Document:

<PAGE>   1
                                                                     Exhibit 4.1

COMMON                              [FIREPOND LOGO]                       COMMON

[FIRE LOGO]                          firepond tm                          [LOGO]

THIS CERTIFICATE IS TRANSFERABLE     FIREPOND, INC.              SEE REVERSE FOR
IN BOSTON, MA OR NEW YORK, NY   INCORPORATED UNDER THE LAWS  CERTAIN DEFINITIONS
                                 OF THE STATE OF DELAWARE     CUSIP 318224 10 2

This Certifies that

is the owner of

  FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK, $.01 PAR VALUE, OF
   =========================FIREPOND, INC.===================================

transferable on the books of the Corporation by the holder hereof in person or
by its duly authorized attorney upon surrender of this Certificate properly
endorsed or assigned. This Certificate and the shares represented hereby are
issued and shall be held subject to the laws of the State of Delaware and the
provisions of the Certificate of Incorporation and the By-laws of the
Corporation, as amended from time to time, to which, the holder by acceptance
hereof assents. This Certificate is not valid unless countersigned and
registered by the Transfer Agent and Registrar.

  WITNESS the facsimile seal of the Corporation and the facsimile signatures of
  its duly authorized officers.

  Dated:

/s/ Paul K. McDermott           SEAL                    /s/ Klaus P. Besier
------------------------                              --------------------------
TREASURER AND                                           PRESIDENT AND
CHIEF FINANCIAL OFFICER                                 CHIEF EXECUTIVE OFFICER

                              COUNTERSIGNED AND REGISTERED
                                                   BANKBOSTON, N.A.
                                                                  TRANSFER AGENT
                                                                   AND REGISTRAR

                              BY  /s/ L.E. Seeley

                                                            AUTHORIZED SIGNATURE
<PAGE>   2
FIREPOND, INC.

The Corporation is authorized to issue more than one class of stock. Upon
written request, made by the holder of this Certificate, the Corporation will
furnish to such holder without charge a copy of the full text of the
preferences, voting powers, qualifications and special and relative rights of
the shares of each class authorized to be issued, as set forth in the
Certificate of Incorporation, as amended from time to time.

The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM --
TEN ENT --
JT TEN --
as tenants in common
as tenants by the entireties
as joint tenants with right
of survivorship and not as
tenants in common

UNIF GIFT MIN ACT --                    Custodian
                                             (Cust)
(Minor)
                              under Uniform Gifts to Minors
                              Act
                                                                  (State)

UNIF TRF MIN ACT --                Custodian (until age          )
                                           (Cust)
                                                  under Uniform Transfers
                                             (Minor)
                                to Minors Act

(State)

FOR VALUE RECEIVED,
hereby sells, assigns and transfers unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

Shares

of the common stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint

Attorney

to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated

X
<PAGE>   3
X

NOTICE:

THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN
UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATEVER.

Signature(s) Guaranteed:

THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATES AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15.<PAGE>   1
                                                                    EXHIBIT 10.3

                                 FIREPOND, INC.
                        1999 STOCK OPTION AND GRANT PLAN

      Section 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS

      The name of the plan is the FirePond, Inc. 1999 Stock Option and Grant
Plan (the "Plan"). The purpose of the Plan is to encourage and enable the
officers, employees, directors, consultants, advisors and other key persons of
FirePond, Inc. (the "Company") and its Subsidiaries (as defined below) upon
whose judgment, initiative and efforts the Company largely depends for the
successful conduct of its business to acquire a proprietary interest in the
Company. It is anticipated that providing such persons with a direct stake in
the Company's welfare will assure a closer identification of their interests
with those of the Company, thereby stimulating their efforts on the Company's
behalf and strengthening their desire to remain with the Company.

      The following terms shall be defined as set forth below:

      "Act" means the Securities Exchange Act of 1934, as amended.

      "Award" or "Awards," except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Restricted Stock Awards, and
Unrestricted Stock Awards.

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

      "Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.

      "Committee" has the meaning specified in Section 2.

