Document:

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                                                                     EXHIBIT 4.7

                               AMENDMENT NO. 1 TO
                          AGREEMENT AND PLAN OF MERGER

       THIS AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER (this "AMENDMENT"),
dated as of October 10, 2000, is among Sonoma Systems, a California corporation
(the "COMPANY"), Nortel Networks Corporation, a Canadian corporation ("PARENT")
and NNC Russian Acquisition Corporation, a Delaware corporation and a wholly
owned subsidiary of Parent ("ACQUISITION") and amends that certain Agreement and
Plan of Merger, dated as of August 14, 2000, among the Company, Acquisition and
Parent (the "AGREEMENT"). Capitalized terms not otherwise defined herein have
the meanings ascribed to such terms in Article 1 of the Agreement.

       The Company, Acquisition and Parent, pursuant to Section 7.4 of the
Agreement, hereby agree to amend the Agreement as follows upon the terms and
conditions set forth herein:

       1. Article 1 of the Agreement is hereby amended by adding a defined term
"Stock Price at Closing" to read as follows:

       "Stock Price at Closing" shall mean the closing (4:00 p.m., eastern time)
sale price of Parent Common Stock on the New York Stock Exchange Composite Tape
on the second trading day immediately preceding the Closing Date, as reported by
Bloomberg.

       2. Article 1 of the Agreement is hereby amended by amending and
restating, in its entirety, the definition of "Series A Preferred Share Closing
Ratio" to read as follows:

       "Series A Preferred Share Closing Ratio" means the Series A Liquidation
Payment divided by the Stock Price at Closing.

       3. This Amendment may be executed in any number of counterparts, each
such counterpart constituting an original and all of which when taken together
shall constitute one and the same instrument.

       4. This Amendment shall be construed in connection with and as part of
the Agreement and all terms, conditions, representations, warranties, covenants
and agreements set forth in the Agreement, except as herein amended, are hereby
ratified and confirmed and are and shall remain in full force and effect.

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       IN WITNESS WHEREOF, each of the parties has caused this Amendment to be
duly executed on its behalf as of the day and year first above written.

                                        NORTEL NETWORKS CORPORATION

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                        NNC RUSSIAN ACQUISITION CORPORATION

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                        SONOMA SYSTEMS

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:<PAGE>   1
                                                                 EXHIBIT 10.5(a)

                            THREE-FIVE SYSTEMS, INC.
                              AMENDED AND RESTATED
                         1997 EMPLOYEE STOCK OPTION PLAN
                         (AMENDED AS OF AUGUST 3, 2000)

SECTION 1.      ADOPTION AND PURPOSE OF PLAN

         (a) ADOPTION. On May 12, 1997, the Board of Directors (the "Board") of
Three-Five Systems, Inc., a Delaware corporation (the Company"), adopted the
1997 Employee Stock Option Plan (the "Original Plan"). The Original Plan did not
require stockholder approval. Under the Original Plan, there were 100,000 shares
of stock issuable. In December 1999, a stock dividend increased the shares
issuable under the Original Plan to 133,333. On January 27, 2000, the Board
adopted an amendment to the Original Plan to (i) increase the available options
to be issued thereunder by an additional 100,000 shares and (ii) impose, for
purposes of Internal Revenue Code Section 162(m), and annual grant limitation
under this Plan of 100,000 shares. In April 2000, a stock dividend increased the
shares issuable under the amended Original Plan to 350,000. On August 3, 2000,
the Board unanimously approved an amendment to the Original Plan to increase the
available options to be issued thereunder by an additional 300,000 shares. Those
amendments did not require stockholder approval and were effective immediately.
The amended and restated Plan shall be known as the Three-Five Systems, Inc.
Amended and Restated 1997 Employee Stock Option Plan (the "Plan").

