for any reason ceased to
provide services as an employee, officer, consultant, independent contractor, or
advisor to the Company or a Parent or Subsidiary of the Company. An employee
will not be deemed to have ceased to provide services in the case of (i) sick
leave, (ii) military leave, or (iii) any other leave of absence approved by the
Committee, provided, that such leave is for a period of not more than 90 days,
unless reemployment upon the expiration of such leave is guaranteed by contract
or statute or unless provided otherwise pursuant to formal policy adopted from
time to time by the Company and issued and promulgated to employees in writing.
In the case of any employee on an approved leave of absence, the Committee may
make such provisions respecting suspension of vesting of the Award while on
leave from the employ of the Company or a Parent or Subsidiary of the Company as
it may deem appropriate, except that in no event may an Award be exercised after
the expiration of the term set forth in the Award Agreement. The Committee will
have sole discretion to determine whether a Participant has ceased to provide
services and the effective date on which the Participant ceased to provide
services (the "Termination Date").

               "UNVESTED SHARES" means "Unvested Shares" as defined in the Award
Agreement.

               "VESTED SHARES" means "Vested Shares" as defined in the Award
Agreement.

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