      "Effective Date" means the date on which the Plan is approved by
stockholders as set forth in Section 13.

      "Fair Market Value" of the Stock on any given date means (i) if the Stock
is admitted to quotation on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"), the Fair Market Value on any given date
shall not be less than the average of the highest bid and lowest asked prices of
the Stock reported for such date or, if no bid and asked prices were reported
for such date, for the last day preceding such date for which such prices were
reported; or (ii) if the Stock is admitted to trading on a national securities
exchange or the NASDAQ National Market System, then clause (i) shall not apply
and the Fair Market Value on any date shall not be less than the closing price
reported for the Stock on such exchange or system for such date or, if no sales
were reported for such date, for the last date preceding such date for which a
sale was reported; or (iii) if the Stock is not publicly traded on a securities
exchange or traded in the over-the-counter market or, if traded or quoted, there
are no transactions or quotations within the last ten trading days or trading
has been halted for
<PAGE>   2
extraordinary reasons, the Fair Market Value on any given date shall be
determined in good faith by the Committee; and (iv) notwithstanding the
foregoing, the Fair Market Value of the Stock on the effective date of the
Initial Public Offering shall be the offering price to the public of the Stock
on such date.

      "Incentive Stock Option" means any Stock Option designated and qualified
as an "incentive stock option" as defined in Section 422 of the Code.

      "Independent Director" means a member of the Board who is neither an
employee or officer of the Company or any Subsidiary.

      "Initial Public Offering" means the first underwritten public offering
pursuant to an effective registration statement under the Securities Act of
1933, as amended, covering the offer and sale of Stock to the public.

      "Non-Qualified Stock Option" means any Stock Option that is not
an Incentive Stock Option.

      "Option" or "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5.

      "Restricted Stock Award" means any Award granted pursuant to
Section 6.

      "Stock" means the Common Stock, par value $.01 per share, of the Company,
subject to adjustments pursuant to Section 3.

      "Subsidiary" means any corporation or other entity (other than the
Company) in any unbroken chain of corporations or other entities, beginning with
the Company, if each of the corporations or entities (other than the last
corporation or entity in the unbroken chain) owns stock or other interests
possessing 50% or more of the economic interest or the total combined voting
power of all classes of stock or other interests in one of the other
corporations or entities in the chain.

      "Unrestricted Stock Award" means any Award granted pursuant to
Section 7.

      Section 2. ADMINISTRATION OF PLAN; COMMITTEE AUTHORITY TO SELECT
PARTICIPANTS AND DETERMINE AWARDS.

(a) Committee. The Plan shall be administered by the Board of Directors of the
Company, or at the discretion of the Board, by a committee of the Board
consisting of not less than two Directors; provided, however, that if each
member of the Committee is not (i) a "Non-Employee Director" within the meaning
of Rule 16b-3(a)(3) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and (ii) an "Outside Director" within the meaning of Section
162(m) of the Code and the regulations promulgated thereunder, any Awards
granted to individuals subject to the reporting requirements of Section 16 of
the Exchange Act shall be approved by the Board of Directors. All references
herein to the Committee shall be

                                      -2-
<PAGE>   3
deemed to refer to the entity then responsible for administration of the Plan at
the relevant time (i.e., either the Board of Directors or a committee of the
Board, as applicable).

      (b) Powers of Committee. The Committee shall have the power and authority
to grant Awards consistent with the terms of the Plan, including the power and
authority:

           (1) to select the officers, employees, Independent Directors,
consultants, advisers and key persons of the Company and its Subsidiaries to
whom Awards may from time to time be granted;

           (2) to determine the time or times of grant, and the extent, if any,
of Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock Awards
and Unrestricted Stock Awards, or any combination of the foregoing, granted to
any one or more participants;

           (3) to determine the number of shares of Stock to be covered by any
Award;

           (4) to determine and modify from time to time the terms and
conditions, including restrictions, not inconsistent with the terms of the Plan,
of any Award, which terms and conditions may differ among individual Awards and
participants, and to approve the form of written instruments evidencing the
Awards;