         (b) GENERAL PURPOSE. The purpose of the Plan is to further the
interests of Three-Five Systems, Inc., a Delaware corporation (the "Company"),
and its stockholders by encouraging employees associated with the Company (or
parent or subsidiary corporations of the Company) to acquire shares of the
Company's common stock, thereby acquiring a proprietary interest in its business
and an increased personal interest in its continued success and progress. Such
purpose shall be accomplished by providing for the granting of options to
acquire the Company's common stock ("Options"). A "parent corporation" for
purposes of this Plan is any corporation in the unbroken chain of corporations
ending with the employer corporation, where, at each link of the chain, the
corporation and the link above owns at least 50 percent of the combined total
voting power of all classes of the stock in the corporation in the link below. A
"subsidiary corporation" for purposes of this Plan is any corporation in the
unbroken chain of corporations starting with the employer corporation, where, at
each link of the chain, the corporation and the link above owns at least 50
percent of the combined voting power of all classes of stock in the corporation
below.

                  (i) Options. All Options granted under this Plan will be
nonqualified options and shall not be "incentive stock options" as defined in
section 422 of the Code.

                  (ii) Duration of Plan. The term of the Plan is 10 years
commencing on the date of adoption of the Plan by the Board. No Option shall be
granted under the Plan unless granted within 10 years of the adoption of the
Plan by the Board, but Options outstanding on that date shall not be terminated
or otherwise affected by virtue of the Plan's expiration.

SECTION 2.      STOCK AND MAXIMUM NUMBER OF SHARES SUBJECT TO PLAN

         (a) Description of Stock and Maximum Shares Allocated. The stock
subject to the provisions of the Plan and issuable upon the grant of Options
granted under the Plan is shares of the Company's common stock, $.01 par value
per share (the "Stock"), which may be either unissued or treasury shares, as the
Board may from time to time determine. Subject to adjustment as provided in
Section 7 hereof, the aggregate number of shares of Stock covered by the Plan
and issuable thereunder as of August 3, 2000 shall be 650,000 shares of Stock.
The aggregate number of shares of Stock that may be covered by options granted
to any one individual in any year shall not exceed 100,000.

         (b) Calculation of Available Shares. For purposes of calculating the
maximum number of shares of Stock that may be issued under the Plan, the shares
issued (including the shares, if any, withheld for tax withholding requirements)
upon exercise of an Option shall be counted.

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         (c) Restoration of Unpurchased Shares. If an Option expires or
terminates for any reason prior to its exercise in full and before the term of
the Plan expires, the shares of Stock subject to, but not issued under, such
Option shall, without further action or by or on behalf of the Company, again be
available under the Plan. If shares of Stock are used to pay for the exercise
price, those shares shall be added to the shares available under the Plan.

SECTION 3.     ADMINISTRATION; APPROVAL; AMENDMENTS

         (a) General Administration. The power to administer the Plan with
respect to Eligible Persons shall be vested exclusively with the Board.

         (b) Plan Administrator. The Board shall be referred to herein as the
"Plan Administrator." The Board may, at any time, appoint a committee of one or
more persons who are members of the Board and delegate to that committee the
power to administer the Plan. Members of such committee shall serve for such
period of time as the Board may determine and shall be subject to removal by the
Board at any time. The Board may, at any time, terminate the functions of any
such committee and reassume all powers and authority previously delegated to
that committee. The Plan Administrator shall have the authority and discretion
to select which Eligible Persons shall participate in the Plan, to grant Options
under the Plan, to establish such rules and regulations as they may deem
appropriate with the proper administration of the Plan and to make such
determinations under, and issue such interpretations of, the Plan and any
outstanding Option as they may deem necessary or advisable. Decisions of the
Plan Administrator shall be final and binding on all parties who have an
interest in the Plan or any outstanding Option.

         (c) Approval of Plan. This Plan shall not require the approval of the
stockholders of the Company and shall be effective as of the date adopted by the
Board.

         (d) Amendments to Plan. The Board may, without action on the part of
the Company's stockholders, make such amendments to, changes in and additions to
the Plan as it may, from time to time, deem necessary or appropriate and in the
best interests of the Company; provided, the Board may not, without the consent
of the Optionholder, take any action which adversely affects or impairs the
rights of the Optionholder of any Option outstanding under the Plan.