           (5) to accelerate at any time the exercisability or vesting of all or
any portion of any Award and/or to include provisions in Awards providing for
such acceleration,

           (6) to impose any limitations on Awards granted under the Plan,
including limitations on transfers repurchase provisions and the like and to
exercise repurchase rights or obligations;

           (7) subject to the provisions of Section 5(a)(3), to extend at any
time the period in which Stock Options may be exercised;

           (8) to determine at any time whether, to what extent, and under what
circumstances Stock and other amounts payable with respect to an Award shall be
deferred either automatically or at the election of the participant and whether
and to what extent the Company shall pay or credit amounts constituting interest
(at rates determined by the Committee) or dividends or deemed dividends on such
deferrals; and

           (9) at any time to adopt, alter and repeal such rules, guidelines and
practices for administration of the Plan and for its own acts and proceedings as
it shall deem advisable, to interpret the terms and provisions of the Plan and
any Award (including related written instruments); to make all determinations it
deems advisable for the administration of the Plan; to decide all disputes
arising in connection with the Plan; and to otherwise supervise the
administration of the Plan.

                                      -3-
<PAGE>   4
            All decisions and interpretations of the Committee shall be binding
on all persons, including the Company and Plan participants.

           (c) Delegation of Authority to Grant Awards. The Committee, in its
discretion, may delegate to the Chief Executive Officer of the Company all or
part of the Committee's authority and duties with respect to Awards, including
the granting thereof, to individuals who are not subject to the reporting and
other provisions of Section 16 of the Act or "covered employees" within the
meaning of Section 162(m) of the Code. Any such delegation by the Committee
shall include a limitation as to the amount of Awards that may be granted during
the period of delegation and shall contain guidelines as to the determination of
the exercise price of any Option, the price of other Awards and the vesting
criteria. The Committee may revoke or amend the terms of a delegation at any
time but such action shall not invalidate any prior actions of the Committee's
delegate or delegates that were consistent with the terms of the Plan.

      Section 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION

           (a) Stock Issuable. The maximum number of shares of Stock reserved
and available for issuance under the Plan shall be 3,000,000 shares of Stock.
For purposes of the foregoing limitations, the shares of Stock underlying any
Awards which are forfeited, canceled, reacquired by the Company, satisfied
without the issuance of Stock or otherwise terminated (other than by exercise)
shall be added back to the shares of Stock available for issuance under the
Plan. Subject to such overall limitation, shares of Stock may be issued up to
such maximum number pursuant to any type or types of Award; provided, however,
that from and after the date the Plan is subject to Section 162(m) of the Code,
Awards with respect to no more than 1,000,000 shares of Stock may be granted to
any one individual participant during any one calendar year period. The shares
available for issuance under the Plan may be authorized but unissued shares of
Stock or shares of Stock reacquired by the Company.

           (b) Recapitalizations. If, through or as a result of any merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar transaction, the outstanding shares of
Stock are increased or decreased or are exchanged for a different number or kind
of shares or other securities of the Company or any successor company, or
additional shares or new or different shares or other securities of the Company
or other non-cash assets are distributed with respect to such shares of Stock or
other securities, the Committee shall make an appropriate or proportionate
adjustment in (i) the maximum number of shares reserved for issuance under the
Plan, (ii) the number of Stock Options, or other Awards that can be granted to
any one individual participant, (iii) the number and kind of shares or other
securities subject to any then outstanding Awards under the Plan, and (iv) the
price for each share subject to any then outstanding Stock Options or other
Awards under the Plan, without changing the aggregate exercise price (i.e., the
exercise price multiplied by the number of shares) as to which such Stock
Options remain exercisable and the repurchase price for shares subject to
repurchase. The adjustment by the Committee shall be final, binding and
conclusive. No fractional shares of

                                      -4-
<PAGE>   5
Stock shall be issued under the Plan resulting from any such adjustment, but the
Committee in its discretion may make cash payment in lieu of fractional shares.

           (c) Mergers and Other Transactions. In the case of (i) the
dissolution or liquidation of the Company, (ii) a merger, reorganization or
consolidation between the Company and another person or entity (other than a
holding company or subsidiary of the Company) as a result of which the holders
of the Company's outstanding voting stock immediately prior to the transaction
hold less than a majority of the outstanding voting stock of the surviving
entity immediately after the transaction, (iii) the sale of all or substantially
all of the assets of the Company to an unrelated person or entity, or (iv) the
sale of all of the Stock of the Company to an unrelated person or entity (in
each case, a "Transaction"), unless provision is made in connection with the
Transaction for the assumption of the Awards heretofore granted, or the
substitution of such Awards with new Awards of the successor entity or parent
thereof, with appropriate adjustment as to the number and kind of shares and, if
appropriate, the per share exercise prices, as provided in Section 3(b) above,
all of the remaining outstanding Awards held by participants, to the extent not
fully vested and exercisable, shall become fully vested and exercisable, except
with respect to specific awards as the Committee otherwise determines. Upon the
effectiveness of the transaction, the Plan and all Awards granted hereunder
shall, unless assumed by the successor entity, terminate. In the event of such
termination, each optionee shall be permitted to exercise for a period of at
least 15 days prior to the date of such termination all outstanding Awards held
by such optionee which are then exercisable.

           (d) Substitute Awards. The Committee may grant Awards under the Plan
in substitution for stock and stock based awards held by employees of another
corporation who become employees of the Company or a Subsidiary as the result of
a merger or consolidation of the employing corporation with the Company or a
Subsidiary or the acquisition by the Company or a Subsidiary of property or
stock of the employing corporation. The Committee may direct that the substitute
awards be granted on such terms and conditions as the Committee considers
appropriate in the circumstances.

      Section 4. ELIGIBILITY.

           Participants in the Plan will be such officers and other employees,
Independent Directors, consultants, advisors and other key persons of the
Company and its Subsidiaries who are responsible for or contribute to the
management, growth or profitability of the Company and its Subsidiaries as are
selected from time to time by the Committee, in its sole discretion.

      Section 5. STOCK OPTIONS.

           Any Stock Option granted under the Plan shall be pursuant to a stock
option agreement which shall be in such form as the Committee may from time to
time approve. Option agreements need not be identical.

           Stock Options granted under the Plan may be either Incentive Stock
Options or Non-Qualified Stock Options. Incentive Stock Options may be granted
only to employees of the Company or any Subsidiary that is a "subsidiary
corporation" within the meaning of Section

                                      -5-
<PAGE>   6
424(f) of the Code. Non-Qualified Stock Options may be granted to officers,
employees, Independent Directors, advisors, consultants and other key persons of
the Company and its Subsidiaries. To the extent that any Option does not qualify
as an Incentive Stock Option, it shall be deemed a Non-Qualified Stock option.

      No Incentive Stock Option shall be granted under the Plan after November
7, 2009.

      (a) Terms of Stock Options. Stock Options granted under the Plan shall be
subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of the Plan as the
Committee shall deem desirable:

           (1) Exercise Price. The exercise price per share for the Stock
covered by a Stock Option shall be determined by the Committee at the time of
grant but shall not be less than 100% of the Fair Market Value in the case of
Incentive Stock Options. If an employee owns or is deemed to own (by reason of
the attribution rules applicable under Section 424(d) of the Code) more than 10%
of the combined voting power of all classes of stock of the Company or any
parent or Subsidiary corporation and an Incentive Stock Option is granted to
such employee, the option price of such Incentive Stock Option shall be not less
than 110% of the Fair Market Value on the grant date.