SECTION 4.    PARTICIPANTS

         (a) Eligibility and Participation. Options may be granted only to
persons ("Eligible Persons") who at the time of grant are employees of or
consultants to the Company or parent or subsidiaries of the Company; provided,
however, that any person that is an Affiliate shall not be an Eligible Person
under this Plan. The Plan Administrator shall have full authority to determine
which Eligible Persons in its administered group are to receive Option grants
under the Plan, the number of shares to be covered by each such grant, the time
or times at which each such Option is to become exercisable, and the maximum
term for which the Option is to be outstanding.

         (b) Guidelines for Participation. In designating and selecting Eligible
Persons for participation in the Plan, the Plan Administrator shall consult with
and give consideration to the recommendations and criticisms submitted by
appropriate managerial and executive officers of the Company. The Plan
Administrator also shall take into account the duties and responsibilities of
the Eligible Persons, their past, present and potential contributions to the
success of the Company and such other factors as the Plan Administrator shall
deem relevant in connection with accomplishing the purpose of the Plan.

SECTION 5.     TERMS AND CONDITIONS OF OPTIONS

         (a) Allotment of Shares. The Plan Administrator shall determine the
number of shares of Stock to be optioned from time to time and the number of
shares to be optioned to any Eligible Person (the "Optioned Shares"). The grant
of an Option to a person shall neither entitle such person to, nor disqualify
such person from, participation in any other grant of Options under this Plan or
any other stock option plan of the Company.

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         (b) Exercise Price. Upon the grant of any Option, the Plan
Administrator shall specify the option price per share. In no event may the
option price per share specified by the Plan Administrator be less than 100
percent of the fair market value per share of the Stock on the date the Option
is granted.

         (c) Calculation of Fair Market Value of Stock. The fair market value of
a share of Stock on any relevant date shall be the closing selling price per
share of Stock on the date in question on the stock exchange determined by the
Board to be the primary market for the Stock, as such price is officially quoted
in the composite tape of transactions on such exchange. If there is no reported
sale of Stock on such exchange on the date in question, then the fair market
value shall be the closing selling price on the exchange on the last preceding
date for which such quotation exists.

         (d) Individual Stock Option Agreements. Options granted under the Plan
shall be evidenced by option agreements in such form and content as the Plan
Administrator from time to time approves, which agreements shall substantially
comply with and be subject to the terms of the Plan, including the terms and
conditions of this Section 5. As determined by a Plan Administrator, each option
agreement shall state (i) the total number of shares to which it pertains, (ii)
the exercise price for the shares covered by the Option, (iii) the time at which
the Options vest and become exercisable and (iv) the Option's scheduled
expiration date. The option agreements may contain such other provisions or
conditions as the Plan Administrator deems necessary or appropriate to
effectuate the sense and purpose of the Plan, including covenants by the
Optionholder not-to-compete and remedies to the Company in the event of the
breach of any such covenant.

         (e) Option Period. No Option granted under the Plan shall be
exercisable for a period in excess of 10 years from the date of its grant
subject to earlier termination in the event of termination of employment,
retirement or death of the Optionholder. An Option may be exercised in full or
in part at any time or from time to time during the term of the Option or
provide for its exercise in stated installments at stated times during the
Option's term.

         (f) Vesting; Limitations. The time at which the Optioned Shares vest
with respect to a participant shall be in the discretion of the Plan
Administrator.

         (g) No Fractional Shares. Options shall be exercisable only for whole
shares; no fractional shares will be issuable upon exercise of any Option
granted under the Plan.