           (2) Grant of Discount Options in Lieu of Cash Compensation. Upon the
request of a participant and with the consent of the Committee, such participant
may elect each calendar year to receive a Non-Qualified Stock Option in lieu of
any cash bonus or other compensation to which he may become entitled during the
following calendar year, but only if such participant makes an irrevocable
election to waive receipt of all or a portion of such cash compensation. Such
election shall be made on or before the date set by the Committee which date
shall be no later than 15 days (or such shorter period permitted by the
Committee) preceding January 1 of the calendar year for which the cash
compensation would otherwise be paid. A Non-Qualified Stock Option shall be
granted to each participant who made such an irrevocable election on the date
the waived cash compensation would otherwise be paid. The exercise price per
share shall be determined by the Committee. The number of shares of Stock
subject to the Stock Option shall be determined by dividing the amount of the
waived cash compensation by the difference between the Fair Market Value of the
Stock on the date the Stock Option is granted and the exercise price per share
of the Stock Option. The Stock Option shall be granted for a whole number of
shares so determined; the value of any fractional share shall be paid in cash.

           (3) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than ten
years after the date the Option is granted. If an employee owns or is deemed to
own (by reason of the attribution rules of Section 424(d) of the Code) more than
10% of the combined voting power of all classes of Stock of the Company or any
parent or subsidiary corporation and an Incentive Stock Option is granted to
such employee, the term of such Option shall be no more than five years from the
grant date.

                                      -6-
<PAGE>   7
           (4) Exercisability; Rights of a Stockholder. Stock Options shall
become vested and exercisable at such time or times, whether or not in
installments, as shall be determined by the Committee at or after the grant
date; provided, however, that Stock Options granted in lieu of cash compensation
shall be exercisable in full as of the grant date. The Committee may at any time
accelerate the exercisability of all or any portion of any Stock Option. An
optionee shall have the rights of a stockholder only as to shares acquired upon
the exercise of a Stock Option and not as to unexercised Stock Options.

           (5) Method of Exercise. Stock Options may be exercised in whole or in
part, by giving written notice of exercise to the Company, specifying the number
of shares to be purchased. Payment of the purchase price may be made by one or
more of the following methods; provided, however, that the methods set forth in
subsections (B) and (C) below shall become available only after the closing of
the Initial Public Offering:

             (i) In cash by certified or bank check or other instrument
acceptable to the Committee,

             (ii) In the form of shares of Stock that are not then subject to
restrictions under any Company plan and that have been held by the optionee free
of such restrictions for at least six months, if permitted by the Committee in
its discretion. such surrendered shares shall be valued at Fair Market Value on
the exercise date;

             (iii) By the optionee delivering to the Company a properly executed
exercise notice together with irrevocable instructions to a broker to promptly
deliver to the Company cash or a check payable and acceptable to the Company to
pay the purchase price; provided that in the event the optionee chooses to pay
the purchase price as so provided, the optionee and the broker shall comply with
such procedures and enter into such agreements of indemnity and other agreements
as the Committee shall prescribe as a condition of such payment procedure; or

             (iv) By the optionee delivering to the Company a promissory note if
the Board has authorized the loan of funds to the optionee for the purpose of
enabling or assisting the optionee to effect the exercise of his Stock Option;
provided that at least so much of the exercise price as represents the par value
of the Stock shall be paid other than with a promissory note.

            Payment instruments will be received subject to collection. The
delivery of certificates representing the shares of Stock to be purchased
pursuant to the exercise of a Stock Option will be contingent upon receipt from
the optionee (or a purchaser acting in his stead in accordance with the
provisions of the Stock Option) by the Company of the full purchase price for
such shares and the fulfillment of any other requirements contained in the Stock
Option or applicable provisions of laws.

           (6) Termination. Unless otherwise provided in the option agreement or
determined by the Committee, upon the optionee's termination of employment (or
other business

                                      -7-
<PAGE>   8
relationship) with the Company and its Subsidiaries, the optionee's rights in
his Stock Options shall automatically terminate.

           (7) Annual Limit on Incentive Stock Options. To the extent required
for "incentive stock option" treatment under Section 422 of the Code, the
aggregate Fair Market Value (determined as of the time of grant) of the shares
of Stock with respect to which Incentive Stock Options granted under this Plan
and any other plan of the Company or its parent and subsidiary corporations
become exercisable for the first time by an optionee during any calendar year
shall not exceed $100,000. To the extent that any Stock Option exceeds this
limit, it shall constitute a Non-Qualified Stock Option.

      (b) Reload Options. At the discretion of the Committee, Options granted
under the Plan may include a "reload" feature pursuant to which an optionee
exercising an Option by the delivery of number of shares of stock in accordance
with Section 5(a)(5)(ii) hereof would automatically be granted an additional
Option (with an exercise price equal to the Fair Market Value of the Stock on
the date the additional Option is granted and with the same expiration date as
the original Option being exercised, and with such other terms as the Committee
may provide) to purchase that number of shares of Stock equal to the number
delivered to exercise the original Option.

      (c) Non-transferability of Options. No Stock option shall be transferable
by the optionee otherwise than by will or by the laws of descent and
distribution and all Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee; provided, however, that an optionee may
transfer, without consideration for the transfer, the Non-Qualified Stock
Options to members of his immediate family, to trusts for the benefit of such
family members, to partnerships in which such family members are the only
partners, or to charitable organization so long as the transferee agrees in
writing to be bound by the terms and conditions of this Plan and the applicable
Option Agreement.

      Section 6. RESTRICTED STOCK AWARDS

           (a) Nature of Restricted Stock Awards. A Restricted Stock Award is an
Award entitling the recipient to acquire, at par value or such other purchase
price determined by the Committee, shares of Stock subject to such restrictions
and conditions as the Committee may determine at the time of grant ("Restricted
Stock"). Conditions may be based on continuing employment (or other business
relationship) and/or achievement or pre-established performance goals and
objectives.

           (b) Rights as a Stockholder. Upon execution of a written instrument
setting forth the Restricted Stock Award and paying any applicable purchase
price, a participant shall have the rights of a stockholder with respect to the
voting of the Restricted Stock, subject to such conditions contained in the
written instrument evidencing the Restricted Stock Award. Unless the Committee
shall otherwise determine, certificates evidencing the Restricted Stock shall
remain in the possession of the Company until such Restricted Stock is vested as
provided in Section 6(d) below.

                                      -8-
<PAGE>   9
           (c) Restrictions. Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein or in the written instrument evidencing the
Restricted Stock Award. If a participant's employment (or other business
relationship) with the Company and its Subsidiaries terminates under the
conditions specified in the relevant instrument relating to the Award, or upon
such other event or events as may be stated in the instrument evidencing the
Award, the Company or its assigns shall have the right or shall agree, as may be
specified in the relevant instrument, to repurchase some or all of the shares of
Stock subject to the Award at such purchase price as is set forth in such
instrument.

           (d) Vesting of Restricted Stock. The Committee at the time of grant
shall specify the date or dates and/or the attainment of pre-established
performance goals, objectives and other conditions on which Restricted Stock
shall become vested, subject to such further rights of the Company or its
assigns as may be specified in the instrument evidencing the Restricted Stock
Award.

           (e) Waiver, Deferral and Reinvestment of Dividends. The written
instrument evidencing the Restricted Stock Award may require or permit the
immediate payment, waiver, deferral or investment of dividends paid on the
Restricted Stock.

      Section 7. UNRESTRICTED STOCK AWARDS

           (a) Grant or Sale of Unrestricted Stock. The Committee may, in its
sole discretion, grant (or sell at a purchase price determined by the Committee)
an Unrestricted Stock Award to any participant, pursuant to which such
participant may receive shares of Stock free of any vesting restrictions
("Unrestricted Stock") under the Plan. Unrestricted Stock Awards may be granted
or sold as described in the preceding sentence in respect of past services or
other valid consideration, or in lieu of any cash compensation due to such
individual.

           (b) Elections to Receive Unrestricted Stock In Lieu of Compensation.
Upon the request of a participant and with the consent of the Committee, each
such participant may, pursuant to an advance written election delivered to the
Company no later than the date specified by the Committee, receive a portion of
the cash compensation otherwise due to such participant in the form of shares of
Unrestricted Stock either currently or on a deferred basis.