         (h) Method of Exercising Options; Full Payment. Options shall be
exercised by written notice to the Company, addressed to the Company at its
principal place of business. Such notice shall state the election to exercise
the Option and the number of shares with respect to which it is being exercised,
and shall be signed by the person exercising the Option. Such notice shall be
accompanied by payment in full of the exercise price for the number of shares
being purchased. Payment may be made in cash or by check as prescribed by the
applicable Plan Administrator or by tendering duly endorsed certificates
representing shares of Stock then owned by the Optionholder and held for the
requisite period necessary to avoid a charge to the Company's earnings and
valued at fair market value on the date of exercise (as determined in accordance
with Section 5(c) hereof). Upon the exercise of any Option, the Company shall
deliver, or cause to be delivered, to the Optionholder a certificate or
certificates representing the shares of Stock purchased upon such exercise as
soon as practicable after payment for those shares has been received by the
Company. If an Option is exercised pursuant to Section 5(j) hereof by any person
other than the Optionholder, such notice shall be accompanied by appropriate
proof of the right of such person to exercise the Option. All shares that are
purchased and paid for in full upon the exercise of an Option shall be fully
paid and non-assessable.

         (i) Rights of a Stockholder. An Optionholder shall have no rights as a
stockholder with respect to shares covered by his Option until such Optionholder
shall have exercised the Option and paid the full exercise price for the
Optioned Shares. No adjustment will be made for dividends or other rights with
respect to any Optioned Shares for which the record date is prior to the date on
which the Optionholder exercises the Option for such shares.

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         (j) Exercise of Options After Cessation of Service; Termination of
Employment. If any Optionholder ceases to be in Service to the Company for a
reason other than death, such Optionholder may, within one month after the date
of termination of such Service, but in no event after the Option's stated
expiration date, exercise some or all of the Options that the Optionholder was
entitled to exercise on the date the Optionholder's Service terminated;
provided, that (i) if the Optionholder's Service is terminated by the Company in
its good faith judgment, for (A) commission of a crime by the Optionholder or
for reasons involving moral turpitude; (B) an act by the Optionholder which
tends to bring the Company into disrepute; or (C) negligent, fraudulent or
willful misconduct by the Optionholder, or (ii) if after the Service of the
Optionholder is terminated, the Optionholder commits acts detrimental to the
Company's interests, then the Option shall thereafter be void for all purposes.
Notwithstanding the foregoing, if any Optionholder who is an employee of the
Company ceases to be in Service to the Company by reason of permanent disability
within the meaning of section 22(e)(3) of the Internal Revenue Code (as
determined by the applicable Plan Administrator), the Optionholder shall have 12
months after the date of termination of Service, but in no event after
Optionholder's Option's stated expiration date, to exercise Options that the
Optionholder was entitled to exercise on the date the Optionholder's Service
terminated as a result of disability.

         (k) Death of Optionholder. If an Optionholder dies while in the
Company's Service, the Optionholder's vested Options on the date of death shall
be exercisable within three months of such death or until the stated expiration
date of the Optionholder's Option, whichever occurs first, by the person or
persons ("successors") to whom the Optionholder's rights pass under a will or by
the laws of descent and distribution. An Option may be exercised and payment of
the option price made in full by the successors only after written notice to the
Company specifying the number of shares to be purchased. Such notice shall state
that the Option price is being paid in full in the manner specified in Section
5(h) hereof. As soon as practicable after receipt by the Company of such notice
and of payment in full of the Option price, a certificate or certificates
representing such shares shall be registered in the name or names specified by
the successors in the written notice of exercise and shall be delivered to the
successors.

         (l) Other Plan Provisions Still Applicable. If an Option is exercised
upon the termination of Service or death of an Optionholder under this Section
5, the other provisions of the Plan shall still be applicable to such exercise.

         (m) Definition of "Service." For purposes of this Plan, unless it is
evidenced otherwise in the option agreement with the Optionholder, the
Optionholder shall be deemed to be in "Service" to the Company so long as such
individual renders services on a periodic basis to the Company (or to any parent
or subsidiary corporation) in the capacity of an employee or a consultant or
independent contractor. The Optionholder shall be considered to be an employee
for so long as such individual remains in the employ of the Company or one or
more of its parent or subsidiary corporations.

         (n) Nonassignability. Except as specifically allowed by the Plan
Administrator at the time of grant and as set forth in the documents evidencing
an Option, no Option granted under the Plan or any of the rights and privileges
conferred thereby shall be assignable or transferable by an Optionholder other
than by will or the laws of descent and distribution, and such Option shall be
exercisable during the Optionholder's lifetime only by the Optionholder.

SECTION 6.     CERTAIN ADJUSTMENTS.

         (a) Capital Adjustments. The aggregate number of shares of Stock
subject to the Plan (and the number of shares covered by outstanding Options and
the price per share stated in such Options) shall be proportionately adjusted
for any increase or decrease in the number of outstanding shares of Stock of the
Company resulting from a subdivision or consolidation of shares or any other
capital adjustment or the payment of a stock dividend or any other increase or
decrease in the number of such shares effected without the Company's receipt of
consideration therefor in money, services or property.

         (b) Mergers, Etc. If the Company is the surviving corporation in any
merger or consolidation, any Option granted under the Plan shall pertain to and
apply to the securities to which a holder of the number of shares of Stock
subject to the Option would have been entitled prior to the merger or
consolidation. A dissolution or liquidation of the Company shall cause every
Option outstanding hereunder to terminate. A merger or consolidation

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in which the Company is not the surviving corporation shall also cause every
Option outstanding hereunder to terminate.

         (c) Change in Control. With respect to any Change in Control, the Plan
Administrator shall have the discretion and authority, exercisable at any time,
whether before or after the Change in Control, to provide for the automatic
acceleration of one or more outstanding Options granted by it under the Plan
upon the occurrence of such Change in Control. The Plan Administrator may also
impose limitations upon the automatic acceleration of such Options to the extent
it deems appropriate. Any Options accelerated upon a Change in Control will
remain fully exercisable until the expiration or sooner termination of the
Option term.

SECTION 7.     MISCELLANEOUS

         (a) Use of Proceeds. The proceeds received by the Company from the sale
of Stock pursuant to the exercise of Options hereunder, if any, shall be used
for general corporate purposes.

         (b) Cancellation of Options. The Plan Administrator shall have the
authority to effect, at any time and from time to time, with the consent of the
affected Optionholders, the cancellation of any or all outstanding Options
granted under the Plan by the Plan Administrator and to grant in substitution
therefore new Options under the Plan covering the same or different numbers of
shares of Stock as long as such new Options have an exercise price per share of
Stock no less than the minimum exercise price as set forth in Section 5(b)
hereof on the new grant date.

         (c) Regulatory Approvals. The implementation of the Plan, the granting
of any Option hereunder, and the issuance of Stock upon the exercise of any such
Option shall be subject to the procurement by the Company of all approvals and
permits required by regulatory authorities having jurisdiction over the Plan,
the Options granted under it and the Stock issued pursuant to it.

          (d) Indemnification. In addition to such other rights of
indemnification as they may have, the members of the Plan Administrator shall be
indemnified and held harmless by the Company, to the extent permitted under
applicable law, for, from and against all costs and expenses reasonably incurred
by them in connection with any action, legal proceeding to which any member
thereof may be a party by reason of any action taken, failure to act under or in
connection with the Plan or any rights granted thereunder and against all
amounts paid by them in settlement thereof or paid by them in satisfaction of a
judgment of any such action, suit or proceeding, except a judgment based upon a
finding of bad faith.

         (e) Plan Not Exclusive. This Plan is not intended to be the exclusive
means by which the Company may issue options or warrants to acquire its Stock,
stock awards or any other type of award. To the extent permitted by applicable
law, any such other option, warrants or awards may be issued by the Company
other than pursuant to this Plan without stockholder approval.

         (f) Governing Law. The Plan shall be governed by, and all questions
arising hereunder shall be determined in accordance with, the laws of the State
of Arizona.

         (g) Withholding Taxes. Whenever the Company issues Stock under the Plan
pursuant to an Option, the Company shall have the right to require the grantee
to remit to the Company an amount sufficient to satisfy any federal, state
and/or local withholding or employment tax requirements prior to the delivery of
any certificate or certificates for such shares. Alternatively, the Company may
issue or transfer such shares of Stock net of the number of shares sufficient to
satisfy the withholding or employment tax requirements. For such purposes, the
shares of Stock shall be valued on the date the withholding or employment tax
obligation is incurred.