           (c) Restrictions on Transfers. The right to receive shares of
Unrestricted Stock on a deferred basis may not be sold, assigned, transferred,
pledged or otherwise encumbered, other than by will or the laws of descent and
distribution.

      Section 8. TAX WITHHOLDING

           (a) Payment by Participant. Each participant shall, no later than the
date as of which the value of an Award or of any Stock or other amounts received
thereunder first becomes includable in the gross income of the participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of, any federal, state, or local
taxes of any kind required by law to be withheld with respect to such

                                      -9-
<PAGE>   10
income. The Company and its Subsidiaries shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to the participant.

           (b) Payment in Stock. Subject to approval by the Committee, a
participant may elect to have such tax withholding obligation satisfied, in
whole or in part, by (i) authorizing the Company to withhold from shares of
Stock to be issued pursuant to any Award a number of shares with an aggregate
Fair Market Value (as of the date the withholding is effected) that would
satisfy the withholding amount due, or (ii) transferring to the Company shares
of Stock owned by the participant with an aggregate Fair Market Value (as of the
date the withholding is effected) that would satisfy the withholding amount due.

      Section 9. TRANSFER, LEAVE OF ABSENCE, ETC.

            For purposes of the Plan, the following events shall not be deemed a
termination of employment:

           (a) a transfer to the employment of the Company from a Subsidiary or
from the Company to a Subsidiary, or from one Subsidiary to another; or

           (b) an approved leave of absence for military service or sickness, or
for any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the Committee
otherwise so provides in writing.

      Section 10. AMENDMENTS AND TERMINATION

      The Board may, at any time, amend or discontinue the Plan and the
Committee may, at any time, amend or cancel any outstanding Award (or provide
substitute Awards at the same or reduced exercise or purchase price or with no
exercise or purchase price in a manner not inconsistent with the terms of the
Plan), but such price, if any, must satisfy the requirements which would apply
to the substitute or amended Award if it were then initially granted under this
Plan for the purpose of satisfying changes in law or for any other lawful
purpose, but no such action shall adversely affect rights under any outstanding
Award without the holder's consent. If and to the extent determined by the
Committee to be required by the Act to ensure that Incentive Stock Options
granted under the Plan are qualified under Section 422 of the Code, Plan
amendments shall be subject to approval by the Company's stockholders who are
eligible to vote at a meeting of stockholders.

      Section 11. STATUS OF PLAN

      With respect to the portion of any Award which has not been exercised and
any payments in cash, Stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Committee shall otherwise expressly determine
in connection with any Award or Awards. In its sole discretion, the Committee
may authorize the creation of trusts or other arrangements to meet the Company's
obligations to deliver Stock or make payments with respect to Awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the foregoing sentence.

                                      -10-
<PAGE>   11
      Section 12. GENERAL PROVISIONS

           (a) No Distribution; Compliance with Legal Requirements. The
Committee may require each person acquiring Stock pursuant to an Award to
represent to and agree with the Company in writing that such person is acquiring
the shares without a view to distribution thereof.

            No shares of Stock shall be issued pursuant to an Award until all
applicable securities law and other legal and stock exchange or similar
requirements have been satisfied. The Committee may require the placing of such
stop orders and restrictive legends on certificates for Stock and Awards, as it
deems appropriate.

           (b) Other Compensation Arrangements; No Employment Rights. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, and such arrangements may be either
generally applicable or applicable only in specific cases. The adopting of this
Plan and the grant of Awards do not confer upon any employee any right to
continued employment with the Company or any Subsidiary.

      Section 13. EFFECTIVE DATE OF PLAN

      This Plan shall become effective upon approval by the holders of a
majority of the shares of Stock of the Company present or represented and
entitled to vote at a meeting of stockholders. Subject to such approval by the
stockholders and to the requirement that no Stock may be issued hereunder prior
to such approval, Stock Options and other Awards may be granted hereunder on and
after adoption of this Plan by the Board.

      Section 14. GOVERNING LAW

      This Plan shall be governed by Delaware law except to the extent such law
is preempted by federal law.

Adopted and Effective: November 8, 1999

                                      -11-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}]]