SECTION 8.     SECURITIES RESTRICTIONS

         (a) Legend on Certificates. All certificates representing shares of
Stock issued upon exercise of Options granted under the Plan shall be endorsed
with a legend reading as follows:

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                  The shares of Common Stock evidenced by this certificate have
                  been issued to the registered owner in reliance upon written
                  representations that these shares have been purchased solely
                  for investment. These shares may not be sold, transferred or
                  assigned unless in the opinion of the Company and its legal
                  counsel such sale, transfer or assignment will not be in
                  violation of the Securities Act of 1933, as amended, and the
                  rules and regulations thereunder.

         (b) Private Offering for Investment Only. The Options are, and shall
be, made available only to a limited number of present and future employees of
the Company, and their permitted transferees, who have knowledge of the
Company's financial condition, management and its affairs. The Plan is not
intended to provide additional capital for the Company, but to encourage
ownership of Stock among the Company's employees. By the act of accepting an
Option, each grantee or such permitted transferee agrees (i) that, any shares of
Stock acquired will be solely for investment and not with any intention to
resell or redistribute those shares and (ii) such intention will be confirmed by
an appropriate certificate at the time the Stock is acquired if requested by the
Company. The neglect or failure to execute such a certificate, however, shall
not limit or negate the foregoing agreement.

         (c) Registration Statement. If a Registration Statement covering the
shares of Stock issuable upon exercise of options granted under the Plan is
filed under the Securities Exchange Act of 1933, as amended, and is declared
effective by the Securities Exchange Commission, the provisions of Sections 8(a)
and (b) shall terminate during the period of time that such Registration
Statement, as periodically amended, remains effective.

SECTION 9.     DEFINITIONS

         The following capitalized terms used in this Plan shall have the
meaning described below:

         "Affiliates" shall mean all "executive officers" (as that term is
defined in Rule 16a-1(f) promulgated under the Securities Exchange Act of 1934)
and directors of the Company and all persons who own 10 percent or more of the
Company's issued and outstanding Stock.

         "Board" shall mean the Board of Directors of the Company.

         "Change in Control" shall mean (i) a person or related group of
persons, other than the Company or a person that directly or indirectly
controls, is controlled by, or under common control with the Company, acquires
ownership of 40 percent or more of the Company's outstanding common stock
pursuant to a tender or exchange offer which the Board of Directors recommends
that the Company's stockholders not accept, or (ii) the change in the
composition of the Board occurs such that those individuals who were elected to
the Board at the last stockholders' meeting at which there was not a contested
election for Board membership subsequently ceased to comprise a majority of the
Board by reason of a contested election.

         "Code" shall mean the Internal Revenue Code of 1986, as amended.

         "Company" shall mean Three-Five Systems, Inc., a Delaware corporation.

         "Eligible Persons" shall mean those persons who, at the time that the
Option is granted, are employees of the Company, who provide valuable services
to the Company or parent or subsidiaries of the Company.

         "Optionholder" shall mean an Eligible Person to whom Options have been
granted.

         "Optioned Shares" shall be those shares of Stock to be optioned from
time to time to any Eligible Person.

         "Options" shall mean options to acquire Stock granted under the Plan.

         "Plan" shall mean this stock option plan for Three-Five Systems, Inc.

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         "Plan Administrator" shall mean the Board of Directors or a committee
thereof.

         "Service" shall have the meaning set forth in Section 5(m) hereof.

         "Stock" shall mean shares of the Company's common stock, $.01 par value
per share, which may be unissued or treasury shares, as the Board may from time
to time determine.

         This Amended and Restated Plan is hereby executed this 3rd day of
August, 2000.

                                             THREE-FIVE SYSTEMS, INC.

                                             By:      /s/ Jeffery D. Buchanan
                                                      -------------------------
                                             Name:    Jeffrey D. Buchanan
                                             Its:     Secretary

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